Bay St. Louis City Council members voted unanimously in special session on Tuesday to take a temporary 20 percent pay cut in the face of nearly $1.8 million in projected revenue losses this fiscal year due to the ongoing coronavirus pandemic. Unfortunately, Mayor Mike Favre said, city attorney Heather Smith discovered Wednesday that — while state statutes determine the council members’ salaries — it does not allow them to reduce it, even temporarily.
“It’s not that it’s illegal,” Favre said Thursday. “They just can’t do it.”
Favre on Tuesday presented the council with a worst-case scenario based on the loss of sales tax, gaming revenues, building permits, court fines and rentals through September, if the local economy doesn’t start moving again.
“We’re planning ahead,” Favre said. “We’re looking at it from every angle. We’re watching our pennies very closely and we’re going to get through this. We’re planning for the new budget year in September. In the worst-case scenario, we’re planning out with no casino revenues, a reduction in sales taxes. We’re looking at over a million dollars in lost revenue between when we shut down (in mid-March) through September. With that, we’ve got to make as many non=essential cuts in the budget as we can.”
“We know we’re losing revenue …,” Favre told council members Tuesday, “but this is strictly speculation at the moment. I think if the casinos could come back,” it would greatly improve the situation.
The Mississippi Gaming Commission ordered all casinos in the state closed in mid-March due to the pandemic. Commission Executive Director Allen Godfrey said last week that although Gov. Tate Reeves has begun easing some of the COVID-19 restrictions, there is still not a scheduled date for casinos to reopen.
Under current projections, Favre said, with the casinos closed and sales taxes down drastically, the city is on track to lose a total of $1,718, 232 over the next six months.
That would include $111,382 in lost revenue for the month of April; $226,186 in May; $260,365 in June; $274,448 in July; $274,448 In August; and $274,448 in September.
“At this point in time, we really don’t know how serious things are going to get or when they’re going to improve,” Ward 4 Councilman Larry Smith said Wednesday. “We do know that not having the casino money or taxes coming in, it’s really hurting, because that’s a third of our income. We really want to save as much money out of our budget as we can and see where we can cut if we have to so that in the worst-case .. we can be proactive instead of reactive.”
“We really don’t know from a revenue standpoint where we are, so it’s hard to budget …,” Ward 1 Councilman Doug Seal said Wednesday. “At the end of the day, if it continues, what will happen, I don’t know. We don’t intend to just cut at random.”
“We do have some projects moving forward that are already fully-funded with grants and GOMESA funds, Tidelands funds and things like that,” Favre said Thursday. “The harbor (expansion) project is going to begin in the next couple of weeks, we have all the funds secured for that. The sidewalk project on Washington Street, the sidewalk on Beyer Drive, we want to move forward on those, as well. The funding for the Beyer sidewalk is secured — funded through the MDOT “Safe Routes to School” program — and we have the matching funds set aside for that. We do believe we’re going to be alright.”
Seal said council members went through the budget line-by-line on Tuesday, looking for places where the budget could be cut if necessary.
“We know what we’ve got today,” Seal said. “Hypothetically, we can last another three months the way we are right now. In a couple of months, we’ll have a better idea of where we’re going to be and what we need to do. … There were no hard decisions (at the meeting) other than we all did agree we would take a 20 percent pay cut (which is now moot). We’ll continue to assess as we go.”
The current annual salary for Bay St. Louis City Council members is $16,800, plus $1,200 for the president of the council.
“We do have a reserve fund with a little over $700,000,” Seal said. “We’re looking to keeping as much of that as possible … but we’ll do what we need to do. We certainly don’t want to leave a million dollars in the bank but cut employees. … We’ll make cuts from daily expenses, not personnel.”
Seal said Favre and his administration would take all the council’s budget suggestions under consideration and come back with more data and proposals at the meeting next week.
“It’s kind of like we’re in a storm right now,” Seal said. “The water’s a little rough, but it’s not time to abandon ship. It’s not doomsday. It’s a bump in the road.”
Favre said he and his staff will have more budget suggestions for the council at next Tuesday’s meeting, but he believes the future will be a bit brighter than the “worst-case” projections.
“The governor’s executive (Safer at Home) order is due to expire on the 11th of May,” Favre said. “He’s waiting, I guess, to see what’s coming from the president. “He’s looking at opening some things, maybe, before his order expires, maybe give a little more leniency to restart the economy.
“Our little shops right now can open, with social distancing and everything like that. We’re trying to get some outdoor seating for our restaurants, maybe work out something like 50 percent seating for dining in to keep people far enough apart.
“We’ve got this other major disaster right now going on locally here, with he (Bonnet Carre) spillway opening. It really hurt these businesses last year. … We’re trying to work with the governor to get some things open sooner rather than later.
“Again, there are still some businesses that are shut down. We need to get them open and start moving forward.”
As for whether opening up will expose more people to risk of contracting the virus, Favre said, everyone just has to use common sense and be respectful.
“The people just need to use common sense,” he said, “and if you’re at risk, please stay home and stay safe. The people that don’t feel they’re at risk also need to use common sense. Just be cautious when you’re around people and be respectful to each other.
“Let’s all use common sense. Let’s not put all the burden on the businesses — you’ve got to help.”
Last Friday night, too many people gathered outside Beach Boulevard businesses, and many of them weren’t wearing masks or practicing social distancing, so he authorized the Bay Police Department to disperse the crowd.
“The p.d. is working on getting with all the beach businesses,” Favre said. “We’ll have a couple of officers up there again this weekend, trying to keep ‘em moving. “The beach is open — get your food and take it to the beach, if you want. The p.d. will be there trying to help the businesses monitor everything so we all stay safe.”