Addressing COVID-19 challenges among state and local governments

Here are some strategies for navigating these difficult times

May 15, 2020
State & local government COVID-19

There is no 21st century template for delivering services during a pandemic, but governments can learn from past disasters. RSM has outlined the greatest challenges facing state and local governments, as well as strategies for navigating these difficult times. 


Governments must evaluate their community’s level of risk and their ability to provide essential services to meet that risk. With federal guidance and forecasts changing daily, leaders need to adapt quickly. 

Empower leaders: During the initial emergency phase, governments have had to define their COVID-19 response leadership structure. While the benefits of a flattened organizational structure are undeniable during times of stability, they rarely are effective in crisis. Roles must be clear, and leadership must be organized. Budget for an uncertainty period of at least 12 months but preferably longer. Appoint a response leader to convene senior leaders in high-impact and high-visibility departments, such as health departments and departments of social services. To protect their independence from political allegiance, governments may choose to appoint an emergency or change management expert outside of their organization. 

Establish lines of communication: Leaders should be independent, but not isolated. Communicate with community leaders, neighboring governments, and the state and federal government regularly. Revisit existing memorandums of understanding with neighboring governments and identify opportunities for sharing. Crowdsource ideas for medium- and long-range plans by pulling together working groups of business and nonprofit representatives. Before allocating funds that may not be eligible for reimbursement, reach out to federal agencies to track appropriations and application deadlines. Most importantly, governments must earn buy-in from trusted leaders within their community, especially those who represent and serve front-line populations. Advocates for homeless, undocumented, elderly and low-income communities can serve as trusted messengers to residents that governments struggle to reach. 

Perform scenario modeling: Before making final decisions about reopening the community, consider various scenarios, timelines and dependencies. For each scenario, do not be afraid to ask hard-hitting questions. For example, if shelter-in-place restrictions continue for two more months, what would be the impact on mortality, employment, local industries, revenues, hospital capacity, etc.? Use these scenarios to inform operational continuity and disaster recovery plans. 

Adopt or update planning documents: Governments should determine whether they should update existing planning documents or create new plans that can codify policies and procedures surrounding pandemics. For example, some leaders have chosen to update their local hazard mitigation plan (LHMP) to account for pandemics in order to increase their likelihood of receiving Federal Emergency Management Agency (FEMA) funding in the future. 

Budget and cost reduction  

Although federal relief funding, the Department of Health and Human Services and FEMA will provide some immediate relief, governments understand they must sacrifice to stay solvent. While grant funding is crucial, it will not be enough to cover services in the long run. Governments, under legal counsel, must decide whether expenditures that do not serve an essential function can or should be delayed. The decision to cut or furlough services to the public will require a cohesive communication strategy. Be prepared to explain your decisions, and ideally, outline a tentative timeline for phasing those services back in. 

Identify a central department or team (independent from the leadership team detailed above) that will apply for grants and disperse the funding accordingly.

In the meantime, chief financial officers should begin cataloging their emergency revenue sources: liquid assets, emergency reserve appropriations, rainy-day funds, etc. Bankers and suppliers alike may be willing to renegotiate with government clients to preserve relationships; so identify obligations and renegotiate lender and creditor obligations, lines of credit, and significant contracts and expenses. 

Workforce dynamics  

To enable information technology for a large-scale transition, governments need more than just remote work software and hardware. Working remotely and reliably in the long term requires cybersecurity to protect sensitive information; digital platforms to process payments, permits and forms; digital notary software to facilitate signatures and approvals; and private and public collaboration and streaming services for intergovernmental teamwork and publicly accessible meetings. Governments should also strongly consider residential communication tools, such as hotlines and chatbots, to facilitate communication with the public. Smaller governments may need to outsource IT teams to troubleshoot IT issues remotely.

Beyond the obvious technology needs, governments will need to quickly address a lack of capacity and resources to meet current and unknown future needs. Take inventory of assets, staff members, and resources to assess the strains on employees and departments. Are there staff members who might be repurposed from departments with better resources to under-resourced departments? Can they be trained accordingly? If the answer is no, governments may need to plan for phased labor reduction and subsequent rehiring initiatives. When possible, prioritize cost-saving measures (such as limiting hours and reducing salaries) over furloughs or firings. Not only will this allow employees to maintain health benefits, it will also increase the chances that the employees could eventually return to their full-time positions and negate the need to train a new employee. Recognize these new working arrangements likely represent a shock to workplace culture and take steps to address the impacts to teams and individuals. Change management tactics will be required. Take advantage of guidance from health plan providers to address physical and mental well-being.  

In addition to protecting your own government employees, consider designating grocery store employees, teachers and pharmacists as emergency workers, making them eligible for benefits like free child care. States like California, Vermont and Minnesota have already begun reclassifying their workforce.

Supply and demand shock 

Governments could become overwhelmed by the sharp and chaotic increase in demand for basic and necessary public services. Expect an increased demand for affordable housing, grant assistance and mental health services, among others. In particular, health departments face the Herculean task of monitoring COVID-19, and all other infections recognized by the Centers for Disease Control and Prevention. Governments cannot afford to install a software that only tracks one disease. If possible, leverage federal funding to install a platform that can be used for decades. In particular, prioritize collaborative software that combines virus tracking with case management capabilities (tracking hospital beds, number of patients, staff availability, etc.)

Guidance and legislation 

With federal and state requirements changing so rapidly, governments must be vigilant to stay compliant. Be wary of making decisions that would not pass an annual audit. Scheduling and workforce adjustments must meet regulatory (e.g., Family and Medical Leave Act) and union obligations. Essential controls must be in place to limit fraud. All resources, including staff hours, dedicated to COVID-19 must be codified. Staying up to date on federal requirements will demand vigilance and patience. Reaching out to the federal government directly will not necessarily yield an immediate response, so stay in contact with membership organizations, attorneys and auditors for quick feedback and expertise. 

RSM contributors

  • Steve Mermelstein

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