It’s too early to predict what the long-term changes stemming from COVID-19 will look like for local municipalities and the nation at large. However, one thing is certain to be true for whatever the new normal brings. From a macro perspective, municipalities will have to reevaluate the building blocks that make their organization successful. These building blocks include the proper management of risk, finances and personnel.
After any crisis, municipalities and businesses alike have an increased appreciation for risk management. Ideally, municipalities should build out a crisis management plan to plan for possible disruptions, small and large, that could impact their communities, personnel and finances. While impossible to predict and plan for the multitude of scenarios out there, it is necessary to be aware of disruptive factors in the marketplace and think through those contingencies when building out crisis plans. In that way, local government leaders avoid knee-jerk reactions and are empowered to act quickly and responsibly, much to the benefit of their employees and community.
Managing personnel and finances
The effects that a changing workforce inevitably have on a municipality are also critical factors to consider. When layoffs occur on a large scale, cascading implications arise that also must be considered. Whether a municipality or a private business, an organization must have a long-term structural plan for obtaining cash to provide critical public services to citizens and customers. A municipality relies on tax dollars to fund services, operations, strategic initiatives and everything that makes a city run smoothly; if people aren’t working, they will no longer be earning wages to pay taxes. This reduction in tax-based revenue needs to be factored into a municipality’s planning scenario. If a municipality has a long-term shortfall in its cash flow, it is confronted with several important questions, such as what are cost-saving measures that can conserve cash to help weather the storm.
During the Great Recession of 2008 and 2009, government spending went up with the help of a stimulus package. A possible trend that could result from this current crisis is that municipalities will see an influx in new cash coming into municipalities and public safety agencies across the spectrum.
Getting back to normal
One of the more troubling things in life is the uncertainty of tomorrow – the current situation carries a significant level of uncertainty around when people will get back to work and things return to normal.
When an organization goes through a crisis of any sort, it is forced to rethink the current ways things are done, such as how much cash should be kept on hand, whether remote work is a better option for employees and whether its risk management plans will be able to mitigate the severity of impact for their community. Crises present opportunities to examine how efficiencies and processes can be improved, so that when the next crisis hits, municipalities can be ready.