How Covid-19 is Affecting These 10 California Cities

Stay at home orders were issued across the state starting in March. The coronavirus outbreak allowed for deficits to replace reserves. Below are 10 California cities which have been impacted by the virus who are taking helpful actions to prevent their citizens and businesses from being ravaged. As they fight, they are waiting for the next round of help from the federal government.

Mayor Eric Garetti took a series of helpful actions fighting COVID-19 and protecting people, even though some items are costly

• 8,000 homeless people will be helped with housing accommodations; Mayor Kevin Faulconer pushed to turn the “San Diego Convention Center” into a massive homeless shelter, which has taken more than 800 people with no stable housing; 2,000 hotel rooms have been procured so far.
  • Large expenditures: Turing “Convention Center” now needs $2.8 million per month; $6 million per month for hotel room use.
• The city’s coffers dried up as two key revenues, hotel tax and sale tax, plummeted; facing a $250 million deficit.
• Actions for money shortfall: Federal, state, and county dollars can offset part of the deficit. The mayor took further cuts on libraries, recreation centers, and arts.

Helpful Actions

• The “Silicon Valley Strong” program brings more than $20 million to help the area’s most vulnerable residents, small businesses and nonprofits.

Lesson from last Recession

• A painful pension battle resulted in losing a third of its workforce due to a hiring freezes, pay-cuts, and employee attrition. Now Silicon Valley is in for another blow.

Economic Situation

• Mayor Sam Liccardo claimed at least a $100 million hit on the budget, and it may get worse. The current relief bill helps the city, but Liccardo expected more financial help from Washington, D.C. 

• In the city’s history, we can take lessons from the 1918 Spanish flu. At that time, the city introduced aggressive social distancing, which limited the initial breakout. However, only because of opening back up early, it came to suffer lethal consequences.
• Now, there is a massive unsheltered homeless population. San Francisco’s board demanded the mayor’s administration lease 8,250 hotel rooms for helping 8,000 people on the street. However, mayor London Breed claimed they can not fulfill the demand. So far, the city has leased 2,000 hotel rooms and helped nearly 800 people.
• The city’s controller initially estimated $1.1 billion and $1.7 billion deficits on the budget over the next two years, and $800 million wiped out from reserved money.

Fresno

• Before the outbreak, the economy was in great shape.
  • The budget increased
  • City services increased
  • Fully funded pensions
  • Unemployment of 5% as of last May
• Many people lost jobs; sales tax, as a main kind of revenue, plummeted; Mayor Lee Brand is looking for another round of funding from the federal government.
• The city funded $750,000 for small businesses, including zero-interest loan options.

Sacramento

• Coronavirus Relief Fund from federal government gave $90 million for the capital city.
•  This fiscal year’s budget can be held, but cuts will come on next year’s for sure. Mayor’s administration is looking for more assistance.
• Mayor Darrell Steinberg instructed staff for a long-term strategy of placing homeless people in hotels or trailers.

Long Beach

• The city’s revenue decreased, as the main revenues of sales tax, oil revenue, and transient occupancy tax, which is paid by hotel guests, decreased, while expenses increased. Under assumption that entering recovery after May, an optimistic projection, by the city finance director John Gross, is that expenses will be between $38 million–$44 million in this fiscal year.
• Nursing homes and long-term care facilities were hit hard in Long Beach. In response the Long Beach Medical Reserve Corps launched a free clinic for testing COVID-19 at Long Beach University and also established a drive-thru site near the free clinic.

Oakland

• 1,100 small business owners applied for emergency relief from a “city-sponsored charity fund”, 7/10 of them made less 35% than median income in Oakland. The budget went toward a deficit, so the city has laid off thousands of temporary workers.
• The city avoided reaching high forecasted death totals and overcrowded hospitals.
• Scattering homeless people to one-person shed camps and sanctioned RV parks, helped prevent the contagion from spreading in large clusters. Mayor Libby Schaaf hoped to help more people become permanent residents and find shelter.

Bakersfield

• The city failed to get the Coronavirus Relief Fund because of population cutoffs. However, a local sales tax measure, which began two years ago, helped the economy and homelessness. The city manager Christian Clegg hoped the Congress would decrease the population threshold on next round to get direct help from the federal government.
  • Christian Clegg claimed $50 million from sales tax revenue could be put into use. Half of the money has already been allocated and the rest can still help the local downturn, but he also expected this revenue would see a double-digit reduction.
• Unlike most other cities, which are planning spending cuts, Christian Clegg said the city would have the ability to do new things.
• There are 500 COVID-19 cases centered on Kern county, 300 of them in the ages of 18-49.

Anaheim

• Disneyland closed for the third time in history
  • As a city depending on tourism, city spokesman Mike Lyster said at least 10,000 workers lost jobs in the tourism industry and the city lost $10 million in revenue from hotel and sales taxes.
• $1.4 million was used from the state fund to open a third homeless shelter and repurpose the Honda Center as a food bank distribution center.
• Mayor Harry Sidhu would use $15 million from EL Pollo Loco franchise
  • Among $15 million, $8 million would use to help seniors, workers, and people struggling with rent. The rest of the money would go to “VisitAnaheim.Org”, which is a main driver for tourism. This company now has laid off half its workers.
• City leaders are optimistic about reopening dine-in businesses in May or June.

– Yitong Liu