By Jack Mayne

The first reality of the impact of the COVID-19 pandemic was unfolded at Thursday night’s regular Des Moines City Council meeting when told of a significant 16 percent possible revenue loss for the 2021 budget because of its ongoing effects on the revenue stream.

Mayor Matt Pina opened the Council’s virtual online meeting with new Zoom software which allows each member to be in his or her home or office and be seen on a single screen. The software allows virtual conversations between members and staff.

Councilmembers were given a list of potential budget cuts as well as new programs to help Des Moines’ retail business community.

‘Budget Challenges’
City Finance Director Beth Ann Wroe said there were budget challenges from the decreases in general city tax revenues and federal revenues, all because of the impact of COVID-19.

Des Moines “faces significant challenges related to the uncertainty in the receipt of revenues.”

The early numbers will change, she said, but as of Thursday (May 7) the city was looking at a decrease in revenue to the city general fund “and what we know today, which we know will change, we’re looking at a possible 16 percent loss in revenue.”

Then there is the added costs of the pandemic such as purchasing masks and other caused and unforeseen costs.

Some potential “adjustments to the 2020 budget,” Wroe said, figured now, would total a bit over $2 million.

One of the uncertainties the city is working with, she said, is when some money will actually be sent to the city with the general uncertainly the pandemic has forced onto the entire nation.

$2.1 million changes
She is making “expenditure adjustments” presently totaling about $2.1 million by cuts or changes, including reducing the arts budget, eliminating transfers of funds, leaving personnel vacancies or not immediately hiring people for some vacancies. Another saving would be to halt the Police Department’s “hire ahead” program where people are hired to fill future officer vacancies for retirements.

The city is checking and reevaluating all areas of the budget in search of added change, Wroe said, noting the the city’s current estimate of fund losses and expenses necessary is likely to significantly change. She said the city is teaching the horizon for other federal or other potential income.

She said the city the being careful in its handling of outstanding debt to that bond holder retain their faith in the city later when financial effects are clearer.

Cash Flow Uncertainty
The city is worried that the property tax payments in the second half of 2020 if taxpayers are able to pay their taxes on time because of COVID-19. Another worry is a further decrease in sales and use taxes and the two month lad in the city getting the sales and use tax receipts from the state Department of Revenue, especially because the state extended the deadline on tax returns.

“Our goal is to maintain fiscal discipline over our expenditure and to monitor the impact of information as it comes in from COVID-19,” Wroe said.

“There are two main tasks that the city faces at this time,” said Pina in an opening statement. “The first is the response to the COVID-19 Pandemic,” which he said was less than 1 percent in Des Moines, compared to the national average cost impact of about 6 percent. He noted the actions of citizens with support and social distancing, plus actions by city government staff, and citizens abiding with the stay at home order, the the death rate was kept low.

No city bankruptcy
A problem of many cities is bankruptcy – but not in Des Moines, the mayor said.

“We are solvent and financially strong, the appropriate financial contingencies in place to weather the unknown,” Pina said. “Many of our Councilmembers who were on the Council when we faced the challenges of bankruptcy in the past. We did not succumb, but we emerged stronger.”

Pina said City Manager Matthew Matthias, who was not at the meeting Thursday, brought together a city staff team that “is one of the finest and most talented in the region.”

‘Significant challenges’
City Finance Director Beth Ann Wroe said there budget challenges from the decreases in tax revenues, general city tax revenues and federal revenues, all because of the impact of COVID-19. Des Moines “faces significant challenges related to the uncertainty in the receipt of revenues.”

It numbers will change, she said, but as of May 7 the city was looking at a revenue decrease in revenue to the city general fund “and what we know today, which we know will change, we’re looking at a possible 16 percent loss in revenue.” Then there is the added costs of the pandemic such as purchasing masks and other unforeseen costs.

Some potential “adjustments to the 2020 budget,” Wroe said would total a bit over $2 million at a time months before the time to write the new budget.

One of the uncertainties the city is working with, she said, is when some money will actually be sent to the city with the general uncertainly the pandemic has forced onto the entire nation.

Cash flow uncertainty
The city is worried about property tax payments in the second half of 2020 and if taxpayers are able to pay their taxes on time because of COVID-19. Another worry is a further decrease in sales and use taxes and the two month lag in the city getting sales and use tax receipts from the state Department of Revenue, especially because the state extended the deadline on tax returns.

“Our goal is to maintain fiscal discipline over our expenditure and to monitor the impact of information as it comes in from COVID-19,” Wroe said.

Suspend Summer programs
Susan Cezar, the city’s strategic officer that supervises Park, Recreation and Senior Services, told the Council her staff is working with “a lot of uncertainties” and have made decisions with the information we have.

The city made the decision to suspend the summer concert series that had been planned for this year, Cezar said.

The city has been working with the people who run the Des Moines Waterfront Farmer’s Market and “is hopeful” it can meet new and more stringent health requirements that have to be met weekly.

Private rental events are being reviewed with “each customer to determine if event can proceed, modified or suspended. The staff people working on the evens are considering creation of virtual events,” Cezar said.

Parks are still open for local use, she said, but reminded that social distancing is still required.

Lunches at the Senior Activity Center are increasing and “staff, volunteers, and partner agencies have done an incredible job keeping up with increasing demand for services” during the crisis period, said Cezar. The volunteers “have done an incredible job.”

The hot lunches started at about 23 per day and “we are increasing steadily and we’re up to between 80 and 90 hot lunches per day and still increasing.”

There has been a similar increase in the “meals on wheels program” and now with volunteers up to about 400 frozen meals a month.

Joint Emergency Operations
Assistant South King Fire and Rescue Chief Dave Mataftin, who is commander of the city’s Joint Emergency Operations Center (EOC), said the biggest problem now is the “supply and resupply of personal safety equipment.” He said the calls regarding the pandemic are slowing but those for daily service continue.

“The EOC is a reality and is working quite well and we’re pretty happy at where we are now.”

Mataftin said discussions now are what the city through the emergency operations center is going to do with 4th of July celebrations. “Falling on a weekend, I suspect it is going to be busier than normal.”

Dan Brewer, the city’s chief operations officer, said he was very concerned and critical of the emergency operations center before the pandemic burst upon the city scene.

“I was openly critical about some of the information you were suggesting at that time,” Brewer said.

“I want you to know I was wrong,” he said. “Everything you told us at that time, about the potential for this virus, has turned out to be spot on.” He added thanks for Mataftin’s service and dedication.

The city’s emergency preparedness manager, Shannon Kirchberg, said she also was impressed by the Emergency Operations Center. “We have all learned so much from South King Fire.”

Restaurant vouchers for seniors
Chief Operations Officer Dan Brewer said the city is helping seniors and vets with a voucher program. Each week there will be a $2,500 voucher provided by the city to a different local restaurant, equaling a $10,000 per month investment in the local community. The first purchase is from Anthony’s and the program began on May 6.

He said Kevin Isherwood donated $5,000 through the GEICO military department to support the program. There were also discussions on assisting the program by Laborers Union 242.

The city noted that donations to the city are tax deductible.

Beaches and ramps
Marina Harbormaster Scott Wilkins said on May 5 that the city reopened the Redondo beach access points and the boat ramp and the Redondo beaches.

“We’ve also opened the parking lot, but restricted it just to vehicle trailer parking only,” he said.

All the changes have been positive, Wilkins said, adding thanks for increased police patrols in the beach area.