Pasadena Now

Reporter’s Notebook: City Manager Talks City Services, Revenue Loss and Local Government

On Friday, Pasadena Now’s Newsdesk Editor David Cross spoke to Pasadena City Manager Steve Mermell. Several of those quotes have been used in various stories. We present the full conversation due to its importance to Pasadena residents. Pasadena Now: We talked about three or four weeks ago about normal city businesses and municipal services. Are we still okay? Are we still moving forward and collecting trash and providing basic services? Mermell: All of the basic city services are continuing. These […]

On Friday, Pasadena Now’s Newsdesk Editor David Cross spoke to Pasadena City Manager Steve Mermell. Several of those quotes have been used in various stories. We present the full conversation due to its importance to Pasadena residents.

Pasadena Now: We talked about three or four weeks ago about normal city businesses and municipal services. Are we still okay? Are we still moving forward and collecting trash and providing basic services?

Mermell: All of the basic city services are continuing. These are important things that people rely on every day, although many times they take it for granted. We’re picking up the trash, we’re sweeping the streets. We’re making sure that the street lights work, the traffic signals are working. All those things have to happen every day. The sewers are flowing. The water flows and the lights come on when you flip the switch.

We have seen some meetings canceled and you said last month that we had to prioritize essential services. Have we had to reprioritize since our last talk?

No, not really. The city operates on a lot of different levels. The meetings needed to be canceled — our commission meetings and some council subcommittee meetings — but the bread and butter functions [city services] that I just rattled off a few minutes ago, those things by and large happen, separate and apart from policy level discussions and discussions around particular development projects, or social programs. So the city plays on a lot of different levels.

Looking at the City Council agenda, it looks like we’re okay. I mean, we’re still buying services and vehicles where needed. Are we doing okay financially for the moment?

Yes, I’m going to be talking about that more on Monday night, but we are anticipating a loss of revenue between the balance of this current fiscal year, which is through the end of June 30 and next fiscal year. We’re currently assuming a loss of about $30 million. So that’s a lot of money, and consistent with other local cities that I’ve talked to on a proportional basis, so that does pose a challenge for us.

But on Monday we’ll be laying out our plans for the council to deal with it.

I want to mention something else because I’m glad you mentioned the purchases on the council agenda. I’ve seen some criticism from some people that say, ‘What are you doing? Why are you buying new trash trucks? Why are you doing these things in the face of this crisis?’

The city is complex financially. If we’re buying trash trucks, we’re buying those from the revenue we’ve received from our customers who pay into the refuse fund. We can’t take the refuse fund money and go buy meals for people with it, or provide grants to people to pay their rent.

Think about where this money’s coming from. It’s coming from the tax payer, the rate payer, and it’s meant to be turned back into the services that support them. If you’re paying in your trash bill, you’re going to want us to use that revenue to pay to maintain the trash program, which means you don’t expect us to take that money and go do something wildly different with it. That’s not very fair to you as the person paying the trash.

Last month you said one of the biggest challenges was trying to manage the flow of information. Has that challenge increased? Does that become harder during these extended stay at home orders?

Well, the amount of information flow has certainly not let up. My volume of just email has quadrupled, which was difficult to begin with and now it’s insane. I will say for the good efforts of Lisa [Derderian, City Press Information Officer] and the help of people like yourself in the media, we’re able to put information together and put it out there. We have a pretty robust website that a lot of people are looking at. I think our biggest challenge is to remind people to refresh their web browser because I keep getting complaints from people saying, you haven’t posted any new information. It’s just that they keep looking at the same old page. So the frantic pace of it has died down, but the sheer volume is just as much as ever.

What do you think the lasting impacts of this is going to be? I mean, I know it’s hard to look into the future, but what do you think this all means for us in the, in the coming months and years?

When you say lasting, it depends on your time horizon, right? I think that for the immediate future we’re still figuring out the economic impact of this, but thinking beyond let’s say 2020 and getting into the next calendar year, are there going to be societal changes? I like to give the example. After the Northridge earthquake, I noticed people wouldn’t drive their cars underneath overpasses anymore. They were afraid that if there was another earthquake, it was going to fall down on them. But then one day I noticed people started doing it again. So I know we act like this is going to change our life forever and maybe everyone’s going to be wearing face masks forever. Maybe we’ll never get together in a large group again. But I don’t know, a hundred years ago they had the Spanish flu and it killed 50 million people.

And then at some point in time people started to gather again. I think some things will change, but some things will go back to what they were. We’re a social animal at heart. We want to be around other people. There will be probably a little more precaution, probably a little more planning. I think almost every city is going to add to their disaster preparedness plan, what to do in a pandemic. What happened with this one is a lot of the rules came spilling out in a haphazard fashion at all levels state and county, local and city.

I think people will say next time, where did we land during the, COVID-19, and God forbid, when we have COVID-20 or whatever, we’ll have a better playbook. We were improvising a lot more on this one, but I think by and large we did a good job.

When will we sit back and reflect what worked and what didn’t? What could we do better next time?

I think a lot of people are already thinking about that. You know, as we start to think about how to transition out of this. One of the big challenges is going to be, everyone’s going to want to be at the front of the line. ‘Oh geez, my business should be one of the ones to open up first’ and that’s going to be the new dynamic for us to grapple with.

What are your thoughts? What are you pleased with and what do you think we could have done better and might even in the coming weeks?

Well, I’m super pleased with the response of city employees. All of them have stepped up and done a wonderful job. Police and fire have been great, but not just them. Really everybody, we have people in the library sewing masks. We have people assisting in delivering food. So, all the city employees have been fabulous. The council’s been very supportive and helpful.

I think the thing that, that I would like to see done a little bit differently next time, again is, is not such a patchwork in terms of guidance and rules. I think the Governor’s been good, but I think in some areas he delegated a little too much latitude to local jurisdiction.  We have our own health department, but we haven’t always gotten the information we needed from the County health department.

So if this were to happen again, I’d want to move to more of what they call a unified command model where effectively, we merge with them over the operational period. These criticisms are, are minor in the scale of it all. It’s going pretty well and you got to remember we’re dealing with so many different people’s attitudes in a given day. I’ll get an email from someone saying, open the [Rose Bowl] loop and then I’ll get an email from someone saying, there’s too many people standing on a corner, go break them up. So everyone has a different opinion.

That goes down to lessons learned and obviously just like with everything, communicate, communicate, communicate. I think we’ve been doing a lot of that. It’s interesting the things that you need. We always plan for an earthquake, and things that you need in the wake of an earthquake are different than the things that you need during the pandemic. We really had to adjust the way we operate instead of having everyone here in our city facilities. We sent a lot of employees homes to telecommute and we’ve been very successful starting that up and someone was asking me the other day, do you think will allow people to telecommute more in the future. Maybe we will if we know that they’re getting the work done. So that might be a lasting effect.

One thing we tell people in preparing for an earthquake is you need at least three to seven days worth of supplies. What would you tell people now? I mean financial advice?

What’s really sad about it, with so many people filing for unemployment — I think we’re up to the 7 million figure nationwide, is how many people couldn’t afford an extra $500 expense or $1,000? So many people don’t have the wherewithal that they can cover one month’s rent. We see that every day with the emails we receive and the conversations we have. So many people are kind of just getting by. And that should be a wake up call at a national level to think about what we can do. Society shouldn’t to be that fragile. In our country it’s potentially dangerous. It’s dangerous in any country to have so many people in a precarious position like that.

If we lose $30 million, what does that mean for the residents?

The important thing is the city has done a very good job of making sure we adequately fund a reserve and the city’s reserve level is in a pretty good place. We have 20 percent of our general fund operating budget in our reserve. Plus we have another reserve for other liabilities like pension liabilities and we’re pretty conservative in our spending. So the truth of the matter is, at least for the balance of this fiscal year, even though we expect to lose just shy of $19 million in the current fiscal year. The only money that is actually coming out of our reserve is the money that we’re recommending to spend for the feeding programs and assembling the alternative care facility that you saw over at the convention center yesterday. Outside of that, we’re able to absorb that shock of an $19 million loss in the current year without having to reduce our services and the city exists to provide services to its residents.

So when we talk about cutting the budget, we’re really talking about cutting our services and thankfully we’re not going to have to do that this year if we tend to money that we’re generating from measure, I, which is you know, a fabulous thing to have. The money that we were going to put into our capital budget next year, eight and a half million dollars, instead if we reallocate it through our operating budget, we can also get by without cutting services. So that’s fabulous. So what I’m saying is if we can weather it, because we’ve done the planning, we never knew that this event would occur, but we always knew that there’d be something, an earthquake, a recession, we always knew it. And this is why you fund your reserves so you can maintain your services to the, to your city.

Balancing the budget has been such a huge priority for City Council and the Mayor and you. It sounds like it paid off.

I think that’s right.