Discussion and Possible Approval: Recession Plan and Other Budget Related Topics

The Recession Plan is modeled after a similar tool that has been implemented in another jurisdiction (and applied during the Great Recession). As such, it does have some history of success. It has been tailored specifically to the City of Flagstaff. While much effort and analysis has been placed into the development of the Plan, it is relatively simple in scope.

The Plan is based upon an incremental application of five remedial action steps (stages) in a progressive fashion. 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 Managers 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.

The Recession Plan is a tool that should enable the City organization to anticipate and adapt to declining economic conditions.  As such, its budgetary impact will, by its very nature, be negative.  The intent of the Plan is to minimize this impact and better prepare the organization to operate effectively and provide essential services to this community during periods of declining revenues. 

While this Recession Plan may have application to a number of Key Community Results, the most notable falls under High Performing Governance:

Enhance the organization's fiscal stability and increase efficiency and effectiveness