Opinion: A tale of two sets of assumptions

Assessments of economic impact of pandemic vastly different between city of Vancouver and Clark County officials

Elected officials and staff at Clark County and the city of Vancouver recently revealed some details of their attempt to address the economic impacts of the coronavirus pandemic and the resulting stay-at-home orders in place in Washington state.

Both entities have experienced a reduction in revenues that have forced their finance teams, department heads and councilors to shed expenses in an attempt to prevent budget shortfalls. However, a quick summary of the assumptions made by the city of Vancouver and Clark County indicate the leaders of each entity are viewing the current economic crisis through different lenses.

The city of Vancouver is projecting a $45 million budget shortfall in 2020. (Vancouver’s total biennial budget for 2019-2020 is $1.2 billion.) When they presented their assumptions to members of the Vancouver City Council on May 4, City Manager Eric Holmes and Chief Financial Officer Natasha Ramras indicated the city’s assumption was that the “stay at home’’ closures would remain in place for an estimated time period of 4-6 months, followed by economic recession through the remainder of the year and, likely, into 2021.

The city plans to address the $45 million shortfall in 2020 in the General Fund by utilizing a combination of reliance on existing reserves, suspension of transfers funding equipment replacement, pay-as-you-go capital and asset replacement as well as departmental reductions. Specifically, the total amount coming from existing reserves is $15 million; suspension of transfers will account for $17 million and departmental reductions will make up the remaining $13 million.

Late last week, county officials revealed some details of how the economic crisis was impacting their budget, which is $545 million for 2020 (while Vancouver is on a biennial budget process, the county is on a one-year budget). The county is anticipating current year revenue losses of $5 to $13 million. County departments have submitted draft reduction scenarios and, in combination with current efforts, have been able to realize approximately $4 million is cost savings. These savings are primarily attributed to personnel vacancy savings and delaying projects.

County departments continue to review their General Fund budgets, assessing service levels and additional potential cost savings measures. Departments will be submitting reduction scenarios to include a 2 percent, 3 percent and 5 percent reduction that may be realized in June, July and August.

Do my eyes and ears deceive me?

As I researched the response of first the city and then the county, it struck me that the views of each seemed significantly different. After the county’s response, I couldn’t help but ask County Chair Eileen Quiring and County Councilor Gary Medvigy if my reaction was accurate.

“Theirs is definitely a more pessimistic view about everything, including when we’re going to open,’’ Quiring said of the city’s assumptions. “My goodness, I hope it’s not going to be that long. We can’t do that.’’

So, naturally, I asked Quiring in light of the differences in outlook between the city and county, is she comfortable with the county staff’s assumptions?

“I do feel pretty comfortable, I do,’’ said Quiring, who acknowledged that the county took a little extra time assessing the data, projections and assumptions, which is something Medvigy appreciated.

“They (Vancouver officials) were so phenomenally dire and then the state came out with theirs, which was also in the same vein. I think the (interim) county manager took the correct approach,’’ Medvigy said. “We wanted to be slow, pragmatic, deliberate … let’s get the truest analysis we can before we start rolling it out to the public.

“We took a slower approach so we feel fairly confident in our projections,’’ Medvigy said. “I feel fairly confident. Obviously, the big question that completely impacts the accuracy of those forecasts is how long is this going to go on for?’’

Reopening the county, state

On Tuesday morning, Gov. Jay Inslee announced that Clark County was one of 10 additional counties that were now eligible to apply to move forward to Phase 2 of his ong in his four-phased process to reopen. Quiring and Medvigy indicated they are eager for news like that.

“We want to do everything we can to safely open this county as safely as possible,’’ Quiring said. “Working with our Public Health officer to actually figure out a way we can safely open and still protect the most vulnerable and at the same time allow those who need to open their businesses to get back to work. In reality, there are stores open and people working in those stores and we’re not hearing of any breakouts in these stores, grocery stores, home improvement stores, they continue to work and be OK. 

“While I do want people to stay healthy and I don’t want any death, I think there are going to be other repercussions, mental health situations, domestic violence, you name it,’’ Quiring said. “It’s a very stressful time, mostly it’s getting stressful over time too. This has been going on and I do feel people are just about done with it.’’

Quiring is a former business owner.

“There are dire consequences with our economy collapsing,’’ she said. “They tell us 40 percent of these small businesses aren’t going to reopen. I had a small business. You have to pay rent. You have to pay overhead. If you’re not bringing in any money, it’s devastating. You can’t withstand this for too many months. You just can’t do it. I don’t care what kind of money the federal government is giving.’’

Medvigy understands the impatience of many to reopen the county and state.

“There is mounting pressure from the public and rightly so,’’ he said. “We have successfully flattened the curve, protected our healthcare systems locally, and the numbers have been fairly flat for a good period of time. Yes, we have to worry about spikes in the future, but the dire impacts of people losing their businesses and jobs Is a huge price to pay. We are not in the same situation we were in a month ago.

“I’m really concerned about the mental health of the community,’’ Medvigy said. “I’m really concerned about people not having the confidence to get back to normal even though our numbers are looking very positive right now in Clark County.’’

Medvigy also encouraged area residents not to turn on each other. He believes the complaints are born out of fear, which he would like to see dissipate.

“We’re getting complaints every day that people are violating the rules and they should be arrested,’’ Medvigy said. “That’s something we need to move away from, but it’s because they’re scared.’’