When it comes to the long-term financial impact of the COVID-19 crisis on services, programs and staffing, the City of Edmonds finds itself in a position of uncertainty similar to many cities across Washington state and the U.S.
Finance Director Scott James told the Edmonds City Council Tuesday night that — due to the city’s sound financial management policies — Edmonds is in a strong financial position to face the projected loss of revenue from COVID-19 and still provide essential services for residents during the public health crisis.
At Tuesday’s meeting, James presented a draft Financial Crisis Financial Policy aimed at tracking what is happening and what will happen as the crisis changes. This policy creates a consistent and uniform approach to deliver actionable information, he noted.
On Wednesday, the city shared additional information about how it preparing for future financial uncertainty:
- In March, the city initiated a hiring freeze, which affected up to 10 regular positions across city departments. In addition, City Parks and Recreation is holding off on filling seven seasonal positions and has laid off 15 recreation employees. The only positions left open are those required to assist in the city’s response to the COVID-19 crisis.
- Non-essential projects were also paused. For example, the bid opening for the Civic Park project was delayed from March to May and the council did not approve a $100,000 contract to hire a consultant for a sewer project.
Like most cities nationwide, Edmonds is developing a financial strategy with triggers and benchmarks that kick in when pre-determined financial thresholds are reached. These triggers include percentage drops to our city budget and reserve fund.
During Tuesday night’s meeting, Finance Director Scott James laid out three trigger levels:
- Level 1: If the general fund balance falls between 5% – 10%, then there will be a freeze on all new hires except crisis-intervention staff.
- Level 2: If the General Fund falls below 10%, there will be a freeze on all non-essential expenditures. This would include projects, equipment and land acquisitions. The city will also use unspent fund balances from select programs to feed the general fund and may also transfer money from the contingency fund to the general fund.
- Level 3: If the contingency fund is exhausted and the general fund falls below 16%, the city will move into another phase of budgeting.
James is also developing several scenarios to reflect various financial impacts, going out as far as January 2021, and plans to share that information with the city council soon, the city said. It is also possible that local municipalities may be eligible for federal and state support.
“We will continue to monitor our financial position closely and will be working with the city council on potential additional actions necessary to maintain a sound, balanced budget,” Edmonds Mayor Mike Nelson said, “while also making critical investments in our community and local economy to help ensure Edmonds can recover swiftly and sustainably from this crisis.”
This is important stuff folks and I’m glad our city management team is already planning ahead for essential actions that will in all probability have to be taken. I just finished watching Gov. Cuomo’s daily report on the situation in New York, and he rightly points out that his state and local government’s are all essentially broke now as a result of the virus and the resultant failed economy in New York State as a whole. He indicated that the only source for funding in the short run for New York State and City government is the Federal government thru action of the Congress. So far Congress has provided relief to major private enterprise and to a very small extent small business and individuals, but no meaningful relief for state and local governments many of which will soon be bankrupt. It looks to me like ideological politics as usual will not serve us well during and after this virus which doesn’t care which political party you happen to endorse.
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