Area leaders, elected officials scramble to address economic impact of stay-at-home orders

Clark County and city of Vancouver officials offer some initial insight into plans for budget adjustments

As the economic impact of Washington Gov. Jay Inslee’s stay-at-home order continues to grow, elected officials and government leaders in Clark County are scrambling to address current and future budget concerns.

As the economic impact of Washington Gov. Jay Inslee’s stay-at-home order continues to grow, elected officials and government leaders in Clark County are scrambling to address current and future budget concerns. Photo by Mike Schultz
As the economic impact of Washington Gov. Jay Inslee’s stay-at-home order continues to grow, elected officials and government leaders in Clark County are scrambling to address current and future budget concerns. Photo by Mike Schultz

The topic of budget cuts has increasingly become a topic of conversation among concerned citizens, many of whom are dealing with economic concerns of their own. More than 22 million Americans have become unemployed due to stay-at-home orders placed to address the coronavirus pandemic. In the state of Washington, 585,000 unemployment claims were recently filed in a single week earlier in the month of April.

Recently, Clark County Assessor Peter Van Nortwick joined a conversation on Facebook about what area government agencies and municipalities are doing to address the economic crisis.

“I can tell you the following,’’ Van Nortwick wrote. “Treasurer (Alishia) Topper gave up 14.37% of her budget. (Auditor) Greg Kimsey gave up 12.12% of his and I gave up 7.71% of mine. In my office we gave up 3 positions and are not buying the new vehicles that were in our budget. Of the initial cuts offered our 3 offices which are 7% of the budget offered up 31% of the cuts.”

In response to Van Nortwick’s statement on social media, Clark County Today reached out to Clark County officials to confirm what budget cuts or adjustments were in the works.

Interim Clark County Manager Kathleen Otto
Interim Clark County Manager Kathleen Otto

“As with most local jurisdictions, the County’s response to the COVID-19 pandemic continues to evolve,’’ wrote Interim County Manager Kathleen Otto in an email exchange with Clark County Today.  “The County is currently reviewing and developing a process to determine the level of revenue loss we are facing due to changing economic conditions. The County is exploring all areas of the budget that might help mitigate the anticipated shortfall.

“As a start, the County has implemented a hiring freeze, eliminated overtime, eliminated the use of temporary employees and is reviewing projects,’’ Otto added. “One of the exercises completed was having departments and elected officials conduct a cursory review of their budgets and submit initial expense reduction scenarios.  These options have not yet been validated and may not be recommended due to operational impacts.  

“While the numbers Mr. Van Nortwick posted may have been submitted for review and consideration, none of the numbers have been confirmed or adopted,’’ Otto wrote. “I cannot confirm the accuracy of these numbers nor the cost savings provided by other departments or elected officials.’’

Otto did offer an approximate time frame for the completion of a formal plan to address the current economic challenges.

“With regards to next steps – the county is looking at all potential options to address the financial impacts of the COVID-19 pandemic,’’ Otto said. “Once these options become solidified, this information will be shared with County staff.   My hope is to have an initial 2020 response plan (which may be updated based on economic information that becomes available) within the next few weeks.’’

At that point, Otto will work with the members of the County Council to implement that plan.

“Pursuant to the Charter, the county manager is designated as the chief financial officer of the county and is responsible for budget preparation, presentation to the council and budget monitoring,’’ Otto said. “Any changes to the budget will be presented by the county manager to the Council for consideration and potential adoption.  Other policies may be applicable as well (e.g. Human Resources Policies, Collective Bargaining Agreements, etc.) which fall under the purview of both the county manager and the Council.

“My goal is to have a systematic and thoughtful approach to finding potential recommendations to balance the 2020 budget and years to come,’’ she said. “County leadership has really come together during this time and their knowledge and input is invaluable.’’

City of Vancouver

Economic concerns was also a topic during Monday’s Vancouver City Council meeting. City Manager Eric Holmes addressed council members in the virtual meeting format.

Vancouver City Manager Eric Holmes
Vancouver City Manager Eric Holmes

“We want to minimize the negative impact to the community, to our economy and to our employees,’’ Holmes said. “We want to maximize access to the external resources that may be available to the city both through unemployment benefits that we can connect to employees, as well as if and when either stimulus or rescue funds become available from the federal level to absorb the fiscal shock to the city.

“We want to maximize the preservation of talent,’’ Holmes stated. “We’re a pretty lean organization relative to staffing. And we want to, on the other side of this recovery mode, be able to retain the talent that we have that allows us to get the exceptional things done that we do. 

“We also want to make sure that we don’t drain down our reserves so that we do have some left for the next wave, whatever that might be,’’ Holmes said. “If it is COVID related, we want to have something reserved to do that, or if there’s some other emergency that we have not identified, or it comes on quickly, we want to have some appropriate reserves for that. And then, as we look at the impact to the city’s cash resources, we want to spread that impact and recovery of those resources over the next five years.’’

Holmes did offer some specific numbers about the level of economic impact anticipated to the city.

“So, within that framework, and based on best available information, we are targeting an expenditure reduction of $45 million for the General Fund, which is a balance point between that initial estimate of $30 million and kind of what is currently a worst-case scenario of a $60 million revenue loss,’’ Holmes said. “If I had three primary areas where that $45 million would be made up, the first is a deferral of funding of our internal services funds. We have a number of funds that are established to allow for regular reinvestment in our facilities, our vehicles, technology, fleet, equipment, repair and replacement and refund those based on a depreciation schedule, as well as a risk. So this would suspend the annual contributions to those internal service funds.

“In 2020, that accounts for $17 million worth of the $45 million,’’ Holmes said. “The next component is our direct spending, which is looking at a reduction of our orders … more discretionary spending, which includes non-essential travel and training supplies, professional services, capital repairs in our facilities — unless they’re safety related — hiring freeze, idling our temporary services.’’

Holmes reported that some expenses will be organically reduced due to the COVID-19 crisis.

“We anticipate some lower jail costs because of COVID-related changes to how the jail populations will be managed,’’ he said. “And then, in addition to those pieces, there is anticipated to be direct staff impacts … We want to really maximize our connection of impacted employees with the Employment Security benefits that have been expanded and have more flexibility than they have in the past, specifically related to emergency responses and the COVID pandemic.’’

Holmes said the city has “provided notice to our impacted unions in the non-public safety, binding arbitration areas and anticipate engaging with the remainder within the next couple of weeks. So that component makes up $13 million of the total. And then the remainder is made up through the use of our emergency cash reserves, a combination of our emergency reserve or revenue stabilization reserve, and use of general fund balance and that makes up a total of $15 million.

“And so, through this regimen, we would actually come out the other side with a fund balance in the general fund that is well within 60 to 90 days of operating capital that’s called for,’’ Holmes said. “That gives us some continued cushion in anticipation of, in preparation of, some heretofore unseen emergency.’’

Holmes said the city is working on further details of that expenditure reduction plan and he hopes to report additional specifics of that plan to members of the council “within the next week or two.’’

More coverage:

Advertisement

About The Author

Ken Vance got his start in the newspaper industry in 1987 as a reporter at The Columbian Newspaper in Vancouver. Vance graduated from Stevenson High School in Stevenson, WA, and attended Clark College in Vancouver. He worked for The Columbian from 1987-2001. He was most recently a staff member of The Reflector Newspaper in Battle Ground, where he served as editor since 2010 and reporter since 2007. Vance’s work in the newspaper industry has won him multiple awards, including a first place award from the Society of Professional Journalists for in-depth reporting.

Related posts