At first, the question puzzled Malone, town administrator for Natick, Mass.
"Although an odd question as to whether we'll have peaches seems to come out of left field, it really isn't because her whole world has been upended," Malone said. "It's difficult conceptually for people to deal with something that is so radically different, and that includes children and professionals."
Malone has been scrambling over the past few weeks to begin planning for the ballooning impacts of the new coronavirus on Natick's town budget.
Roughly four days into the spiraling crisis, it became clear to her that Natick needed to prepare for long-term, potentially significant losses that, without swift action, could limit the town's ability to serve its more than 35,000 residents.
Malone said Natick will likely lose about $4.3 million in local taxes and fees, including revenue from restaurants and hotels, in the current fiscal year alone, a drop she called "exponential and dramatic." But she expects those losses are only the beginning of a fiscal crisis she described as the most difficult moment of her career.
"This is a 180 day-plus event, and that is what we need to plan for," she said. "And I didn't make that number up. That is the number in looking at what was happening on the other side of the globe that seemed reasonable. That, I think, is what we have to plan for."
Malone has already begun talking to department heads in Natick about what can be cut from the budget for the next fiscal year, which begins July 1. Plans to hire more police officers and Department of Public Works employees are now on hold.
"We're doing a full-scope review of all of our departments so that we can make sure that we're finding every savings possible," she said.
A few weeks into the coronavirus crisis, several municipal finance officials in the area said the pandemic could have a sizable impact on municipal budgets, which fund everything from schools to first responders to economic development. Many are already planning cuts and considering when they might need to dip into rainy day funds.
"I think ultimately what taxpayers and residents care about is services," said Michael Herbert, Ashland's town manager, "making sure that we're providing the services that you expect out of a full-service municipality, and that you're moving forward and creating the type of community that people have expressed that they want, in terms of things like community development projects."
Ashland is in the process of designing and engineering a new public safety building and school, and while design plans for those projects remain ongoing, the town is forecasting significant revenue losses that could impact projects like those down the road.
The new coronavirus hit just as cities and towns were finalizing their budgets for next year, and while Ashland has not yet adjusted its fiscal 2021 budget, Herbert and Finance Director Brittany Iacaponi are planning to revisit the budget to see if it should be revised in coming weeks.
"I think people need to understand that if budgets get bad enough, that we then have to start looking at reductions in municipal services," Herbert said. "Now, we're in a fortunate position right now where that's not being considered. I know a lot of other communities are already talking about having to do that. But if this thing continues and things get bad enough, we do have to look at a reduction of services."
Most municipalities in the area are expecting less state aid and lower revenues in local taxes, some of which come from residents coping with layoffs or reduced hours.
Framingham has already decided to waive interest and penalties on late payments from taxpayers, an effort to relieve financial pressure on residents who have been most affected. Waiving those fees will result in about a $100,000 loss this fiscal year, and about a $200,000 loss in the next one.
Cities and towns are also coping with additional expenses related to the new coronavirus. Framingham has already spent about $40,000 on technology needed to support remote work for municipal employees and officials, as well as additional expenditures for public health and safety, Chief Financial Officer MaryEllen Kelley told the Daily News on Friday.
Both Framingham and Ashland have now created spending codes and accounts specifically for coronavirus-related costs using guidance from the Massachusetts Emergency Management Agency, or MEMA, which put together a list of coronavirus-related expenses that would be eligible for reimbursement.
Expenses on the lengthy list include emergency operation center-related costs, vaccinations for survivors and emergency workers to prevent outbreaks, durable medical equipment, child care and mass mortuary services.
Cities and towns are starting to receive grants from the state Department of Public Health to offset coronavirus costs — $200,000 to Framingham, $6,700 to Ashland, $13,000 to Natick — and while the relief funds are helpful, Malone said they likely won't be enough.
"At this point, I don't have a dollar amount that I can say that I'm expecting to receive, and while we're very appreciative of every dollar, I still think we're going to have to go through this exercise of looking through every budget to see what we can find because I don't think that that will be sufficient to cover all of our costs," Malone said.
Many municipal finance professionals are looking for a reference point as they start to prepare for a crisis that is still unfolding.
While any data is helpful at this point, most officials said this moment differs greatly from what happened in 2008.
Herbert said the new coronavirus seems to be a bottom-up crisis, where job losses in parts of the economy like the service industry are causing reverberations on Wall Street, a scenario he described as "kind of like the reverse" of the 2008 economic downturn.
"We were actually prepared, I think, for a downturn that would even approach 2008 levels, at least on the municipal side," Herbert said. "But this is something like we haven't seen before."
In Natick, town officials have begun scouring the Town Hall basement for files that would show how the 9/11 terrorist attacks impacted the town.
"Again, it's not going to be perfect, but we do recognize that there's great things and thought that can come from reviewing the history of what's happened," Malone said.
Not all cities and towns are sounding the alarm bells that Malone is. Some municipal leaders say that while they are watching the coronavirus crisis closely, they have not yet started to plan for the long-term impacts that Malone and others are preparing for.
"It's important that people be thinking about this stuff, but to be cutting budgets or making decisions like that in the heat of this emergency, in my opinion, is premature," said Northborough Town Administrator John Coderre. "Any drastic moves at this stage would be, in my opinion, an uninformed knee-jerk reaction."
Interim Hopedale Town Administrator Robert Reed, like Coderre, said he's focused on immediate emergency management.
"At present, I don't think it's going to be a huge economic impact," Reed said. "We're trying to conduct business as usual."
©2020 MetroWest Daily News, Framingham, Mass. Distributed by Tribune Content Agency, LLC.
