Hattiesburg, Mississippi – Due to projected shortfalls in sales tax revenues from COVID-19’s effect on the Hattiesburg economy, the City of Hattiesburg will experience a reduction in force beginning this week.
The city’s general fund is heavily dependent on the tax dollars generated from retail sales, and March numbers indicate a downturn (approximately 15%) for when the parts of the economy were shut down for less than half the month. That shortfall is anticipated to double for April.
“We have endeavored to be very transparent throughout the city’s response to COVID-19. We believe our employees and our citizens deserve to know the good, the bad and the difficult decisions we are making as a city throughout this public health crisis,” said Mayor Toby Barker. “This crisis has challenged us all, and this decision, while painful, is necessary.”
In early March, the city instituted two policies to help with cost-savings and to lessen the potential impacts for the spread of COVID-19: (1) restricting out-of-town city-sponsored travel; and (2) a hiring freeze for general fund positions (except for essential public safety personnel).
While these policies will help cover some of the revenue shortfalls, sales tax revenues will continue to lag behind last year’s totals. With six months left in the fiscal year, a reduction in force will help the city reduce expenses and possibly alleviate the need for a second or third round of layoffs.
Barker added, “This decision is similar to the ones our small businesses, organizations and churches are having to make. It’s tough and uncomfortable, and it is the last thing we want to do. However, we have to take steps to maintain a balanced budget, especially when we don’t know how long this will last. By going through this process now, we afford our employees who are let go to take advantage of enhanced unemployment benefits due to the CARES Act. It is my hope that we can regain some of our economic momentum while still prioritizing public health, and we’ll then be able to have conversations about adding back positions to the city’s workforce.”
The process for deciding which positions will be dissolved is based on several criteria given to directors so that they can make recommendations. When deciding reduction in force, they will consider the following factors:
- critical nature of the position to the provision of city services;
- employee attendance and discipline history;
- experience, professional training, length of service and work assignment;
- skills and licensure in the area where the city has a requirement;
- and positions with shared similar duties within an area.
At this time, there isn’t a definitive number included in the reduction in force policy. However, city administrators will use both recommendations made by directors and the budget to guide the process.
The timeline for the reduction in force to take place includes directors making recommendations this week and notice to be given directly to employees within five to seven days.