Oct.

14, 2009

Dear City Employees:

We continue to see change in our City as revenues fall at historic rates. In August, for example,
core sales tax collected was down 9.8 percent from the same month a year earlier. This marked
the 11th consecutive month of revenue decline in the City. The average decline for the past 10
months has been 10.9 percent.

The impact has been significant: We trimmed $120 million from the City’s general fund and used
$40 million from the City’s reserve fund to balance the 2010 budget. We also reduced our
workforce by abolishing or holding vacant more than 600 positions, and we certainly recognize
that this has made life harder for almost all City workers.

Many difficult budget choices this fall may have directly impacted you and your families. We
understand the hardship these decisions may have caused, and we are working to provide support
for employees whose positions were eliminated. We will launch next week an enhanced
Employee Transition Assistance program – with such features as help with job searches – for
these City employees.

We are also close to finalizing the proposed 2010 budget, and we want to take a few minutes to
update you on important changes that will be delivered to the City Council on Monday. This final
draft of the budget takes into account feedback from City Council and others necessary to
maintain sustainable change and give the City the best footing possible to get through the current
economy.

The City Council received the proposed 2010 budget on Sept. 15 and then spent two weeks
meeting with major City agencies to review their individual spending plans. Those meetings
culminated in an Oct. 6 memo to the administration in which City Council members collectively
identified these items they wanted to see addressed in the 2010 budget:

• Restoring reduced hours to libraries based upon Library board prioritization decision.
Council was concerned that as currently budgeted, no library is scheduled to be open on
Sunday. Emphasis was on quadrant, Schlessman and Central libraries.
• Continued operation of Byers Library.
• Stop transition of the La Alma Recreation Center until community input process has been
fully completed.
• Restore summer employment opportunities to 200 youth.
• Limit potential furlough days to employees to four in 2010.

These suggestions totaled slightly more than $4 million in expenses not included in the 2010
budget. Today, we responded to the City Council. We plan to:

• Spend $910,800 to avoid closing the Byers branch and reducing hours at several library
branches. Specifically: The Byers branch will remain open and operate for one more
year; four hours on Sunday will be restored at the Central Library; eight hours in a week
will be restored at the Schlessman branch; and eight hours in a week will be restored at
four other branches – Bear Valley, Montbello, Woodbury and University Hills.
 • Provide up to one year of funding to ensure services can be transitioned at La Alma
Recreation Center. This is an increase of $260,000 in the budget to fund a pilot program
that would allow for a transition plan to be developed with the community. In addition,
the department has committed to find $75,000 of savings within its proposed budget
should the transition process take the full year.

To pay for these changes, we will use $350,000 previously included in a business incentives
special revenue fund used to attract new business to Denver, reallocate $40,000 budgeted for
collective bargaining next year, and reduce the amount of general fund money by $1.05 million
budgeted for homeless programs – money that helps offset a much greater cost to house the City’s
homeless in jails or hospitals.

We will seek private funding to help augment summer youth employment. As for furlough days,
right now we believe we need to keep the five days already in the 2010 budget. We are
committed to reducing the number of necessary furlough days next year should the City’s
financial position improve. We will provide the schedule for the five 2010 furlough days within
the next month.

A final draft of the 2010 proposed budget will be delivered to City Council on Oct. 19, and a
public hearing is scheduled for Oct. 26. The City Council will consider final approval of the
budget in early November.

We would be remiss at this point not to applaud our firefighters and police officers for agreeing to
make contract changes that help ease our budget crisis. As a City, we needed their help. Their
shared sacrifice with all other City employees who are helping to shoulder our financial burden is
greatly appreciated and compliments the fine jobs they do to preserve public safety in our
community.

We also want to applaud the work of all City workers for continuing to work through the most
challenging economic times any of us have ever seen. Despite the uncertainty that change brings,
you continue to provide our community with outstanding service. For that, we thank you.

Sincerely,

Mayor John Hickenlooper