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City Manager's Blog

May 28

The State Can Help Ease Local COVID-19 Budget Challenges. But will it?

Posted on May 28, 2020 at 4:46 PM by Thomas Reeves

It's no secret the City of Modesto's budget has been impacted greatly by the COVID-19 pandemic, and the Governor's budget for Fiscal Year 2020/2021 does not go deep enough in assisting California cities of our size.  Below is an excerpt from a letter I've written to our state legislators asking for advocacy on our behalf.

As you may know, during the Senate Budget and Fiscal Review Subcommittee No. 4, the Governor’s Administration clarified that the $450 million of CARES funds dedicated to cities will be split with $225M going to seven cities with populations between 300,000 and 500,000 and the other $225M for cities with populations under 300,000. This puts Modesto five cities away from funding (as the 18th largest city in the State of California), and based on our calculation Modesto would only receive approximately $2.2M for COVID-19 expenses. 

This funding formula provides seven communities with a total population of approximately 2.6M the same amount of funding as 469 smaller cities with a population of 22.1M. When viewed on a person by person basis, cities with populations above 300,000 will receive funding equal to $85.59 per resident, while the other 469 cities will receive funding equivalent to $10.18 per resident.  We implore you to work with the Governor and your colleagues in the Legislature to revisit this formula and recommend a more equitable solution. 

Specifically, we would recommend that you consider the below revisions, either separately or as a combination of the two:
  • More equitable split of funds between cities – As noted above, half of the $450 million of Coronavirus Relief Fund (CRF) is proposed to go to communities that represent 10.5% of the California residents eligible to receive funding, while the other half of funding goes to communities representing 89.5% of eligible residents. As an example that further demonstrates the disparity, under the current formula, the City of Modesto would receive $26.9 million less than the City of Stockton, despite only having 97,000 fewer residents. We would recommend a split of the funding that would provide more equal funding to all California cities.  For these reasons,  the City proposes an equal distribution of funds by population, which would result in smaller cities receiving critical financial relief.  
  • Increase overall level of funding provided to cities – The May Revise proposal for distribution of Coronavirus Relief Funds provides $450 million to cities and $1.3 billion to counties.  Additionally, the proposal does not provide any funding for cities that received direct allocations of CRF funding from the federal government; however, the May Revise proposal provides approximately $644.5 million in funding to counties that have already received direct allocations of CRF funding from the local government.  We would recommend that the Legislature revise the funding distribution split between cities and counties to ensure that those entities who have not yet received any CRF funding have access to these vital funds.  To that end, we would recommend that the CRF allocations be revised to provide $1 billion to counties and $750 million to cities.  This distribution split would ensure that the 476 communities that have not received any CRF funding, will be provided additional resources.
COVID-19 has decimated Modesto’s local economy. As a result of the Governor’s stay at home order and the sales tax deferral program, these impacts are estimated to amount to $11.3M. Additionally, our unanticipated expenses include the rapid activation of an emergency operations center, procurement of personal protective equipment, initiation of frequent facility sanitizing, and other essential costs required to ensure the safety of the public and employees are expected to easily exceed the allocation of funding that the City would receive under the current May Revise proposal. 

As we’ve experienced over the course of the past couple of months, COVID-19 has not shown mercy to jurisdictional boundaries or industries. For these reasons, the City of Modesto proposes a funding formula that is fair to all cities and strongly opposes the arbitrary allocation of funds to larger communities at the expense of smaller cities, and requests your support. We are happy to meet with your office to discuss potential options that we can explore to ensure that all cities can meet this moment.
May 05

COVID-19 and the Budget

Posted on May 5, 2020 at 3:13 PM by Thomas Reeves

As we all continue to practice safe distancing from one another in this crazy time in which we’re living, I miss seeing all the foot traffic around Tenth Street Place.  I stood out in front of the building (our City Hall) the other day and, looking out onto 11th Street at all the quiet storefronts, I couldn’t help but feel a sense of anxiety over the question of when life will get back to normal.  And yet by now we’ve all come to some level of realization that life won’t simply get back to normal, or at least not the normal we were comfortable with before COVID-19.  

Today Governor Newsom mapped out a general framework for how he anticipates “re-opening” the economy through non-essential businesses.  No one knows for certain how long this pandemic will disturb us, but every economist agrees this pandemic has and will continue to substantially and negatively impact our economy.  

I don’t mind telling you I am concerned about our local economy and the City’s ability to sustain services.  Several of our major revenue categories, including sales tax and transient occupancy tax (hotel tax) have been severely compromised in the current fiscal year, and will continue to be impacted next fiscal year. 

We anticipate falling short of our budget targets, and the loss in revenue will have a significant impact on the City’s year-end financial position.  As we move into estimating potential impacts to the City revenues for Fiscal Year 2020-21 and beyond, the picture becomes less clear.  We know that losses will continue – and make no mistake, the losses are projected to be deep – but to what magnitude is still to be determined.  

You may have heard about potential funding sources in the form of federal stimulus packages. One directly benefits Stanislaus County (The CARES Act) and the other, not yet voted on by Congress, may provide direct funding to cities of our size.  We are closely monitoring and working with our local legislators to express our needs, but it is still too soon to say whether or not either of these sources will directly benefit this city.  

In the midst of this pandemic, the Modesto leadership team is keeping a watchful eye on this year’s budget, and also trying to develop a balanced budget for the next fiscal year.  The impact we are projecting this to have on our current year budget is profound and we are doing all we can to stem the losses in revenue by reducing expenses; I’ve already authorized a spending and hiring freeze through at least the end of June and it will likely continue for the foreseeable future.  

These are uncharted waters we’re all navigating across, and I appreciate your support and understanding.  The COVID-19 virus has caused us all to take a hard look at our own personal and business finances, and I'm sure you would agree that it’s not an enjoyable exercise.  

Change is not always fun, and it’s likely the only thing we can count on during this challenging time, but I am confident in this: change brings growth.  

And I am all for growth.
Mar 23

March 23 COVID-19 Update: Here’s What We Know

Posted on March 23, 2020 at 4:04 PM by Thomas Reeves

It’s been roughly one week since the City of Modesto started taking drastic steps to ensure we do our part to slow the spread of coronavirus, but it’s been since January when it was found in China that our team of emergency personnel truly started to review how this pandemic could affect our community.  We’ve been pouring over our emergency plans for months and have been working closely with the Emergency Operations Center staffed by the County, the Health Officer, and other important partners.  Around the clock, your local government is working hard to ensure the safety and health of its constituents, but also to ensure we get out as much information as possible.  

Here’s what we know
  • As of this writing, there are nine (9) confirmed cases of coronavirus in Stanislaus County. 
  • The Governor has issued a Shelter-in-Place Order for the entire state, calling for all Californians to stay home unless making essential trips.
  • Most City buildings and facilities are closed to public access, and most meetings and activities have been cancelled or postponed.  
  • All City services to your home continue as normal, and should you need to conduct business with City Hall – for business license, permitting, or for questions about your utility bill – check out our COVID-19 page or call (209) 577-5200.
  • There are simple things you can do to help keep yourself and others healthy.  Wash your hands often with soap and water for at least 20 seconds, especially after blowing your nose, coughing, or sneezing; going to the bathroom; and before eating or preparing food.  Avoid touching your eyes, nose, and mouth with unwashed hands.  Stay home when you are sick.  Cover your cough or sneeze with a tissue, then throw the tissue in the trash.
  • You can help stop COVID-19 by knowing the signs and symptoms: Fever; Cough; Shortness of breath.  Seek medical advice if you develop symptoms AND have been in close contact with a person known to have COVID-19 or live in or have recently traveled from an area with ongoing spread of COVID-19. Call ahead before you go to a doctor’s office or emergency room. Tell them about your recent travel and your symptoms. 
  • For most people, the immediate risk of becoming seriously ill from the virus that causes COVID-19 is thought to be low.  Older adults and people of any age who have serious underlying medical conditions may be at higher risk for more serious complications from COVID-19.
We also know, from experts and examples around the globe, that the number of cases will increase – in this county and around the world – and that we can expect to be dealing with this disease for many weeks and potentially even months.  

Do your part

It’s important to remember that although this virus is new and many of us have not dealt with this type of crisis before, it’s clear that each of us play a role in slowing the spread.  
  • Stay home if you are able and avoid in-person contact with others.
  • Avoid gatherings and events, and maintain a social distance of at least 6 feet from others.
  • Know the COVID-19 symptoms, and seek treatment if:
    • you have difficulty breathing (shortness of breath)
    • you feel like symptoms (such as fever and cough) are getting worse rapidly
    • you are unable to care for symptoms at home
  • Get tested through your local healthcare provider if you experience these symptoms
Stay connected

I encourage you to seek information from trusted sources.  Like, follow, and share these pages:

On the Web:
City of Modesto COVID-19 Page
Stanislaus County's StanEmergency Page

On Facebook:
@CityOfModesto
@StanEmergency