Seemingly overnight the coronavirus (COVID-19) pandemic has swept through the world and changed every aspect of daily activity. From home-life and recreation to work and business operations, individuals everywhere have had to quickly learn to adapt to an unprecedented event.
Working from home has been a trial by fire as businesses throughout Nevada closed their doors after the Governor mandated that everyone but those considered to hold “essential” jobs stay home. And those that do go to work find themselves facing a danger no one could have anticipated. While healthcare workers have likely accepted they could come into contact with something that might make themselves or their families sick, it’s unlikely the convenience store clerk ever considered that to be an issue when applying for their job. It is now.
And, for those that can’t work, they face losing their income and the ability to pay bills. That’s to say nothing of the billions that will be lost when businesses have no income or way to pay their bills. In short, every single person in the United States, and certainly in Nevada, has been affected by COVID-19 in some way, and many will feel those effects for years to come.
To gain a better understanding of how businesses in Nevada will be impacted and what they might expect moving forward, a number of leaders in a variety of industries were asked to weigh in with their best interpretations.
Economy
Kyle Bybee: We’ve never seen anything like this before. COVID-19 has been devasting to individuals and businesses. We’ve seen this virus spread across the globe in just a few months. It has resulted in business closures, school closures, limited travel, state and city mandates to stay at home and hoarding at grocery stores. COVID-19 has not only invoked global fear, it has pulled economies throughout the world into a recession unlike any other. Many businesses have been forced to close doors or transition to remote work for employees.
Terry Shirey: There has been a dramatic impact to businesses, with many unable to operate due to closures and those that remain open dealing with contracted revenues. The businesses are adjusting and adapting the best that they can. But even then, they are still operating well below normal levels.
John Restrepo: The empirical and observational information is clear: large-scale layoffs and furloughs and closed businesses. What we don’t know yet, data-wise, is the depth and length of the downturn. The hospitality, tourism and retail industries will be hardest hit, along with their vendors. The professional services industry, that has a quite a few freelancers and gig workers, will also be hurt for a period of time. [The threat of COVID-19 to the economy] depends on the ultimate depth and length of the shutdown, the level of layoffs and the impact on consumer confidence and discretionary spending. I’m afraid a “V” style recovery is not likely for southern Nevada. It took nine years for southern Nevada’s job market to recover the 140,000 jobs lost because of the Great Recession. There will likely be another round of stimulus dollars coming. Most economists say that the first $2 trillion and the Federal Reserve’s almost $500 million injection won’t be enough.
Brian Bonnenfant: Those businesses that were operating on a slim margin before COVID-19 will likely permanently fold. Each affected company will have to walk the plank with emergency/disaster loan applications and know that the limited funds cannot resuscitate every establishment. Approximately a 10 to 15 percent hit on state revenues can be expected if COVID-19 impacts last a year, and 5 to 7.5 percent if the impact lasts six months. Also, expect residual impacts on state revenues into the next couple of years, until households and businesses stabilize.
Restrepo: This too shall pass, but Nevada’s recovery, I fear, will be slow and plodding. And, the level of jobs in our hospitality industry will not come back to previrus levels for some time, if ever, because of advances in AI, robotics and automation. I believe the tax structure will be looked at again to reform and we, hopefully, will enhance our efforts to invest in education and workforce development.
Bonnenfant: I am optimistic that businesses [that were] successful prior to COVID-19 will eventually recover, but not this year. It will take businesses months to ramp up employees, reset supply chains, and shed debt. If COVID-19 impacts end this summer, Nevada’s economy could rebound in 2021. If COVID-19 ripples thru 2020, even with pauses, it will take Nevada two to three years to rebound. Full recovery may never occur for some businesses and households affected in impacted industries.
There will also be a delayed and prolonged effect on the construction industry. Thirty-nine percent of contractors report that project owners have halted or cancelled current construction projects amid deteriorating economic conditions, according to a survey, released March 27, by the Associated General Contractors of America (AGC). An April 3 survery by AGC reports that 29 percent of contractors have reported layoffs. Full recovery in the construction business will not occur until all other industries have recovered.
Bybee: First, remain calm. This can be tough when cash is tight (or gone) and business has dwindled or been temporarily closed. However, losing your calm will only escalate your current situation and further effect your health and reasoning. Second, focus on what you can do, and don’t dwell on what you can’t do. Use any resources available through the government or your financial institution. Third, create a short-term plan to conserve resources for the next three months. Take an inventory of what you have, what’s available and where you can conserve cash or reduce expenses to get by. Communicate your situation to your landlord and suppliers and see what options are available. Lastly, reevaluate your business plan and look for new opportunities. Anticipate how your customer’s behaviors may change after COVID-19 and whether their priorities will change.
Shirey: There is a myriad of programs available to help, and it might be difficult to understand the best one for your business’s situation, so engage with your advisors— your CPA, legal and financial—to help take advantage of the best stimulus program. Bybee: Companies need to monitor the effects that COVID-19 will have on disclosures, accounting conclusions and their financial statements. The purpose behind financial reporting is to accurately provide information to regulators, investors, financial institutions or the general public. COVID-19 could impact a company’s ability to both obtain and provide this information. Companies also need to determine any effect on internal controls over financial reporting due to COVID-19. For example, controls may be revised as companies adjust to a remote workforce.
If a company receives SBA loans from either the Economic Injury Disaster Loan program or the Paycheck Protection Program (PPP), they should put those funds in separate bank accounts and track how those funds are used. This is especially important for the Paycheck Protection Program because that loan is eligible for full or partial forgiveness. We anticipate that the application process and receiving the funds under the Paycheck Protection Program may be much easier than receiving the loan forgiveness.
Employment
Dr. Tiffany Tyler-Garner: It is critical that our business community knows they are not alone. There are local, state and federal resources available to help with relief during these unprecedented times, as well as recovery efforts.
Ask for help. Agencies and organizations from across the state have come together to help businesses understand new legislation or programs that are now available, such as disaster loan assistance from the SBA. Reach out to your local chamber of commerce, professional associations and networks, as well as our team at DETR. Don’t be afraid to ask questions.
No one could have anticipated the magnitude of this crisis. At DETR, we put multiple measures in place to address what we knew would be a rapid spike in unemployment insurance claims. However, as shutdowns in Nevada continued in an effort to help slow the spread of COVID-19, we quickly had to add more resources and we continue to do so.
In responding to this monumental event, we have learned a great deal about our agency’s successes and shortcomings. While our staff has been working tirelessly to provide unemployment insurance support, it was a challenge to have anticipated just how vast the enormous support would be resulting from this pandemic.
Healthcare
Dr. Sherif Abdou: First and foremost, follow all the CDC’s (Centers for Disease Control and Prevention) recommendations as well as our local and state guidelines to minimize the spread of germs. Stay home. Stay physically distanced from each other. Encourage your friends and family to do the same. If you are a business that uses PPE (personal protective equipment, ie. masks, gloves, gowns) in your daily line of work and you have these supplies on hand, please consider donating them to the hospitals. If you have access to these supplies or the financial means to help source PPE, please contact the hospitals.
Expressing your gratitude is important in a time of crisis. Nothing will motivate the providers, nurses, care givers and technicians on the front lines more than knowing the community at large appreciates their commitment and sacrifice. Use social media to express your appreciation. Consider dropping off food for the ER department or sending someone you know in healthcare a thank you card. Small gestures will go a long way to inspire and motivate right now.
Dr. Robert McBeath: We’ve seen significant engagement by people in the private sector, and I appreciate their willingness to come together to leverage their expertise or contacts to help solve the immediate needs of our state’s healthcare system.
Mark Price: It’s been great to see such creativity from Nevada organizations pitching in to help out. The pandemic is much more than a health crisis for many people. People are struggling with loss of employment, social isolation, food security issues, and many other major concerns. Almost every organization has a role they can play in helping our community get through this.
Dr. Anthony Slonim: Five local construction, electric and plumbing crews all answered the call to help us build a new patient care site, in three weeks, in what formerly was a parking structure. Our care providers appreciate the outpouring of support from local businesses during this time to donate meals, supplies, equipment and so much daily encouragement for healthcare heroes. We are humbled by the generosity of our local business community as we know this is an extremely tough time for all of us.
Mason VanHouweling: Our community always comes together during times of crisis, and local businesses continue to show their support for UMC. In recent weeks, we have received a significant number of donations, including personal protective equipment, hot meals for team members and financial support from generous individuals and organizations. In addition, many businesses have introduced special hours and offers to assist workers on the front lines of our community’s COVID-19 response.
Abdou: Experts predicted this type of outbreak was possible and yet we were not really prepared. It is predictable and likely that, in the foreseeable future, we will have another similar outbreak. As the world’s economy shifts, our climate continues to change, and our travel and leisure habits broaden even further, we should expect to experience another pandemic.
Tiffany Coury: Saint Mary’s has an Emergency Operations Plan that supports our emergency preparedness efforts. Every year, we drill for numerous scenarios which has given our team a firm foundation in emergency management. The situation with COVID-19 is unique from previous drills, however, in that we have been given more time to prepare for a surge. This has allowed our team the ability to conduct soft drills for a multitude of scenarios across our hospital and develop surge responses in a thoughtful tiered approach. It has also allowed us the time we have needed to prepare additional capacity for patient beds, equipment and supplies.
Helen Lidholm: Northern Nevada Medical Center has an emergency preparedness plan that we review and test annually. Our staff receives regular training to prepare for crisis scenarios related to a wide range of community disasters. Our team was as prepared as we could be when the pandemic started. However, when you see such a widespread crisis that taxes resources of all healthcare facilities and other businesses, it presents unique challenges.
McBeath: OptumCare has had in place emergency operation planning for numerous healthcare scenarios, which is part of our strategic and business continuity planning. As part of the southern Nevada community for nearly 50 years, we’ve had the good fortune to be able to continuously plan, implement and review processes over time, reviewing organizational strengths, weaknesses, opportunities and threats. This is a new virus and we are on a steep learning curve. These “lessons learned” will be an important part of all ongoing emergency operation planning. Some of these are evident at the moment. I suspect we will identify many additional opportunities for improvement that will become clearer down the road.
Price: This pandemic has been described as a “once in a century pathogen” by Bill Gates and others. It’s unlike anything seen in the lifetimes of most people alive today. Preparation across the world was not where many wish it was, particularly related to global supply chains for personal protective equipment and testing supplies. Healthcare workers are heroically doing everything they can with the supplies they have available.
Slonim: At Renown, we practice emergency preparedness 365 days a year. Based on [that] extraordinary work, we were fully prepared to face this pandemic, although we are learning every day about things we could do differently. If there’s a bright spot in the midst of this pandemic, it’s that COVID-19 is pushing us to rapidly adopt new ways of thinking about and delivering healthcare, through new technologies. For example, I am thrilled that telehealth utilization has gone through the roof as our community is taking advantage of alternative options to reach our medical providers.
VanHouweling: Emergency preparedness has always remained a top priority for our entire team. At UMC, we routinely conduct pandemic training exercises, and we maintain comprehensive crisis response plans. As a result of our team’s dedication to emergency preparedness, UMC had the ability to act swiftly and implement detailed processes to support our response to the current COVID-19 pandemic. UMC is fortunate to have an in-house team of infectious disease specialists who have spent their careers planning for this moment. Our team has taken every possible step to prepare for this pandemic, including efforts to conserve personal protective equipment and maximize hospital capacity. UMC was ready for this crisis, and we will remain prepared for any future influx of patients.
Tourism
Virginia Valentine: These are difficult times for every business and all business leaders are making tough decisions. Several of our members had valuable early experience with casino closures in Macau which gave them insight on actions needed to contain the virus for the health and safety of employees, guests and fellow residents. The biggest insight was that, while the closure causes economic hardship in the short term, it’s critical to stop the spread quickly for the long-term viability of our community, and ultimately our tourism based economy. In addition, our industry is keenly aware of the impact we have on other businesses as well as state and local government budgets, and we’re doing all we can to secure federal assistance to ensure Nevada’s tourism-based economy can recover as soon as possible.
We’re working very closely with Governor Sisolak, the Gaming Control Board and state and local agencies on a long list of critical items from safety and operational issues to assistance for employees and economic relief measures that can provide immediate help to all businesses. Things like deferring certain license fees and tax credits for retaining employees. We’re in close contact with our bipartisan Congressional delegation to ensure Nevada and its largest industry is included in federal relief, stimulus and recovery packages. We’re going to need substantial help from the federal government for the long-term health of Nevada’s economy and its workforce.
It’s devastating not only for the industry, but for the state as a whole. We all know the economic toll of the pandemic is causing serious financial ramifications for individuals, families, businesses and state and local budgets across the state. Each passing day Nevada’s largest industry is shuttered makes it all the more difficult for Nevada to recover. No other state in America depends on travel and tourism at the magnitude Nevada does. Nevada depends more on tour – ism than Alaska does on oil, Wyoming does on coal mining or New York City does on the financial sector. Nevada’s tourism industry is the lifeblood of the state’s economy, generating nearly $68 billion annually in statewide economic output; contributing almost 40 percent of the state’s general fund revenue; and, supporting more than 450,000 jobs statewide.
Major conventions have been cancelled or postponed. This causes a ripple effect across the entire economy from the resort industry to the small businesses that also rely on convention and event business. Based on research we did with Applied Analysis in March, we estimate the impact of March and April meetings and convention cancellations alone to be about $2 billion in lost economic activity for Nevada. We also estimate that we’ll see another $3 billion in lost economic activity just from the meetings and convention business for May and possibly June. Looking at the effects of the shutdown alone, we know that nearly 320,000 tourism employees relying on $1.3 billion in wages and salary payments each month are already affected due to the closure. These numbers are nearly twice those reported during the Great Recession.
While we do not yet know the length or severity that the coronavirus outbreak will ultimately cause, based on Applied Analysis’ model in March, if Nevada’s tourism industry is shuttered for 30 to 90 days, recovery will require 12-18 months. The impacts of this are devastating for Nevada’s economy. We estimate that nearly 160,000 jobs, in addition to the 320,000 mentioned previously, and $7.7 billion in wages and salaries, in addition to the $1.3 billion mentioned earlier, will be lost. We also estimate that Nevada’s economy will lose about $39 billion in total economic activity. And we believe that more than $1 billion in tax revenue will be lost and half of that would have gone directly into the state’s General Fund. You can see just how catastrophic this can be given the ripple effects across the entire economy. This is why we’re working very hard to secure as much federal assistance as we can for Nevada.
The biggest priority is containing the virus so we can resume a semblance of our normal lives. Until people feel it’s safe to travel, Nevada’s tourism industry will suffer which means the entire state will struggle – particularly the state and local governments who rely heavily on the gaming industry and sales tax revenue for funding. Given the ripple effect of the gaming and hospitality industry across Nevada’s broader economy, we need to ensure this industry recovers as quickly as possible. One in every three Nevada jobs depends on the tourism and hospitality sector.
Education
Dr. Jesus Jara: In the first week of the current school closure, many Clark County School District (CCSD) teachers contacted families individually and worked out a system for communication for their students. More than 650,000 student contacts have been made by teachers during the two weeks since Student Learning Extension Opportunities began. CCSD has asked educators and parents to utilize the different platforms used by schools to communicate for messages from CCSD educators and to establish the communication process for students to work with their teachers.
However, there are still situations at schools, particularly in communities lacking devices or internet connectivity, where ongoing communication protocols between educators, students and families have not been determined. The district is working to address these issues and have made printed instructional materials available at the food distribution sites and on CCSD’s website.
In an effort to provide assistance for families, CCSD created the Learning Line, a service where CCSD personnel are providing support for all students via telephone to maximize learning through distance education. This resource allows parents and students the ability to call 702-799-6644 to access the Learning Line.
Dr. Kristen McNeil: Leadership for the Washoe County School District (WCSD) immediately began working together to explore ways in which we could launch and effectively utilize a distance education program for our 64,000 students. Our staff members gathered and created lessons and plans for every grade level and submitted them as requested to the Nevada Department of Education (NDE). Upon approval from the NDE, WCSD staff posted the materials on our website where students could access and download them. Print shop employees worked virtually around the clock to create packets of printed materials for students who do not have access to the internet at home. Transportation department employees created routes and drop-off schedules to deliver the packets to schools and bus stops across the district.
Principals and teachers participated in professional development to learn this new way of teaching and learning, while reaching out to their students with messages of encouragement.
Rick Trachok: Across the board our faculties and staff rose to the occasion and shifted to virtual classes using Zoom or other platforms almost overnight. As a system we have made the transition with very few problems.
Jara: We are awaiting guidance from the Nevada Department of Education. My team is currently working on plans to address the needs for our children. One of my biggest worries is for our most vulnerable students with the missing class time. Research is clear, for our students during the summer, we experience a summer slide. I am extremely worried that our students will fall further behind because of the extended time away from the classroom.
McNeil: Our students are in school, receiving instruction and support from our educators. They have not lost any time in the classroom, thanks to our distance learning program. We are working in partnership with the Nevada Department of Education on next steps and monitoring the situation with our local and regional health officials. We expect to receive guidance from the state as we move forward.
Jara: Ensuring all students have access to technology and the internet from home is a huge need for our community. This is more than just getting a device in the hand of our students; this is about transforming the education experience for teachers and students. Right now, if CCSD distributed all the technology resources (such as tablets and Chromebooks) we have available to our students for learning opportunities, we would only be able to provide technology to approximately two-thirds of our students. The biggest concern is the inequities that this pandemic will amplify for our most vulnerable students.
McNeil: [Had we seen this coming], we would have had more devices available to our students, free Wi-Fi connectivity for our families and extensive professional development for our teachers on a district-wide platform to ensure each teacher knows how to use these tools.
Trachok: As a system we would have insured that each of our community colleges had their distance/online teaching capabilities in place and ready to go. Some of our colleges were more prepared than others. One of our challenges as a state is that not all rural areas have access to high speed internet. Unfortunately, this is not something that we as a system could or can address.
Resources
Shirey: On March 27, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. This landmark stimulus package is intended to provide emergency relief to individuals, families and businesses impacted by the coronavirus pandemic and current economic conditions. A key component of the CARES Act allocates $350 billion to the Small Business Administration’s (SBA) new Paycheck Protection Program (PPP), which provides small businesses, self-employed individuals and independent contractors who have been adversely impacted by the COVID-19 pandemic, funds to pay up to eight weeks of payroll costs — including benefits. Funds can also be used to pay interest on mortgages, rent and utilities, with some limitations.
EDITOR’S NOTE: At press time, the first round of PPP funding was exhausted. The second round of funding was stuck in congress but expected to pass.
Bybee: Congress and the Administration have been active in passing legislation to help individuals and businesses. The Families First Coronavirus Response Act (FFCRA) requires that certain employers provide employees with expanded family and medical leave if they are unable to work or telework as a result of COVID-19. The FFCRA also provides employers with dollar-for-dollar reimbursement for all qualifying wages paid under this act.
The CARES Act was enacted to help the economy by providing tax incentives, tax relief, loan forgiveness, enhanced unemployment insurance and support for small businesses. The Act also provides loans for industries that are significantly impacted by COVID-19. Prior to the CARES Act, the Treasury provided tax relief by automatically extending the payment and filing deadlines from April 15 to July 15 for individuals, trusts, estates and businesses.
Bonnenfant: Federal assistance will come in the form of emergency/disaster loans as outlined in the CARES Act. The SBA will lead efforts with allocations to small businesses and will rely on business advisors in financial institutions and Small Businesses Development Centers (SBDC) to process and vet the loans. The speed of the processing and vetting will be critical; SBDCs are reporting that all phone calls are from clients requesting loans immediately. Given the finite amount of funding available for these loans, it is important for SBA to determine whether the loan will allow the business to survive or simply postpone the death of an already inefficient or suffering business.
Tyler-Garner: If you are the owner of a business that is shutting down or laying off employees, DETR’s Employment Security Division has a free program to assist you called Rapid Response. Rapid Response provides immediate services to companies and their workers to help walk them through what we know is an uneasy time. For more information on obtaining Rapid Response assistance, employers can call (775) 684- 0362 or email: detrinfo@detr.nv.gov.
Lessons Learned
Abdou: It’s important to realize that this too shall pass. Tough times don’t last but tough people do. True leadership is being your best in the darkest moments. As a community we must build a better response system that includes standard protocols, a central command center as well as an established distribution channel for supplies and materials. We also need to have dialogue and an understanding around how we balance our individual rights and our community’s overall welfare.
Coury: Once our community is through this crisis, there will certainly be things to celebrate that worked extremely well and there will also be lessons learned that will only make us stronger. One area that I think, culturally, will change across our nation is that people will feel a sense of responsibility to stay home anytime they are ill. Many of us have felt an obligation to continue working while we are sick, and now, we will feel an obligation to do the opposite.
Lidholm: As we look back on this crisis, we have a supply and resource challenge that needs to be addressed. The need for area hospitals to have PPE and critical supplies will not doubt be a continued discussion.
McBeath: The emotional, physical and professional demands placed upon all healthcare providers everywhere as a result of this pandemic have been unequaled in modern times. It would not be surprising in any way to foresee cases of emotional distress and other related issues affecting them in greater numbers when we eventually emerge on the other side of this pandemic. Our healthcare workers are here for us right now, when we need them most. We need to be there for them now and in the future.
Price: American healthcare will never be the same again on the other side of this crisis, and the changes will mostly be for the better. Consumers will certainly have more options for convenient technology-enabled care. Hopefully, government agencies will also be better prepared and hospital supply chains will be more resilient.
Slonim: One of the important things that this crisis has helped me better understand is the topic of abundance and scarcity issues within our community. I am also reminded of the importance of the true leadership, both the formal and informal leaders in our community. We are fortunate to be together on this journey and together, with hope and determination, is how we will come to recognize a future that is brighter than the darkest days we will endure.
VanHouweling: The COVID-19 pandemic has highlighted the importance of collaboration and unity. In the early days of this crisis, our team established the UMC Collaboration and Education Forum, bringing together representatives from local hospitals and other key stakeholders to promote the free exchange of information. These weekly forums promote new levels of collaboration within our local healthcare industry as we work together to overcome new challenges.
Jara: This has been the hardest situation I have dealt with in my career in education in over 25 years, something that you cannot prepare for. As I mentioned to my board, we are going to make mistakes but our decisions are based on what I feel are going to be best for our students, families and employees. Ensuring all students receive a rich and rigorous education has always been a top priority for me. Moving forward, we will work to ensure our students have the ability to learn, not only in the classroom, but also in the virtual world.
McNeil: We are learning a lot right now as we roll out our first effort to conduct distance learning. As we get more sophisticated with lesson content and the ability to teach virtually, I think we will continue to learn a lot of lessons surrounding that. We will be looking for extensive feedback from our principals, teachers and families about their experience and how we can improve and adjust the delivery of content and education in a virtual forum.
Trachok: I would like to see more training for our faculties and staff, as well as a robust training program for all teaching faculty on how to optimize teaching real time through the various platforms. In addition, this would be a good time to expand our online education. By this I mean, that each of our colleges and universities start developing and creating online instruction.
Bonnenfant: The impact on business operations and revenues will trigger a secondary impact on government services. It is unknown how much of Nevada’s rainy day fund can cover the revenue gaps for the most pressing government services including education and public safety, but governments will have to make difficult decisions on how to fund the more peripheral services.
Restrepo: [We should] indulge less in irrationally exuberant cheerleading and indulge more in diversifying our economy in STEM-related industries, reforming Nevada’s tax structure and investing in education and workforce skills.
Shirey: So far, the lessons we have learned from a banking perspective—expect the unexpected. You never know for sure what risk will occur and how it will manifest. Businesses should strive to structure their financial situation to be ready to ride out disruptions in our economy. This is a clear lesson. I can’t stress enough that business owners should stay close to their advisors and maintain open, candid communication. We all want to help our community and businesses make it through this difficult time.
Bybee: As I stand back and consider the global effects of this pandemic, I am reminded how interconnected we all are. A crisis that begins overseas can quickly change from a distant threat to an imminent and local disaster. In these situations, individuals, business and governments should work together to find solutions to minimize the current devastation and also plan for the eventual recovery and rebuilding that will need to take place.
Businesses can play a key role in helping communities get through these crisis moments. We are seeing businesses that have donated food, money, medical supplies and employees’ time to help the community. We’ve seen businesses permit the use of their facilities or land to accommodate the homeless or sick.
While business owners need to continue their focus on weathering this crisis, they should also consider ways their business can support their communities. We are all in this together, and the business community can play a huge role in getting everyone through this crisis.
Tyler-Garner: The spirit of collaboration and partnership in the workforce development community has never been stronger. At DETR, we are working together with our workforce partners in monitoring the state’s economic health and identifying trends to assist in planning for the future. The magnitude of this pandemic has impacted all Nevadans – workers and employers alike. It is only by working together, that we can overcome whatever challenges arise.
