Greetings and welcome to a special edition of ZapCast. In light of the emergency declarations that have been issued both in the state of Texas and also nationally, we wanted to sit down and chat with someone who is in the thick of it, someone who is working through the difficult questions on emergency management, on continuity of government, uh, trying to figure out how to keep their staff healthy so that they can continue to serve the public. We spent some time with James Earp of the city of Kyle, Texas to answer and ask some of these tough questions. So, uh, we appreciate you listening, and here we go. Hey, guys. We're joined by, uh, James Earp with the city of Kyle. James, thanks for joining us, man. Obviously, we've got a lot going on right now, uh, with COVID-19. Lot of cities are preparing. Lot of cities taking their plans, their continuity business plans off the shelf that they haven't looked at in 10 or 15 years. Talk to us a little bit about what you guys are doing right now.

Yeah, sure. Thanks, Podverse. I'm excited to be here, so thanks for having me on y'all's deal. Um, so today, w- uh, everyone is really kind of starting to pay attention to the COVID-19, if they hadn't already. Uh, here in Kyle, which we're just outside of Austin for those that aren't familiar with the area, so probably one of the bigger hotbeds of, of activity in the state of Texas just generally. Um, you know, we've been meeting with the local school districts, the hospital, uh, the health department, the emergency management office of the state of Texas, uh, our local emergency management office, which is ran by the county. And, and talking through our, uh, operations and con- and continuation of operations plans. City of Kyle has done a lot in that regard, but, you know, getting an update on, on the virus, I, I think probably one of the terminologies that a lot of people have heard is flattening the curve. I'm not sure if they know what that means, so I just thought I'd take a second to talk through what flattening the curve means.

Yeah, talk about that, 'cause that's extremely important.

Yeah, okay. So essentially, i- in any type of viral outbreak or pandemic, or whatever you wanna call it, uh, you know, all of us are used to seeing or imagining distribution curves, you know, with standard deviations and whatnot. A, a typical, uh, viral outbreak that has no type of response has a very, very steep, uh, point and a very, very narrow standard deviation. So what that means is the curve is really, really high because everybody, uh, gets infected exponentially fast. Flattening the curve means squishing the top down and dragging that out over time to where the standard deviation gets, gets really, really further away. And then the curve, instead of it being a spike and exponential, becomes more of just the standard, you know, more like a standard line graph, more linear. Um, that is what the different strategies that are being put into place are meant to do. They're meant to change, uh, the viral growth from exponential to linear, uh, as much as possible.

Okay. So the, the reason we do that specifically is because we're trying to flatten that curve so that we can get, uh, all of the medical necessity under the... Basically we, we only have so much capacity within our medical system, right? And so we're trying to make sure that our medical system can sustain itself, uh, throughout, uh, you know, for a better term, the outbreak, right?

That's exactly right. Did you want me to talk to that real quick?

Yeah. Yeah, yeah. Go, go through that. Talk about that a little bit. 'Cause obviously you've been in the room with the hospital systems, so I think it's, it's important-

Right

... for some of these cities who haven't had that opportunity yet to be able to hear exactly what's being talked about.

Okay. So essentially, y- you know, what you're saying is exactly right, and, and we could see this by looking at what's happened in Italy. So when you look at Italy, right, which has, like, gone complete lockdown for, for all their major cities are pret- pretty much in complete lockdown right now. What happened was is whenever they had 300 cases of people that needed to be treated, they had plenty of medical capacity to be able to treat those folks, and the folks that are able to get treated, they, you know, the, and the ones that are being treated are the ones that, uh, need, uh, ventilation, or they need to be able to have fluid taken off their lungs. They need to be in the hospital, and they were able to provide that. But as the growth went exponential on the people who are getting sick with it, and then the ones who are most susceptible to the virus being, as we know, the, the elderly or the ones who already have some sort of, uh, you know, complicating medical factors, like, you know, something wrong with their lungs or their heart already. Those folks then, there started to be more people needing the treatment than what the hospitals have available to be able to treat. That then in turn means people aren't getting treated, and then the mortality rate increases because they may have been okay had they received medical attention. But because there was such a demand on the medical facilities, they couldn't provide it. So here in the States, like our medical facility here, uh, it's not a huge hospital, but it's, it's near a trauma one, so it's, it's pretty on, it's on up there. It's about a 300-bed hospital. They have 16, uh, quarantine rooms that are negative pressure, so they can put folks in there who have, you know, whether it be Ebola or whatever. That's, you know, it's, it doesn't have to necessarily be the COVID-19 virus. But they have 16 rooms, so i- if, if we suddenly have, you know, 45 people that are ill, well, only 16 can be treated. So that's what the whole purpose of flattening the curve is all about. The other thing that, uh, that they're trying desperately to do, the hospitals anyway, are to get, is to get the message to folks that are in local government or, uh, in a position to be able to spread the word, like you guys through this podcast or what have you, is that, you know, if you think that you're sick or you think that you may have, uh, COVID or what have you, y- you do not want to go to the emergency rooms. That is not the path to get your treatment.Because if you go to the emergency rooms, you're just gonna overwhelm even the emergency rooms who are there dealing with other life-threatening situations too. So what they're recommending-- Our local hospital actually created an, an app for the phone or through the web if you wanted to do it on your browser, and it's the, the Seton-- it's the Seton Ascension network. So I would assume anybody can download this. You don't necessarily have to be near a Seton Ascension hospital, uh, but you should be able to download this. If you think that you are exhibiting, uh, you know, any of the symptoms of COVID-19, you simply open up the app, and it takes you through the CDC checklist, uh, which then categorizes you as whether or not you're at risk for the, for the virus or not. And it's things like, you know, have you traveled to one of the, you know, to one of the countries that, you know, you shouldn't have gone to? Uh, have you come in contact with those folks that may have traveled to those same places? Uh, but then also your symptoms, you know, um, so on and so forth. If, if they think that you are a, a, a potential candidate for, uh, having been exposed to COVID, then there's additional instructions on what you need to do. And right now in Austin, I don't know about in other places, but here, uh, they're swabbing and taking the test to Austin for te-to, to be run through the lab. So that's the other thing is that there are only so many, you know, tests to be given because it's relatively new. They haven't had a chance to make a whole bunch of these. So they don't want anybody who has a sniffle or a cough to try to get a COVID test because, one, there aren't that many, and it needs to be reserved for the folks who are actually at risk, and number two, if the labs get swamped with all the swabs, then the labs are gonna back up, and the amount of time that they have to turn around on, on some sort of a confirmation of, of, uh, the COVID presence, uh, greatly increases. So the hospitals are, are trying to get the, that word out.

Yeah. So, uh, literally ten, fifteen minutes before we recorded this podcast, there was a big national press conference with the president where he, you know, obviously declared a national emergency. Um, but as part of that press conference, they talked about the next phase of the pandemic plan. Um, and that next phase being that they're partnering with the private sector, uh, specifically Roche Pharmaceutical, uh, who does a lot of, like, your, your flu quick test in the office. Um, and they're partnering with, uh, Walgreens and CVS and Walmart and Target, and, uh, Google is building a website that should be up, I believe, by this evening, where you actually will go to Google, you'll put in your symptoms, and if you qualify for one of those tests, they'll direct you to the parking lot of one of those retailers, where they'll do a drive-by, uh, which is hand-in-hand specifically with what our pandemic flu plans say that we're supposed to do. Uh, they'll direct you to a drive-by testing location. So I think, I think, uh, Seton Medical was, was way ahead of the curve on this, right? And, uh, we're starting to see kind of the national presence start to move that direction as well. Um, but, you know, really, I, I wanna, I wanna really, James, with you talk about continuity planning 'cause obviously we're government. We have to provide services. You know, water has to be delivered. Health and safety has to be protected. Talk to us a little bit about what you guys are doing internally to be prepared for continuity planning.

All right. So, so Patrick, essentially, we have looked at our organization and broken it into em- uh, put pl- employees in three pools. The, the first pool are folks who are predominantly at an office setting. Uh, most of their workload is, uh, you know, is generated, uh, either inter-service from d- from department to department or comes in via online, uh, submittals of maybe, you know, plan reviews or housing permits, those types of things.

Mm-hmm.

Then we have the folks who are, who are internal but outward-facing, you know, the folks who are heavy, uh, customer service. And what I mean by that is, like, the ladies who sit at the utility billing window or maybe the librarians or the municipal court clerks. Like, they don't have a lot of work that's generated necessarily internally for themselves. Their, their work is generated from people walking in. And then we have the third pool, which are the folks who are out in the field, and that includes everything from, uh, emergency services, police, fire, those, you know, EMS, but it, but also includes the public works and the parks department and, and those folks who are out mowing and doing the water repairs and running the water systems and the wastewater systems. So that's, that's essentially how we looked at it organizationally. And, uh, the city has been investing in quite some time in technology to... that would increase our productivity anyway, but also the benefit, the side benefit of it is it allows us to be able to essentially work from anywhere. So for example, I could have been doing this podcast with you guys while I was at the Starbucks in Round Rock, which is nowhere near where I live, and still be working because everything that I do or have access to or need to do that doesn't require an in-person meeting, I can do remotely anywhere. Now, I'm high in the organization, but the folks who are lower in the organization or who are more day-to-day type folks, uh, let's, let's talk about, like, a, a permitting clerk. Well, we have been investing in the technology that allows the home builders to put in all of their permitting requests online. And about maybe four months ago, so it hasn't been too terribly long, but about four months ago, we started requiring every permit request to be placed through online. Uh, we put in-... computers out in our lobby to be able to handle the folks who were transitioning from being able to used to do things by walking in with paper to doing it online. Well, because those building permits come in online, the permitting clerk, with the right technology on her computer and the right cloud access, and on the rare instance that she needs a VPN, but, uh, can sit at home, uh, have her phone on her desk ring her personal phone or, or the work phone that we assigned her, what have you, because all of our phone system here at City Hall is VoIP based. So I, I can be anywhere, and you call my desk, and it will ring my phone as if I was sitting at my desk. So we have been putting that infrastructure in place for quite some time. We didn't necessarily intend it for, specifically for continuity of operations, but that was one of the concerns that we thought about, and we're using this COVID opportunity, if you wanna look at it as something positive, to, to kind of stress test those systems and see how it's working. Because we already allow folks to work from home on limited schedules. Um, the, the parts of City Hall or other facilities that have to stay open, uh, we have different plans for that, and I'll talk about that once I wrap up this section about the, the work from home folks. Um, we have been, uh, putting in place conference, uh, video conferencing and other type of virtual meeting, uh, opportunities, so the, the teams can still stay in touch even if they're not here, uh, all together at the same time. So that, all that infrastructure has been, has been built and put into place, so we are able to essentially shut down probably 80% of, of the personnel or 80% of the, of the office space in City Hall and the other offices, and those folks still be productive.

Gotcha. And, and so basically, you have lim- you've already limited before we got to this customer point of contact, right? I mean, to the point of-

Yes

... as far as you possibly could. Um-

Right. That's-

You guys are in a dynamic area, obviously. There's a lot of growth. You're right outside of Austin, so technology's probably, you know, a bigger push in y'all's area than it would be in other, in other places. Out of curiosity, what, what phone system are you guys using right now?

We, we use RingCentral as the, as the-

Right

... phone system, the VoIP service provider that we use. And inside of RingCentral, I know this isn't a advertisement for them, but inside of RingCentral is also conferencing, uh, and I think you can even do the video conferencing through RingCentral as well.

Yeah, we actually, uh, we did a similar, when Chad wa- and I were both still in Hudson Oaks, uh, and Hudson Oaks has it now, but, um, it, it's so crazy the things that you talk about then and then, you know, you put into place now. But, um, you know, everybody was at, was on Cisco or ShoreTel or, you know, some of those older legacy systems, and, and we went totally VoIP where you can control your entire phone system off an app on an iPhone. Um-

Yep. That's exactly what we have too

... and, and, you know... Yeah, and we're on Nextiva, which is very similar to RingCentral. Um, and, and so having conversations with, uh, city council members at this point, you know, "Hey, we can fully operate other than the point of contact of the customer. We can fully operate City Hall. Whether we're in the building or not, we're still an operational city." Um-

Right

... and so I, I think that's important for people to understand that, you know, it's, it's tough, but like I just sent a, "This is not, you know, icing over and snow hitting the ground where we're sending our employees home. This, this is a, you know, a national incident. Um, and we're government. We have to have continuity."

That's right.

Right? So-

And this won't be the last. You know, this will not be the last.

Absolutely.

So-

So talk, talk a little bit about that. Talk a little bit about how this is different, how COVID-19 is different from being closed for a day because of ice on the street. Like-

Well, predominantly, it's because of the, it's the time, right? So the, the amount of time that the virus can, uh, can be live and you can be sick and not even realize it and be contagious, uh, is, is a, a minimum of 14 days. So that's the incubation period is 14 days. So if, if, say, for example, you know, you got sick and you needed to be quarantined, you would be away from the office for 14 days, but you had been at the office for quite some time contagious before you realized that you were symptomatic. So that's why this is significantly different than being closed a day or two for ice. And for a day or two of ice, in Texas anyway, I mean, I guess up north it may be a little different, but, you know, in Texas, you know, you, you close for ice, everybody stays home, gets a little extra day to themselves. The citizens don't get out either because, you know, they're stuck at home, uh, without ice and, I mean, with ice and not able to drive around. So they make their way to City Hall only whenever the roads kind of open up, but you're back in two days or maybe three at most. I, I can't think of a time where... In fact, the last ice storm we had here was so severe that n- only three of us even came to City Hall that day, and we just sat here with the door open to be able to make sure people didn't panic, and maybe we had one person that walked through the door. So, you know, that is a very different scenario where everything will be back up and to normal within a day or two. This is so significantly different because of the time that's involved. You know, 14 to 28 days is a long time period for City Hall to be closed to the public or closed for work because there's other, there's other issues that go into that. I mean, there are, uh, far-reaching implications of, of things that people don't even think about, such as, uh, municipal court. So all of those are statutory, right? You have to respond within so many days, and if the court-Gets canceled, you know, then how do you address all of those, you know, statutory requirements of, of time? I mean, I- it can all be worked out, but those are the- just the types of things that you don't generally think about in a one or two-day shutdown that you have to immediately start thinking about in a multiple days shutdown.

Yeah, no, I, I think that's absolutely the case. And, you know, the, the question is, is how do you ... From an employee standpoint, right? Uh, how do you, how are your employees reacting to y'all's planning at this point? How are they feeling about it?

I mean, the, the, the feedback that we're getting right now is pretty positive. I, I think they were a little s- caught off guard and surprised whenever, uh, within the last ... It's just been the last couple of days really that we've been hitting it hard around here. But whenever I started telling, you know, my direct folks and my direct department heads and then the divisions that I specifically work with, so I told them, "I, I want you to work from home on Friday, and if you can't work from home on Friday, I wanna know why." And, you know, some of them, you know, it's like, "Well, I, you know, I have access to all the online stuff, but I don't have, uh, you know, the computer at home," or, "I don't have, uh, you know, the paperwork that I'd need to be able to get into the system," or what have you. So, so a lot of them have just been pretty, pretty, um, I guess stable or even keel when it comes to thinking through the obstacles that they would have. Getting the apps on their phone if they didn't have them on their phone, for example. Uh, you know, just because the technology's there doesn't mean that everybody had a- had adopted it to use it the way that it was meant to be used, because most of them are used to coming to, you know, City Hall or coming to the library or what have you, uh, to do their work. So they didn't bother to put the RingCentral app on their cell phone because unlike, you know, people at my level in the organization and what you are used to, Patrick and Chad, is, you know, w- we kind of work 24/7. It's just kinda how we are, so we have all that stuff already because we are wired that way. But a lot of the folks that are wired to the 7:30 to 4:30 or 8:00 to 5:00, or whatever your schedule is, they're not. So some of them have been, you know, the last day or two, uh, you know, talking to their coworkers and getting advice on how to, how to make this stuff work. Uh, it's been a pretty ... It's been pretty neat seeing it happen a- across the organization and at least in the divisions that I can see. Uh, public works and those guys are a completely different category, and we'll talk about those separately. Uh, but, uh, but as far as the first bucket of people who have the ability to work from home, the technology's in place, and they, and, and the, the work that feeds them is able to sustain them at home, uh, I, I think we've made really good progress. You know, n- not all communities though are there yet, so that's, that's probably something else we ought to talk about, is if you're not there, what are you gonna do? What is the challenge?

Yeah, I mean, I think too, because-

Yeah.

Go ahead, Chad. Go ahead.

You have to weigh some different things. So i- let's say that you don't have the technology quite yet to be fully remote. Uh, y- you're basically running the risk of your people getting sick and being out for that 14 to 28 days, and then it's not even a matter of, well, we, we can't really work from home. It's like, we don't actually have the people to provide the services that the city needs to provide in this kind of emergency situation.

Yeah, that's exactly right. I think, I think the, that applies to the same idea of the folks who are in the field, and the strategy that we're looking at adopting, I think could apply. Um, so I'll just throw it out there, and then you guys can kind of chew on it and tell me what you think. But essentially, what we're looking at for is the folks that are in the third bucket, the ones that, uh, predominantly don't work in a office but work out in the fields, is we're looking at splitting those up into, into two shifts and putting them on 14-day rotations. So essentially, half of the crew would be working for 14 days, and the other half would be off, and then the next 14 days, they would s- they would flip-flop. Now, that's gonna cause some overtime issues, I know, and those types of things, but and generally speaking, probably the cost of doing that is worth not putting your entire division at risk at the same time. I think you could apply that to the folks who are in City Hall. The difference is, is that a lot of the City Hall operations aren't 24/7 or aren't seven days a week. So for those folks, you know, if you have one of them sitting at home for two weeks while the other one's at work for two weeks, well, if they're not being able to be productive while they're at home, now you're just, you're just down the manpower. But what you're doing is you're buffering yourself against losing your people all at the same time. You know, it's, you gotta decide whether it's worth, whether it's worth the financial cost for you to essentially be paying folks to be on administrative leave, or whether you would rather risk shutting down your department completely, uh, for an extended period of time because one person got sick and spread it to everybody.

Yeah, it's really just a microcosm of the flatten- the curve flattening.

That's exactly right. That's exactly right.

Yeah.

Yeah. Yeah, that's exactly right.

I, I think the first question that I would ask i- is have y'all, uh, ha- have you spoken specifically to the emergency management officials on that scenario to see if any of that overtime coverage would be FEMA reimbursable?

We have not. I have not asked that question.

Okay.

You know, with the national declaration just coming through, uh, it, it may end up being possible to do it that way. Uh, but right now, regardless of whether it's reimbursable or not, it's probably worth the cost, uh, for us anyway. I mean, our organization's pretty big-

Mm-hmm

... compared to, you know, maybe some of the smaller communities that are out there. I mean, we're not huge, but, you know, we got 300 employees. So, you know, it's, uh, for us, it's, it's gonna be costly to do it, but at the same time, it, it, it's way more costly, in my opinion, to not be able to have those services available. If, for example, if all my water crews are home sick and my water line breaks-Or one of the main transmission lines goes down, what, w- you know, what, what's my alternative then? Well, my alternative then is to call up some contractor who's gonna charge me an arm and a leg because it's an emergency to come out and take care of the break. So I'm, I'm really thinking about it from that perspective as far as the cost benefit goes, is that even though I know what the, what the cost of overtime may be if we implement this, and keep in mind, it's if we implement this. We haven't put them on, on two shifts yet, but that's where we're thinking about going. Um, you know, in my mind, even though we know what the cost is, we don't necessarily know what costs we're gonna be, uh, you know, diverting or what have you. Uh, so it's hard to do a true cost benefit analysis, but to me it just seems to make logistical sense.

I, I, I think the... I think it's an extremely interesting idea. I'm just trying to... I'm, honestly, I'm trying to poke holes in it. Um, and I haven't been able to do it yet.

No, go for it. I-

Yeah.

Yeah, I'd like to hear it, you know?

So I, I, I just... I mean, the only thing, uh... You know, I think it's an interesting idea because you're basically putting somebody in the quarantine period every 14 days.

That's exactly right.

So no matter what happens-

That's the whole point

... they, you're basically telling the employee, "Hey, you're, you're off for 14 days, but your responsibility is basically to be at home and be separated," right? Um, and that way you're, we know we have a healthy body after that 14 days is over. Um-

That's exactly right. That's the intent. Now, whether or not they do it or not, I don't know. But it's not, "Hey, go to, you know, go on vacation for 14 days." It's, "If we're gonna be paying you to be at home, you're gonna need to be home and be responsive from the hours of 8:00 to 5:00, and then you need to be responsible with the way that you are, you know, that you're behaving so you don't necessarily expose yourself."

Yeah, I see.

Uh, and then the idea is that... Right.

Yeah. I mean, I, I joked that, you know, my last week as a city manager, I have a pandemic. Um, and it's-

Yeah

... it's very interesting to kinda work through that. But one of the things I did, uh, earlier this week is I sent an email to the entire staff and I said, "Look, what you and your family chooses to do will directly impact our operations. If you have a, a immediate family member who decides to do something that's not smart and they catch this, you're quarantined."

Yes.

"And I lose you as a staff member. So understand the ripples that occur, uh, and you know, we really have to be a team. We have to work together, uh, through this process. So I'm asking you at this point..." At that point I was not requiring, uh, and I still haven't, "But I'm asking you to avoid large gatherings." Um, now our churches and, uh, and public events and all those type of things here, they have all canceled, and I imagine it's pretty much the same in Kyle.

Yeah, most of them.

Yeah.

Yeah, most of them have. That's true.

Yeah. And so, you know, we're, we're a little better off now, uh, from a standpoint of trying to protect our staff. But, uh, y- you know, my, my question for you, the, the only thing I could see is I guess if you're gonna do that, from a pay standpoint, are you gonna pay those folks to stay home and then try to average out their overtime over the full 28-day period?

Well, I think the fo- I think the folks that are on the 24/7 shifts anyway, it, it just works itself out. You know?

Okay.

The, the difference is, is that we do end up, you know, if... With civil service, we end up with the 84-hour rule, uh, in effect. But at the same time, we can still try to keep those folks on, on shift. So we can go instead of just an AB shift, a, a day not shift, you know, you go to two, two AB shifts, if you will, and then you just have those other folks off while the other ones are working. It, there will be overtime. There, there's no way around the overtime that I can think of that's legal.

Mm-hmm.

I mean, I guess, I guess technically the employees could agree to it, you know, by contract or something like that, but I don't think we're gonna go to that effort. If we have to do this for six months, yes, we will come up with, with a solution. But really what we're hearing from the, from the CDC and everyone else down is that really it's this 30-day window that everyone's kinda looking at, and that's somewhat to do because of the, of the time of year. You know, we're getting to where there's more sunlight. You know, sun- sunlight naturally, you know, degrades these types of, of outbreaks. Um, the, the hospital told us that if this outbreak had happened at the beginning of winter, then it would be exponentially worse than what it is.

Wow.

And that is because, you know, it's, it's darker, people are, tend to be huddled together more, so on and so forth. They tend to be, you know, kind of gathering up in groups indoors, they're not outside. Um, you know, that, that it would be exponentially worse. But because it's this time of year, it appears to me, from what I've been able to interpret, is that they're trying to push it, you know, another 30 days before everyone's kinda getting together again. Because eventually, I mean, this is something, guys, that we're gonna live with. This is gonna burn its way through our population. People are gonna get it. It's gonna happen. We're just gonna have to g- you know, just accept that. This is not something that we're gonna stop and then suddenly there's gonna be no COVID-19 ever again. You know, that's just not gonna happen. But what can happen is it could naturally go into a lull because of the season, and then because we did all of these efforts to, to, uh, flatten the curve, you know, the effect of it that hit us right now isn't, you know, won't be too terribly bad. Granted, people have lost their lives. Anytime that happens, it's bad, but you know, it could be way worse. So that's the, kind of the feeling that I get. I think we're looking at a, a 30-day window. If it extends beyond that, then we're gonna have to get creative on, on some of the things that you're thinking about, which is the, the, the overtime and how all that stuff works.

So let me, let me ask the question on the financial at this point. Uh, 'cause we've, we've had a lot of conversations with our client cities today, uh, specifically about impact to revenue. What are you guys thinking? Have y'all talked about it? What is it, what does it look like for Kyle right now?

Well, right now, uh, you can't find... It's the great toilet paper shortage of 2020, and everybody is, uh, buying up all the food and everything that they can buy up at the, at the markets. It's, you know, people are doing their typical, uh, you know, mania type sh- thing where they, there's a, there's a, um, a view of scarcity even though it's not actually true.

Mm-hmm.

There's a view of scarcity, and that, that view then in turn feeds itself, and then they make a run, and everything runs out. And then that then in turn validates their view of scarcity, so then it starts to expand into bigger and bigger, you know, problems. It's, it's just like the great gas crisis of Thursday from last year, right?

Yeah. Yeah.

So the, the it's the same concept. So, you know, the folks don't understand that the, you know, the supermarkets, they, they have just-in-time inventory because they don't want to have stuff on the ground that's, uh, sitting in a warehouse costing them a bunch of money. They, they, they want to have the least amount of stuff on-hand that they can possibly have, but still meet the demands of the, of their normal cyclical s- uh, shopping. So whenever everybody decides to go buy toilet paper at the same time, which normally isn't how behavior works, of course they're gonna run out of toilet paper and hand sanitizer and milk and eggs, and all those things that people are freaking out about. Now, as far as the, the revenue ex- you know, cost, one of the things that we've done, Patrick, is, is, you know, we're trying to remind people that, you know, really the f- the, the businesses that are most susceptible to this type of a, of, uh, of a mania... I'm calling it a mania. That may not be the right word. If y'all wanna edit that out, you edit it out, but mania is what I'm calling it.

No, I mean, I, I, I think it is.

Yeah.

I mean, I, I think, look, we have a... I, I think what a lot of people don't understand is there's a l- there's a ton of unnecessary panic, right? Call it mania, you call it panic.

Absolutely. Yeah.

There's a, there's a lot of that. What, what people... And, and to be honest, probably a government, we have not done a good job with this. This is not something that we haven't planned for. I mean-

No. I mean, for sure. Yeah

... we have not planned for this. I mean-

Yeah.

And, and I just don't know if we've done a good job with the general public to tell them, "Hey, we know exactly what this is gonna look like. It ain't gonna be pretty, but we have a way to deal with it if you just cooperate."

Right.

You know, if you, if you become-

So-

... a good American and you cooperate.

Well, there's also this weird incon- incongruity where people are hoarding all this, all these staples, but then they're really upset when their concert gets canceled or, you know, they can't go to a basketball game.

Right. Yeah. God.

So there's a real cognitive dissonance just among the, the normal population that, that they're trying to get ahead of a panic on, like a run on toilet paper, but they don't really see the need for the social distancing and things like that.

Right. Yeah. That's, that is exactly true, and there is a, a lot of, of dissonance in that regard. But the, you know, the, the folks who are gonna feel the change in behavior, of spending behavior and people, you know, staying at home are, at first, they're gonna be your small businesses that are local. Those guys are gonna get hit first and foremost because they're probably already running on small margins as it is. And, you know, so we're working with the chamber of commerce. Uh, right now as I'm talking to y'all, there is a, a group of, uh, various individuals from the community, including the chamber of commerce, uh, president downstairs in my council chamber that are recording, uh, their f- their Facebook Live and their, uh, public broadcast channel, uh, message that's about to go out, uh, here pretty soon from us. And it's very much the things that you guys are probably expecting. It's, "Don't panic. We're open for business. You know, do things that you would normally do. Make sure you wash your hands, use sanitizer," you know, that type of stuff. Um, but, you know, remember your small businesses. That, that's probably the biggest thing I could say. Do, uh, personally, I think we're gonna see a huge uptick in sales tax for this time, uh, because everybody's buying, and then next month it's gonna be a, a, a decline in sales tax over what we're used to. And then the two will average themselves out. That's what I think is actually gonna happen. But your small businesses that may be, you know, only operating month to month, maybe they can't survive that. So, you know, use, use Favor or Uber Eats if you are worried about getting out and having food, you know, getting, getting food to eat out or something. Or, you know, buy gift certificates. Do that kind of stuff for your local folks that you really like to support. You know, keep those folks in mind. That's, that's probably the biggest thing I could say there. I, revenue-wise, I don't think the city's gonna have much of a problem until this begins to, uh, snowball into something much bigger than what we think it is, you know, going to be. If, if they shut down Austin like they did Venice, you know, that obviously is going to have a trickle-down economic impact that, you know, o- o- of a substantial scale. So i- if we do get to that type of a circumstance, that's a different scenario.

One of the things that we've talked to our clients a lot about today, and, and we're working through that process, we're actually trying to get something thrown up here pretty quick, but, uh, is the ability to track consumer traffic. Um, you know, there are ways to do that. It's, it's qui- kinda quick and dirty, to be honest. Uh, but we, I was on the phone, I bring this up 'cause I was on the phone with one of our clients today and, and they asked the question, you know, "Can we get an idea..." And, and, and they are more, like, seriously retail driven, you know? Um-

Sure. Yes

... th- you know, it's, it's, you know, like-

Much, much more susceptible to the change.

Much sore, much more susceptible to the change. You know, your, your cities that have much more of, like, a entertainment or consumer driven, you know, they, they live or die based on the mall, those type of things, uh, those communities are gonna get hit. There's no doubt. And, and in this conversation with this community, it was an economic development director, he said, "Well, you know, we just don't know how bad it's gonna be." And I said, "Well, let's just, let's just Google right now, uh, your, uh, your Apple Store." I said, "It's 60% down in traffic." He said, "What?"I said, "Just Google it." He Googled it. I showed him. You can look on the live traffic indicator. Google's tracking you on your phones, of course. And you can look-

Sure

... on that live traffic indicator, and you can figure out real quick that that, that store's down. Well, that's probably their third or fourth highest sales tax generator in the city, right? So-

Yeah

... those cities are gonna... They're gonna be more susceptible than, say, you know, you guys are in Kyle, or we are in Hudson Oaks, where, you know, my Walmart, my H-E-B, which, uh, you know, let me say this again, I, I am always impressed with H-E-B from a city perspective.

Yes.

Um, they, they run a disaster better than most governmental entities do. They have been in constant contact with us. Um, they are, uh, I mean, just, once again, incredible job. But our store shelves are being stocked at both my Walmart and our H-E-B every single day and restocked. I'm sure you guys are seeing the same thing. And, uh, yeah-

Yeah, we're seeing the same thing, for sure

... I, I, you, you know, you're seeing, you're seeing that boom. But those small businesses, that's my concern. My concern is that guy who's running on 30 days of, of cash. You know, he can't take two weeks of no revenue, can't pay his employees, lays everybody off, throws his hands up in the air, and that's where we've gotta do a good job through our chambers of commerce, our EDCs, and, and we've gotta make sure that all these people know, you know, "Hey, there are options out there." You need to... You know, the SBA program that's been put in place, and, and they're still working some things out, but what we've told our businesses here locally is, is, "Guys, in order to qualify for this SBA program, you have to prove to SBA that you can't get credit elsewhere. So go get denied right now. Go figure it out." So you, you go to the bank-

Yeah

... and you say, "Hey, I need a line." Go ahead and get a letter from the bank that says they can't provide you a line. 'Cause the only way you're gonna qualify for this SBA program is you've already been denied. It's clear as day on their website. You know that's gonna take you some time, so let's go ahead and knock that out of the way. And, uh-

Yeah. No, that's good advice

... you know, we-

I like that.

Yeah. And, and that's, you know, those are the things that we've gotta step up and do, uh, because that sl- that small business environment is huge for not only the revenue at the local government side, but also for the jobs in, in the community and the mental health of the folks that, that are gonna go through this. And I think that's something that we, we forget is, you know, our kids are coming home for two or three weeks. This is gonna be a huge mental blip in their world. Could be positive, extremely positive, a lot of family time, you know, those type of things. But, you know, we're gonna have to deal-

Right

... with some of these things, uh, on the long term. Like, you know, you or I or Chad grew up with 9/11 early on in our lives, right? So, um-

Right. Right

... I, I think that's, you know, it, there's... It's just another thing that we've gotta do. We've planned for it. Uh, I'm impressed, James, with, with how far you guys have gotten at this point. I just-

Well, thank you

... I just wanna say that. Yeah. Um-

Yeah. Thank you very much. Now, we have been joking that there's gonna be a big baby boom from the COVID-19, so we'll-

December

... we'll have like a new... Yeah, that's right.

Yeah.

Be a new baby boom.

December. Mm-hmm. Yeah, December, December '20, there's gonna be a bunch of Christmas babies. And, um-

Yeah, a bunch of COVID babies

... you know. Okay, yeah. So, so the baby boomers have returned from war, right? So, or the kids-

Hey, so, so-

... of the baby boomers from war

So back on the retail deal that, that you were hitting on.

Yeah.

I know this is y'all's business, so maybe it'd be a good, you know, a good segue to talk about. But, but what about the value of geofencing and using that, you know, to track, you know, how folks are moving through your community and, and maybe where they're going and whatnot?

So, you know, it's extremely expensive. I think that's the, the hard thing is the data in order to, uh, to get the data from the carriers, and that's, that's actually become a little bit more difficult, uh, because people care about the privacy of their data now, uh, which is important.

Right.

We, we agree with that. Uh, but like you used to, where you could, like, geofence a public event, kind of figure out the demographic, who was there, and what your traffic counts were, and so forth and so on, that has changed quite a bit. Uh, it's a little harder to do that, but it's expensive. I'll tell you what we're doing is, is that we're taking just the, um... W- we're, we're working with our communities and trying to get the top 10 or 15 businesses that they have, uh, that are retail consumer traffic driven, and we're trying to give them real time analytics on whether those businesses are busy or not. I can't tell you sales, but I can tell you if you're busy and if you're busier than normal or you're less busy than normal. Uh, so giving just quick and dirty indicators. We're not charging our clients for that. We're trying to... Literally, Chad's been locked in a dark room all day today coding on this. Um, and, and we're trying to do that. And Chad, you can kinda chime in on that a little bit, 'cause I j- I just basically told our viewers we're gonna put something out there. Hopefully, we can.

Yeah, hopefully, we can.

No pressure, Chad.

No pressure.

You, you got this.

Well, I mean, this is something that we have been kind of toying with for a while now, and, uh, this is really a, a, a good opportunity for us to just put some, put a proof of concept out there. Um, you know, we've been looking at multiple different places where this data is possibly available. Um, given the time crunch, we've settled on one, and we'll see how it works. But yeah, that's, that's pretty much what we're trying to do, is not really project revenue or, you know, give you an, uh, an estimate of how this might affect your sales tax, but at least show you how foot traffic is, you know, throughout the city and, and these places that you depend on for your sales tax revenue. Is traffic more or less than you would normally expect if, you know, on a baseline, uh, comparison?

Yeah, no, I think that's extremely valuable, and it would be a, an valuable tool to implement or to, to merge into the already, the plans that people are putting into place, like, like I said, with us, you know, partnering with the local chamber to try and get the message out. You know, they're, they're putting their finger on the pulse by reaching out and making phone calls, but having the data to be able to give them, you know, live information, and then to know, hey, or, you know, do we need to, to, you know, to adjust our messaging, or do we need to adjust our platforms, or, or what have you in a more real time type-Setting, I, I think would be, you know, very valuable, especially... You know, let, let me tell you one story real quick, and this is a perfect example of what we're talking about. I, I have a person I went to high school with that, you know, I kept in touch with through Facebook. She has a florist shop in Dallas. You wouldn't think too terribly much about buying flowers right now, but, you know, she had a lot of large orders for weddings and whatnot, you know, things along that nature, that have been canceled. But she had already ordered all the flowers in for the arrangements, and now they've canceled and have had, you know, their orders refunded. So here she is, you know, a small business owner of maybe two people, you know, with this huge inventory of flowers that we all know is not gonna, you know, th-those are perishable, and she not only spent the money to buy the inventory, but now she doesn't have the clients, uh, to sell them to. So this is the exact example of what we're talking about, uh, for the small businesses that are running very low margins or very small margins, uh, who might be, you know, that big, that big order that came in was what allowed them to buy the inventory to deliver it, and now, uh, you know, they're not able to, to deliver that, so now they have this inventory. But then the second, uh, prong is the more far-reaching implications of this, which is, you know, China being affected the way that it has been affected. You know, they export what, like 30% of the world's exports, right? So-

Yep

... uh, you know, if, if you have, if you have goods or you have... y-you get back to the city, for example, you know, if your, uh, fittings for your pipes and stuff are from, are made in China and, and, and sold here to you because they're cheaper, uh, it won't be long before those supply lines dry up because the, you know, the, because of the situation going on in China the way that it is. So if the exports dry up, and then you have supply issues here, that is gonna cause problems not just at the local level, but at the small business level too, because they won't be able to fulfill orders or, uh, you know, be able to, to have products.

Yeah, a-absolutely is the case. I mean, you know, you're... The, the world economy now is, the, the ripple effects are larger than they've ever been, right? And so we, we have to think about those small businesses. We have to work with our chamber. Talked to my chamber today, and one of the things I, I asked is I said, "Hey, you know, how worried are we about these small businesses?" And the, the chamber president said to me, "We did a survey a couple years ago, and over 70% of the, of the chamber members that we surveyed responded back that they had less than a month of payroll in reserves." I was just shocked by that.

Yep, and this is a... Yeah, and this is at least a month of, uh, at least a month of a problem, if not longer than that.

A-a-absolutely. And so, you know, in order to salvage our local economies, we, we need to be able to provide that data, uh, in, in as real time as we possibly can. You know, we, we should be-

Yeah

... able to figure out with technology in this country, uh, what the impact is and how we can try to mitigate that impact the best as possible. You know, look, there are some industries out there like movie theaters, right, that at some point-

Right

... if this thing gets to a community spread perspective, um, you know, it's, it's like the cruise industry. You just don't wanna put people inside of a movie theater. It's just, it's just not a-

Right

... smart thing to do, right? Um, it, it... So that-

Please don't talk about the cruise industry right now.

Yeah, I know Chad's got one booked. It would be his second-

Got one for next month.

Oh, no. No.

Yeah, the last one got...

So-

We had to reschedule the last one because of, uh, Dorian, the hurricane last fall.

Yeah.

So-

Oh, my goodness. Yep. Well-

This is the cruise that will never happen.

Yeah.

So Chad, let me know next time you plan a cruise, so I will make sure I do not.

Yeah.

Will do.

So, uh, and, you know, the, the, the airline industry, those type of things are gonna get hit. I came back from Florida yesterday. I actually went to spring training to watch my beloved Astros, and, um, when I came back, I flew into, uh, I flew into Terminal D, one of the international terminals at DFW. It was an absolute ghost town. Ghost town. I mean, walked in-

Yep

... we were the only plane being offloaded on the baggage carousel. That was it. It was, it was weird.

Yeah, there's-

You know, and, but there's gonna be economic impacts, and, and I think from a governmental standpoint, we've gotta think of the continuity, and then we also have to think about our economy down the road. What does it look like?

Yeah.

Does it bounce back?

I don't, I don't wanna y- you know, I don't wanna make this too terribly, you know, broad a national perspective. We can dial it back down to the local. But, you know, to, to your point, uh, a good friend of mine owns a, a business in Australia, and, you know, they're reporting, you know, the Qantas, which is predominantly international flights, you know, all of their folks are on furlough right now because all the planes are grounded because none of the planes can fly anywhere. So that many people on furlough, you know, all those employees, all those planes, everybody that supports it on the ground, you know, there is definitely going to be an economic impact of, uh, an economic shrinkage worldwide of the global economy for sure. Now, dialing it back down to the local level, you know, locally, we're a little bit more insulated unless, like you said, you know, you, you are one of those cities or one of those, uh, you know, local governments or even counties, I suppose, that are very heavily, uh, funded through entertainment or our sales tax, and you don't have a lot of commodity sales.

Like if you had a Final Four tournament scheduled?

Yeah.

Yeah, you know, something like that. That, that could be it. That could be a, a big, a big drain, you know, for sure. But yeah, if you're one of those folks, you know, obviously this is gonna hit them really, really hard and really, really fast. For those of us that are more, you know, diverse or aren't lucky enough to have those things, 'cause a lot of us that don't have it look at it that way, is like, we would like to have those things and we don't. So, you know, we're more w- you know, we're more insulated from this, and it will take a longer time. But, but at the same time that this is going on, guys-Russia and OPEC are in a oil war.

Mm-hmm.

And while that may not necessarily sound like something we need to worry about domestically, the oil prices plummeting are affecting the oil business in, in Texas, which has predominantly been propping us up economically while the rest of the United States have been in a, a recession and kinda slowly crawling its way back out. So if we lose all of the jobs associated with the oil fields and the oil business because of the, of the oil, uh, war between Russia and OPEC, um... And I read an interesting article today that, I don't know if this has any credence whatsoever, but it, you know, sounds cool, sounds like a conspiracy theory. So, you know, the whole concept, the whole concept was is that Russia and China are trying to shift the global power. So Saudi Arabia being a US ally who runs OPEC essentially, that, that's why the, the oil war is going on, is that Russia and China are trying to pull, uh, you know, their, their weight to pull control of the, of the global oil, oil economy into their favor away from OPEC. And it just so happens all these things are happening at the same time. So, you know, there may be, is, I guess what I'm saying is there may be economic impacts that are far-reaching that are coming down through, through the ripple effect that have absolutely nothing to do with COVID, but COVID happening at the same time is, is definitely gonna exasperate the problem.

You know, obviously this is, these are different times for cities. Um, you know, it's been very interesting to talk to everybody in the career. One of the greatest things about being a manager in the state of Texas or being affiliated with Texas city government is, is just how close-knit, uh, our group is, right? And-

Right

... we are extremely blessed to work in this state with the group of professionals that, uh, that we have. And so man, I just, I just wanna take a minute. I wanna thank you for coming on, spending time. I mean, obviously you've spent almost an hour with us. You guys have got a lot going on. Um, I know you've been stuck in a lot of meetings all day and, uh-

That is true.

Yeah. And so we, we are thankful that you took the time to spend time with us so that, you know, hopefully a couple hundred other folks out there that work in local city government in Texas can kinda hear about what you guys are doing. So, uh, we appreciate that-

Well, thank y'all for-

... and thank you very much.

Yeah. Thank y'all for putting all this together and for making the opportunity and the platform available. You know, I, I obviously didn't go into tons of detail about the things that we're doing, but I'd be more than willing for you guys whenever y'all put this up to make sure that you link my contact information and anybody that listens and feels like they need more information or they wanna find out more about the things that we're doing or the technologies that we're using or how we're implementing the work from home policies and, uh, you know, the shift, uh, variations and cutting out all of the employee meetings and minimizing, you know, contact in that way. Uh, you know, all they have to do is reach out and, and I'm here to... If I can't help them directly, then I will definitely get them to folks that can, but I'm happy to spend the time to help them too, because we're all in this together. You know, it doesn't do me any good to, to work it really well here in Kyle and then for all the communities around me to muff it, and then everybody there to be sick and, you know, and get my people sick regardless of how smart I'm playing. So the more of us that can play on the, with the same rules and try and get, you know, strategies that work together, the better in my opinion.

A- absolutely. So man, thanks so much for coming on with us. Uh, we really appreciate it and, uh, you know, I'm sure we'll be talking to you in the future as well.

Yeah. Keep me in mind. I'm happy to help you guys out. Uh, thank y'all so much.

Absolutely. That is it for the COVID-19 edition of ZacCast. If you would like to reach out to James Earp, just check the show notes for his contact information. Thanks for listening. We'll see you next time.