The Denver City Council on Monday approved a $25 million agreement with a company that provides hotel rooms for migrants who have arrived in the city from the southern border.
Most of that money — around $17.5 million — has already been spent, according to the city’s Department of Finance.
The agreement modified an existing purchase order with Quebec Hospitality LLC that started last year, upping the maximum expenditure from $378,486 to $25 million and extending the arrangement through the end of June. The measure also corrected a clerical error on the city’s part, according to officials, opening the door for the vendor to be paid for the first time since October.
City officials project that the $7.5 million that has yet to be spent under the purchase order will fund rooms to keep people sheltered through the first quarter of this year. Or so they hope.
The measure, which passed unanimously as part of the City Council’s consent agenda Monday, demonstrates the challenging financial situation the city finds itself in in the wake of a wave of migration that limited state or federal reimbursement to offset the burden. As of Monday, Denver has spent more than $42 million supporting migrants, according to officials involved in the response.
As of Monday afternoon, more than 38,000 people had arrived in the city as part of a migrant crisis that began in the waning days of 2022. More than 3,800 of them are currently staying in city-provided shelters, according to an online dashboard. Many of the migrants are Venezuelan asylum-seekers fleeing political and economic uncertainty in the South American country.
The agreement with the hotel operators comes a week ahead of a separate $25 million measure on the council’s agenda. That bill would take $15 million out of the budget for a renovation project at the Denver Human Services Department’s campus at 1200 Federal Blvd. and move it into a dedicated fund for the border crisis.
Another $10 million would be moved into the border crisis fund from the city’s 2024 contingency reserves. Contingency funds are set aside to pay for unforeseen expenses each year.
A portion of that $25 million, should it receive final approval next week, will likely be used to pay for the hotel contract, city finance officials say.
Stephanie Adams, the city’s budget director, told members of the council’s finance and governance committee last month that tapping into contingency funds this early in the year is necessary to make sure the city can fund services for migrants through the end of March. Her goal is to come back to the council in April with a funding plan for the rest of 2024 but she could not guarantee the crisis would not require more funding before then.
“To be honest with you there is a strong possibility I will be right back in front of you in a couple weeks as we begin to evaluate the census” of migrants, she said.
Mayor Mike Johnston’s administration has estimated the city could face a budget shortfall of $180 million in 2024 if migrants continue arriving in Denver at the current rate. He has instructed city agencies to find ways to carve between 5% and 15% of their budgets in response to the need.
Monday marked the first day Denver reinstated time limits for migrant families with children after pausing restrictions due to cold weather. Those families can now stay in city-provided shelters for a maximum of 42 days. Adults without children are now subject to a 14-day length of stay limit.
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Updated Feb. 6, 2024, at 9:46 a.m. This story was updated to include the latest cost estimates for the city’s migrant support efforts.
