Loss of grants, sales taxes leads to city layoffs

Published 10:21 pm Saturday, June 23, 2007

Nineteen employees of the City of Picayune are being laid off, including nine from the Picayune Police Department.

The layoffs are taking place because no additional grants are coming from the Federal Emergency Management Agency and other sources and ones received after Hurricane Katrina are ending, which were funding the employees, and because of a post-storm sales tax slump.

None of the layoffs in the police department will involve existing patrol officers or investigators, said City Manger Ed Pinero Jr. Of those nine police department employees to be laid off, two are in the police academy and the rest were retired officers or employed in records or secretarial positions, Pinero said. None were certified patrol officers.

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“This reduction in force will have no bearing on public safety or public works,” Pinero said.

Five of the police department’s layoffs were part time.

The rest of the layoffs will be in other city departments, with the exception of the Picayune Fire Department, which had no grant-funded employees, Pinero said. Nearly all of the employees being laid off were employed by the city after the storm by using grants.

“These people have been here less than two years,” Pinero said.

While the loss of the grants was mentioned as a major factor in the layoffs, slumping sales taxes, which the city uses for various operating expenses, also were a contributing factor.

Immediately after Hurricane Katrina, not only did the city get a number of grants to fund additional personnel, but an increase in transient shopping boosted sales tax collections in Picayune. Now that a number of large retail and building supply stores have opened or reopened in surrounding counties and Louisiana parishes, those residents are not coming to Picayune to shop.

“People were coming here to buy (goods), now they are staying home,” Pinero said. “Specifically, Hancock County and St. Tammany Parish.”

The largest employee reduction was in the public works department, though not all of the reductions in that department were from layoffs. Pinero said some employees in that department quit due to the increase in outside temperatures, a work condition the department must deal with. Others were let go due to performance issues.

Not only is there a reduction in the number of employees, but there will be a decrease in expenses. While Public Works will have the largest decrease in personnel, 15 including the voluntary and involuntary terminations, the department will have the smallest cut in expenses. The voluntary terminations were not included in the city-wide total of 19 employee layoffs. In contrast, the fire department will suffer the largest decrease in expenses, since it is not losing employees.

Sanitation workers let go due to the down-sizing will be replaced with contract workers in numbers equal to, or greater than, the previous staff, Pinero said.

“We have to treat this as a business. Every business we know would reduce their number of employees necessary to operate within the budget,” Pinero said. “We would not be fiscally responsible if we kept more people than we could afford.”

Pinero said the decrease in personnel is not related to an increase in pay for employees that the city approved last year, which was nine percent across the board. Two percent was for the increasing cost of living while the remaining seven percent was the city employee pay raise. The city council approved that raise on Oct. 15, 2007. Pinero said the pay increase helped the city keep valuable employees. Before the pay raise, the city had suffered a high turnover rate.

“That raise reduced the turnover rate, so our personnel are staying with the city,” Pinero said.

Even with the pay raise, Picayune is still paying less on average than surrounding cities and counties, Pinero said.