Boulder retailers adjusting to pace of new climate as officials gauge coronavirus city budget damage

City Council authorizes city manager's office to require masks of business patrons

Employee Katie Loomis, right, grabs a returned item from Kathy Veeck, of Longmont, at Weekends on the Pearl Street Mall on Tuesday, April 28, 2020, in Boulder.  (Jeremy Papasso/Staff Photographer)
Employee Katie Loomis, right, grabs a returned item from Kathy Veeck, of Longmont, at Weekends on the Pearl Street Mall on Tuesday, April 28, 2020, in Boulder. (Jeremy Papasso/Staff Photographer)

Customers trickled back to the Weekends apparel retailer on Boulder’s Pearl Street Mall to pick up online orders and make transactions curbside Tuesday, as stay-at-home orders aimed at curbing coronavirus contagion eased slightly this week to allow such activity at non-critical businesses.

“With the current climate, the current trajectory, I don’t think it’s sustainable for everyone. We were operating on such a different scale before,” Rachel Steinberg, women’s buyer for the store, said.

The store is among a number of retailers in the city that, prior to the pandemic, depended on Boulder’s normally bustling downtown, packed with University of Colorado students and thousands of workers who commute from across the Front Range. Those patrons have since disappeared as businesses have been required to shut out customers.

Despite Boulder’s reputation as a tech town, at least a handful of stores in its central business district had little or no online presence as the outbreak struck Colorado. They scrambled to make and improve websites to carry out sales as it became clear normal routines would be disrupted across the globe.

Now, they are trying to innovate ways to stay afloat, as city officials gauge the damage already done to the municipal budget. That damage that could proliferate into a more drastic financial circumstance for the public sector, depending on the course the virus runs through the country and reactions of consumer bases to the potentially dangerous decision to leave the home and come into contact with anyone, including employees of their favorite stores.

“We were single-handed reliant on foot traffic,” Steinberg said.

Weekends staff has taken to procuring “try-on” kits of clothing sent via mail or dropped off for recent customers, giving them a low-contact option to test their fits and looks, with employees coming by after a couple days to pick up the garments and charge a buyer for whichever items are kept.

Also under consideration is allowing shoppers to book appointments to be one of only a few people allowed into the store at a time when customers are allowed to return inside non-critical businesses with social distancing practices in place, tentatively scheduled to be May 9 in Boulder County, where stay-at-home orders were extended in recent days. Businesses are also looking to their patrons to offer guidance on how they should operate under the economic slowdown inflicted by the virus that causes COVID-19.

“I feel like it’s not going to be as prosperous. Once this soft opening launches, we’re curious to see what happens,” Steinberg said. … We’re ready to engage whoever is ready to engage with us. It’s up to our audience and customers to dictate to us what they want.”

City Council unanimously gave the city manager’s office authority to require face coverings to be worn by not only employees of businesses that are open, but their patrons, too, with an order mandating non-medical masks, bandannas or scarves obscuring mouths and noses in spaces of public accommodation in Boulder likely to be put into place quickly.

Budget contingencies underway

Precautions are being taken in workplaces and regional public health officials are moving closer toward ramping up virus testing capacity and tracing that could bring about a more targeted approach to business closures. However, city leaders are anticipating big hits to sales tax revenues. As much as a $28 million shortfall of the approved $284 million 2020 budget, excluding utilities, is expected as a best-case scenario.

“People are buying a lot of groceries, but they’re not buying a lot of yoga pants,” CU Boulder Leeds School of Business research division director Brian Lewandowski said.

Furloughs of more than 700, or 38%, of all city employees and a hiring freeze of temporary and seasonal workers will save a combined $6 million, and officials are recommending Council approve up to a $6.5 million draw from municipal reserve funds to take them from 19.5% of the general fund to 15%.

“Staff recommends using a portion of the emergency reserves to support essential city services with this sharp revenue decline but recommends drawing the balance down to a minimum of 15% as the city remains vulnerable to other disasters which could require the use of reserves and must hold minimum balances to maintain a strong bond rating,” city staff stated in a memo to Council.

Area leaders are pleading with federal officials to design more relief programs to funnel funds to local governments with jurisdictional populations of less than 500,000, which were left out of eligibility in past coronavirus response bills.

“To close the remaining expected budget gap, the organization has begun the process to develop further 2020 budget reductions that are strategic, based on performance and based upon services we should/will provide with a focus on essential and important services, particularly during what is expected to be a slow recovery,” the memo stated.

Each city department is developing prioritized 2020 budget reductions up to 10% their of budgets.

“Departments will quantify costs associated with each Council priority projects. This exercise is not intended to result in across-the-board cuts,” the memo stated.

Second wave shapes rebound

The city’s executive budget committee will make suggestions for budget reductions based on:

  • Whether impacted services fall under the definitions of essential, important, helpful and amenity from the a city “Budgeting for Community Resilience” report;
  • Application of the city’s racial equity instrument;
  • And whether a service should reasonably be provided based on anticipated phased recovery and re-opening schedules over the next six months or year, or until a COVID-19 vaccine is developed.

Economic recoveries may end up making a “W-shape” in terms of jobs and revenues, with expectations of another slowdown, albeit a less severe one, is likely to coincide with a second wave of virus transmissions as the country returns to normal behaviors, said Richard Wobbekind, associate dean and economist for CU’s Leeds.

“Overall, we think the second piece of the W is much smaller than the first piece and we go onto a reasonable amount of economic health as we go forward,” Wobbekind said. “… We’re really wondering if the consumers get back. You have the psychological aspect, are people going to be willing to go back to stores? Those are things that we’ve never faced before.”