Jul 28, 2014

Employee Buyouts on the Horizon

In an effort to temper a projected $1.6 million shortfall in revenue, the City of Gulfport is considering buyout packages for some employees.

Employee Buyouts on the Horizon Employee Buyouts on the Horizon

Facing a shortfall of revenue of potentially $1.6 million due in large part to a drop in revenue from real estate taxes, the City of Gulfport will be offering buyout packages to some employees in a way to save money.

This, along with other topics on how to get the city's budget back in the black, was discussed during a city council workshop Thursday.

Gulfport City Manager Jim O'Reilly noted that by a combination of cost-cutting measures and employee buyouts, the city could save up to $500,000. If employees take the buyouts, many would be replaced by employees at a lower salary.

"It could be two (employees) or as many as four," O'Reilly said of the potential buyouts. The buyouts would include a lump payment of three months' salary and three months of health benefits. If as many as four employees take advantage of the buyout offer, it could save the city $100,000, O'Reilly said.

But even if the council approved O'Reilly's measures, the city will have to dip into its reserve funds to avoid a budget shortfall.

Much of the workshop topics centered on how to get the budget back on track in the future without using reserve funds.

Council members Jennifer Salmon and Sam Henderson were inclined, in addition to cost-cutting measures outlined by O'Reilly, to raise the millage rates.

Both Henderson and Salmon noted that with the reduced property values, that even with a higher millage rate, many residents will still see lower taxes, though both acknowledged this won't be universal for all Gulfport residents.

Vice Mayor David Hastings was adamant that taxes should not be raised. He argued with Salmon that in fact, residents taxes – specifically in his district – would rise with a higher millage rate, despite the drop in property values.

"It's hard to tell people they have to pay more (in taxes) because we didn't want to" lay off employees, Hastings said.

seemed to side with Hastings when he said, "Raising taxes without using the reserve funds is not right."

Outsourcing some services, such as mowing, would be one of the cost-cutting measures the city is debating.

"We need to find out how to generate revenue," council member Barbara Banno said.

Henderson has the same thoughts. He brought up plans to generate revenue including having a kiosk for people to use when they park at the beach, much like what is used at beach parking facilities in St. Pete Beach.

Two other ideas Henderson had for raising money would be to have an online reservation form to use the city casino and patrons would have to put a deposit down or, if canceling a reservation, lose the deposit. A third revenue-generating idea Henderson floated was to bring "big-named" entertainment acts to Gulfport.

O'Reilly noted that whatever the council decides on the city's next budget, it will shape the near future of Gulfport.

"You will have to make decisions on what type of city Gulfport will be," O'Reilly said.

Both Yakes and Salmon cautioned that too many cuts may lead to a city on the decline, which may very well see even lower property values and perhaps an exodus of some residents and businesses. Salmon claimed, unlike Hastings, that her district members would be willing to have a hike in the millage rate in order to keep many city services intact.

Hasting said that much like the rest of the area, the city needs to make do with what it has.

"Running a city is like running a business," said Hastings, who co-owns  with his wife. Because of the plummeting economy, "my wife cleans out the bathrooms each morning. She never had to do that before."

"We have to accept responsibility. We have to make changes this year that are permanent, or we are just pushing the problems off for another year," he said.

Hastings strongly cautioned against dipping into the city's reserve funds, saying that can only be a short-term solution.

Banno echoed Hastings, saying, "We cannot live on the savings forever."

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