Mesa prepares for dire city service cuts The Mesa Tribune | The Hometown Newspaper for the city of Mesa, AZ

Mesa prepares for dire city service cuts

Mesa prepares for dire city service cuts
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By Jim Walsh, Tribune Staff Writer

Parks, museums, libraries and the Mesa Arts Center likely will become the first casualties of Mesa’s financial crisis from the recession wrought by the COVID-19 epidemic.

All city facilities that were closed to reduce the corona virus spread would likely stay closed until October, cancelling all summer programs and cultural programs through the long hot summer ahead.

That grim scenario – echoing Mesa’s near-collapse wrought by the 2008 Great Recession – was detailed during a briefing to City Council last Thursday as officials discussed preparations for the economic damage inflicted by COVID-19.

“This is a sad scenario,’’ Mesa Mayor John Giles said, after City Manager Chris Brady and budget director Candace Cannistraro described three scenarios based upon factors that are impossible to predict at this time.

Those unknown factors include the duration of social distancing measures and the extent of Mesa’s financial hit from plummeting sales tax and other revenue.

Signs of the virus’ impact already abound in Mesa.

Most park bathrooms are now closed after visitors stole the toilet paper, although a few remain open to give the homeless a place to go.

Playgrounds remain open with warning signs that they are not cleaned regularly, even though Councilman Jeremy Whittaker described them as “petri dishes’’ and urged officials to close them.

The doors at Mesa City Hall are locked, with only those who have appointments admitted as 1,000 city employees are working from home.

All of these measures are aimed at curbing the viruses’ spread and protecting employees’ health.

“The quality of life in our community is tied to things we are talking about. I understand it’s probably necessary,’’ Giles said.

Brady said that making cuts earlier will have the biggest economic impact on city revenues, limiting the reductions to “non-essential services’’ and protecting public safety functions.

“This is very painful,” he said. “This is not something we want to do.”

After passing a “continuing budget’’ in May for the 2020-21 fiscal year, the council could make modifications, either adding more cuts or possibly restoring some services in January 2021 if conditions gradually improve, Brady said.

Brady and Cannistraro plan to discuss more details about potential cuts and even layoffs with the council next week.

“It becomes an estimation of how deep, and how long this is going to last,’’ Brady said. “We are trying to solve a problem on the backs of non-essential services’’– which comprise about 30 percent of the budget, with the police and fire departments representing 70 percent of that.

He said this is traditionally how recessions have affected Mesa, with 300-400 positions eliminated during the Great Recession of 2008 as the city experienced a $60 million shortfall.

Cannistraro said the budget for the fiscal year beginning July 1 would include immediate austerity measures, such as no pay increases, halting recruiting for non-essential positions and delaying projects where the city has no contractual obligations.

Construction of a new fire station in Eastmark in east Mesa near Phoenix Mesa Gateway Airport would continue because the city has financial obligations.

A long-awaited new police station in northeast Mesa, already considered two or three years away from construction, would probably be delayed.

“It doesn’t mean anything is being eliminated. We can just put them on pause,’’ Cannistraro said, until money is available to staff and operate the facilities.

Mesa has reserves of $90.5 million – about 19 percent of the present budget – and has set aside $7 million in the last year to cover itself during an economic downturn that officials expected even before the virus outbreak, she said.

“We had an economic correction in our budget. It’s just that it’s sooner and deeper,’’ Cannistraro said.

She said any potential reductions in positions “will skewer the impact toward these departments’’ already represented in the closures, such as parks, libraries and the Mesa Arts Center.

A skeleton crew would staff such facilities, and positions would be re-evaluated to see if they are necessary when the COVID-19 recession recedes and it is time to consider restoring services.

By delaying projects planned for the upcoming year, “it frees up the resources we need to get through this difficult time,’’ Brady said.

Brady said his six-month scenario represents the minimum the city can do to protect itself from declining revenues, but he did not present any specific number of reductions in revenues or positions.

“We have to make an assumption that nothing is going to change until October,’’ Brady said, noting that it would be impossible to open the Mesa Amphitheatre for shows and still comply with the Centers for Disease Control’s guidelines limiting gatherings to 10 people or less.

“It’s very difficult for me to contemplate how I can protect city employees,’’ Brady said. “The risk to our city employees is undetermined, but it is high.’’

The somber meeting about unappealing budget options prompted a testy exchange between Giles and Whittaker about the city’s priorities and Whittaker’s proposed Yes on Affordable Utilities charter amendment.

All budget scenarios presented by Brady and Cannistraro reflect the utility measure passed earlier this month by the council and touted by Giles, which cuts utility rates 30 percent for low-income seniors and formalizes a 25 percent transfer to the General Fund from the Enterprise Fund to pay for public safety.

The Enterprise Fund is largely made up of utility revenues and the transfer historically has compensated for Mesa’s lack of a property tax. Whittaker, who repeatedly criticizes the city’s high water rates, wants to reduce the transfer further to 20 percent.

“This initiative is not going to matter, right?’’ Whittaker said.

But Brady said that was not correct.

He estimated that the initiative would cost the city another $50 million in revenue, forcing the cancellation of plans to hire more police officers and firefighters and leading to a reduction in public safety.

“This initiative will have a significant impact. It will be on top of COVID,’’ Brady said. “It’s probably not bringing back a lot of services closed today for years.’’

Whittaker challenged that, saying his initiative is based on a percentage and that the recession is already forcing cuts in city revenues.

When Brady said the utility, accounts have sufficient reserves and that utilities have been a strong source of revenue through other recessions, Whittaker suggested that all utility fees be waived for anyone who had been laid off from the COVID-19 crisis.

That drew an unusually strong rebuke from Giles, who strongly opposes the initiative.

“Give us a break on the campaigning for the initiative, ok?’’ Giles said.

He said that it’s time to convince those who support the initiative that the city is in a financial crisis from COVID-19 and they need to drop it.

“The time for floating a stupid idea is not now,’’ Giles said.  

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