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ZacCast

It's May 1st, and Texas is officially reopened. Pat and Chad discuss Governor Abbott's order to reopen the state, whether the general public will jump at the chance to get back to normal, and how localities will be impacted by the enforcement mechanisms of Abbott's plan.

Transcript

0:11 Chad
Hey, everyone. Welcome back to another edition of ZacCast. I'm Chad Janisek here with Patrick Lawler. How you doing, Pat?
0:17 Patrick
Hey, I'm doing good. It's, uh, it's a little different.
0:19 Chad
Excited for today?
0:21 Patrick
I'm excited for today, yeah. I am, I am in quarantine inside my house.
0:25 Chad
But no longer are you required to stay at home because as of today, as of this recording, across the state of Texas, the governor has ordered that locations and businesses can reopen.
0:38 Patrick
Uh, uh, I, I w- can I applaud that? Like, can we get some background music just like, wah. You know, get it out there.
0:44 Chad
And I, I don't have access right now to a bunch of like sound effects, but I'll, I'll see what I can do before we actually publish this.
0:49 Patrick
We, we are, we are not in a normal studio environment at this point. We are, we are at our houses podcasting away from each other. Uh, easily a 35-mile difference at this point. So-
1:02 Chad
Yeah. I'm not even sure-
1:02 Patrick
... we're, we're as close locally as this
1:03 Chad
... I've seen you in person in like seven or eight weeks.
1:05 Patrick
It's, it... Well, I've seen you on, you know, the, the Zoom calls. So my-
1:11 Chad
Yeah, but that's not, that's not in person.
1:12 Patrick
It's not in person, but my background is better than your background on Zoom.
1:15 Chad
With your Eat, Pray, Love-
1:17 Patrick
I had Eat, Pray, Love
1:18 Chad
... uh, wall art.
1:19 Patrick
Uh, yeah, I had Eat, Pray, Love wall art, and, and now I'm really big on the beach scene. I've got the beach scene in there now.
1:25 Chad
Is this wishful thinking?
1:28 Patrick
One day. One day maybe we'll have a vacation, right? So, well, let's talk-
1:33 Chad
So tell me-
1:33 Patrick
... let's talk about it.
1:34 Chad
Yeah.
1:34 Patrick
Yeah.
1:35 Chad
What do you think about it? Give a little background, if you don't mind, and then kinda give your opinion.
1:39 Patrick
Yeah, so I mean, you know, obviously, um... Well, first off, let's talk about why, why haven't we, we podcasted in a month. Uh, I think that's the first thing we wanna jump into. And, uh, and, and the main reason we haven't podcasted in a month, guys, is, is not because we went into hiding and quarantine. It's because we were just, uh, we were working with so many clients, so many different cities, and, uh, we, we basically were dedicating 100% of our time to working with those municipalities and those counties and special districts to get them the information that they needed and do those analysis projects that they needed us to do. So, uh, you know, we appreciate you bearing with us, uh, for a month as we, as we jump back into it. So yeah, I mean, you know, look, COVID, uh, and COVID-19 has been a big change for our country, a big transition. Uh, we've got a lot of things going on. Uh, you know, there's a lot of information that's out there. It's almost information overload at this point. You get differing opinions on both sides of the equation. You have huge swings and, uh, in, in, in people's thoughts on the issues. Um, you know, and then we're dealing with, you know, all the ramifications of people being stuck at home for the last, you know, month and a half. So, you know what? I am, uh, I'm excited that we're getting to this 25% opening. I think we're gonna jump into having conversations about, well, what does that mean for those businesses? Uh, you know, are, are, are those businesses gonna be able to truly operate at 25%? I think we've seen a lot of folks say no. We've seen a lot of industries that have come in and said there's just no way for us to operate at this level. Uh, and, and we'll get into that. But, uh, you know, I, I, I think, look, we're, we're taking a step forward. Uh, it's a small step, but we are taking a step forward to kinda get back to what I would say is the new normal. I, I don't think it's fair to say it's gonna be normal. It's gonna be a long time from normal, but we're gonna try to get to a new normal.
3:27 Chad
So, so one of the questions, 'cause th- obviously there's been some controversy around this, and I saw, uh, an article on The Hill that was saying, uh, Texas hits its one-day death total, or, you know, one-day peak death total the day before everything reopens. Um, I've been personally, um, a little bit back and forth on this question of when do we actually reopen. And I think what I've finally kinda come around to is just the, remembering the purpose of the quarantines in the first place and the, and the shutdowns in the first place. Um, you know, when we, when we first, probably six, seven weeks ago, when we first started to, to see these shutdowns, the big, the big purpose, the stated purpose was we have to make sure that we can flatten the curve and maintain capacity in our healthcare system. Uh, over time, the, the narrative has changed a little bit, and, you know, the longer we've all been at home, the more we've kind of, uh, forgotten the initial limited purpose of those shutdowns. And, and so now you hear a lot of arguments about, well, maybe we should stay shut down till we have a vaccine or till we have some kinda cure or till we know whether some medic- you know, medica- medical treatment is particularly effective at, uh, at, at resolving the, the COVID-19. The problem with that is if that's the, if that becomes the new goal, like, we may never, we may never actually get out of this shutdown. Uh, vaccines for coronaviruses are, uh, notoriously hit or miss. And, uh, I mean, who knows? There's some promising reports out of, uh, I think, uh, the UK. But I mean, we, we sh- could still be months away from a, from a vaccine, if not years away from a vaccine. So yeah, that's been, f- for me at least, a- and you can kinda chime in on, on your opinion. I know you've been a little bit more, uh, eager to, to get out of this than I have. But, uh, for me, just remembering the actual purpose that we started with and, and h- resisting the urge to sort of move the goalposts as we get further and further along.
5:31 Patrick
Yeah. So, you know, one of the things is, is that, uh, you know, for me, a little, little bit of background on what's going on in my life right now. Obviously, we're super busy with Zach, uh, and we've got a lot of stuff going on there. But I was also appointed five or six weeks ago by a county judge, uh, to, to help lead a task force, uh, here in Parker County. And so a lot of the information that comes in, a lot of the medical professionals, a lot of the public health folks, uh, you know, I've been, uh, very lucky to be able to sit around a table and have conversations with those individuals and, uh, communicate and, and look at some data and numbersThat really honestly are available to the general public. It's just a lot harder to find. Uh, you know, Tarrant County has done a tremendous job. Tarrant County being where Fort Worth, Texas is, uh, for those who, uh, listen to us out of the state. Uh, you know, Tarrant County's done a tremendous job of putting numbers on their website. Uh, and, you know, their, their focus in their numbers has been in case counts. Uh, and, and I, and I don't know if that's necessarily the-- where we should focus 'cause it's so hard to be able to correlate case counts at this point. Because, you know, when we were looking at case counts and we were barely doing any testing, that was, that was a good number to look at. But at this point, you know, where we've ramped up testing by, you know, tenfold in Fort Worth and Tarrant County and DFW in general, um, you know, it's hard to use case counts. And so, you know, we've really come to focus on hospital capacity, which is, you know, what you're talking about, Chad, which was flatten the curve. You know, that's what we heard over and over and over again, was flatten the curve. And, and you're right. It, it seems like there's been a, a, a national change in that mentality to not necessarily just flatten the curve, but, but also to, uh, we've gotta do everything we can to keep people from dying. Uh, and that's a much, much harder bar, uh, to set in reality. Uh, from a public policy standpoint, we, we have people that die all the time from diseases, and we do not have the wherewithal to save everybody from disease. We just, we haven't been able to do that. Maybe one day we will, but I, I, I just-- It, it hasn't happened yet. And I think what, y- you know, what, what I've been in tune to, and, and Chad is correct, I am much more on the, uh, open Texas bandwagon. Uh, you know, I'm, I'm not saying we need to go to 100%. I think we need to be responsible. I think we need to listen to those health professionals. Uh, but, you know, we've, we've seen, you know, th- that Hill article is-- it's kinda misleading. Yes, did we have our highest number of, of deaths? Somewhat, y- yes, but the reality is, is that that was the reporting deaths. It wasn't necessarily the day of the death. It was when the deaths were reported to DHS, so it's, it's not necessarily a good number for the day. And two, what we have seen is when those, when those deaths get put back to where the actual day that they occurred, we've really been at a flat, uh, kind of a plateau as a state. We've, we've seen, uh, we've seen case numbers go up significantly 'cause testing has gone up, but we've seen deaths plateau, and so they've been flat for a number of days. Five, six, seven days here in the state of Texas we've seen flat in those numbers, just bouncing around very little. Um, and s- and I think that's, that's been the real problem with this, is, is that, you know, there is a lot of information out there, and so there's a lot of opinions, and we're hearing from a lot of different people how they feel. And everybody on social media is an expert. And, and, and look, I, I appreciate that everybody's looking out for their family, and I think they, they need to do so. But we have to also, at that same time, we have to get to a point of individual choice. And, and that's why, um, you know, when you're a local official and you know that local business and, and you know the sweat equity that they've put into that business to get that business open, and you see all those businesses that are losing everything, those families that are losing everything, that you know they're some of the hardest-working people that have bootstrapped their way to it, um, a- and, and it just, it's, it's painful. And so, yeah, it, it's had an impression on me, and, and I tend to be a little bit more on the individual responsibility side. You know, I ha- I have other issues. I, I'm a big local control guy, always been a local control guy. Uh, I don't care if you're a big city with more of a liberal tilt or you're a smaller city with more of a conservative viewpoint. I think we're a very big state, and I think we have to have some local control aspects that, that come into play. And, and, and that in Texas started that way. Thought the governor was doing a great job, and, and then that's been taken away. So locals at this point have kinda had to throw their hands up. And other than tracking, tracing, and, and trying to, you know, make sure everybody has proper PPE and testing supplies, we've really been given little authority to help those small businesses here. And so that's-- It's just been a painful thing at this point.
10:13 Chad
So we can talk about that, uh, you know, the local impact on the governor's orders. But just for some reference, uh, I'm looking at the University of Washington's health data for COVID-19, specifically for Texas. As of April 29th, which is two days ago as of this recording, um, Texas needed 1,200 beds and had 28,600 available. Needed 303 ICU beds, had 2,260 available. So, I mean, I think it is fair to say, uh, whatever your opinion on whether we should reopen, it's fair to say that the closures over the past six weeks have helped maintain the availability of our hospital resources. Um, and Patrick, you were talking about, uh, death placement, and which is a really morbid thing to, to discuss. But-
11:03 Patrick
Right
11:03 Chad
... if you look back at the past 14 days in Texas, um, on April 17th, we had 37 deaths recorded. Um, there have only been two days in that window where we had more than that. Everything else was actually significantly less. So yeah, you-- we've had a couple of peaks where we've had some deaths that had not previously been counted and were now being reported. Um, but 48 deaths reported on April 23rd, 53 on April 28th. Other than that, it's 14, 15. It's, it's a, it's a much lower. So I think that you're right. If, if you were to put those in the actual day where they occurred, I think you'd have a much different story about, uh, our plateau, as it were.
11:44 Patrick
Yeah, and it's anecdotal, but, uh, Tarrant County does that. If you go to Tarrant County's data website that they've got, they actually go back and record... You know, they may have a spike on the day that we're in currently, but they actually go back and record the deaths to the actual day they occurred. And so you, you can get a better idea of what that looks like. It's anecdotal. It's, it's just Tarrant County. Uh, and, you know, but they have their own health department, so they tend to be able to control their data flow significantly better than some of the smaller counties can. So, um-
12:13 Chad
So let's talk about this 25% reopening.
12:16 Patrick
Okay.
12:16 Chad
So it, it doesn't apply to everyone, um, but th- there are a couple of non-enforcement questions, um, that, uh, should be considered in terms of how this is gonna impact society. The first is, are people gonna feel comfortable going back out? Um, I think maybe at 25% you're probably, uh, there's probably at least 25% of the population that's ready to get, get back out there. Um, so, uh, you know, if we had, if we had decided that we were gonna reopen at 100%, I don't think that you would have 100% capacity taken up. Um, yeah, yeah, we wouldn't get back to normal overnight, but 25%, you know, we may be able to kind of meet those, uh, meet those thresholds. But the big question is, can every business operate at 25% and make it worth reopening, right? And we probably won't be able to answer that question here, but it's something to consider as you look at the impact of these reopenings, particularly for, you know, uh, as a city official or a local government official from a revenue standpoint. Um, not every business, uh, will be able to scale linear- linearly, you know, in terms of their cost structure versus the revenue that they generate. So if you're making X at 100% open, you may not be making one-fourth of X at 25% open. So, so there's gonna be other calculus, uh, involved beyond just do, as a business owner, do I want to reopen? If it's not financially feasible for you to reopen at 25%, you may not have everyone, uh, participating in that.
13:46 Patrick
Yeah, absolutely. I think, you know, one, as a business owner, you've gotta make the personal decision on whether you wanna open up. Uh, and then two, when you do open up, you've gotta make a decision or you've gotta be able to figure out a way to be profitable when you, when you do open up. I've had quite a few conversations with restaurants, especially smaller restaurants, that, you know, they, they had figured out a way to stay alive, to make a little bit of a profit on to-go and delivery, and the problem is, if they open up at 25%, if they eliminate that side of the business, then they, they're no longer profitable, right? So they, they have to do both now. They have to build-- They have to use the apparatus that they built for this to-go and pick-up business, and then they also have to serve their normal inside tables like they would every day at a service level that is respectable. And so I, I-
14:31 Chad
So, uh, real quick, real quick. Uh, th- these-
14:33 Patrick
Yep
14:33 Chad
... restaurants that you've talked to, are they using, like, the Grubhub's or DoorDash, or are they doing their own operations?
14:39 Patrick
So, uh, a couple of them we worked directly with to... You know, they, they kind of bootstrapped their own delivery system early on, and then they went into the Grubhub's after that, right? So it took about, took them a week and a half or so to get on the Grubhub platform, and, and then they got on there. And, and the problem with Grubhub is they take about 30%, right? So-
15:00 Chad
That's so much money
15:01 Patrick
... they take so much money from these local businesses, and so, uh, you know-
15:04 Chad
And, and another huge problem is that, uh, they end up charging a promotion fee just to get at the top of the search results.
15:10 Patrick
Of course.
15:10 Chad
So I mean, you may lose 25% on that on top of their actual service fee.
15:14 Patrick
And, and anybody who's worked in restaurants or managed in restaurants knows your, your, uh, your margins are already razor thin. So if, if you, if you take 25 or 30% of that and, and lose it... So what, what they end up doing is they raise their prices on DoorDash, right? I mean, that's just, that's what ends up happening. So instead of a $10 burger, it's a $13 burger. Uh, and DoorDash allows them to do that. They don't publish that, but that's, that's the case. That's what happens.
15:40 Chad
Well, they, I mean, they should do that. Th- there's no really reason-
15:43 Patrick
They, they... Yeah
15:44 Chad
... for you to, for you to pay, uh, a third party to facilitate a transaction and then also have it delivered to your house for basically the same price. I mean, we should all... You should kind of assume that should be built in, that you're, you're using a middleman and it should, it's going to cost more. I mean-
16:01 Patrick
Correct. Yeah
16:02 Chad
... these things are extremely convenient and, you know, I am happy to, uh, have them available, but when it comes at the expense of the actual business, that's... Like, if the only people making money in this process i- is DoorDash or Grubhub, that's a problem long term. So th- be mindful of that. If you, if you have the opportunity to order directly from a restaurant and have them deliver it versus going through DoorDash or Grubhub, you might consider doing that.
16:28 Patrick
Yeah, a- absolutely. Yeah. I mean, you know, if, if you pick something up from a restaurant instead of getting delivery or they have a direct delivery service, uh, through the restaurant, they're always gonna make more money on that. Always support the local restaurant first before you have to go to Grubhub. That's, that's just the easiest way to say it, especially if you care about those local businesses and, and their survival, which is... You know, a lot of these small towns that, that, uh, that we work with, these smaller cities that only have three or four restaurants, um, you know, it's vital that we do everything we can to salvage those three or four restaurants. Been extremely proud of what some of these smaller towns have come out with, uh, program-wise to, to help stabilize the economy and, and keep those businesses and, uh, you know, really tr- getting them to profitability and working directly with them. Heard some great stories on that.
17:13 Chad
It kinda reminds me of Groupon. Uh, I remember stories a few years ago about these local businesses that would get into this, like, vicious cycle using Groupon, where, uh, they ended up spending so much money on the Groupon that the only way they could generate the volume was to do another one, and they just kinda kept digging themselves deeper into a hole, like trying to make up for, uh, a unit loss with more volume. Uh, so yeah, it's, it's tough 'cause I mean, some s- you know, a lot of restaurants don't have even a website. They just have a Facebook page with their, a picture of their menu on it. So how are they supposed-
17:48 Patrick
Mm-hmm
17:48 Chad
... to build in the technology to take online orders or to take orders for delivery, uh, especially overnight? I think it's, uh, it's definitely a weak spot in our, in our restaurant market.
18:01 Patrick
I mean, you're one of the best coders around, Chad. How long would that take somebody to build? I mean, we just don't have the apparatus and manpower to do that for every local restaurant that's around, right?
18:09 Chad
Yeah. It, it would be nice if there was some kind of platform. I'm sure there are. There have to be.
18:14 Patrick
Like a sh- there have to be, like, Shopify's for that, right? I mean-
18:17 Chad
Yeah
18:17 Patrick
... yeah
18:18 Chad
... for restaurants that would-
18:19 Patrick
Yeah
18:19 Chad
... you could basically just pay a flat fee to use their service, and then it wouldYou wouldn't have to use a third party like, like Grubhub or whoever else. I keep saying Grubhub just 'cause it's like the canonical, s- uh, provider, kinda like we always talk about Uber even though there's a variety of different, you know, alternatives. But-
18:37 Patrick
Correct. Yeah
18:37 Chad
... so let's get in- into the actual details of the governor's orders, um, and what they portend for local governments, like how, how the localities are actually gonna respond to these orders.
18:49 Patrick
A fair warning before we get into this conversation. I'm gonna get on a soapbox. So, um, but yes, let, let's talk about where we are. So... And, and I think you have to go back. You have to look at where we started. The governor originally came out and said, "Look, you know, I'm gonna declare an emergency. The counties are declaring emergencies. Cities are declaring emergencies. The locals really have to do this at a local level. It's gonna be different everywhere. We're a big state, 254 counties." He would, he would say that over and over and over again. Then he got beat up by really one, maybe two urban counties in particular about not having a forced statewide shutdown. Um, and so he at some point, uh, implemented a statewide stay-at-home order. And, you know, at the time, I, I don't think people really realized what that meant and what that was gonna do economically to many of our communities. Uh, but you know, it has hurt. It's hurt jobs. Uh, it's, you know, you've got basically almost one in six Americans at this point have filed unemployment. Um, you know, in small counties like Parker County, we've, we've gone, you know, basically we're averaging 1,000 unemployment filings a week at this point, so we've lost 4,000 jobs in the last five weeks, right around there, last four to five weeks. And you know, it's, it... We, we've come a long way. So what, what is-- what's happened, though, is that it somewhat has slowed the growth of COVID. And as we've slowed that growth and we've seen some cases start to fall and we've seen deaths level off and we've seen that our hospital capacity is, you know, not utilized much at all, uh, you know, we're, we're well below 50% across the state, and that doesn't actually include the surge capacity that's been built across the state. If you, if you add the surge capacity for hospital space that's been built, I mean, you can add almost, I believe it's like another 18,000 beds statewide. Uh, so, you know, we, we've come a long way. So as we were going through the process of locally trying to figure out, 'cause the governor's office was not very clear with us. You know, "We're gonna reopen the state. You need to be prepared for when we reopen the state. Uh, we don't really know what that's gonna look like." And we kept asking the question, "Do we need to build local rules?" And, you know, the answer we're getting back is, "Well, we don't really know. We're gonna form a task force." And so in Parker County specifically, we had a task force to reopen businesses formed two weeks before the governor's office did. I mean, when the governor announced his task force formation, we were shocked that he was just now announcing his task force formation, because we thought that was already done. We thought he was g- making an announcement on what we were gonna do, you know, in late April, May 1st. Uh, and in fact, he was just forming a task force that had about seven to 10 days to make an announcement on April 27th for the May 1st opening. So long story short, we had built a lot of our local plan, and we had communicated through, uh, numerous local individuals, including, uh, you know, some of our local representatives here, uh, state representatives and, and state senators, um, to the governor's office about, you know, what they were looking at doing. And, and basically the Friday before April 27th, it was communicated down to some of the locals, and, uh, we were kinda told, "Well, this is what the governor is thinking about doing." Nothing was put in paper. Nothing was officially coming from the governor's office. It was all kinda just like, you know, backdoor communication. And, you know, two of the things that came up in that conversation specifically was, uh, was occupancy. The governor wants to do everything by occupancy. And then, uh, the, the crazy thing was movie theaters, uh, you know, that, that he put in there as well. And on the local side, we just, we looked at this and we said, "Wow, uh, these two items show us that, one, the governor really has no local representation on his opening task force at all. Uh, and two, he, he's showing, at least to us in the near term, that he's a little out of touch with actual business operations." And I'll, I'll get to that one in a, in a little bit, but let's start with the occupancy question and why he didn't have any local representation. So in Parker County, we had a committee of five city managers and myself, technically six city managers even though I'm not a city manager anymore. Uh, and, and we got together. In our first week and a half, we started, you know, basically spitballing ideas about how we would reopen, what it would look like, talking to medical professionals, uh, talking to our local hospital district, also including our chambers of commerce and things like that. And, uh, it-- we came to the conclusion real fast that we couldn't use percentage occupancy. I, I mean, you know, on the face of it, we were like 25%, 50%. These are easy numbers to use. It's easy for the public to understand. Maybe this is what we should use. But when we started digging into it, and, and because we have a lot of knowledge, I mean, I think our group had well over 100 years of city management experience. Uh, but when we, when we came to it, we knew occupancy wouldn't work, and the reason occupancy wouldn't work is, is because the public doesn't understand how occupancy is measured. So, you know, occupancy is not always measured by table, number of chairs and tables in a restaurant. So if somebody walks in a restaurant and they see tables and chairs and they think it's 25% occupancy, they're gonna assume that only 25% of the tables and chairs in the, in the restaurant are full. Well, when that restaurant submitted their proposal to the city for occupancy calculation, they probably packed in as many tables and chairs into their plan as they possibly could, and they may have only built out to 70% of what they were approved for. So they may, in turn, really be filling 45 or 50% of their tables and chairs, and the public's gonna walk into that restaurant and they're gonna freak outAnd, and our, our point was is that we're doing a disservice to the enforcement side at cities, but we're really doing a disservice to our local business owners because we're putting them in a position to where when they're at 25% occupancy, they're gonna look like they're cheating. And we don't want them to get blown up on social media. Uh, you know, those sales tax dollars are extremely important to those local cities. But more importantly, we don't want the public to be confused. And, you know, I could go into de- uh, extreme detail, uh, specifically about, you know, why occupancy doesn't work. You know, outdoor patio space a lot of times doesn't count towards occupancy numbers. People don't understand that. Uh, if there's no roof over the top of it, in a lot of cities it d- it doesn't calculate. Then you get into the nitty-gritty details of different cities calculate occupancy different ways because they may be under different codes. In Parker County alone, you've got some cities that are under the 09 codes, some under the 12s, some under the 15s, and some under the 18s. And then almost all of those have different NFP codes as well that govern occupancy. So it's just a, it's a, it's super confusing and hodgepodge, um, and, and it's just very difficult for the public to understand. And so you ask the question, "Well, what did we propose through back channels to the governor's office?" And, and the answer was is, is we proposed social distancing. We basically proposed that you should keep everybody six foot apart from each other, and you should keep tables at least 10 foot apart from each other. And, and that way you could assure that they met the CDC guidelines, uh, for being separated, and it would regulate occupancy. And we did some calculations on four or five restaurants in town and basically figured out that would put us somewhere at 35 to 50% occupancy for pretty much everybody. Um, but the problem comes down to that local control question again. The governor's office doesn't have a single person who's ever worked in a city government or been a code official, and there's nobody of any of those business owners that are on there that understands that question and how that's enforced by locals. And to make matters worse from an enforcement standpoint, not everybody in a city that works within code understands occupancy. It's usually one or two individuals in some pretty sizable cities that understand how occupancy is, is calculated. So, uh, that's a lot of soapbox on that issue, Chad. I, I know you probably wanna go back and forth and answer, ask some questions on that, so...
26:44 Chad
Well, I guess the big question is, despite the difficulties, is it better to have something than to have complete local control over those decisions?
26:55 Patrick
As in it would-
26:56 Chad
In other, in other words, if, if the order had been, "Okay, uh, every city manager and mayor can decide what they wanna do," and go. Obviously, that might, uh, have allowed for more, uh, unique choices based on the actual conditions on the ground. Um, but it would've been equally hodgepodge. So I guess the question is: Is what we have now better than what we had yesterday?
27:21 Patrick
I think what we have now is better than what we had yesterday, yes. But I think it would've been very easy... And I, and look, I agree on the hodgepodge argument, but Comanche County is very different than Tarrant or Parker County, right? And are you going to legitimately enforce on the 52 or 3 counties in the state of Texas who do not have cases the same requirements that you're enforcing on Tarrant County or Dallas County, Texas? And, and that's just a-
27:47 Chad
Well, those, those counties are actually open at 50%, right? If you have like less than five cases.
27:51 Patrick
They, they were able to... They were open, yeah. But and, and then we get into that argument, right? Like the arbitrary number of five. So Comanche County with a population of 10,000, right, could have four cases, which is a substantially higher percentage of their population than Parker County, who may have, you know, at the time we had seven cases with a population of 140,000. Like there, there's no logic to what he put on there. He just... At, at the end of the day, just being honest with you, the governor was lost. He didn't know what to do. He didn't plan for it. He was two and a half weeks behind what happened, and he didn't ask for help because they didn't respect local governments, and he should have. If you go look at Oklahoma's plan, which by the way is well-written. Can't believe... Nobody likes Oklahoma. I'm just kidding. But I mean, Oklahoma has a very well-written plan, and front and center on the Oklahoma plan is the Oklahoma Municipal League assisting-
28:48 Chad
Did I, uh-
28:48 Patrick
... with the writing of that plan.
28:50 Chad
Speaking of that, did I tell you what my, uh, my young, my son, uh, started s- saying in the car at the Target curbside pickup the other day?
28:59 Patrick
No, you did not. What did he say?
29:00 Chad
Okay. I, I, I will leave it, but he had his-
29:02 Patrick
Okay
29:02 Chad
... his, uh, Texas Longhorn shorts on, and he was, uh, using a familiar phrase to us Longhorns about our rivals to the north. So I'll just leave it.
29:14 Patrick
So I, I'm, I mean, look, th- this is like one of the, the few things in college sports that Chad and I agree on 'cause he's, he's a Texas guy and I'm an Aggie. Uh, one thing we can agree on is we don't like Oklahoma. So it just is what it is. But, uh, you know, Oklahoma did a better job. The plan that they put out has clarity. It tells people if the numbers dictate what the next step is, and right now in Texas, we don't know that. I mean, we have gym owners and hair salons and nail salons and, uh, you know, all different types of uses that weren't allowed to open under this plan that were just left in limbo. Uh, they can't go to their banks and, or tell their landlords how long it's gonna be till they reopen 'cause they don't know. They can't renegotiate anything. All they can do is declare bankruptcy and go under. And in small town Texas or medium sized tow- in all town Texas, businesses are literally going under overnight because from a public policy standpoint, we, we have not provided clarity. You can't plan anything without saying, "This is what we are shooting for. This is our goal. This is where we wanna be." And let me just talk about how out of touch that is. That's the second point I was gonna make. And, and like I said, I was gonna be on a soapbox, and I'm on a soapbox, so... But the second point I'm gonna make on this is we also told the governor's office specifically that he didn't need to worry about movie theatersWhy did, why did we do that? Because we picked up the phone and we called the two movie theaters that we have in Parker County, and we said, "Hey, guys, wanna talk to you about safe practices. Want you to teach us about your business. Tell us how we can work together." And they, they said, "You know what? Hey, uh, love that you guys reached out to us. We're not gonna get new movies until July 1st from the mu- movie picture association, so don't worry about us right now. Like y- go work on some other local business. We appreciate you reaching out to us, but, you know, we care about those other guys, and we know we're just not really gonna be able to operate till late June or early July."
31:06 Chad
Did you see the numbers, by the way, on the, uh, the Trolls World Tour?
31:09 Patrick
Yeah. Oh, that's a, that's a whole other podcast that we gotta-
31:11 Chad
Yeah
31:11 Patrick
... get into 'cause that's a, that, that's-
31:13 Chad
Yeah. Movies-
31:13 Patrick
... that whole storyline right now with, with AMC coming out and saying that they won't play any Universal movie is... I mean, it's just... Oh, it's so good to talk about. Let's not waste it here, though.
31:24 Chad
Okay.
31:24 Patrick
We'll come back. That, that's a to be continued, right?
31:26 Chad
Uh, yeah, I just, uh, I'll just-
31:27 Patrick
Yeah
31:28 Chad
... say it's, we may not have had to worry about movie theaters because come June 1st or whatever, they may be in a lot more trouble than just because of the coronavirus.
31:37 Patrick
Uh, uh, I mean, absolutely. But they're fighting back. Hey, and you know what? There's, they've got a business model. I loved paying my $20 to watch Trolls at home, I'm not gonna lie. But, uh, you know, it, I, I respect where that's going, and I, I know there's gonna be a significant change in their business model. Um, but y- back to the story, we, we talked to movie theaters. We told, through the back channels, the governor's office, "Hey, don't open movie theaters. It doesn't, it doesn't make any sense to open movie theaters. Let's look at some other uses. Let's... I know you guys are crunched on time." I mean, he was so crunched on time that he originally planned his press conference to happen early on the 27th, then it was midday the 27th, then he pushed it all the way to 2:30 on the 27th in the afternoon. I mean, he, they, they didn't know what they were gonna do for so long to put this plan together. Eventually, 63 some-odd pages. They were still packaging it before it came out, and there were so many issues with it, so many changes, that a lot of what he said in his press conference wasn't specifically what was reflected in the plan. His conversation about a county going from phase one to phase two, and then having to go from phase two to phase one based on if their numbers drop below five, that wasn't correct. That's not actually what's in the plan. The plan says you have to be at three per thousand, which in Parker County would mean we'd have to go not from six to five. It would mean we would have to go from, what is that? 320 cases. Right. No, I'm sorry, 420 cases to five, right? I mean, it's just, it, it just, it didn't make a lot of sense, and I just felt like at the end of the day, the governor was out of touch. And, you know, honestly, had a lot of conversations with small businesses and, a- and, and I know the, the governor's got a really tough job, but in, in my book right now, he's looking a lot like Hoover in the state of Texas, um, because he's so disconnected from our local business community. And it's great that he's got some business owners that are on his committee, and two of them, you know, are great people that live here in Parker County. But at the end of the day, I watched a Facebook video yesterday or the day before of a couple that we all know very well here who had to close down two of their three concepts for good here in Parker County, and that's just, it's extremely tough. Extremely tough to see at a local level. And we've had no seat at the table to have those conversations. They have not been able to get that feedback. Uh, and I just think it needs to be said, and I think we need to remember it.
33:57 Chad
Well, I think that in questions like these, the best place to put that control is as close as possible. What is it called? Uh, subsidiarity, right? The, the, the-
34:08 Patrick
Right
34:08 Chad
... smallest possible body that can effectively make that decision should be the one that we defer that decision-making to. And I mean, just given the wide disparity in, in caseloads and density and, uh, geography that we have across the whole state, it does make sense to give local con- give much more control to the local officials, whether it's at the county level, which, by the way, isn't an actual arm of the state, um, and then to the, the mayors and city managers, uh, across the state, and allow them to respond to what's actually happening in their, their jurisdictions. Certainly would've made the governor's work a lot more, a lot easier, right? Not having to come up with a one-size-fits-all solution, or I guess a two-size-fits-all solution, um, that can't really account for all the in- intricacies that you're gonna see across the whole state.
35:03 Patrick
I, I'm just saying at the end of the day-
35:04 Chad
But I mean, just i- imagine, um, imagine if you were trying to do something similar across the whole country, and you've got places like the, you know, the New York metropolitan area, which is still in pretty bad shape, versus even here in Texas, where, you know, we're doing okay. Um, you, you can't make a solution that can account for both of those sc- scenarios at the same time, which is why the states have been granted constitutionally the authority to, to handle those questions. Um, we, we've talked about the concept of pushing federalism down below the state level before, um, but I think this is definitely one of those scenarios where the more local that those decisions can be made, the better.
35:43 Patrick
I, I mean, absolutely. And y'all, I'll put this out there so that somebody can come back and listen to this later on a recording, but I do believe that in the state of Texas right now, it's not a, it, it's not a conservative or a liberal or a Republican or a Democratic topic. But much like we saw in '08 and '09, where we had a huge political movement called the Tea Party, uh, that really changed the way cities operate, I, I think when this is all said and done, you're gonna have a lot of conversations, and there's probably gonna be some type of new movement set up, uh, because I think we're gonna be able to sit back and realize what just happened and why it happened, and we're gonna realize that the last six years of legislative sessions in this state, that the state has taken locals for granted. Uh, I, I think this is, uh, this is gonna change politics in Texas for a little while. I think we're gonna see that. And I don't know if that's gonna be good or bad for the locals. I hope certainly that it's gonna be good.
36:43 Chad
Uh, yeah, I mean, using the Tea Party as a comparison, like, for whatever you think about the Tea Party, it certainly didn't end up being, uh, a great boon for local control.
36:53 Patrick
It was not a great boon for local control, nor the length of city manager contracts during that period of time. So, uh, but, you know, I, I think, I think what we're gonna find now is, uh, you know, and I've talked to a lot of people here in Parker County that are very outspoken politically that, um, you know, they've ... A lot of people's minds have been changed. They realized very quickly that their locally elected leaders were, you know, available, ready to talk to them, trying to find solutions, and a lot of them are just, um, exacerbated right now with the state. Uh, and, and look, at this point, I don't think any politician can do it right.
37:29 Chad
Exasper- Ex- Did you mean exasperated?
37:31 Patrick
Exasperated.
37:31 Chad
Okay.
37:32 Patrick
I said exasperated.
37:33 Chad
I thought you said exacerbated.
37:35 Patrick
I don't know. It's exacerbated? So I, uh... We'll, we'll put that in the Patrick made up a word on a podcast list. Uh, but y- you know, at the end of the day, I, I think we're just, we're in a situation right now, uh, that people are gonna look back on. I mean, let's just look at the simple part of this, right? I, I, I think this is... No matter where you fall on the spectrum, I, I just wanna put this in perspective for everybody. At a local level, a mayor can declare a disaster, and at any time, a city council can call a special meeting and clip the authority of a mayor when he goes through that declaration process, okay? And under state code, within seven days, the city council has to authorize the extension of that order. So the mayor really only has that authority for a week, okay? Same thing at the county level. County judge declares a disaster, two county commissioners can call a court, and they can clip the authority. That actually happened in Dallas County. I don't know if anybody paid attention to that. But Clay Jenkins kinda, or Judge Jenkins took one step too far, and it was quiet, but the court came to dinner and said, "Eh, we're not gonna do that," and they clipped part of his authority. In the state of Texas, the g- the governor can declare a disaster, and there is no check or balance on that declaration. If we are not in session, there is no authority for the state legislature to go into a special session to clip the authority of the governor, and I'm just gonna put that into perspective. No matter where you fall on the spectrum, if somebody got elected where global warming was their absolute biggest thing, and they declared global warming to be a disaster, in the state of Texas, they could order you to stay home and not drive your car. And except every two years, the legislature couldn't do anything about it. That's a problem in Texas, not something we ever contemplated, but certainly something we have to fix, so. Yeah, so, like, at the end of the day, I, I think it is important to say we have a lot of cities out there, a lot of counties out there that are doing a tremendous job with this, that are just working their tails off, that are doing what's best for their community. I think if anything comes out of this that's fantastic for local governments is the direct connection that they've been able to, to create with, uh, with the, with people, right, uh, with residents. I, I think it's been tremendous, and, and we've seen some great things come of it. Um, and, and, you know, so there, there are some good things. Uh, there are some positives. A big one I wanna hit on before we get out of here is that Walmart announced yesterday that they are gonna do direct from store delivery, and there's almost, I mean, it's almost most of the stores in the state of Texas. It's a lot of them. They're gonna do direct s- to store deli- from store delivery, two-hour delivery, um, from that store and start that to compete directly against Amazon. And why does that matter, Chad?
40:34 Chad
Uh, sales tax sourcing.
40:36 Patrick
Sales tax sourcing. So because it's an existing brick-and-mortar business that has customers that walk in that's different, you know, what is it, three or more different customers-
40:46 Chad
Yeah
40:46 Patrick
... right? So when they do those deliveries, that sales tax is gonna be sourced to the location of the store. That could be extremely beneficial for a lot of our cities that have lost revenue, uh, or, you know, whatever the shifting has done to them. Uh, this, we should start to see, as this gets fully rolled out, we should see an uptick in Walmart sales tax, uh, coming, and remittances to, coming to those local governments that have those stores.
41:10 Chad
Yeah. Well, I can tell you as, as a frequent Amazon user or household, uh, just the fact that a lot of things are not two-day shipping anymore, we're batching, and when we do make the trip to Walmart, which is the closest store to us, you know, we're, we're getting everything that we normally would have ordered on Amazon, uh, at the store, so.
41:32 Patrick
I mean, it's absolut- absolutely brilliant of Walmart, right? H-E-B made a very similar brilliant move where, you know, they didn't have, uh, Favor Delivery, their delivery company that they bought a couple years ago. They didn't have that fully rolled out in all of the markets that they had H-E-B and Central Market stores in, and, and, and they aggressively rolled that out as well. So, um, some of these companies that are making these decisions are preparing themselves for, for what that new normal is gonna be.
41:56 Chad
So what that means, though, do, do they, do they have a defined, like, delivery radius, or does it just depend on the market?
42:03 Patrick
So Walmart specifically, uh, they, they have a, a fairly large delivery area. Uh, so for example, I believe my Walmart actually delivers into, uh, like four or five different zip codes, so pretty much almost the whole western side of Fort Worth.
42:17 Chad
So if those people were gonna come to that Walmart anyway, then that Walmart would collect the sales tax as a normal in-person, you know, transaction. But, um, if they were to order on Amazon, then the jurisdiction where that Walmart is located would not get that revenue. But with Walmart being the delivery source, uh, that sales tax would now come to that jurisdiction.
42:39 Patrick
Well, and what Walmart is doing very smartly is that Walmart is, uh, is very prominent in suburbia, right? And Amazon has focused a little bit more on the densely populated areas for their same-day delivery or one-hour, two-hour delivery windows. And so, uh, what that does is, is in areas that, you know, don't have that Amazon service, Walmart has really brought this two-hour service there, so it really is the only option. So instead of ordering off of Amazon, those folks are gonna order from that local Walmart store 'cause they can get it in two hours instead of, you know, in some cases right now with Amazon, three or four days, right?
43:14 Chad
Good stuff. You got anything else before we head out?
43:16 Patrick
No, that's it. I think I'm done.
43:18 Chad
No light topics today.
43:19 Patrick
No light topics today. Maybe next time we can talk about that really cool, uh, you know, universal "Trolls" movie. I think that's what we need to get into.
43:27 Chad
Yeah, it's crazy. They ma- they made more money in those three weeks of streaming than they made at the box office for the original. It was like five months at the box office.
43:35 Patrick
Yeah, absolutely.
43:36 Chad
All right. Well, uh, let's go ahead and wrap up then because I've got to, uh, do some post-production so that we can hit our, uh, Team Zach happy hour before too late. So, uh-
43:48 Patrick
Let's, let's not forget about our, our Friday afternoon happy hour.
43:51 Chad
All right, buddy. Well, thanks for listening. Uh, we will be back soon with some more riveting content about, uh, local government. Hopefully, uh, we'll be able to get into less COVID-related topics. But, uh, in the meantime, stay safe and social distance.
← Budgeting under the cloud of COVID-19 with Kyle Lester
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May 1st, 2020
Updated Oct 27, 2025
44:21
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