Thread by @shayshinecastle

No break, we are moving straight into the financial update which is scheduled to last 2.5 hours. Presentation: www-static.bouldercolorado.gov/docs/Item_5C_F…

And my story, again, for a summary of what we'll be talking about tonight. boulderbeat.news/2020/06/06/29-…

I've requested more info that I'll have in a new story by the weekend, including how each department's work fared in the Essential-Important-Helpful-Amenity ranking system.

CU economists Rich Wobbekind and Brian Lewandowski are back for Econ forecasting. They also brought Robert McNown from JTC Econometrics (?) with them.

These presentations get really dense, really quick with all the data. I'll share what is pertinent/interesting.

"We've seen 20 million, 30 million ppl unemployed in a short time" nationally, Wobbekind says. "It's going to take some time for employment to recover."

In Colorado, 75% of job losses (March to April) were personal services (tattoo parlors, beauty salons, car repair), retail, hotel/restaurants, arts/entertainment/recreation, and healthcare/social assistance.

Unemployment in Boulder County: 10% (lower than state's 11%)

One of the lowest on the Front Range, Wobbekind says. "Why is that? Our mix of industries," fewer hospitality jobs and "unemployment is reported by where you live, not where you work."

Many ppl who are laid off don't live here.

So they don't count toward our unemployment rate, Wobbekind reminds council.

I want to show this slide to show what Econ recoveries could look like. Still looking like a W-shaped recovery, Lewandowski says.

My eyes are already glazing over as we go over national projections for GDP.

Some key assumptions on Moody's projections: Vaccine by summer 2021, and no further lockdowns/biz closures akin to March-April

In the last downturn (Great Recession) Boulder's recovery took one month longer than Colorado's (21 mos. vs 20 mos.) and we lost more jobs overall (6.8% vs. 6.6% statewide)

Young: Does the same hold true that the job losses show up in different counties, where the worker lives?
Lewandowski: No. The job loss shows up where the job is; unemployment is household data.

Lewandowski: Colorado employment projected to bottom out this month and then start rising, but will still be below pre-COVID levels by early 2021

"This should really be the worst of it and we should be on this path to recovery," Lewandowski says.

Models for sales tax predict 7.4% decline in 2020 and "modest" decline in 2021 before recovering. That's Boulder specific and the "medium" scenario, not worst case.

Retail fell by 23% in two months nationally, Lewandowski says.

Staff data from Boulder, coming later in the presentation, show 6.9% declines in April, compared to April 2019.

Construction activity is down, Lewandowski says, so that may reduce construction use tax. But "a couple large projects" could change that projection.

Good slide on the Gallagher Amendment, which makes sure residential properties pay 45% of property tax while commercial spaces pay 55%.

That may get axed this year, depending on what voters say.

Wallach asks about unemployment.
Wobbekind: I was saying 8-9% unemployment by the end of the year, but most projections are now saying we'll still be at 10%.

Young: There has been talk about how this impacts low-wage workers the most, and discussion of policies such as higher minimum wage and paid leave. Do any of your models look at how those impact recovery?

Wobbekind: Higher minimum wage is already addressed by the state law. Paid leave probably won't happen bc state is out of money.

"Recovery of those jobs and the way they used to be will be much more difficult." There may be progressive retraining of folks for new jobs.

Unemployment for ppl with HS degree or less is double those with college degrees, Wobbekind says.

No, models don't look at that, Wobbekind says.
Young: "So all the models are business as usual recovery?"
Wobbekind (laughs): Yes that's a fair way to say it.

Swetlik: Unfortunately the minimum wage proposal dropped off bc of COVID.

His q is about office space usage and long-term impacts of remote work.

It matters to long-term planning, Swetlik says. "We could be looking more at housing options than office space options in the future."

Wobbekind: Talking with industry ppl, residential is holding up fine, industrial/warehouse is doing great and office space is falling.

Some co. asking about reducing space, but some looking for more space so they can spread out workers.

"So far that's inconclusive," Wobbekind says.

Weaver: If retail continues to be down, is there the likelihood we'll end up with a lot of empty storefronts? Are there ways the gov't can help with that? Or will high land values keep them vacant for a long time?

Wobbekind: "I do think it's going to be v difficult for biz to operate, particularly restaurants, with half capacity or less. It's a low-margin biz to start with."

"I do think that's going to lead to more storefront issues," Wobbekind says.

Starbucks apparently is just telling their landlords for EVERY location: We're paying you less, take it or leave it. According to Wobbekind.

Elsewhere, landlords are giving in a bit and gov't are reducing property taxes. You're not in any position to be giving up property taxes, given the budget, Wobbekind says.

"It's shared suffering."

Cheryl Pattelli, Boulder's CFO, taking over.
She gives a reminder: 48% of city dollars (not including utilities) are from sales and use tax.

We're on slide 30 of the presentation, FYI. Here's the link again: www-static.bouldercolorado.gov/docs/Item_5C_F…

Another reminder: Sales tax reports are only for what's actually been paid. April's numbers matter so much bc things were closed the whole month.

In April, about 89% of biz have filed and paid taxes.

Most of the ppl who filed and not paid (91% filed, but 1.9% of those didn't pay) were in restaurant or retail who have been highly impacted

Slide 31 is the number I referenced earlier: sales tax down overall 6.92% in April compared to April 2019.

Big declines in restaurants (28%) home furnishings (33.7%) and clothing (33.7%)

But offset a bit by sales of online software and equipment, given all the working from home. Up 52% from last year.

Grocery stores up 10.8% in April. too.

"We certainly do expect this to continue on a downward trend," Pattelli says of sales tax slides.

Year-to-date, sales tax from restaurants is down $3.9M
From general retail, $6.8M decline

Grocery store tax revenue is up that same amount: $6.8M

Actually, I should clarify these tweets. These categories are up or down certain %, but the dollar amounts is what they brought in (I think) The graph doesn't make it entirely clear.

I will follow up.

Tax from Airbnb and other short-term rentals and hotels is down significantly.

"This has taken a complete nose dive," Pattelli says.

Down 48.8% YTD in April

Going over some modeling of city tax declines. In the current best-guess, $29M lost from major funding sources (sales tax, parking fees, parks & rec, hotel tax)

$32.6M shortfall in major funds (general fund, parks & rec, activity fund, transportation fund, OSMP)

"The outlook hasn't changed substantially," Kara Skinner says.

Skinner moving to cuts.

$28.4M has been cut from those major funds we talked about earlier (plus a few others)

I'm still not entirely clear about how funds translates to dept. I know dept get money from certain funds (OSMP, for instance is 98% funded by dedicated sources, while the library is almost entirely dependent on the general fund + some dedicated funds)

But I'm not sure how to directly translate cuts to these funds to actual city dept. I will try and get that clarity this week for a story

Asking for cuts by dept.

I will be* to be clear. This isn't in staff's presentation. Maybe it doesn't work that way.

There *is* a list of reduced spending by department on slide 49.

We're moving into discussions about city employee cuts. There's a good chart on slide 51, but I like this graphic I got over the weekend bc it shows % of a dept total workforce.

These are only "standard" employees. (Not temp or interns or seasonal).

Parks & rec had a LOT of those.

Which isn't necessarily reflected in the graph I shared.

Of 472 non-standard employees furloughed: 77 have already been called back and 68 more returning by the end of June, Pattelli says.

"What we're finding," she says, is that a lot of ppl don't come back when we call.

Forgot to say in my story or tweets that the new budget process also incorporates a racial equity tool. Slide 53 goes over how employee reductions were undertaken using these guidelines.

Deleted first tweet bc it had a typo:
Through 124 layoffs or terminations, Boulder's workforce went from being 86.1% white to 85.9% white.

As you can see, a whopping 0.6% improvement in diversity.

Boulder is doing more unpaid holidays this year to save some $$. Police, fire emergency personnel and OSMP rangers are exempt.

Basically, they're tacking on furlough days / city closures to holidays.

Getting an update from Kurt Firnhaber, director of Housing and Human Services. He is addressing many emails to council about decreasing housing budget over 3 yrs. "The info is correct but not the full story" he says.

I just want to point out (via that graph I shared earlier) that HHS had the most layoffs by % than any other dept. 13% (plus 6% of positions that won't be filled)

In the past decade, Boulder has invested $77M in affordable housing and added 1,446 units.

That's just over $53,000 per unit, if my math is correct.

Firnhaber going over slide 61: www-static.bouldercolorado.gov/docs/Item_5C_F…

Showing the housing and human services budget.
Housing ranges, but typically averages $28-$30M (2016 was a low year at $21M)
Human services has increased steadily (and hugely) in the last 5 yrs, mostly due to the sugary beverages tax, Firnhaber says.

"Part of the story here is that our income for housing ... varies quite a bit from year to year," Firnhaber says.

Young: There's dedicated sales tax that goes to human services, yes?
Firnhaber: Yes

Always new thing to learn about the budget. I had 0 idea about that.

Brockett: How are we going to protect these funds and services for the folks that are in the greatest need?

Firnhaber: "We've really prioritized what we see as the critical needs in our community: Food security, rent/housing security, childcare support, homeless services and health/mental health services. Things that are outside of that are where we made our cuts."

Funds have been reallocated to cover those functions, Firnhaber says.

Seems like a good time to remind ya'll that every dept was in charge of ranking its own expenditures via the Essential-Important-Helpful-Amenity system.

Next financial update will be July/August
Budget study session is Sept. 8
Public hearings on the budget in October

I don't really love the budget process. I don't feel like it allows for too much input or change until it's almost too late. I can see why that's good in one way (provides stability) but bad in others (really not viable for ppl to demand change)

Brautigam: "Are you OK with the direction we have shown you? Any concerns about how we're moving forward with 2020?"

Wallach: "I think you spread the pain around in a fairly equitable manner."

Literally no other questions. Where has Yates gone? He hasn't been here since the beginning and he never fails to talk about the budget.

Weaver: "This is a monumental hit to the city budget. It can't be overstated."

Oh, there Yates is. idk why he suddenly popped back up.

Weaver: I know we've heard from some of the community that we're not making changes to the 2020 budget in regards to policing, but we're heading into the 2021 budget process now. "This is the time for us to be having that conversation."

Young: "The 2021 budget is really going to be looked at through ... our priorities. ... It's going to require not just the sacrifice of the employees we spoke about, but a sacrifice from all of us. ... Things we have enjoyed will not be available."

That's it for budget stuff. We're going to do the 8:46 of silence next.

@threadreaderapp please unroll. Thank you.