Local Government in the Time of Covid-19

National figures and national issues take up most of the hot air, but most actual government we experience is local.

Right now that experience is a state of shock.

Calling COVID-19 a stress test for local government is like calling Krakatoa a firecracker. State and local tax revenues have collapsed more drastically and suddenly than anyone has ever seen. So much so that it's a fair question, if not whether, at least how local governments will survive?

The Fort Bragg City Council, meeting weekly instead of bi-weekly during the lockdown, has started to come to terms with an estimated 90 percent collapse in Transient Occupancy Tax (motel bed tax) revenues over the past two months. That money makes up nearly a third of the city's general fund, which has to pay for everything from paved streets to a police department.

Fort Bragg's situation is in some ways easier to get than San Francisco's, Santa Rosa's, even Ukiah's, simply because of its size (pop. 7000 more or less). But every city and county government in the nation is facing a fiscal crisis like it's never seen before.

In Fort Bragg that means layoffs and furloughs. Last week City Manager Tabatha Miller was carrying out the grim task after the City Council gave the go ahead during a closed session on April 27 to job cuts intended to close an estimated $425,000-per-month hole in city finances.

Who will be furloughed or laid off wasn't released by week's end. When people's jobs are being ended or suspended abruptly, officials like to tell them first before announcing it to the public. But there is no question the cuts — which will not touch the essentials: police department's sworn officers or water or wastewater treatment plant crews — will be severe.

In an interview before Monday's meeting, Miller made clear that this round of cuts is likely not the last.

"That money just didn't show up," she said of the sales and bed tax receipts for March and April at least. "And the tough part…is that some of those businesses won't open back up.”

Miller said she's talked to a number of local proprietors who don't think their operations will be around after the lockdown lifts. And just driving through town and seeing all the empty motel parking lots and shuttered shops and restaurants tells a harrowing story, even if the ending is unclear.

Miller and city council members have taken a sooner-rather-than later approach to decisions, partly because there will be no hard data on tax receipts probably until the end of the summer. All they know is it's bad, and not addressing the fiscal fallout immediately could mean wheels falling off down the road.

Sworn police officers and workers in the city's water and wastewater treatment plants are off limits for cuts, Miller said, describing the council's direction to her. A water supply, a working sewer and a police department are about as basic as city services get. Fort Bragg's fire department, partly funded with its own tax base and basically overseeing itself through a fire district board of directors, will also not be directly affected by the plunge in sales and bed tax money. City government contributes half the Fire Department's budget and Miller said that funding will not change.

The water and sewer plants are funded by user fees, not taxes, so they are shielded from the immediate punch. But no part of local government's infrastructure will be unaffected in the long run.

According to the League of California Cities, "Cities anticipate a nearly $7 BILLION GENERAL REVENUE SHORTFALL over the next two fiscal years. This shortfall will grow by billions of dollars if COVID-19 stay-at-home orders extend into the summer months and beyond."

(Emphasis theirs.) They also said California's cities will need unspecified "assistance" to survive.

Though Miller gave no specifics, some of the cuts in Fort Bragg are likely to come in the city's Community Development (planning) department, and she did say it's likely most local development projects will slow down or be on hold in coming months. Still, she said, it's important for the city to keep up with what infrastructure for development it can. 

That was the thinking behind the council's April 20 approval of a contract to replace and relocate the water pipe running north across the Pudding Creek to Fort Bragg's northern light industrial reaches. That pipe is the key to a future water supply that could enable the proposed Avalon Hotel and other development in a part of town that a lot of people probably think is outside city limits.

But long range planning for the most part is at a standstill for now. Miller said she has heard no change of plans from any of the landowners of Fort Bragg's millsite. But the millsite planning process is frozen for now and who knows what new scenarios planners will face once lockdown ends.

The city's seasonal workers, who do a range of necessary tasks during busier summer months, have already been told they won't have jobs this year. A police sergeant on leave retired. Someone newly hired in Community Development was told to keep their old job — last hired/first fired means taking a new job with a city government right now is not a wise thing to do.

The next round of cuts will hurt a lot worse. Fort Bragg's smallness is a wonderful thing when it comes to local government — you run into city council people, the mayor, etc. on a regular basis. A cheerful bunch normally — and they still are. But when the subject of their (pretty much unpaid) jobs on the city council comes up, they look stricken. Words like “terrifying” are used. They are firing people on a moment's notice. They are firing some of their friends.

One can only guess what is happening in other City Halls and County executive offices. One thing's for certain: when it comes to COVID-19 carnage in local government, this is the opening round.

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