City of Aurora issues hiring freeze; pandemic tax losses in the millions already

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Town Center of Aurora has closed to the public, as a result of the current health crisis resulting from COVID-19. The parking lot sits empty, March 24, 2020. Photo by Philip B. Poston/Sentinel Colorado

AURORA | As the novel coronavirus pandemic grinds the business world to a halt, city governments are also feeling the fiscal impact. The City of Aurora temporarily halted most hirings as a result of the crisis and expects to lose millions of dollars in revenue over the next month.

A selective hiring freeze has been put into effect, according to city budget officer Greg Hays. “Effective immediately, if a job offer has not been extended on a vacant position as of March 24, 2020, we will cease hiring activities, including interviews, evaluations, etc.,” he said in an email. 

That order excludes sworn police officers, firefighters, emergency dispatchers and detention officers.

Keeping those current vacancies open could save the city about $6 million, he said. That’s an annual estimate, assuming those positions remain open. Ryan Lantz, Deputy Director of Human Resources said there are 162 full-time vacant positions within the city. However, 27 of those are “exception-based and could be deemed essential by department directors and city management and will continue to be recruited for and hired,” he said.

So far, the city hasn’t had to cut existing positions.

“Layoffs are not the budget-balancing tool we tap into first when issues like this change in revenue projections arise. We also address shortfalls by not entering into non-essential contracts, restricting consulting services and restricting travel and training. There are also existing funds that can be used on a one-time basis,” Hays said. “Although layoffs might be necessary at some point, they are not right now.”

Much of Aurora’s coffers are fed by consumers spending money at area retail stores where sales tax is applied, buying cars — which typically makes up more than $3 million in revenue to the city each month — and from visitors who stay in Aurora hotels and pay a lodging tax. 

Hays said the city stands to miss out on somewhere between $8 million and $12 million through the end of the stay-at-home orders, which were first issued by Tri-County Health this week and then rescinded when Gov. Jared Polis mandated the order statewide. 

The order expires on April 11, but during a news conferences this week Polis indicated that the order is flexible and reliant on data. The goal of the stay-at-home order is to “flatten the curve” and prevent hospitals from being overwhelmed with sick patients all at once.

It should be apparent within a few weeks if the social distancing policies that have implemented are making an impact on the virus’s spread.

The revenue loss estimates in Aurora are rough at this point, Hays said. They’re expected to change as more information is gathered throughout the duration of the orders.

Hays told city leaders on a phone call this week he and his office have already started looking at recession projections.

City management is also asking each department to review capital projects that could be deferred, downsized or canceled. So far, nothing has been yet.

For lawmakers, ever-changing information regarding the pandemic has meant big budget questions for the short term and long term.

“It is hard because the situation does change so rapidly, but you know, I feel like we’re getting the information to start making decisions that will impact us long term,” said at-large councilman Curtis Gardner, who sits on the city’s management and finance policy committee.

This week Gardner asked city management to track and report expenses related to the COVID-19 pandemic, as federal reimbursement to local municipalities is expected to become available. That too will start molding policy discussions, although Gardner said public safety still remains at the top of the priority list.  

“For policy makers, we don’t know whether we’re back to normal on April 12 or if it’s going to be a new normal for the distant future,” he said. “Looking at the curve over the next couple of weeks might tell us where we’re at budget wise.”