Local governments are tightening their belts to help stave off negative financial impacts of the COVID-19 pandemic.
On Monday, Camas City Council members unanimously approved a supplement to Camas Mayor Barry McDonnell’s civil emergency proclamation, which detailed steps the city is taking to save money during the coronavirus crisis.
“These are really good steps the city has taken to reduce spending and take steps to emerge from this situation financially strong,” Councilwoman Ellen Burton said Monday.
The city’s cost-reduction efforts include a moratorium on hiring new and seasonal employees; a crackdown on business travel and conferences for any city employee or public official; direction to department heads to “maintain ongoing strict adherence to established budgets;” and a pause on all city capital projects deemed “nonessential.”
Camas Finance Director Cathy Huber Nickerson said some of the steps would help the city in the short-term while others were meant to help in the long-term.
The city had enough cash in its reserves to last about four months, Huber Nickerson said Monday.
“Those reserves help us get through July but that doesn’t mean we’re going to wait until July” to help mitigate the financial ramifications of statewide shutdowns that have halted residential and commercial construction and shuttered all nonessential businesses in an effort to slow the spread of the highly contagious coronavirus.
“If things don’t start changing, we’ll revisit this on May 4,” Huber Nickerson told city councilors Monday.
If the state of Washington is still under any sort of “stay at home” order through the month of June, she added, the city of Camas will likely need to go into “stage two” of its mitigation efforts.
“That might involve other options, not excluding some hard choices,” Huber Nickerson said Monday.
The finance director said she expects to have more information for the city councilors at their Monday, May 4 council meeting.
In late March, Huber Nickerson and McDonnell discussed the city’s finances in a video posted to the city’s YouTube channel.
Huber Nickerson said then that Camas was “in a unique position” and had nearly doubled its reserves in recent years thanks to the strong local economy and an increase in building construction throughout the city.
“That put us in a position (of having) four months’ worth of reserves available,” Huber Nickerson said. “The reserves are where we need (them to be) to weather this crisis.”
The mayor said in the March video that the city was going into the crisis “as best prepared as we can be.”
“We will continue to monitor, continue to take direction from the state to do everything we can to lower this curve,” McDonnell said. “If we don’t, I believe the financial costs to our community and people who are most vulnerable will be even more significant.”
Washougal tightens belt on already ‘lean organization’
The city of Washougal has implemented some cost-savings measures to combat the economic impact of the COVID-19 pandemic, but will still be able to move forward with the vast majority of its major projects this year.
“We are going to have some (repercussions),” Washougal city manager David Scott said. “Hopefully we can mitigate those without a significant impact on services to the community. We’re a lean organization anyway, but we’ll do our best to tighten our belts around the things and services that we buy. We have to see where that gets us with respect to what revenue losses we might anticipate and whether the expense reductions cover (those losses).”
The city has decided to not hire seasonal employees for several of its departments, including parks, streets and stormwater. It will not conduct its annual pavement management program this summer. And with certain exceptions, it will limit travel and training opportunities for employees.
However, the city will proceed with most of its major projects — including the Schmidt Ballfields renovation/expansion, waterfront and Jemtegaard trail construction and 32nd St. underpass design — because they don’t require money from the city’s general fund.
“We’re not as dependent on sales tax as some other cities, and sales tax is something that is going to suffer when economic activity slows down dramatically,” Scott said. “It’s not by design; I’d love to have a higher sales tax. But we’re positioned better in that regard.
“As far as utility taxes go, people are using utilities less, and we’ve got some businesses that are closed, so our revenue will go down there a bit, but not like sales tax. We’ve engaged consultants to help us on the utility side, and I’m expecting (this) week to get preliminary feedback on that. We’ll huddle up, see what the implications are and figure out what they mean.”
The city will have to “be prudent” in its long-term financial planning, according to Scott.
“I’m not an economics expert, but if we do end up in a recession, we’re going into it in better shape than we were going into the Great Recession (of 2008),” he said. “But how deep will it be, how long will it be, what will the recovery look like? It’s all very ambiguous right now, and that’s challenging.”
Port of Camas-Washougal delays projects
Ripp said that port officials are “looking at our own budgets, tightening our belts and trying to be very conscientious of our own spending and operating expenses” in the wake of the COVID-19 outbreak.
The port has delayed several projects, including its strategic planning and economic analysis sessions, waterfront marketing brochure and Grove Field flight plan center.
“These things are very important,” Ripp said, “but we knew we could put them on hold until later in the fall, hopefully, when we’re back — maybe not completely out of the dark, but our businesses are open and starting to generate some revenue for themselves.”
Kim Noah, the port’s director of operations, and Derek Jaeger, the port’s business development manager, are working closely with the port’s industrial park tenants, many of whom have been financially weakened as a result of the pandemic.
On Wednesday, April 1, commissioners approved a rent relief policy that postpones rent payments for a specific period of time.
“The last couple of weeks we’ve just been really busy talking with tenants, looking at projections for this year, looking where we can cut back with our expenditures and trying to work with our tenants the best we can to help them out during this time,” Noah said. “At the same time we’re keeping track of the deferred revenues that we’re pushing out and monitoring it quite closely.”
“It’s so important to keep an open line of communications with (our tenants) to see how we can best help them in this economic situation that we’re all in,” Keister added. “It’s critical that we retain our port tenants, not only for the port but also for our community.”