Clovis City Manager Luke Serpa projected the city will lose at least $3 million in revenue over the next fiscal year because of the COVID-19 crisis, spelling expenditure cuts for police, fire and the senior center.
Serpa presented two scenarios for how the crisis may impact the Clovis economy over the next two years at an April 6 city council meeting. The meeting was closed to the physical public, but residents were still able to attend online via Webex.
“We had staff put together an estimate for this current quarter that we are in, April through June, and as to what the impacts are going to be on sales tax and transient occupancy tax and then we extrapolated that information out with assumptions based on how long this is going to last,” Serpa said to explain the thought process behind the scenarios he presented.
The first scenario, which Serpa called the “good scenario,” projects that city revenue would remain flat for the next six months, costing $3 million in revenue in the current fiscal year and forcing the city to delve into its emergency reserve in the 20-21 fiscal year. According to this scenario, Clovis would see a “steady” recovery in the last quarter of 2020, but would not fully recover until the beginning of 2022.
“It would be more than a yearlong recovery, about a five quarter recovery, to get back to where we had projected our revenues,” Serpa said. “When we would come out of this, in the fiscal year 21-22, our reserves will have dropped to $8 million. We would have spent 37 percent of our emergency reserve over the next two years.”
Even in the good scenario, the loss of revenue would force the city to make expenditure cuts, which could mean freezing vacancies in the police and fire departments, as well as cuts to recreation, parks and the senior center. Serpa said the city would not lay off people already on staff, however.
“Currently our police department is funded for 109 officers, they have nine vacancies that the chief was hoping to fill, we would not be filling those for a year and nine months,” Serpa said. “In the fire department, we had two additional positions in the forecast for this fiscal year. That was to start staffing up for station six. We would not fill those positions until December of 2021 or January of 2022.”
Under this scenario, the police department would maintain its current 100-officer force, but would not be able to fill its nine vacancies until the city recovers from the crisis.
Clovis Police Chief Curt Fleming said “any cuts to staffing will be tough,” but that the department will “continue to come up with creative ideas and efficient ways to operate to ensure we continue to provide citizens of Clovis with a crime free and safe environment to live.”
He continued, “The Clovis Police Department is currently one of the lowest staffed departments per capita in the valley. We currently have .847 officers per thousand population. Most agencies in the valley have 1 to 1.5 officers per thousand in population.”
“We are authorized for 109 sworn police officers. Currently, we have 100 and have been working tirelessly to fill these 9 vacancies. These proposed cuts will prevent us from filling the current vacancies we have. We will continue to do our best providing the citizens of Clovis with the superior service they expect.”
Clovis Fire Chief John Binaski told the Roundup the delay in hiring staff will not negatively affect the department’s response times.
But the Loma Vista area, which already experiences slower response times than the rest of Clovis, will not see an improvement in response times until additional staff is hired and fire station six is completed. The station is still expected to open in January 2022.
“We are still able to service the community at the high level that we do today, it’s just that the issue that comes forward is that it’s very difficult when you have reduction in revenue to be able to service the growth that we are experiencing,” Binaski said.
The second scenario, which Serpa referred to as the worse of the two, projects that revenues would remain flat until a vaccine is available, which Serpa estimated would be in early 2021. The scenario predicts Clovis would lose $12 million in revenue in the next fiscal year and $6 million the year after that.
“In this case, I don’t think we will stay in a shelter in place order all that time, what I am concerned with is some of the projections are that we will flatten the curve enough, the shelter in place order will be lifted, and a few months later it starts to come roaring back and they issue another shelter in place order,” Serpa said. “So there will be a number of small bumps in the curve, but no real recovery until we have a vaccine.”
Under this scenario, the city would make an additional $500,000 in cuts the next fiscal year and burn through its entire emergency reserve in two years
Serpa said his main concern with this scenario is that the cuts force the city to permanently make significant changes to its services.
“Every time there is an economic downturn, we make cuts and that become the new normal and we never recover,” Serpa said. “Every time we ration it down, we make cuts and at some point it becomes unsustainable without some significant changes to the quality and quantity in services that we deliver.
“I am very concerned that, because some of our services never recovered from the last time (referencing the 2007-2008 financial crisis), that unless this recovery is rapid and robust, we come out of it, we think we survive but we have no money to put towards vehicles, no money to put towards facilities and we have no money to rebuild our emergency reserves… just to continue our current level of 100 officers and five fire stations.”
The city is expected to present its budget for the next fiscal year May 18. By then, the city expects to have clearer data on revenue.
“We are going to refine our estimates of our projected revenues as shown in the first scenario, assuming things stay flat till the last quarter of this calendar year and build our budget with that scenario. We will be closely monitoring what happens and adjust as we go,” Serpa said. “We don’t know what to expect, what to anticipate, what is going to happen, how long this will last, what kind of adjustments the economy will make. Nobody knows.”