Mississippi city could run out of cash if spending continues

A northeast Mississippi city could run out of cash by Sept. 30.

Posted: Mar. 23, 2019 5:15 PM
Updated: Mar. 25, 2019 9:24 AM

COLUMBUS, Miss. (AP) — A northeast Mississippi city could run out of cash by Sept. 30.

Accountant Mike Crowder told Columbus city council members on Tuesday that the city will be more than $300,000 in debt by the end of the budget year if current spending continues, the Commercial Dispatch reported .

Crowder said Columbus is on track to spend $14.2 million in the budget’s remaining six months, but projects city revenue of only $10.9 million. The deficit would wipe out $2.9 million in the bank.

Mayor Robert Smith said it’s not time to panic.

“You can’t get a true picture until you get to the summer months,” he said. “By then, if you see things are looking rough, then you have to start thinking about layoffs and things like that.”

Some council members disagree, though.

“The time has passed for ‘Let’s wait and see,’” Councilman Joseph Mickens said. “It’s time to react, and we need to react now.”

Smith said the city should have raised property taxes this year to repay bond debt. He blames former Chief Financial Officer Milton Rawle for many of the problems. Now Smith said he wants a larger property tax hike for the budget beginning Oct. 1.

Crowder’s report doesn’t count what the city will pay to mitigate the $4 million in damage a February tornado caused its streets and other property. The Federal Emergency Management Agency typically pays 75 percent of such costs, while the state chips in 12.5 percent. The city will still shoulder the remaining 12.5 percent, a projected $500,000.

Over the past two fiscal years, Columbus has recorded deficits of more than $800,000. But if Crowder’s numbers prove true, that deficit this year would be closer to $2.5 million.

“How did we get here?” Ward 6 Councilman Bill Gavin said. “We spent too much money. That’s how. ... We’ve not been working off of realistic budgets, and that’s been a big part of the problem.”

The city could have to take out a loan to cover the shortfall until the next budget begins.

Possible spending cuts include closing a health clinic for city employees that costs about $25,000 a month, selling some real estate, cutting back on capital improvement projects, furloughs or layoffs.

Councilman Stephen Jones said he favored putting city employees on 32-hour workweek, furloughing them without pay one day each week. The city’s twice-monthly payroll averages about $412,000, said Human Resources Director Pat Mitchell. That includes police officers and firefighters that could pose safety problems to furlough.

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