Phoenix will freeze non-essential city spending and hiring to prepare for the "unprecedented" financial impact of the novel coronavirus, City Manager Ed Zuercher said in an email to city department heads Thursday.

"The money we save today is important for our ability to manage the economic impacts we are witnessing," Zuercher said.

He said the impact of COVID-19 on the Phoenix economy is "unknown, but significant."

The city's sales tax revenue will surely take a hit as businesses close — either willingly or by mandate — to stop the community spread of coronavirus.

On Tuesday, Phoenix Mayor Kate Gallego ordered bars to close and restaurants to change to a take-out, delivery or drive-thru model. On Wednesday, the council held an hours-long executive session and then adjourned until Friday before voting on whether to allow Gallego's order to remain in place.

In his email, Zuercher asked the department heads not to send department-wide emails about budget forecasts as they would "stir unnecessary anxiety with staff."

"Our focus is to maintain operations, continue providing core services and continue to pay our existing staff. Speculation about future actions are premature and unnecessary," Zuercher said. "We need to help our staff stay focused on the existing situation."

All non-essential spending is to cease, according to the email. Examples of essential spending include city facility maintenance, vehicles or computer systems needed to deliver services to residents, Zuercher said.

He ended the email by saying Phoenix employees have developed "frugality muscles" over the past 10 years.

"It's time to exercise them again," Zuercher said.

In a statement, Phoenix spokeswoman Julie Watters said Zuercher's plan "is exactly what leaders of both the public and private sector are doing around the globe right now – using foresight to be prudent and monitor this health emergency for potential impacts to service and budgets."

She said Zuercher is confident in the city's ability to address any challenges that arise from COVID-19 and his email was "out of an abundance of caution."

She said the city will continue all essential services, including police and fire response, water and wastewater services, and trash pick-up.

"Our Phoenix employees are strong and dedicated public servants who are resilient and resourceful and working round-the-clock to serve our customers," Watters said.

Reach the reporter at jessica.boehm@gannett.com or 480-694-1823. Follow her on Twitter @jboehm_NEWS.

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