Consideration and Adoption of Resolution No. 2020-33:  A resolution of the Flagstaff City Council, Directing the City Manager to implement remedial measures set forth in the 2020 Economic Recession Plan, Significant Stage, and providing of an effective date

Staff has provided City Council an update on revenue projections for the fiscal year 2020-21.  Projections provided have demonstrated the City will see a significant decline in certain revenues for the upcoming fiscal year.  Staff has developed an Economic Recession Plan earlier this year and Council adopted this plan on April 21, 2020.  Staff is now recommending the organization move into the Significant stage of the Economic Recession Plan based on updated revenue projections.

The adoption of this resolution will allow the City Manager to implement action items within the Significant stage of the Economic Recession Plan.  The fiscal impact will align with strategic reductions of expenditures to mitigate estimated revenue reductions.

Implementing the Significant stage of the Economic Recession plan allows the City Manager to manage future expenditures within the available revenue resources.

Foster a Resilient and Economically Prosperous City: Enhance the organization's fiscal stability and resourcefulness. 

On April 21, 2020, Staff presented to City Council the Economic Recession Plan and the Council chose to adopt the plan.  Additional discussions occurred during the April Budget Retreat.  

• Approve the resolution as submitted.
• Do not approve the resolution. 

The Budget Team began working on an Economic Recession Plan (Plan) since October 2019.  The plan was advanced for Council Adoption on April 21, 2020.  The Plan is based upon an incremental application of five progressive, remedial action steps (stages). The first stage is relatively minor, while the fifth and final stage presupposes a crisis situation. The intervening stages become progressively more impacting, as declining revenues worsen. The Plan is intended to be proactively applied, utilizing economic forecasts and indicators as enumerated. Notably, formulation of the Plan commenced during healthy economic times, well in advance of the current pandemic and its resulting economic downturn.

Procedurally, the Plan is a tool that can be considered and implemented at the administrative level during the early stages of a recession or economic downturn (first two stages), with Council action being required for more stringent measures (third, fourth, and fifth stages). The Budget Team, comprised of members of Management Services, City Manager's Office, Human Resources, Economic Vitality, and the Employee Advisory Committee, serves as the working body to evaluate the economic indicators and recommend the correlating remedial measures. While the formulation of this Plan was conducted through members of the Budget Team, transparency of the process was achieved through presentation before the Leadership Team, Extended Leadership Team, and the Employee Advisory Committee.

This Plan is formulated to endure the test of time, utilizing a sliding-scale approach to both its implementation and suspension as necessary. This is important to allow for the necessary fluidity to changing economic situations. The current pandemic, with its rapid spread, uncertain severity, and unknown duration, illustrates the need for this adaptiveness. e