Pascagoula announces layoffs amid $14M crisis. Raising taxes could be next.

Ten full-time employees will be laid off effective Sept. 1 in the first step of measures to deal with the city’s financial crisis.

Those employees were notified Wednesday, when the city’s manager and attorney Ryan Frederic outlined proposed changes for all employees during mandatory meetings.

A recent special audit uncovered the city has $14 million less to spend than budgeted and is essentially broke. The money in the bank is mostly bond money that needs to be spent on the projects the bonds were issued for.

It appears the city has been spending beyond its means for years, living on false estimates of the money coming in.

Documents gave the appearance that everything was fine. The auditor hired told the City Council, however, that nothing indicated money had disappeared or that anyone was personally profiting. However, the city has been using bond money to cover its debt since 2015.

The sales tax is stable and the value of property has not deteriorated. But the city doesn’t have the money it thought it did.

A cornerstone in the plan so far is to raise taxes.

“We — all being extremely financially conservative — never would we have thought we would recommend a tax increase,” Frederic said. “But we can’t come up with a way to get out of this, and quickly, without raising taxes.”

Property owners could be looking at $260 more a year on a $200,000 home — that’s $160 or more for the city on top of $100 the school system has fought for.

City leaders only have a few weeks to decide. The budget is due. And budgets aren’t supposed to be in the red.

One of the city’s considerations is putting public parks up for sale. Mayor Dane Maxwell suggested the land could be sold for development.

These are the changes announced Wednesday:

▪ Four city employees and seven part-time workers were let go.

▪ Employee contributions to health insurance and vision and prescription benefits will increase.

▪ There is a freeze on merit raises and new enrollees in the tuition reimbursement and education compensation programs.

These are the changes proposed at recent City Council meetings to get Pascagoula out of the hole within 2 to 3 years:

▪ Make a decision on the tax increase in the next few weeks: 8.4 mills is recommended. That would be $168 for a $200,000 home. The school system increase will be closer to 5 mills.

▪ Combining contracts with Utility Partners, the private public works firm, which will lay off about 11 workers and save the city $500,000.

▪ Cut 10 of the 2017 full-time city jobs, cut three of 60 part-time positions and eliminate 21 summer and temporary help and one contract employee.

▪ City workers will pay more for health care — $50 across the board increase, which means single employees will begin paying $50 a month, when before they paid nothing. Increase co-pays to $10 and change pharmacy providers.

▪ Freeze employee merit pay raises for a savings of $207,000 in one year, and stop the benefit of tuition reimbursement for education and refunding the cost of employee certifications (even if necessary to keep the job) for at lease a year.

▪ Outsource the summer programs for children and end the partnership with the Boys & Girls Club for after-school care.

▪ Close the Scranton Floating Museum, a shrimp boat on the Pascagoula River, and the Scranton Nature Center at I.G. Levy Park.

▪ Consider selling the gas system.

▪ Consider listing for sale right away for Pat Wilson Park, B.B. Jennings Park and Pine Street Park and as early as next year, the 12th Street Complex and the north portion of I.G. Levy Park, where the Scranton Nature Center is.

▪ Reduce cleaning services to three public buildings — including the Recreation Center and Senior Center — and ask employees to clean up after themselves in the others. Renegotiating grass mowing.

▪ Ask Jackson County for help with roads.

“These changes are sad,” Frederic said in a news release.

“We’re a family. But we are doing everything in our power to dig out of the hole and streamline city government. The sacrifices for all of us, employees and citizens, are not easy. We will get through this.”

This story was originally published August 1, 2018 at 1:01 PM.