Denver proposes oversight fees and spending rules for three tax-funded programs

Three proposed Denver ordinances would let the city charge up to 1% of revenue from the Denver Preschool Program, Prosperity Denver and Caring for Denver while adding administrative, transparency and spending rules.

The measures are scheduled for the Denver City Council’s Governance and Intergovernmental Relations Committee on Sept. 15. If approved through the legislative process, they would take effect Jan. 1, 2027. The timeline calls for a first reading Sept. 28, followed by final action, three public hearings and a supermajority vote on Oct. 5.

A city presentation projects 2027 oversight fees of $280,000 from the preschool program, $145,000 from Prosperity Denver and $516,000 from Caring for Denver — about $941,000 combined. The fees would be budgeted in advance, with unused amounts returned to the nonprofit administering each fund, the presentation says.

The measures would retain administrative-spending caps of 7% of annual Denver Preschool Program revenue and 5% for Prosperity Denver and Caring for Denver. They generally would bar administrative funds from paying for alcohol, regulated marijuana, tobacco, routine food, beverages and related services, while allowing some qualifying non-routine events that benefit the organization.

The Prosperity Denver proposal would retain reporting requirements on students assisted, outcomes, graduations, completion progress and audited financial statements. The proposed ordinance also would update city code to use the fund’s current name; it was previously known as the Denver College Affordability Fund. The measure would not change the fund’s 0.08% sales-and-use tax rate or its Dec. 31, 2030, expiration date.

The Denver Preschool Program proposal would keep the requirement that tax revenue be spent through a qualifying Colorado nonprofit, subject to City Council appropriation and audit. Its operative language defines which costs count toward the nonprofit’s 7% administrative cap; it does not clearly impose a blanket ban on every use of preschool tax revenue for alcohol and other listed purchases. The proposed ordinance also excludes third-party contractor and consultant fees from its administrative-expense definition.

The Caring for Denver proposal would impose the 1% city fee and a 5% nonprofit administrative cap. It also would direct at least 10% of annual revenue to alternatives-to-jail facilities and staffing, police co-responder and alternative-response programs, and first-responder training. For the first two years after the proposed effective date, another 10% would go toward developing an alternatives-to-jail facility, including planning, real-estate acquisition, renovation or construction.

The proposed Caring for Denver ordinance also would require a strategic plan at least every three years with public input, measurable objectives, implementation timelines and performance measures. Board meetings, records and final grant awards would be subject to Colorado public-meeting and public-records requirements. The proposal would prohibit using Caring for Denver tax revenue for staff-specific mental-health or wellness services at the administering nonprofit.

The proposed fees and earmarks could reduce the amount available for grants and other program work, but the measures do not specify reductions to current grants or services. The Caring for Denver presentation projects that the new fee structure would allow the fund to retain about $130,000 more each year from its existing administrative allowance; that is a projection, not an observed result.

The ordinances address fund governance, oversight and future allocations. They are separate from the Caring for Denver crisis-response grant covered previously.