Sonoma County government budget facing economic fallout from coronavirus

Precisely 10 years ago, Sonoma County confronted a budgetary shortfall of enormous proportions.

In April 2010, County leaders made hard choices to carve 10% from the general fund to maintain a balanced budget and keep at least some level of services running. Sonoma County faced staggering unemployment levels ­- above 10% - during the Great Recession. Mortgages fell like dominoes as foreclosures hit 40 per week during the worst of it.

And at the county’s largest employer, the Sonoma County government, nearly 600 people lost their jobs amid the worst economic collapse since the Great Depression.

Ten years later, businesses are closed and residents are cloistered at home to slow the spread of the coronavirus pandemic sweeping the world. The toll on the economy - on jobs and business and lives - and the subsequent impact on government coffers and services is just now being sketched in rough outlines.

But it’s going to be bad, leaders say, an echo from the past.

“Absolutely; there’s no way it couldn’t be,” said Shirlee Zane, the senior incumbent on the Board of Supervisors who governed through the Great Recession. “We’ve got businesses shuttered. Some will probably never reopen.”

A decade after that downturn, Sonoma County officials are looking to that experience to hone their response to another potentially dire fiscal reality stemming from shuttered businesses, high unemployment and subsequent hits to the county’s sales and property tax revenues as a result.

While county leaders grapple with the public health crisis and burgeoning economic fallout, the drumbeat of the county’s regular business continues. There are meetings to attend, albeit virtually, and decisions to be made.

“We’re all learning to do things differently, remotely,” said Susan Gorin, Board of Supervisors chairwoman. “This is part of how we need to lead in the age of COVID-19.”

A new age, a new process

Sonoma County has 3,270 employees working amid the coronavirus pandemic, including 1,530 working from home, according to an internal email obtained by The Press Democrat.

The number, representing about 75% of the county’s total workforce, nearly matches the bare-bones staffing levels that remained after the worst of the Great Recession’s toll on county budgets.

Those employees are doing work mandated by law or considered critical by top county leaders. These workers, to use a now-ubiquitous phrase, are essential.

Christina Rivera, deputy county administrator for Sonoma County, said the criteria used to decide which employees are needed now will play into the county’s arithmetic for potential future cuts, as the county sections off workers into essential, critical and discretionary categories.

“That is something we’ll be relying on,” Rivera said. “It gets revisited every day through the lens of essential services.”

Rivera has been with the county for 24 years, and has spent the past 12 years as assistant county administrator overseeing the annual budget process. She is already starting to dig into data from the Great Recession to forecast the potential impact of the coronavirus pandemic on the county budget.

“Perhaps some data in our most recent fiscal crisis can help us understand how our revenues may behave,” Rivera said.

On Friday, some of the preliminary numbers came into focus: the county predicts a $10 million to $15 million shortfall for the next budget, and a $2 million to $8 million reduction in revenue for the current budget year, which ends June 30, according to county documents up for discussion at the Board of Supervisors meeting on Tuesday.

It will be months before county officials are able to fully assess the impact of the coronavirus-related economic downturn on the county’s budget and services.

But there’s reason for optimism, Rivera said. Where the Great Recession was a churning, 18-month economic erosion, the current crisis is entering only its second month. She said the federal government has already promised help for government entities like Sonoma County, a departure from the way the Great Recession was handled.

“Hopefully we won’t be in this for 18 months,” Rivera said. “Even with that optimistic outlook, we recognize the county’s fiscal outlook is to hope for the best but be prepared for the worst.”

It starts with a streamlined budgeting process, said County Administrator Sheryl Bratton, Rivera’s boss.

Bratton, who was with the County Counsel’s office as an attorney during the last economic downturn, said departments will be required to submit a “straight rollover” budget, with no changes or requests for more money. Then county officials will pass a preliminary budget in June and wait until the last possible minute in the fall, when the county will have a clearer picture of revenues from sales and property taxes along with state and federal infusions.

In the meantime, Rivera said, the county may look at delaying recruitment for vacant positions, and limit new programs or services once considered for funding boosts. Both strategies, as well as layoffs, were employed a decade ago.

“(We know) from that very painful time that we may have to make permanent position cuts,” Gorin said. “Our county employees certainly know that’s a possibility. It’s not easy.”

Governing continues

Gorin attempted to start a recent Board of Supervisors meeting with an opening monologue, an effort to put into perspective the moment in history.

It was first virtual meeting attended remotely by supervisors, staff and constituents. But Gorin’s soaring rhetoric to start the March 24 meeting fell flat.

“Susan, I’m really having trouble understanding you. It’s really garbled,” said Zane, Gorin’s fellow supervisor.

Later, during a tense discussion surrounding the board’s vote to protect renters from eviction amid the coronavirus pandemic, the board lost Supervisor David Rabbitt, who dropped off the line just as he was making clear his frustrations with the effort. It took 10 minutes before everyone was reconnected and the vote could be taken.

During a public comment period, names were unclear. Voices, at times, came across as robotic and mumbled.

The problems with that first virtual meeting were enough to persuade Bratton to delay hearings on key or controversial topics in the coming months.

“We’re looking for the next evolution to technology,” Bratton said. “I think I want to have a month’s worth of meetings under our belt before we try to bring back something (controversial).”

Along with voice recordings, the county accepted public comment via email up to and during the March 24 meeting. About two dozen comments were submitted for the eviction ordinance, which provides a defense for renters who face eviction due to nonpayment of rent because of financial losses related to coronavirus.

Bratton recently delayed a cannabis permit, and likely won’t bring the indoor/outdoor shelter sites for the county’s homeless to the board until June.

“That’s on a temporary pause,” Bratton said. “But we know that’s a high priority. We have to bring it back to the board.”

Other items, though, continue to move forward, even outside of board meetings. Winery expansion projects and other permitting work continues, and the board will take action on key coronavirus initiatives in the coming weeks. Fee approvals, appointments and other typically small, noncontroversial matters must go on, too, Bratton said.

“There has to be some business that continues,” Bratton said, pointing to contracts, payments and more. “There’s a fair amount of administrative stuff that’s routine and typically is not controversial.”

Facing the future

Zane’s historic March 3 election loss to former Santa Rosa Mayor Chris Coursey, the first sitting Sonoma County supervisor to be ousted since 1984, will bring to an end to the tenure of the county’s longest-serving incumbent.

Zane knows how she’s going to spend the final nine months in office. They’ll be eerily similar to her first nine months, another round of recession-era governance and hard choices.

“I can’t foresee us not coming up with a balanced budget, and that means it’s going to be some very significant and painful choices ahead of us,” she said.

Zane is concerned about existing budget problems related to fires and floods, and commitments to homelessness services and the proposed teardown of the county-owned Chanate Road hospital buildings. She worries the county’s institutional knowledge base has eroded, too. Among its 24 department heads, Sonoma County doesn’t have a single top leader who weathered the Great Recession in their current role.

“I don’t think anybody wants to talk about layoffs,” Zane said. “But with businesses closing, the downturn of the economy and loss of jobs has a domino effect. We have to find a way to retain as many people as we possibly can.”

But Rivera was here for the last round of layoffs, and she’s confident that before the pandemic, the county was in good shape.

Gorin, the chairwoman, has plenty of confidence as well.

Bratton was with the county, she said. So was District Attorney Jill Ravitch. Sheriff Mark Essick was with the Sonoma County Sheriff’s Office. All of the department heads have worked in government and very likely went through the recession somewhere else, at the least, Gorin said.

“We are well-positioned to make some of the very hard decisions we probably will have to make in the next six months,” Gorin said. “We are all up to the task. We’ll get through this.”

You can reach Staff Writer Tyler Silvy at 707-526-8667 or at tyler.silvy@pressdemocrat.com. On Twitter @tylersilvy.