Developing_Funding_Choices

The City of Denver provides for its recycling endeavor through the Department of Public Works within its annual budget. The city budget places funding in required funds per governmental accounting standards, yet allows each department to disburse the allocated funding as necessary. Denver’s recycling programs have reach a cost savings point, allowing additional revenue for the programs. These programs have won national recognition and favorable public opinions. Sources of Revenue According to the Governmental Standards Accounting Board (2009) there are three primary groups of funds into which revenues are placed. These funds are governmental, proprietary and fiduciary. Fiduciary funds are government accounts which hold funds for specific groups or outside parties; an example is an employee pension fund. Proprietary funds report on activities which generate revenue themselves. Governmental funds are more complex, consisting of the following five types: general fund, special revenue fund, debt services fund, capital projects fund and permanent funds. These funds are the very basic services and account for the bulk of the revenue placement. The general fund holds the basic operating expenses of the government. Everything not designated to another funds is contained here. Special revenue funds are used as a reporting means for specific sources of revenue and funds for a specific purpose. Sometimes this account is used for functions such as road maintenance or a new storm sewer. The debt services funds is strictly for repayment of debts. Debts related to a specific fund or activity are accounted for within those funds. Capital project funds hold the monies for construction, rehabilitation and acquisition of assets such as roads, buildings and equipment. These may also appear in special revenue funds. Permanent funds hold resources which cannot be expended, such as invested resources which must be held in perpetuity, although the government may spend the interest earnings for a purpose specified by the resource provider (Governmental Standards Accounting Board, 2009). Based on the above definitions, the revenue for the GreenPrint Denver program and the recycling endeavor fall into the general fund. Please note that with the sustainability of these programs, a propriety fund is in their future. The 2009 budget does not designate any revenue to a fiduciary fund, but solely to governmental and proprietary funds. The proprietary funds are the areas into which the revenues from specific programs are held. For example the Environmental Services fund holds revenues generated from the operation of a landfill site. The Wastewater Enterprise fund holds revenues generated from services (City of Denver, 2009). Grant money for the special GreenPrint Denver projects are held in the proprietary funds. The use of light-emitting diode technology in traffic lights has saved the city nearly $800,000 a year (City and County of Denver, 2009). The grant monies for GreenPrint Denver, which are revenues, are restricted as they are for designated projects. For example, funding received through Denver’s selection as a Solar America City must be used to establish as sustainable solar infrastructure program. This $200,000 grant is being matched with local funds. Other revenue sources can be restricted as well, especially if it is donated money or grant money. Policy and budget decrees can also restrict the use of funds to specific projects or programs. The City of Denver (2009) requires that all capital funded projects and their revenue sources be declared no later than the third Monday in October for budget preparation. Effect of policy decisions on the receipt of revenues Various policies can affect the receipt of revenues. These policies can increase, decrease or place restrictions on funding for a department or a program. Sen. Ken Gordon (Denver) proposed a bill to require all state-funded buildings to be “green,” meeting strict low energy standards (Rebchook, 2007). This would initially increase funding for local municipalities, however soon the cost savings would be significant in addition to the added benefits of reducing the wear and tear on the infrastructure of the utility system and increase the health of community members such as employees, students and teachers. While a gold-level LEED building will cost $3 to $5 more per square foot to build, the savings in the long-term justifies this expense. A LEED school in Fort Collins is realizing a $90,000 savings per year in energy costs alone (Rebchook, 2007). Webb Municipal Building, certified as both LEED_EB Gold and Energy Star, has reduced its energy consumption by 25%, saving $218,000. The Denver Housing Authority, through the implementation of retrofits in more than 3,700 public housing units has saved $1.8 billion per year. The retrofit of Denver Place Towers, with the Xcel Energy rebates now saves unit owners more than $300,000 annually in energy costs and paid for itself within three years (City and County of Denver, 2009). These savings help provide additional revenues to the programs. Economic conditions that affect revenue projections Decreasing property value has placed a damper on many revenue projects, especially those municipalities which depend on real estate taxes for revenue. The City of Denver, in preparation for slow growth and decreasing revenue through sales and property (real estate) taxes, planned the budget with this decrease in mind (City of Denver, 2009). Investment properties have slowed, reducing the revenue generated through construction. Similar to our national economic outlook, the City of Denver is cautiously optimistic, but nonetheless preparing for a slow year of revenue. The projections are down with growth projected at rates under 3% (City of Denver, 2009). Departments are encouraged to retain a percentage of their budgeted money and to find cost savings within their areas. Revenue policy alignment with community values Greenprint Denver does a very good job of aligning the allocated revenues with the program. The City is very pro- environmental and supportive of the program. The matching funding for specific programs is a working incentive. The cost savings which are being redirected into the program provide a substantial amount of revenue to support new programs while sustaining existing ones. This environmental endeavor is contained within the Department of Public Works along with other programs such as street sweeping. Residents are ticketed at a rate of $20 per incident for parking on the wrong side of the street on sweeping days. This is a “tax” on those who forget, generating more revenue for the department. The City helps to decrease the tickets by offering e-mail alerts the day before sweeping days and an information number the residents can call to confirm the dates (Burch, 2008). The City of Denver, in interest of not only the environment, but also the health of the community, is now using herds of goats for weed control rather than chemicals. This, along with the natural mulch created by the goats during this process, provides a sense of value to the residents and provides cost savings (City of Denver, 2009). Greenprint Denver outlines a community outreach program to help garner support for the programs and encourage the citizens to lobby for revenue allocation. The targets groups ar businesses, neighborhoods and youth. This allows for advocates as leaders of public opinion, social networks and on the grassroots level (City of Denver, 2009). This outreach has been very successful in promoting environmental offsets. Voluntary travel offsets (use of bicycles, light rail, biofuel busses, or pedestrian facilities) has reached over two million participants (City of Denver, 2009). Energy audits claim 15,000 participants (City of Denver, 2009). Conclusion The City of Denver has mad sound funding choices through the continued policies within the GreenPrint Denver plan and with the budget. Seeking cost-savings has allowed the city to provide the needed repairs and resources without being forced to cut programs or personnel. The services, especially those which are environmentally friendly, are increasing and finding much support from both residents and the federal government. References Burch, Jody. (2008). Street-sweeping returns to Denver. The Denver Post. Retrieved March 1, 2009 from http://denvergov.org/Greenprint Denver - News and Events - Greenprint in the News.htm The City and County of Denver (2009). Greenprint Denver. Retrieved February 1, 2009, from http://www.greenprintdenver.org/waste/index.php City of Denver (2009). Denver, The Mile High City. Retrieved February 1, 2009, from http://www.denvergov.org/ Environmental News Service (2009). 12 New Solar America Cities Earn $200,000 Grants. Retrieved March 1, 2009, from http://www.ens-newswire.com/ens/mar2008/2008-03-31- 092.asp Governmental Accounting Standards Board (2009). Touring the Financial Statements, Part III: The Governmental Funds. Retrieved March 1, 2009, from http://www.gasb.org/newsletter/governmental-funds_nov2007.html Rebchook, John. (2007). Senator pushes energy efficieny. Rocky Mountain News. Retrieved March 1, 2009, from http://www.rockymountainnews.com/drmn/real_estate/article/ 0,1299,DRMN_414_5303315,00.html