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Denver council tightens rules for the nonprofits that spend three voter-approved city taxes

Bills passed 11 to 0 on Oct. 5 let the city keep up to 1 percent of each fund for its own oversight and bar spending on alcohol. Caring for Denver also comes under the state open records law and may spend up to 7 percent on administration, up from 5.

A tree-lined pedestrian street in downtown Denver with people walking at a distance, a man playing a painted street piano and a white SUV parked under the trees
The 16th Street Mall in downtown Denver, photographed in 2016.Paul Karolyi (Changing Denver) / Flickr (CC0)

Denver. The Denver City Council voted 11 to 0 on Oct. 5 to change the rules for three nonprofits that spend dedicated city sales taxes approved by voters: the Caring for Denver Foundation, the Denver Preschool Program and the Prosperity Denver Fund. One member was absent, according to the council's roll call. As of Oct. 8 the three bills were awaiting the mayor's signature.

Councilwomen Jamie Torres and Amanda P. Sandoval sponsored the bills. Their presentation to the council said the three funds ran under different rules on public records, city oversight and spending, and proposed making them consistent.

What changes for all three

Each fund pays a nonprofit under a contract with the city. Under the bills, the city may keep up to 1 percent of each fund's yearly revenue to pay its own costs of administering the money, separate from what the nonprofit may spend on its own administration. The presentation estimates the city's share for 2027 at $516,000 from Caring for Denver, $280,000 from the preschool tax and $145,000 from the Prosperity Denver tax. The fee must be budgeted in advance, and unused money goes back to the nonprofit, it says.

The nonprofits may no longer spend their administrative money on alcohol, marijuana or tobacco, or on food and drinks except for an event outside daily routine that benefits the organization, such as one recognizing accomplishments or marketing a new service. The bills date the city's share, and Caring for Denver's new records and planning rules, from Jan. 1, 2027.

New duties for Caring for Denver

Caring for Denver is funded by a 0.25 percent sales and use tax that voters approved in 2018 for mental health, substance use, suicide prevention and jail diversion programs. Until now, only information shared at its board meetings and its final grant awards were public records. Under the bill, all of its records fall under the Colorado Open Records Act and its board meetings under the state's open meetings law.

Its board must write a strategic plan at least every three years, with public input, goals, measurable objectives, a timeline and performance metrics. Tax money may not pay for mental health or wellness services specifically for the foundation's own staff. Its cap on administrative spending rises from 5 percent to 7 percent, and it will no longer pay for a city position, which the sponsors estimate leaves it about $130,000 more a year.

The preschool program, funded by a 0.15 percent tax, keeps its 7 percent administrative cap, and the Prosperity Denver Fund, funded by a 0.08 percent tax for college scholarships and support services, keeps its 5 percent.

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