'A Challenging First Year' For Norfolk City Manager
Larry "Chip" Filer learned everything they don't teach you in school about city management in the last 6 months. The City of Norfolk swore him in as city manager on September 16, launching him from academia (Filer has a PhD in Economics) into his first foray into government work.
But all the ideas he brought to the table from years of research were derailed in March with the pandemic, and again in May with nationwide calls for criminal justice reform in city police departments.
WHRV's Gina spoke with Filer about the city's financial outlook and plans for police reform. Listen to the extended interview and read the transcript below.
If you are facing eviction or homelessness in Norfolk, please visit the Homeless Action & Response Team (HART) or call 757-587-4202.
Gina Gambony: I am delighted to speak with Norfolk City Manager, Larry "Chip" Filer. Thank you for joining us, Chip.
Larry “Chip” Filer: I'm glad to be here. Thanks for having me.
GG: I bet when you took this job, you had no idea what was ahead of you. How are you doing?
Filer: Yeah, it's it's been a challenging first year. I think, for me coming from outside of government into a job like this, and what counsel and I had talked about for me to do this was, you know, bring some of these bigger ideas, some of this policy research that I had done on topics like flood mitigation and poverty mitigation, and bring those in, let's do smart things. And then within six months, you know, by March, that's all just blown off, and you're just trying to keep the city from going bankrupt and trying to keep businesses from going bankrupt and trying to keep citizens from having to be on the street homeless. It's been quite a change in what I thought I was going to be doing, but it at the same time, you just tackle it head on. It's a great team of people here at the city. We have a very good council that understands the very unique situation we're facing. And I think every day rather than sort of the 30,000 foot view, policy-oriented big picture things, we've just been in the weeds trying to keep things afloat.
GG: You have a background in economics. In fact, you hold a doctorate degree in economics, and recently you've had to make a lot of tough recommendations for Norfolk's budget. Because of the pandemic, we have a decrease in tax revenue and an increase in unplanned expenses. Really hard situation. Is it correct to say that Norfolk has received a little over $42 million in federal money through the cares act?
Filer: Yes, via the state. So, the money from the federal program went to the States. And then the Commonwealth of Virginia's decision on allocating that to the localities was a per capita decision. So we've received a little over $21 million in each round, of which there's been two rounds. So yes, a little over 42 million.
CARES Act Money Cannot Replace City Revenue Loss
GG: Now, how is that money going to be spent? And I know that there must have been a lot of difficult conversations about where to put this money. And I also understand it has to be spent by the end of the year.
Filer: Yeah, it does. It's been challenging. I think if you talk to other city managers, they would agree that the, the money has been very helpful. So it's been extremely flexible in that we can use it to cover unique COVID expenses that otherwise would not have existed. The downside to that string attached to the to the use of the money is that those unique COVID expenditures have been relatively small. So, I don't have $42 million of unique COVID related--I'm not buying $42 million of PPE. So, we've been able to spend a lot of that money on purchasing PPE, we've used a lot of that money on trying to reconfigure our our vehicles, our utility vehicles, our waste management vehicles, to try and put Plexiglas in between the driver and the passenger, to try and make those more safe. We've done some modifications to City Hall and other city facilities to interact with the public to try and make them more safe.
But those expenses are in the small millions of dollars, right. And so one of the big strings that was to the use of the COVID CARE's money was that you cannot use it for revenue replacement. So our fiscal year 2021 projection is about $40 million of loss. And that's a revenue loss. That's not a expense increase. It's a revenue loss. And so it's been very difficult to try to make ends meet with $42 million of cares money, but yet, I'm not allowed to use that to actually fill that $40 million gap And as a result, we've still made $40 million worth of cuts to city operations, and that meant a very hard decision for me being new and just learning the organization. Right off the bat I had to layoff 550 part-time employees. We've had to furlough nearly 100 other employees through December. And and while we have that other money there, I can't do anything with that other money to prevent the pain from from that. And that's been frustrating. But I think we've tried to do what we can do with that money in its most useful capacity.
CARES Act Funding For Small Businesses
GG: So, because you don't have big expenses related to the pandemic, have you been able to allocate how you're going to spend all of it by the end of the year?
Filer: Yeah, I would say one of the great aspects of what we are allowed to use the money for, and it's been great, is to help small business and to help individuals. And so we do have programs through our Economic Development Administration, that provides some small grants to help businesses and some of the modifications they may have to go through in order to keep their businesses safe. One thing that's been talked about a lot in the media, and I think really is a hallmark, perhaps something we may not actually get rid of, even when this covid pandemic resolves itself--we started a program called Open Norfolk where we didn't ask any questions, we didn't go through some big permitting process. We didn't go through some big planning process. We went to the restaurants and we said, in an environment where you are allowed to reopen, and what we mean by reopen is actual seating, when you people are going to be allowed to come back in and sit and sit, whether it be inside or outside, we want to augment your outdoor dining as much as we can. And so for those of you that drive down Granby Street, you'll see a lot of parking spaces that now are parklets. They are seating. And so we've pushed the outdoor dining into the parking spaces, we've pushed it onto the sidewalk. We spent in a pretty good amount of money through our CARES money doing all of that.
And we are also using our CARES money to help with rent assistance, utility assistance, and all of those things were great because those are, in fact, appropriate uses for the funds. And that's been very helpful. And I think that is our way of trying to, while we can't directly refill our revenue bucket, that is kind of our way of trying to refill the revenue bucket. So if our restaurants are going to be down 60%, can we provide this outdoor dining so that our revenue and receipts for sales and meals taxes maybe are only going to be down 40% because we spent the money on this? That's sort of the way we tried to get creative. And while we're not able to just dump it into the revenues, we might be able to augment revenues to try and prevent some of the loss.
GG: Did you call this space a parklet?
Filer: Yes, we have we call them parklets, yeah.
GG: So, like a little park, that's a parking space turned into a little seating area.
Filer: It's usually two or three parking spaces that are clearly defined by boundaries, and some of them are reflective boundaries, some of them are actual, I think in front of a few of establishments, there's more formal fencing, and they've put up tents and umbrellas and seating. And, you know, I think the interesting thing for us at this point is once this sort of passes and in-establishment seating is allowed to go back, we think a lot of the establishments may come back to us and say, hey, can we keep this we've really enjoyed the kind of al fresco environment of the outdoor dining experience. But that was really done strategically to try and buoy some of the meals tax revenue and keep these restaurants afloat during a period of time when we knew some of them had very small establishments inside and it was going to be extremely difficult for them to do in-restaurant eating.
GG: Can you give any insight about how how many businesses are have failed or are expected to fail? I honestly have no idea how many businesses are failing in Norfolk.
Filer: So this is interesting, one of the things I used to rail on back at my time at ODU was that, while we had all of this wonderful data in this digital age on things, we still had horrible data on small business health. And part of that is because they're small, right? I mean, you take these surveys, they don't show up in the surveys. And so I think this is highlighting the fact that numbers of these small businesses, they they close their doors, they go away, and there's barely a peep and you don't know it. And you don't know it until an event like this, when instead of just one or two of them closing their doors for various reasons and going away, you start to get 20, 30, 40.
And so what we've done I think in economic development is aggressively reach out to the small businesses and the best partners we've had is really with some of our local neighborhood business associations. They have been invaluable on this, because those are the boots on the ground. And so we hear that we've got two or three companies in Ghent that are really struggling, and and we're able to reach out to them and ask, what's the pain point. And figure out if there's an opportunity to keep them afloat into a better economic environment. Or if really, it's just something that we, you know, let's face any number of these small businesses, this economic event is going to be too hard to overcome. And we probably on our end, can't do anything to fix that. But for those that are just teetering, you know, if there's an opportunity for us to step in, we want to do that. So I wish I had an answer and could tell you it's 60 it's 65. But the data on this is so hard and a lot of it's anecdotal. But we do know we are starting to see some non-renewals of business licensing, and that's kind of the first leading indicator of some of these failures.
CARES Act Funding For City Employees
GG: Waste management employees in Norfolk have received extra hazard pay. Is that correct?
Filer: Yes, that is correct. Yeah, they were on our hazard pay list. The other thing we did pretty quick and early on, which I think is something that this pandemic is shown, and I think you're seeing it sort of play out and do you open schools or do you not? I mean, this really is about protecting your workforce. I mean, I mean, we have a workforce here in the city, that, you know, I oversee 5000, approximately 5000 people and and, you know, at the same time, we're trying to prevent outbreaks out in the city, an outbreak within our workforce would be disastrous.
You know, if I, if I have an outbreak inside the waste management workforce, where I have 100 of those employees that go down sick, we're not collecting trash, and I don't know how long that's going to take before we collect it again. And so we've been very strategic on trying to spend Care's money to not only make outside of City Hall and outside in the city safe, but they try to make our own operations as safe as they can be. Particularly in those environments, we were we were not going to be able to socially distance the workers from each other.
GG: So the people who work in waste management because of the nature of their work, they are at risk. Also, they're an extremely important part of keeping the city operational. If there's trash everywhere, that's gonna hurt the restaurants and every other business. Now, early in the pandemic, you said that the city had to have a budget, you had to make a budget of shared sacrifice, which is you've been speaking about that. With the federal funding we've we've we've received and the partial reopening of businesses, is the budget looking any rosier over the next 12 months?
Filer: So the short answer to that is yes. I mean, I think we are trending a little bit better than what we thought the the caveat to that is That this is also draGG:ing out a little bit longer than we thought. And and so while the the move into what I would refer to in Hampton Roads is like a phase 2.5 or whatever, we didn't get quite clear to phase three because we had to sort of roll back a little bit. I think we exceeded our expectations of economic activity in the in the phase two. So I think we saw people eating out a little more than we anticipated. We saw people, you know, frequenting takeout and so on a little more so that that buoyed us we saw some hotel occupancy that was a little bit higher than we expected.
My concern, though, is that that improvement above what we were thinking would be the steady state is going to be offset by being in this kind of a posture much longer than what we were anticipating. And so I think what We were hopeful was that by the fall, we would be really past this pandemic and looking much more like normal operations in our business community. And I don't think we're going to be anywhere near that. And so this event, I think, is going to have a long tail. And that is something we have, we are constantly so we sort of wrapping up the fiscal year 20 and the quarter for impacts of all this, and we're getting our arms around what our forecasts are for fiscal 21. So it won't be as bad as we thought, but we're going to be in a diminished economic activity level for for a longer period of time than we thought.
GG: So the injury is not as harsh but the recovery is lengthy.
Filer: Yeah, it's the way we've been discussing it inside staff and I think you've seen it discuss this way in the media a little bit is the question really has been in Is there the rebound this? Or is there more of a U shaped or? Or is it just flat? Do we not see a rebound for a long period of time? And we're definitely not going to see a V. I think everybody agrees that out, it's definitely going to be a U. And then for us right now, it really becomes the difference between a you are very flat over multiple fiscal years is really a question of do we see businesses fail. And so while each individual business might be doing a little bit better than we had anticipated, we are starting to see some small business failures. And that's why I think Council was brilliant and getting something passed right away. That allows us to get money to our Economic Development Administration to start reaching out and seeing if we can help stave off some of that small business failure in the short run.
CARES Act Funding For Housing
GG: Right. You know, similarly, there's been an increase in folks not being able to pay their rent. Yeah. And we had the eviction moratorium. It doesn't look like there'll be an extended moratorium on evictions. And it looked like it was it was kind of a bipartisan decision by the Virginia Senate that in terms of the impact that that has on property owners, it could be a really hard situation. What's going on in Norfolk with homelessness increases or eviction rates and what can folks do about that? What's happening about that?
Filer: It's a tough situation. And I get why the Commonwealth has said, well, you know, maybe this moratorium isn't the right route to go policy wise. Perhaps there's other things we could do. And I think really that it falls on the localities. So I can in fact use some of the CARES funding to address rent relief, utility relief, mortgage assistance, things like that for those individuals that have been acutely affected by by this event. And so what I think we've tried to do internally is recommend that you know, let us work with individuals that rather than having a broad brush policy that covers everything, let us address this with individual households that are in these situations. And so we are getting ready to announce within the next week or so a program through NRHA (Norfolk Redevelopment & Housing Authority). We will partner with NRHA to provide a very formal process and application process and program for rent relief, utility assistance, mortgage relief to those individuals that have been acutely affected by this.
And it really is an effort, I think, to your point, it's an effort to prevent a broader homelessness problem. And so what we don't want is we don't want a family to face this: do I pay my rent? Do I buy food? You know, what do I do here? We don't want them to face that difficult decision right now. And so to the extent that we can help push that decision out, hopefully into an environment where this is all settled down, and things look a little bit more normal, that's what we're trying to do. And I think, the unemployment insurance assistance, that's helpful as well. I think that's been effective at trying to keep individuals from having to face that hard decision also. And so we're getting ready to announce that we'll do that in the next couple of weeks.
Norfolk Criminal Justice Reform
GG: I look forward to receiving that information. What is going on regarding policing policies in the city? I know that you have been tasked with doing some things involving policing. Could you give us an update about that?
Filer: Sure. What Council is really tasked the administration with is looking at policing, mental health, all that in three ways. Number one is, you know, how do we report data? How do we make sure we're reporting it frequently and efficiently and in a meaningful manner? What is our current policies regarding police response and public safety response, and that is this whole issue of if there's a homeless event or if there's an issue with a substance abuse problem or whatever, is it police reporting? Or do we want, you know, other folks with police reporting to events like that? And then finally, you have kind of this this broader issue, which I think you're also seeing play out in the, General Assembly's special session, which is, what are we doing internally with respect to training, implicit bias training, use of force training, and so on. So those are really the three areas that we're looking at.
I think what citizens in Norfolk are going to see is, I'll come back on September 22, and have a discussion with counsel on kind of where we currently are in these three areas. We've already made some changes to the data reporting. So one of the things that was asked of the city is, you know, why do we not have our general orders and just our policies and procedures in an open portal environment where people can go and see you know, how we ask our officers to police. So that's up on the website. There's been a conversation about various statistics. And you know, right now we report them annually. Can we do that more frequently? We're going to have that conversation for sure. Some of the policy changes, I think these bigger policy changes that citizens are asking localities to look at, may actually happen from the commonwealth. And so we're kind of in a holding pattern waiting to see what happens in the special session, what policies will the Commonwealth pass.
But I think what the citizens of Norfolk have to understand is, regardless of what happens at the commonwealth level, Council has said on the record, that we will be pursuing policy changes that make Norfolk a better city in this space regardless. So some of it may come from the Commonwealth, even if it doesn't, you're going to see the city, make some policy and procedural changes to try and do this better going forward. And at the same time, kind of weigh this--really I think it's a use of force, you know, the use of policing, how are they being utilized? And is it the most effective manner? And could we do other types of calls in a different manner?
GG: One thing that seems true, from my perspective, is that the Norfolk police department does have a good relationship with the community. Do you feel that?
Filer: Absolutely. I think our men and women in the Norfolk Police Department have done an admirable job at neighborhood level policing. And I think that is why we have a certain level of trust here that that perhaps you haven't seen in some of the other cities. I think our own Police Chief Boone has said on multiple occasions to me, you know, Dr. feiler, if, if our first engagement with folks is in an adversarial manner, that's usually not going to be a good outcome. And so the first interaction our officers try to have with folks in the various neighborhoods is at an ice cream social or at a park or something like that. And I think that's what we've tried to do. Are we hitting, you know, batting 1000 on that? No, I mean, we're not. And I think you've heard the Chief admit, you've heard the Mayor admit, you've heard myself admit that we can always try and strive to do better and that and that's what we're going to try and do. Some of that is policy oriented. And frankly, some of that is just procedurally inside the administration where it isn't even all that visible, but it's a change, for the better. I think in those three areas, the the data reporting the the actual, how we utilize the officers and who's responding to what types of calls and then this internal training area, those are the three we're going to try and examine and bring back some changes to.
GG: And are you receiving advice from the community or from experts or from the police department or from other police departments? Are you receiving information that is guiding changes that you might be making?
Filer: So at this point, no, but that will be happening going forward. So I think one of the concepts we will discuss on September 22 is would we like to bring a citizen advisory panel back into city government And that citizen advisory panel then would be convened very early in this process so that they were actually playing a role in how should we report data, and how frequently should we report it and so on. So you know, I don't think it's the will of the administration, it's certainly not my thought that we would drive this train just on our own. And so I think one of the first conversations we will have with counsel is about reinstituting some kind of an advisory panel to help them us address these three issues.
GG: Lots of tough stuff you have on your plate.
Filer: It's important and challenging. But we've got a great group of folks here. And I think the most important thing in all of these types of conversations is not to be deterred by asking hard questions. We have to ask hard questions, and we're going to do. That's budgetary, that's criminal justice reform. Really just making the city a better place in in general. And once we get past this acute event, you know, I'd like to get us all refocused again on the long term of what do we really want Norfolk to look like 20 years from now? And how can it be a better Norfolk than it is today, how do we improve that?
GG: That's Norfolk City Manager, Larry “Chip” Filer. Thank you for joining us, and best of luck to you.
Filer: I appreciate it. Thanks for having me, Gina. I think we're we're gonna keep at it. And I wish everybody the best out there, stay safe and hopefully we'll get past this and get back to something that feels somewhat normal. Whatever that new normal might be.