Cities Hope for Federal Funds, Adjust to Pivoted Roles, Layoffs…

Cities Hope for Federal Funds, Adjust to Pivoted Roles, Layoffs, and Revenue Decline

(Crystal A. Proxmire, April 16, 2020)

Berkley, Clawson, Ferndale, Holly, Madison Heights, MI – While many are debating actions at the state and national level to prevent the spread of COVID-19 coronavirus – cities, townships, and villages are more quietly tackling the challenge of serving residents in quickly-changing times, with uncertainties about having the budget to do so.

The Governor’s “Stay Home, Stay Safe” order mandates that people able to work from home do so.  This includes municipal workers, causing city staffs across the state to quickly adapt.

For some cities, townships, and villages this means changing the way employees do their jobs.  But for other cities the COVID-19 crisis brought such financial uncertainty that scaling back and laying off happened quickly.

Regardless of the approach, local officials from communities of all sizes and tax-bases are looking at their options for state and federal funds to help.

Congressperson Andy Levin held a virtual press conference April 10 along with several officials from the 9th Congressional District to discuss municipal funding issues, and to tout the This Coronavirus Community Relief Act which he cosponsored to assist municipalities.  Oakland County Times also followed up with other cities to see if their problems were similar.

Madison Heights is a suburb of about 30,000 people.  They rely on city staff to the parks clean, the water flowing, the streetlights working, permits and inspections happening, the wheels of justice turning, and many other things that can easily go un-noticed until there is some interruption in the service.

Normally the staff numbers around 150 people, but in the wake of the coronavirus outbreak about a third are on full or partial furloughs.  The police and fire departments remain fully staffed and ready to help those in need. But nonessential services and projects have been scaled back or put on hold in what is just the beginning of likely cuts.

“One victim of this virus that many are not talking yet are the cities and states around this country, who will face massive budget shortfalls in the wake of the pandemic, and be forced to implement drastic cuts that impact residents,” said Madison Heights City Manager Melissa Marsh at the press conference.

“Budgets in many communities in Michigan, and around the U.S., have not yet fully recovered from the 2008 recession.  Now we are struggling with continuing to provide essential services on drastically reduced cash flow and revenues.

If massive cuts to budgets are required in the wake of COVID-19 — due to lower sales tax, postponed tax due dates, increased expenses and fewer property taxes being paid due to residents losing their income — the resulting financial impact on essential services in communities will be severe and devastating. These are the services our residents depend on during a crisis.”

Marsh noted that while the CARES Act did provide some potential funding for communities, it limited the use.  “Those funds could only be spent on new costs related to the pandemic, not for any already budgeted basic services such as regular emergency medical services, police, trash pickup or road maintenance. Those funds in the CARES Act also were reserved only for communities with populations of 500,000 or more, excluding most of the country.”

Levin’s proposal would provide direct stabilization funds for smaller communities across the county.

“This money is vital to Madison Heights. We made extreme cuts to our work force and capital improvements during the recession. There isn’t anything more in our tight budget to cut except key services that our residents depend on for their well-being. This issue isn’t just Madison Heights or Michigan issue. It is a nation-wide issue… And speaking at a purely human level, the biggest loser at the end of the day is the resident, the voter, who will see their access to services decreased and their quality of life diminished.”

In Berkley and Ferndale, where average incomes are higher, there is a little more wiggle room to keep employees working.

“My staff is largely working from home right now,” said Berkley City Manager Matthew Baumgarten.  “ We were, thankfully, able to repurpose existing equipment to facilitate working from home but we did have to purchase some software and licenses to allow for secure access to our servers for staff working offsite. Exceptions include Public Safety personnel and we have been calling Public Works staff in as needed. We have not laid off workers as our departments are still functioning, even our Community Center and Library staff are still busy calling over a 1,000 senior members of our communities each week.  It is not their typical function but it meets an important need in our community while this population is home-bound and potentially isolated.”

The City of Ferndale has also used the social distancing time to let employees be flexible and creative while remaining connected.

Communications Director Kara Sokol said “At present, we don’t have layoffs. Director- and deputy-level staff are working the same as usual, just from home.

“Most departments have pivoted roles; for example, parks are closed and Rec programs are canceled, so our Parks & Rec Department is holding virtual video fitness classes, doing enrichment tutorials, and running a senior citizen wellness check-in call program. They’re also working on sponsorship and communications materials for later events and redesigning some of their events to incorporate new safety and social distancing measures.

“This allows hourly staff to continue contributing in new/different ways (though some have had hours reduced).”

Fernande City Manager Joe Gacioch recognizes the importance of maintaining city services.  “Like most others are, we are compartmentalizing our mobilization and response, taking it 30 days at a time. We have not laid off staff. Like most cities our size, the local government is a top ten employer; economic relief for smaller local governments is just as impactful and important as it is for other industries,” he said.  “The Mayor, Council, and I appreciate Congressman Levin for his acknowledgment of the importance of maintaining the integrity of local government…The economic impact of COVID-19 is unknown. Our budget is conservative, capital priorities are being reevaluated, but our culture and workforce resolve to deliver on the promise of quality services for Ferndale residents with integrity, inspiration, innovation, and inclusiveness.”

In the Village of Holly, already accustomed to operating with a small staff-size, there were only a few layoffs.  “When the Governor issued the Executive Order 2020-21 Stay Home, Stay Alive and defining Essential and Non-Essential Employees we laid 4 off from the DPW.  One of the employees was full time Laborer, two part time Laborer and one Clerk/Meter Reader.  Due to the latest EO which runs through April 30th  and additional clarification we may begin Village Parks maintenance and mowing since the EO  encourages outdoor activity.  All other employees are considered Essential pursuant to the EO.”

In Clawson, the economic reality is harder to face, especially while already in the midst of leadership changes. With 42 of about 100 employees laid off, the city is focusing their resources on Police and Fire services, and hoping for assistance.

“We’re used to doing more with less, but there is a limit to that,” said Clawson Mayor Reese Scripture during the video conference.

“When this new recession starts reducing property tax revenues, I don’t know how we are going to recover.  Short term and long term we are going to be in trouble,” she said.

Like many other communities the City was instantly hit with an inability to get needed supplies.  “We had people in the community donating masks and sanitizer because it was not available to buy.”  Other cities had similar problems, with Roseville City Manager Scott Adkins stating “It was $20,000 to get N95 masks. That’s not a budgeted expense.”

Not only is the virus decimating the economy, leaders worry about the emotional suffering in cities where people are dying, businesses are failing, and residents are growing weary of social isolation.

“July 4th cannot happen,” Mayor Scripture said.  “If anyone thinks we’re just going to say ‘okay, everything back to normal,” they’re wrong. Canceling the 4th of July [event] this year is going to be devastating for the community. This isn’t just money. This is our communities. Our identities are at risk.”

The Coronavirus Community Relief Act (HR 6467) is a bipartisan measure with 111 co-sponsors that, if approved, would allocated $250 billion in relief for municipalities with populations of up to 500,000.  It was introduced on April 7 and referred to the House Committee on Oversight and Reform.  “We are doing this on a bipartisan basis,” Levin said, adding that communities of all sizes need to be supported.

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