Finances and economy: City, businesses struggle with Camp Fire fallout

Chico City Manager Mark Orme is grappling with a million-dollar question—or perhaps a multimillion-dollar question—that there’s no template for answering. How can a municipality adequately serve a population that surges by more than 20 percent literally overnight?

In the early weeks following Nov. 8, during public meetings and in interviews with the press, Orme and other city administrators estimated 15,000 to 20,000 people displaced by the Camp Fire had resettled in Chico. At the time, folks were crammed into hotels, motels, RVs, homes, apartments, short-term rentals such as Airbnbs, the temporary Red Cross shelter at the fairgrounds, and even tent cities, like the one that sprang up immediately in the parking lot of Walmart.

The city based the estimate on numerous factors, including a spike in traffic and sewer volumes, but Orme acknowledged that it wasn’t an exact science. Last week, however, just prior to post-disaster life hitting the six-month mark, stats released by the state Department of Finance backed up the figures. Based on year-over-year analysis, Chico had gained more than 19,000 residents as of Jan. 1. That’s a 20.7 percent increase. For context, under normal circumstances, the city expected to see that level of growth sometime in the 2030s.

Orme gave a breakdown of the situation during a City Council meeting in March. Among the segments of the community under great stress: public infrastructure (such as roads and sewer systems), public safety, mental health providers, refuse collection, Enloe Medical Center, housing. Of course, when it comes to the city addressing the things in its purview, money is the major holdup.

“Usually, in a devastating event, there’s a population shift that occurs. These survivors usually relocate to a place that can support and manage the impacts of the population increase while the incident is being mitigated and cleaned up,” Orme said while standing in front of the dais. “Typically, this is done within or adjacent to the jurisdiction where the disaster occurred and where adequate funding and support mechanisms are available.

“Well, as we’ve all seen, this situation is atypical, and the vast impacts have engrossed our fine city, and so I’m here tonight to voice, in public, Chico’s sincere desire to have access to funding to help the city overcome the dramatic impacts of this disaster on the city’s resources and infrastructure.”

What most Chicoans didn’t know at the time was that Orme had been working behind the scenes for months to try to get additional resources to support the unprecedented aftereffects. During a recent interview at City Hall, he told the CN&R about some of his efforts. At the end of December, for example, he contacted the California Office of Emergency Services and the Federal Emergency Management Agency—or “raised a red flag,” as he put it—underscoring the many ways in which the city is struggling.

“Realizing that there’s no perfect playbook on this incident (losing virtually an entire city and having the majority of it move into another for an unknown period of time), we need your help in being iconoclasts of classic models of recovery efforts to help ensure the welfare of this wonderful city,” Orme wrote to the agencies.

The city is participating in long-term recovery groups run by those state and federal agencies—the hope is that they will help “find access to funding pools” such as grants, Orme said. City staff also has been collecting quantitative data on things such as traffic volumes that are worsening already deteriorated roadways (see page 22).

Meanwhile, Orme is working with state and federal lawmakers who might be able to tap government coffers through legislative means. On that front, Assemblyman James Gallagher (R-Yuba City) is asking for a budget request intended to bring $3 million and $2 million to Chico and Oroville, respectively.

According to a letter from Gallagher addressed to Assemblyman Jim Cooper, chairman of a Budget Subcommittee on State Administration, the one-time general fund appropriation request aims to help the municipalities address the “significant and ongoing impacts that are currently not accounted for with existing disaster response mechanisms.”

Orme told the CN&R the city already has spent over $1 million thus far to address the explosive Camp Fire-related growth. However, he estimated the city needs in the ballpark of $6 million annually to sufficiently staff city services to meet the population’s needs. The bulk of such funding would go to public safety operations, both police and fire.

Orme noted that Gov. Gavin Newsom backfilled property taxes for three years. Chico otherwise would have been looking at a loss of about $800,000 this year alone, since mid-year changes in such revenues are spread proportionally among the county agencies that are recipients of such funding. Another bright spot: Transient occupancy taxes haven’t dipped as much as predicted, Orme said, as there has been higher-than-expected turnover in local hotels, motels and other short-term lodging.

One of the chief concerns that remains is the stability of the local workforce—and businesses in general, including retail operations, which bring in the largest portion of the city’s general fund revenue. At issue is the dearth of housing (see this page). Many displaced by the fire worked in Chico, where the market was tight prior to the disaster. Now, finding a place to live is next to impossible. That’s true not only for those directly affected by the fire, but also for the countless Chico renters who’ve lost their homes because landlords are selling them at inflated prices.

Officials at the Chico Chamber of Commerce are especially concerned about the exodus. They have captured a snapshot of the problem by polling the organization’s members. Seventy-six of them responded representing 13,929 employees.

“What we heard across the board was between 10 percent to 12 percent of the workforce of Chico was affected,” said Associate Vice President Kelsey Torres.

The most recent figures from the Camp Fire Workforce Impact Survey—conducted in March, after an initial poll in December—concludes that of the 1,399 employees affected by the blaze, 232 have not secured long-term housing. Thirty have relocated out of the area, while 45 are “at risk” of leaving the region.

Employers also are having trouble recruiting.

“The labor issue is significant, because when these employees leave and these companies are recruiting to replace them, there’s nowhere for these [prospective employees] to live,” added Katy Thoma, chamber president and CEO.

Thoma came aboard the chamber about a month ago, and while the post-fire effects are overwhelming, she said she’s been heartened by the collaboration in the business community. Six months out, the chamber board’s Task Force on City Revenues and Expenditures continues to discuss the aftereffects. It also supports Assembly Bill 430, Assemblyman Gallagher’s controversial effort to exempt residential projects in Butte County—and portions of Glenn County—from the California Environmental Quality Act.

The disaster, Thoma noted, was ruthless and widespread. “It affects all different people. It’s people who are making minimum wage, it’s people making $40,000 a year, and people making a lot of money,” she said.

Orme explained that, though the Camp Fire immediately strained the city’s resources, he chose to hold off on speaking publicly about the burden for many months out of respect for those directly affected by the disaster, including the local government officials in the burn-scar region.

“And I know so many people in this community were desirous of really understanding it—they’re seeing it, they’re bearing witness, but they want to hear their public officials acknowledge the fact that we have been impacted,” he said.

Now that he’s acknowledged the effects on Chico, and sought relief, Orme says locals must keep the bigger picture in mind.

“We need to attempt to open our arms with compassion, love and understanding and try to balance the same quality of life we had [before the fire] with the population growth … that exists within our community today,” he summed up.