HomeMy WebLinkAboutCM COVID-19 Economic Recovery Plan____________________________________________________________________________________
FOR CITY CLERK ONLY
Council Meeting: May 18, 2020
Disposition: Accepted report and provided direction to staff
Agenda Item No: 6.a
Meeting Date: May 18, 2020
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: City Manager’s Office
Prepared by: Cristine Alilovich,
Assistant City Manager
City Manager Approval: ______________
TOPIC: COVID-19 ECONOMIC RECOVERY PLAN
SUBJECT: INFORMATIONAL REPORT ABOUT THE CITY OF SAN RAFAEL’S DRAFT
COVID-19 ECONOMIC RECOVERY PLAN
RECOMMENDATION: Accept report and provide feedback on the draft COVID-19 Economic
Recovery Plan (CERP)
BACKGROUND:
Marin County and six other Bay Area jurisdictions have been under a Shelter in Place public
health order due to COVID-19 since March 17, 2020. Marin County has developed a reopening
initiative called Marin Recovers. It calls for a sequential reopening of the economy informed by
13 industry-specific advisory work groups that have been formed to develop protocols that
support social distancing protocols, a safe working environment, and describe specific ally how
each type will operate once re-opened. City staff are involved in both leading and participating
in these efforts.
On May 4, 2020 the City Council heard an informational report describing preliminary financial
impacts of COVID-19 on the City’s services based on projected revenue losses of almost $12M
through fiscal year 2020-21. The report described initial, but sudden impacts on service delivery
and revenues due to the closure of City facilities, business and commerce, parks and open
space, and more. It also detailed the efforts of the City and its partners to address the
community's needs during this time through public safety, caring for vulnerable populations,
assisting businesses, workplace safety, and public information.
The City Council also approved several initial programs to begin curbing expenses including a
voluntary retirement separation program, voluntary work hours reduction program, and a
mandatory furlough program.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
Lastly, the May 4th informational report called for a COVID-19 Economic Recovery Plan (CERP).
The purpose of this staff report is to present the draft CERP (Attachment 1) and seek initial
feedback from the City Council.
For general context, below is the latest information related to COVID-19 cases in Marin County
and California.
COVID-19 Activity (as of May 12, 2020)
Marin County California
Confirmed Cases (cumulative) 271 69,347
Deaths 14 2,779
Persons Tested 7,732 955,664
Confirmed Hospitalizations
(cumulative)
48 3,218
ANALYSIS:
The purpose of the CERP is to communicate how the City plans to economically recover from
this public health and subsequent financial crisis. The CERP has the following four sections:
• Introduction and Purpose – including City EOC response examples
• Budget and Fiscal Impacts of COVID-19 – including estimates for City revenue losses
and expense reductions and specific recovery strategies both already taken and in -
progress/future
• How City Services will be Impacted - including a brief overview of likely impacts
• Getting to Economic Recovery - including preparing for a phased reopening, getting
people back to work, and the City economic recovery actions already taken and in -
progress/future.
The plan will be amended as needed due to the changing nature of the public health and fisca l
crisis. Progress reports and updates will be made regularly to the City Council and to the
community.
Staff’s intention is to receive your feedback and comments on this draft CERP and would then
bring back a final for your consideration as part of our annual budget in June.
COMMUNITY OUTREACH:
The City has been communicating COVID-19 information through regular email, video, and
social media updates. The May 4 City Council meeting was streamed on YouTube and has over
400 views. Staff has developed portions of this plan based on regular communication with the
San Rafael Chamber of Commerce and other partners.
FISCAL IMPACT:
As this is an informational report, there is no fiscal impact to accepting it and providing feedback
on the CERP.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
OPTIONS:
The City Council has the following options to consider on this matter:
1. Accept informational report and provide staff with feedback on the CERP.
2. Take no action.
RECOMMENDED ACTION:
Accept informational report.
ATTACHMENTS:
1. Draft COVID-19 Economic Recovery Plan (CERP)
SAN RAFAEL ISRESILIENT
PURPOSE
The goal of the COVID-19 Economic Recovery Plan (CERP) is to
communicate to San Rafael’s residents, businesses, elected officials, and
the City workforce how the City plans to economically recover from
this public health and subsequent financial crisis. We must respond with
urgency to preserve the vitality of our City and remain resilient during
these unprecedented times by controlling costs and finding innovative
ways to create new revenues.
This CERP describes the strategies the City has already taken to address
the economic impacts of the COVID-19 Shelter in Place (SIP) orders on
the City of San Rafael, both as a provider of critical government services
and as a community. Additionally, it forecasts additional strategies to
reduce expenses, increase revenues, and enhance the economic vitality of
our City.
The CERP also outlines our work plan to reopen and reinvigorate local
businesses and the economy of San Rafael.
EMERGENCY MANAGEMENT
RESPONSE TO COVID-19
To better coordinate our response to COVID-19 and the SIP orders, the
City of San Rafael has been operating our remote Emergency Operations
Center (EOC) since the proclamation of a Local State of Emergency on
March 10, 2020. Through the EOC, City staff has been managing the
logistical and operational activities behind the City’s response to the
pandemic, including public information communications, supporting non-
profits and local businesses, and maintaining a continuity of government
through innovative digital solutions in the face of disaster. The City has
a dedicated section of the City website for resources and the latest
information on COVID-19. Throughout the crisis, the City’s public safety
first responders have been there for all of us responding to calls and
serving as the City’s front line of defense against COVID-19. SAN R AFA
E
L
THE
C
ITY WI T H A M ISSIONCOVID-19
ECONOMIC
RECOVERY PLAN DRAFT MAY 2020
SAN RAFAEL COVID-19 ECONOMIC RECOVERY PLAN ( DRAFT MAY 2020) 1
EXAMPLES OF SAN RAFAEL EMERGENCY
OPERATIONS CENTER (EOC) EFFORTS TO DATE
Emergency Childcare Program
for Essential Workers
Early in the crisis the City of San Rafael’s Library and Recreation Department
began providing popup childcare for healthcare workers, first responders,
disaster service workers, and other essential workers working or living in the
county while classroom instruction is suspended. All childcare centers are
following social distancing, sanitation, and hygiene guidelines.
Support for Local Businesses
The City has partnered with the County of Marin, Chamber of Commerce,
BID, and others to create a San Rafael Small Business COVID-19 Disaster
Relief Fund to help businesses struggling to maintain cash flow and financial
solvency during these unprecedented times. To date, over $200,000 has
been raised and over 280 grant applications were submitted. The City has
also assisted businesses to interpret the Federal CARES Act and Payroll
Protection Program (PPP), provided financial and legislative advocacy,
maintained a directory of open businesses on the website and is playing a
leadership role in the Marin Recovers reopening plan.
COVID-19 Testing and Surge Planning
The City of San Rafael Office of Emergency Services and Fire Department
have worked in coordination with the County of Marin Health and Human
Services in the setup of drive-thru COVID-19 testing facilities and surge
planning for potential increases in patient volume.
Assistance for Our Vulnerable Communities
Staff has worked in coordination with local service providers to set up
food distribution and local lodging providers to provide shelter for people
who were experiencing homelessness and who are medically vulnerable
or required to be in quarantine due to exposure to COVID-19. The City
has also supported food banks, blood drives, and have even turned book
drops into face covering donation sites. A Neighbor to Neighbor Toolkit
was created to harness the superpower of neighbors helping neighbors to
get through these difficult times together.
Online Access to City Services
City staff has developed remote access to City services including a Virtual
Recreation Center and an Online Library where you can participate in
online story times, workshops, and live chat, or get books delivered to your
doorstep. Many services are now being offered online such as remote access
to building and planning permit applications.
Equitable Access to Information and Services
Staff has also worked in coordination with the County of Marin and San
Rafael School District to expand internet access to students and families with
limited or no access. The City has developed stronger translation services for
public information to ensure public safety messaging is reaching as much of
our community as possible, including regular informational videos in English
and Spanish.
SAN RAFAEL COVID-19 ECONOMIC RECOVERY PLAN ( DRAFT MAY 2020) 2
BUDGET AND FISCAL
IMPACTS OF COVID-19
In addition to the health impacts of COVID-19, the restrictions put into
place through the public health order have taken an unprecedented toll
on our federal, state, and local economy. Economists are predicting cities
such as San Rafael who are heavily reliant on sales tax, transaction and
use tax (TUT), and transient occupancy tax (TOT) will endure the hardest
financial hit.
As of April 30, it is preliminarily projected that over the next 16
months, the City will experience reductions in revenue in the range of
approximately $11,790,000, which is 14% of the City’s General Fund
budget. The breakdown of this financial hit is as follows: 71% of the
revenue reductions are due to loss of sales and TUT, 10% is attributed to
TOT, 6% is attributed to business licenses and the remaining 13% is an
accumulation of several smaller revenue generating sources.
While the fiscal year 2019-20 general fund budget for operating expenses
was more than $80 million, approximately $43 million or more than
53% was for the funding of public safety operations. Although staff is
recommending reductions to these operations, the majority is planned to
come from the non-public safety operating budget. Theoretically, if staff
was asked to make cuts of $12 million solely in non-public safety areas, it
would take closing down the libraries, eliminating all recreation activities,
cutting community development services and we still would not get to the
target amount.
The economic impacts of the pandemic and shelter in place orders have a
direct negative impact on our local businesses and the revenues used to
operate our city. To meet our financial challenges, the City is taking steps
that will create a balanced budget for fiscal year 2020-21 in line with
the City Council’s goals and strategies. Budget development is guided by
tenets such as:
• Continually assess and improve efficiency in the delivery of services.
• Manage the size and compensation of the workforce to best deliver
services given our current and anticipated financial realities.
• Seek additional revenues from all sources to meet the community’s
expectations of a high level of service.
• Collaborate with other Marin governmental agencies to consider
partnerships and/or regionalized services to leverage resources and
improve efficiency.
REVENUE ITEM % LOSS FY 19/20 FY 20/21 TOTAL
LOSSES
Sales/Transaction & Use Tax 71%$4,930,000 $3,440,00 $8,370,000
Transient Occupancy Tax 10%$860,000 $290,000 $1,150,000
Business Licenses 6%$240,000 $500,000 $740,000
Permitting/Franchise/Investment Earnings 13%$1,120,000 $410,000 $1,530,000
Projected Revenue Losses as of 4/30/2020 $7,150,000 $4,640,000 $11,790,000
REVENUE LOSS ESTIMATES
PROJECTED REDUCTION
OVER THE NEXT 16 MONTHS
$11,790,000
THAT’S ROUGHLY...
$24,194,338
1/2 of our Police Department
General Fund Budget for one year
$18,925,306
2/3 of our Fire Department
General Fund Budget for one year.
$12,021,259
Our entire Department of Public Works
General Fund Budget for one year.
SAN RAFAEL COVID-19 ECONOMIC RECOVERY PLAN ( DRAFT MAY 2020) 3
There are a number of efforts and programs that will be necessary
to reduce expenses and increase revenues. In an effort to meet the
revenue loss estimates, the below table lists current and potential future
actions. A hiring freeze has already been instituted which would result in
approximately $1.4 million in savings annually. The City Council approved
a mandatory furlough program for non-safety employees which is
expected to save approximately $700,000 for the year. This would reduce
non-public safety compensation by 5%.
The City Council also approved a Voluntary Retirement Separation
Program which will result in on-going salary and benefit savings to
the City by not filling the vacant positions or restructuring around the
vacancies. This program is expected to yield approximately $600,000
but it is completely dependent upon the number of applications and
selections.
The Council additionally approved a Voluntary Work Hours Reduction
Program. This program will depend upon the number and position of the
employees participating and would lower that employee’s base annual
pay for a period of time.
These measures will significantly help to address the projected General
Fund deficit, however additional efforts will be needed including using
one-time funds available from the prior year and use of the City’s
Emergency Reserve.
Following the Great Recession, the City has been able to build its
Emergency Reserves from less than 3% to meet its policy of 10%. While
a reserve figure of 15% or 20% would be optimal, the below chart
illustrates reducing our reserve by a total of 5% (bringing it to 5%)
through Fiscal Year 20/21. Even with these reductions, an additional $4.2
million could be needed to meet the estimated revenue losses on the
prior page. These additional budget reductions will significantly add to
the negative impacts on city services, such as described on pages six and
seven.
COST CUTTING MEASURES FOR
FY 19/20 & FY 20/21 AMOUNT
Hiring Freeze for non-public safety employees $1,420,000
Furloughs for non-public safety employees $700,000
Voluntary retirement separation program $600,000
One-time funds available from prior year $1,104,000
Emergency Reserve up to 2.5% per year for 2 years $3,766,000
Additional budget reductions $4,200,000
Estimated Sources to Fund Projected Deficit $11,790,000
EXPENSE REDUCTION RECOMMENDATIONS
SAN RAFAEL COVID-19 ECONOMIC RECOVERY PLAN ( DRAFT MAY 2020) 4
RECOVERY STRATEGIES
The City’s immediate response to the economic downturn was to
implement a variety of measures to reduce expenses and City staff have
also identified additional cost-savings opportunities to be implemented
over the coming months. We will continue to monitor the impacts of
revenue and expenses and make additional recommendations for the City
Council’s consideration as the situation evolves.
Actions Taken:
• Implemented a hiring freeze for non-essential positions.
• Left 14 positions vacant since March and all new, non-
essential vacancies will remain unfilled.
• Halted all non-essential/discretionary spending and
projects.
• Eliminated planned cost of living compensation
increases for executives, management and bargaining
units without closed contracts for fiscal year 2020-21.
• Offered a Voluntary Retirement Separation Program
that provides an incentive to encourage employees to
retire earlier than they would otherwise.
• Offered a Voluntary Work Hours Reduction Program
which allows employees to voluntarily take time off work
without pay.
• Actively seeking COVID-19 related state and/or federal
financial assistance through the support of our local
legislators.
• Implement a Mandatory Time Off Work (MTO)/Furlough
Program for non-public safety employees which is a 5%
pay reduction. (in progress)
• Focus on re-opening the local economy and enhancing
efforts on business attraction and retention during the
recovery process to support businesses and increase
revenues. (in progress)
• Continue to pursue any federal stimulus funding made
available to local governments and other grants that
can provide resources for projects and other one-time
needs. (in progress)
• Finalize the fiscal year 2020-21 budget including
reducing the Emergency Reserve to 5%, if needed,
as well as implementing additional departmental
reductions in expenses. (in progress)
• Evaluate savings associated with the voluntary
retirement, voluntary time off without pay, and
mandatory furlough program to determine if reductions
in force are necessary to balance the budget.
• Meet with employee unions to work on collaborative
ways to control costs and analyze other operational cost
savings opportunities. (in progress)
• Consider increasing the Paramedic Tax within the
current voter-approved cap limits.
• Evaluate the City’s “master fee schedule” to bring them
in line with the costs of similar Bay Area agencies and
insure total cost recovery of our services. (in progress)
• Continue to explore and gauge community interest in
other revenue generating possibilities.
• Collaborate with the County and all Marin cities
and towns to evaluate opportunities for savings
through partnerships, shared services, and/or other
consolidation efforts. (in progress)
• Participate in regional groups such as Marin Recovers
(and its Industry Advisory Groups) and the Marin
County Council of Mayors and Councilmembers Adhoc
Economic Recovery Committee that are working on
reopening businesses and regional financial recovery
solutions. (in progress)
Actions in Progress/Future:
SAN RAFAEL COVID-19 ECONOMIC RECOVERY PLAN ( DRAFT MAY 2020) 5
HOW WILL CITY
SERVICES BE IMPACTED?
The City Council adopts specific goals and strategies each year along
with the budget adoption process. The goals are broken down into the
following 5 categories:
1. Neighborhood & Economic Vitality
2. Quality of Life
3. Public Safety
4. Public Assets
5. Foundational Services
The public health crisis has made it nearly impossible for City staff to
remain focused solely on the goals/strategies developed pre-COVID-19
as the EOC and other disaster service work has been more urgent and a
much higher priority in serving the community. In addition, the specific
impact of the mandatory furlough means City services will need to be
closed to the public for 13 calendar days during fiscal year 2020-21.
Described below are some of the anticipated impacts to city services by
each goal category:
Neighborhood & Economic Vitality
Regaining and sustaining the vibrancy of our City will be an enormous
challenge in the years ahead, both as it relates to housing as well as
business attraction and retention. Additionally, this goal includes the
work that City staff has been successfully implementing to reduce the
number of individuals experiencing homelessness in our community.
Unfortunately due to job loss and economic hardships due to COVID-19
we expect to see those numbers increase. With greater needs and fewer
staff resources available to help, some of the initiatives underway in this
area might be slowed down and take longer to accomplish. In addition,
the number of hours staff can provide public services over the counter
for processing permits, etc. will be reduced and the processing of current
planning development applications will be slowed. While greenhouse gas
emissions are down due to the economy coming to a halt, however now
is not a time to get complacent about climate change. Implementation of
our Climate Change Action Plan is as important as ever.
Quality of Life
This category is focused on the arts, culture and recreational experiences
of our community, as well as improving resident engagement and
governmental transparency. Due to our revenue losses, the City’s three
library branches may need to reduce their operational hours of service.
Staff will continue to look for ways to mitigate for closures to the public.
In addition, some recreation programs may not be justified if we cannot
achieve full cost recovery for our staff to operate them. There are many
priority initiatives planned for the coming years to improve engagement
with our Latinx community and develop a City-wide data program to
monitor the success of City services. City staff may need to be re-directed
to focus on critical/essential delivery of services, which may result in the
deferral or reduced pace of progress in these areas.
SAN RAFAEL COVID-19 ECONOMIC RECOVERY PLAN ( DRAFT MAY 2020) 6
Public Safety
We will continue to provide critical public safety services, protect our
most vulnerable populations, and prioritize maintaining as much funding
toward these activities as possible. However, due to the need to reduce
budget in both police and fire we will need to defer equipment and vehicle
purchase which in the longer term can become a safety issue. In addition,
there will be less resources available for professional development/
training available for our police officers and fire fighters.
In addition, the Police Department’s cadet program will be on hold which
is a key strategy for identifying up and coming talent and training and
retaining new public safety officers.
Public Assets
After years of deferred maintenance due to the Great Recession, the
City was beginning to make progress in improving our roads and parks.
Unfortunately, this economic crisis will result in continued deferral of
maintenance projects of the City’s key facilities, such as the downtown
San Rafael and Terra Linda community centers. With significant projected
losses in gas taxes coming from the State, as well as reductions of
other funding sources, the City’s Capital Improvement Program will
be impacted and fewer core infrastructure projects will be able to be
accomplished in the coming year. In addition, the City may not be able to
implement another sidewalk application program this year, resurfacing
of streets is likely to be reduced, and we will not be able to make
improvements to outdated park structures and public restrooms.
Foundational Services
The City has a focus on exemplary service which relates to creating and
sustaining a high performing team and improving our technology and
digital presence. Our Together San Rafael culture initiative has grown
over the last few years and has received significant awards from state and
national organizations. Staff will continue to prioritize innovation and
service design improvements, but it can’t be ignored that there will be
far fewer staff carrying out initiatives. For example, existing staff will be
needed to backfill for the many current and future vacant positions due to
the hiring freeze.
While our City staff work to adapt services that meet health and safety
requirements and move services online, enhancing our technological
infrastructure and some improvements to digital services may need to
wait until new revenue sources can be found for more costly projects.
Delays in technology investments, enhancements, and automation will
have a direct impact on efforts to improve service delivery.
SAN RAFAEL COVID-19 ECONOMIC RECOVERY PLAN ( DRAFT MAY 2020) 7
GETTING TO ECONOMIC
RECOVERY
The novel coronavirus is causing major disruptions to businesses and
communities across the world. COVID-19 is compromising supply chains,
workers’ hours and income, and demand for products and services as
consumers are encouraged to avoid public places.
Economic recovery requires a safe start and healthy workforce.
Workplaces will continue to look and operate differently. Continued
physical distancing, teleworking, and other measures will continue to be
necessary to keep workers and customers safe.
A phased approach:
Businesses should be prepared for a phased comeback approach which
will start with the State of California, and then be customized by the
County of Marin, to meet the specific needs of our community. Industries
and venues will be reopen based on their ability to address health risks
and comply with the state and county orders.
Maintain physical distancing and other public
health requirements:
Businesses and public spaces will need to maintain physical distancing
and make modifications as necessary to keep employees, customers and
the public safe.
PREPARING FOR A PHASED REOPENING
Leverage lessons learned:
Apply best practices from industries and businesses that have adjusted to
new COVID-19 safety standards.
Listen & Learn:
Engage with the business community to understand challenges and
evolve our approach based on what we learn.
Assist small businesses:
Help prepare restaurants, main street businesses, and manufacturers,
that are critical to local economies, understand changing health and
safety protocols.
Support the recovery of regional economies:
Develop and use a data-based approach to determine support needed by
sector and region to assist with recovery.
SAN RAFAEL COVID-19 ECONOMIC RECOVERY PLAN ( DRAFT MAY 2020) 8
ECONOMIC RECOVERY
San Rafael’s quality-of-life is maintained and sustained by a healthy local
economy. The City’s beautiful natural setting, sense of community, public
safety, recreation facilities, and efficient government is supported by municipal
revenues. These unprecedented times require us to respond swiftly to
maintain the strength of our City while controlling costs and being innovative
in stabilizing revenues. Staff will be focused on long-term COVID-19 business
recovery, advancing key development projects, conducting business outreach
and education, and keeping local partnerships strong.
Continued business outreach,
education, and marketing/promotions.
Partner with Chamber, BID, commercial property owners,
merchants, developers, and brokers to support our existing
commercial base and achieve our economic goals.
Develop a post-COVID-19 economic
development recovery strategy
Work with our community partners to advance a
comprehensive and forward-looking strategy to stimulate
the economic vitality of San Rafael in the post-COVID world.
Stimulate business growth through
retention, expansion, and advancing
new development projects:
• Encourage business growth, private investment, and
economic vitality including but not limited to: in-fill
development, biotech, large format stores, hotel/lodging
• Create local employment opportunities
• Expand cannabis licenses and license types
• Improve the fiscal condition of the City by expanding the
tax base
Business Recovery Support:
• Ensure businesses have a strong voice in the State and
local reopening protocols and get people back to work.
• Directly assist our local businesses in taking advantage
of Federal, State and Local recovery programs.
• Partner with the Chamber of Commerce and BID to
find creative out-of-the-box ways to support our local
businesses to maintain their viability.
• Continue to invest in our business ecosystem including
infrastructure improvements (e.g. Third Street project,
East and West Francisco Boulevards) and beautification
efforts.
ACTIONS UNDERWAY |
ACTIONS TAKEN
• Continuing to communicate available small business
federal, state, and local COVID-19 disaster relief and
recovery programs
• Improving revenue stability by communicating business
reopening health and safety protocols
• Promoting which San Rafael businesses are “Open for
business” to the community
• Partnered with the County of Marin, the San Rafael
Chamber of Commerce, BID and others to administer
Small Business COVID-19 Disaster Relief Grants
• Participating and advancing the County’s Marin
Recovers plan and taking part in the County of Marin’s
Retail Industry Advisory Group
GETTING TO A SUSTAINED RECOVERY.
SAN RAFAEL COVID-19 ECONOMIC RECOVERY PLAN ( DRAFT MAY 2020) 9
SUMMARY AND CONCLUSIONS
The City of San Rafael faces serious financial challenges to recover from
the COVID-19 public health emergency and due to the unprecedented
nature of this economic downturn, we will need to remain vigilant about
updating our financial projections and assumptions in order to ensure we
are doing enough. As economic conditions change our staff will continue
to develop solutions that balance our expenses with available resources.
We have an amazing team who will work diligently to find innovative
ways to keep our organization operating and providing the highest quality
services to our community possible. However, we will face challenges in
maintaining pre-COVID service levels with less funding and fewer staff to
provide services. We will do our very best to continue building trust with
our community and will always looks for something we can say yes to.
And we will take every necessary action to ensure the City’s finances and
operations remain resilient moving forward.
The City Council will move forward with the efforts outlined in this plan
and will adopt the fiscal year 2020-21 budget in June. This plan will also
be amended as necessary to keep up with the rapidly changing COVID-19
crisis environment. Progress reports will be prepared as part of the
City’s regular updates to the City Council. We will also provide updates
regularly in the City Manager’s Snapshot e-newsletter.
QUESTIONS OR COMMENTS
If you have questions or comments about the Economic Recovery Plan
you can make them online at the City Website.
SAN RAFAEL ISRESILIENT
SAN RAFAEL COVID-19 ECONOMIC RECOVERY PLAN ( DRAFT MAY 2020) 10