City Will Be Challenged Even When COVID-19 Restrictions Change

Alameda should expect big challenges as the COVID-19 even as restrictions change over the coming weeks. First and foremost, maintaining practices needed to reduce virus spread is imperative but at the same time, cities have to prepare for the financial hit lurking behind this extraordinary health crisis. So far, Alamedans for the most part seem to have behaved as they should to meet health safety rules, but the risk of infection has not gone away. Most restrictions have been extended to 31 May. See the County Public Health Update at:

http://www.acphd.org/2019-ncov/shelter-in-place.aspx

In the background of this crisis, regular City business has surely been low on the attention scale. One thing for sure is that budget challenges will be among the major side effects of the pandemic, and it is very important that budget information are presented to the public clearly and frequently.

Here's a first pass at a list of  budget-driving factors to watch:

- Loss in sales taxes due to closed restaurants, Alameda Theater,  business district and South Shore retailers

- Fewer property sales means less real estate transfer tax to the City

-  Fewer rooms booked at local hotels with travel restrictions means lost transient occupancy tax

- Construction slow down means fewer permits pulled, resulting in reduction in fees

- State budget drain due to COVID-19 costs and record unemployment claims. These unexpected expenses will surely reduce funding normally received by Alameda for roads and transportation.

- Impact of CalPERS retirement fund losses on Alameda's required contribution to its employee retirement fund: could be significant with investment market losses this quarter.

Tracking cases of COVID-19 in the coming months is imperative to protecting public health and our County Health System seems to be a leader in this effort and our City is on board by all accounts doing what it can to protect residents and City employees.

In the coming months, keeping City services functioning will surely demand  a reckoning of income loss and unforeseen costs to the City due to COVID-19.

For detailed commentary with City sourced information from March, local blogger, Robert Sullwolld's post about the  status of the City Budget is worth a read. Mr. Sullwold's commentaries include references to source documents, links are included below.

https://alamedamgr.wordpress.com/2020/04/19/the-coronavirus-and-the-city-budget/

City of Alameda Sources:

March 3, 2020 projections: 2020-03-03 Ex. 2 to staff report – Budget Summary; 2020-03-03 Ex. 4 to staff report – Revenue Projection; 2020-03-03 Ex. 6 to staff report – Expenditure Summary

April 21, 2020 projections: 2020-04-21 Ex. 1 to staff report – Revenue and Expenditure Update

Staff reports: 2020-03-03 staff report re mid-cycle update; 2020-04-21 staff report re budget update