ACES Letter to Mayor & Council – Business Assistance Ideas

ACES                                     

Ashland Citizens for Economic Sustainability

Memo To:                  Mayor Stromberg, Councilors

From:                          Ashland Citizens for Economic Sustainability (ACES)

Re:                               Ashland Business Assistance Ideas

Date:                           5/5/2020

We respectfully submit the following recommendations to provide immediate assistance to struggling Ashland business people facing financial challenges resulting from the COVID-19 pandemic.   They are in addition to, and in some cases, updates to the suggestions ACES presented to you in an e-mail on April 5 (See below).

  1. Provide direct financial assistance to restaurants and lodging places by allowing them to retain lodging and meals taxes collected in the first six months of 2020.
  2. Provide direct financial assistance to all retail businesses, including those above, by rebating base utility charges for the first six months of 2020.
  3. Create an economic development low-interest loan fund to provide additional financial assistance to businesses that are too small to qualify for the federal small business program.
  4. Direct AFN to offer free internet service to businesses.  Have the city’s IT department provide assistance to businesses in setting up and/or improving existing websites, e.g. order and delivery systems.
  5. Implement a program that provides some form of rent relief to closed businesses.
  6. Reduce regulations on businesses through the end of the year, allowing greater use of sidewalks, parking lots and streets for dining and vending, as well as suspending enforcement of operating hours, delivery hours and business signs.
  7. Given Ashland has virtually no curve for Covid-19, appeal to the Governor to reopen businesses that would pose no more risk than grocery stores, with appropriate safety measures in place.

Some of these suggestions, we realize, would impact the city budget by reducing tax income or by requiring new unbudgeted expenditures.  The current 2019-21 city budget already needs to be revised to reflect changes in reduced tax income and increased expenditures.  ACES strongly recommends that the city:

  1. Offset some of the costs from the actions listed above by reductions in the ending fund balances of the water, wastewater, electricity and other funds.  The December 31, 2019, fund balance report (see below) presented to you last month showed that the city has $50.3 million in restricted, committed and unassigned fund balances, up $5 million in the first six months of the current budget.
  2. Follow the lead of the state of Oregon, SOU, Portland and other cities by reducing employee costs through employee furloughs, elimination of planned cost of living raises, not filling open positions, increasing employee contributions for retirement and health benefits and other similar steps.  As outlined on page 1-3 of the 2019/21 budget message, the cost of city employees has been, and continues to be, the largest expense in the budget.
  3. Follow the lead of Southern Oregon University in cutting upper management pay.
  4. Continue to explore savings in economic development, conservation, public works, parks, utility billing, human resources, legal, fire and police overtime and other activities.

This crisis may be the greatest challenge the city has faced in decades.  The continued viability of restaurants, retail stores, art galleries, book stores, salons and barber shops, businesses offering professional services and gyms, yoga and other exercise studios is at serious risk.   We urge you to give serious consideration to these and other proposals to maintain and expand our downtown and other businesses that contribute so much to the livability of our city and its attraction to tourists.

April 5, 2020

Dear Mayor and Ashland City Council:

We represent a number of citizens who were deeply concerned about the fiscal status and economic health of the city of Ashland before the advent of Covid-19.  Now, we’ve seen little to no action on the part of the council and mayor to address the financial tsunami about to hit us.   In fact, the only action taken by the Council since it declared a state of emergency a month ago was to officially place an $8.2 million bond request on the May primary ballot.

Our “shadow” government may, once again, be working behind the scenes developing a plan.  However, if so, there has been no relevant communication with Ashland citizens and they are, once again, not part of the process.  This lack of transparency combined with a lack of responsible fiscal policy underscores and reinforces our mounting distress.

As a result, Ashland Citizens for Economic Sustainability (ACES) is offering specific actions that could mitigate the pending financial disaster.  We urge you to seriously consider the following ideas that address the city government fiscal crisis and also help mitigate the impact of the pandemic on our citizens, businesses and their workers.

  • Put all CIP projects on hold including city hall, the water treatment plant and Park’s swimming pool.
  • Freeze all non-essential spending until the end of the year, including outside consultants.
  • Freeze all hiring until the end of the year, especially senior management positions.  Eliminate the Assistant City Administrator position and furlough non-essential staff.
  • Put a cap on total payroll, freezing it at its current level for fiscal year 2020/21.
  • Eliminate overtime.
  • Freeze all purchases of equipment and don’t allocate any additional dollars to the equipment fund.
  • Reduce allocations to the Parks Department until the crisis is over.
  • Provide utility relief to citizens by waiving all taxes, surcharges and fees for the next 3 months.   Do not raise rates in July.
  • Help closed businesses by creating and managing a rent relief program.  This could be taken on by the Chamber of Commerce.
  • Help restaurants that are still open and locals by eliminating the food and beverage tax on “take-out” purchases for the next three months to encourage more purchases.
  • Initiate a plan to house the homeless.  See online, “U.S. Tries to House Its Homeless in a Hurry to Prevent Coronavirus Outbreaks” Wall Street Journal, April 3, 2020.

The warnings about the past ten years of irresponsible spending have come home to roost and we must face the current threat to our town boldly, transparently and meaningfully.  Heed the example set by Bret Champion, Medford School District Superintendent, who recently canceled the purchase of Cobblestone Village for a new school site because of an expected drop in tax revenue due to Covid-19:

“As soon as this hit, and we began to see the effect it was having on the economy, it was clear this was going to have a very dramatic impact. We are a business that relies on taxes and all that goes with it, so a downturn in the economy definitely has impact on us in the long run.”

Words of wisdom we hope to hear soon from our city leaders.

Ashland Citizens for Economic Sustainability

City of Ashland Summary of Fund Balances as of December 31, 2019

Restricted and Committed Funds

Restricted                     $10,776,447

Committed                    $14,207,094

Unassigned                  $25,312,247,

Total Fund Balances     $50,295,789