How much is the coronavirus pandemic going to cost Whatcom County and its cities?
The cost of fighting the new coronavirus is tough to estimate this early in the pandemic, but it will run into the millions of dollars for Whatcom County and its cities, local finance officials said.
With many businesses shuttered under a statewide social-distancing order issued Monday, March 23, cities such as Bellingham as well as Whatcom County are losing tax revenue from several sources.
In addition, county and city governments are facing new expenses related to the pandemic such as buying protective equipment and establishing isolation sites that include the Motel 6 in Bellingham — which is $1.36 million alone.
“This is going to be a difficult disaster to quantify,” Bellingham Finance Director Andy Asbjornsen told The Bellingham Herald in an interview.
It’s not like an earthquake or a flood that has localized effects — it’s a catastrophe engulfing the entire county, state and nation, Asbjornsen said.
“These are very difficult economic times and we’re all trying to evaluate what it means,” Asbjornsen told the City Council during its meeting on Monday, April 13.
Recent unemployment claims show 18% of the workers in February are now out of work. Self-employed workers will be allowed to file for unemployment this week, which should increase the overall number.
Whatcom Unified Command, the multi-governmental agency that’s directing local pandemic response, is tracking expenses countywide because a disaster allows local governments to seek reimbursement from the state and the Federal Emergency Management Agency.
Its Emergency Operations Center is a massive exercise, using staff from the Whatcom County Sheriff’s Office and Health Department; administrators, police and fire officials from every city in the county; the public schools; representatives from St. Joseph hospital; officers from fire protection districts throughout the county; and many volunteers.
$4 million cash infusion
To finance ongoing operations at Whatcom Unified Command, the Whatcom County Council recently voted to borrow $4 million from its Economic Development Investment Fund.
In addition, Whatcom County and cities such as Bellingham have reassigned some of their employees to work for Unified Command.
Officials at Whatcom Unified Command haven’t responded to The Bellingham Herald’s request for the amount of funds that it has spent fighting the pandemic, or the value of donations from private industry and members of the public — including cash and protective equipment such as face masks.
Bellingham City Council voted April 13 to move $500,000 from its general fund to the Emergency Management Division of the Fire Department to fund its pandemic response.
“The intent is to ensure that they have the resources they need in place for costs related to this crisis,” said Forrest Longman, deputy finance director, in a presentation to the council.
“A portion may be used to support Whatcom County and Unified Command, however at this point the county expects their expenditures to be reimbursed by FEMA and other sources,” Longman said.
Longman told the council that staffing is being allocated to the Fire Department so that it can be tracked for potential reimbursement.
Bellingham revenue takes hit
In Bellingham, pandemic measures are affecting revenue sources such as sales taxes, admissions taxes for entertainment and business and occupation taxes based on gross sales, Asbjornsen said.
And with the current border restrictions, few Canadians are coming south to shop.
CTV News in Canada reported on Friday, April 17, that the United States and Canada have agreed to extend the current restrictions another 30 days. The restrictions were scheduled to expire on Tuesday, April 21.
Officials at the Whatcom County Health Department on April 14 urged cancellation of summer events such as parades, festivals and fireworks — a further hit to revenue, both the city’s and that of private businesses.
Taxes, including those on homes and commercial buildings, business, utilities and retail sales, brought in $88 million to Bellingham in 2019, according to the city’s budget.
Bellingham workers reassigned
In a briefing on the pandemic response at the Bellingham City Council’s online meeting April 13, Police Chief David Doll said that many city employees are telecommuting under Gov. Jay Inslee’s stay-home orders.
Others such as police, firefighters and public-works personnel are considered essential workers. Other employees are on “standby” and some have been reassigned to the pandemic response.
Doll said 54 Bellingham city employees had been reassigned to support Whatcom Unified Command’s Emergency Operations Center, putting in nearly 2,500 hours of work.
They’re assisting incident command and medical surge planning, and helping with support systems such as supplies ordering.
“The flexibility is huge for city employees,” Doll said.
For example, Library Director Rebecca Judd is part of the city’s resources team helping to fulfill requests for personnel and supplies from Whatcom Unified Command, and organizing and coordinating specialty assignments.
Judd told the council that public-works flaggers were directing traffic at Bellingham Food Bank to-go box locations, that museum and parks staff were assisting the food bank, and that librarians are working in logistics at the Emergency Operations Center, where they are cataloging and organizing supplies instead of books.
At a March 23 briefing on the city’s financial situation, Bellingham Mayor Seth Fleetwood credited previous Mayor Kelli Linville for leaving the city on solid financial ground.
“Obviously, much remains unknown about long-term costs and impacts,” Fleetwood said. “The city is in strong financial health. We have sufficient reserves to manage this crisis for a period of time.’
Little effect in Ferndale
Ferndale spokesman Riley Sweeney told The Herald that the pandemic’s impact on the city’s budget could be less than in other places.
“We don’t have any hard numbers or projections at this point, it is still too early to tell,” Sweeney wrote in an email. “Unlike some of our neighboring communities, Ferndale does not have a single revenue source that provides a majority of our funding. We actually have taken in very little sales tax in comparison to other communities our size because many residents do their shopping in Bellingham. Usually, this is a drawback but it means that a downturn in sales will not affect us as sharply as others.”
Sweeney said the city’s major contribution to Unified Command has been to assign him to the Joint Information Center, the EOC’s public-relations section.
“We’ve had some minor expenses related to transitioning to telecommuting but nothing notable. We have not cut a check to Whatcom Unified at this time,” Sweeney wrote.
“(But) any drop in revenue will be a struggle,” he wrote. “As a small city, there is almost no discretionary spending in our city government. We run a lean operation and are currently looking for any possible ways to tighten our belts for the eventual impacts to arrive.”
Lynden eyes its budget
In Lynden, Mayor Scott Korthuis told The Herald that sales tax is a main concern as city officials re-examine their budget.
“All cities receive payment two months after the tax is collected,” Korthuis wrote in an email. “So we are all worried about our June revenue numbers; they would reflect receipts from April. What we are doing now is identifying where we can conserve cash.”
Another issue is cash flow, he wrote.
“We know that property tax payments have been delayed two months,” from April 30 to June 1, Korthuis wrote. “We would typically see all the first-half money by mid-May. Now it will trickle in between now and mid-July. We should be fine, but it is a concern. Our other income sources seem to be stable at this time.”
County facing heavy losses
Whatcom County’s financial situation is more complicated and could be more dire, officials said.
Property taxes, sales and use taxes, excise taxes and timber harvest taxes are main sources of revenues — totaling 48 percent of the budget — and the county also relies on business and occupation taxes as well as other business fees.
Treasurer Steve Oliver told The Bellingham Herald in an email on Wednesday, April 15, that he, county Finance Director Brad Bennett, and Deputy Executive Tyler Schroeder are taking a hard look at revising the county’s $437 million 2019-2020 budget with respect to funding loss and extra expenses related to local pandemic response.
“We are working on revenue and expenditure projections currently at this time,” Oliver wrote. “We have not had an opportunity yet to convene a working group of in-house county finance professionals as was recently requested by the County Executive’s Office. The purpose of the group is to help craft revenue projections and expenditure recommendations for future consideration. As that work progresses, I would think better information may become available.”
Oliver and others have discussed the county’s finances at County Council meetings in March and April as the severity of the pandemic crisis grew more evident.
Councilman Tyler Byrd said during a Thursday, March 19, council meeting that the pandemic will affect the local economy in ways that seemed unimaginable several months ago,
“Our biggest issue is going to be the economy and how we start preparing to address that,” Byrd said. “I’m hoping that we can consider doing things to help stimulate the economy and help us locally moving forward.”
Oliver said March 19 that the county is less prepared to weather a prolonged economic downturn than it was during the Great Recession just a decade ago.
“This is a very different circumstance than 2008. (The recession of) 2008 was Wall Street and a lot of these impacts we’re going to feel this year are going to be Main Street,” Oliver said.
“The general fund is certainly in a different situation than it was 12, 13 years ago,” Oliver said during a Tuesday, March 31, council meeting. “We had a substantial cash balance in the fund at that time which allowed us to kind of let the air out of things in a little more controlled manner than a lot of other (Washington) counties. We don’t have the cash balance in the general fund that we did 12, 13 years ago.”
He urged the council to save money wherever it can for the near future.
“What I’m seeing is that we’re seeing a fairly large cliff,” he said.
This story was originally published April 19, 2020 at 5:00 AM.
