COVID-19 – Top 10 for Finance Teams

By Marcus Pimentel, CSMFO President-Elect & Assistant Director of Health, Santa Cruz County

On Sunday, March 15, 2020, California Governor Gavin Newsom held a dramatic press conference in which he announced new guidelines that could reduce already declining restaurant sales in half; all but eliminate bar operations, and isolate seniors 65 or over.

With his latest announcement, and the trend line of community spread of COVID-19, here are the top 10 things every Finance team should understand and take action on.

1. This situation is serious but not one to let panic or hysteria take over.
While the Governor’s guidance was unprecedented in modern California history, they are targeted at slowing the COVID-19 spread curve and protecting our most vulnerable populations.

2. Expect the guidelines issued by the Governor to be broadly implemented.
Bars, nightclubs, wineries and brewpubs will close, and restaurants will reduce their dine in capacity. Most of our community who is 65 or older will embracing staying home.

3. Local public health agencies begin issuing enforceable orders.
Following the Governors guidance, local Public Health Officers are expected to issue community specific orders to enforce prior guidance around social distancing and mass gatherings. So far, the Center for Disease Control (CDC), the State of California, and local Public Health agencies have predominately issued voluntary guidelines.

4. How will you operate with 40% of your staff on leave? Are you ready for full virtual workforce?
Every Finance Director and manager should carve out time today and develop a conceptual plan this week for how to continue your essential operations if staff are working offsite or if whole work groups go on leave.Start by identifying your most critical and timely operations and plan for what if all your primary staff are on sick leave. While the chances of them all getting sick are small, but if one person is ultimately diagnosed with COVID-19, a whole unit may end up being quarantined at home for up to 14 days.

And, you should understand your agencies capability for how your workforce can work remotely. What is your inventory of laptops that can be issued? Can your agency support staff who need help configuring their own devices to connect to your network? How will those who rely on physical processes be able to work if others are offsite

Remember, social distancing in the workplace is a tool for COVID-19. Even if some staff have to remain onsite, reposition their work areas to create at least 6 feet of distance between other staff. And don’t forget, we are all disaster response workers. Before letting someone work from home, check with your EOC to determine what gaps they might need filled by staff.

5. Now is the time to update your financial models.
Connect with your consumer tax base specialists, your staff leads, and your pension cost and investment rate of return experts. Travel declines will impact transient/hotel tax revenue and consumer spending. Closure of bars and reductions in restaurants will be another hit to consumer spending. And if somewhere near 10% of our State’s population (those 65 or over who choose to stay home) avoid stores, restaurants, coffee shops, etc., expect another hit to your consumer spending tax base. Not to mention the already turbulent stock market and how it’s losses are quickly lowering CalPERS rates of return.

And, consider building into your models that these impacts may continue into the next Fall/Spring season. It is probable that many of these measures will continue for at least another 12-18 months (albeit hopefully with some relaxation during the summer season).

6. Time to start building up cash. 
Our economy will continue to sputter and maybe this is what pushes our economy into the next recession. Consider prioritizing capital projects and suspending those that can remain now. Evaluate your vacant positions and prioritize now which positions are essential and must be filled, those that can be delayed, and those that can be frozen. Don’t wait to start filling up your emergency and contingency reserves.

7. Time to review your emergency reserve protocols.
Make sure you understand all the triggers for when emergency reserves can be used and can clearly articulate those to your agency manager, department heads, and elected officials.

8. Lean into your strengths in your agency.
You and your staff’s skills are perfectly suited during times of crises. Lean into your Square-ness and start tracking all your costs related to COVID-19 responses, lean into your Triangle-ness for leadership and work ethic during this time period, lean into your Circle-ness to keep spirits up and stay connected with those who might get overwhelmed with the weight of 24-hour news, or lean into your Squiggle-ness to remain flexible and find new ideas or strategies.

9. Help everyone by reassuring your community that the actions they take now could be an amazing act of collective social responsibility.
The great majority of us who contact this will recover. Social distancing reduces the number of high-risk people needing care and will give our nurses, doctors, and hospitals a fighting chance to save as many lives as possible.

10. Take care of you, your family, and your friend networks.

      • Call regularly to connect to members of your social networks who might self-isolate during this pandemic;
      • Make sure you have a supply of all essential medications for your entire family;
      • Resupply your cold and flu medicine to treat mild flu or COVID symptoms;
      • Make a childcare plan if you or a caregiver are sick or if they close down;
      • Make arrangements about how your family will manage through extended school closures;
      • Make a plan for how you can care for a sick family member; and
      • Keep calm and don’t let hysteria consume your family networks.

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Marcus Pimentel is the Assistant Director of Health of the Santa Cruz County Health Services Agency. Marcus serves CSMFO as President Elect leading the 2021 San Jose Host Committee and member of the Communication and Membership Committees. Marcus has over 20 years of local government finance and administration experience in the Monterey Bay area serving previously as the Finance Director for the City of Santa Cruz. He is proud of his family’s Portuguese heritage and is grateful for his wife Laurie and daughters Kaitlynn and Kirsten.

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