In this Panhandle city, officials tried to keep the budget in check by selling assets, cutting spending, shutting off hot water and asking public employees to take furloughs as revenues dwindled.
The Pensacola Interstellar Airport needs $1.5 million to cover its shortfalls. The Community Redevelopment Agency owes more than $4 million annually to bondholders and the Emerald Coast Utility Authority.
Mayor Ashton Hayward has found himself staring at bleak prospects. Vendors can’t be paid and cash is running out to make payroll. Former Chief of Staff John Asmar is no longer around to be blamed.
“I have only one solution,” said the young mayor at a press conference at the Pensacola Country Club golf course. “We will hold a telethon.”
Hayward has enlisted the help of City Councilman Larry B. Johnson, who has attended a lot of concerts. Johnson has agreed to chair his Telethon to Initiate Pensacola Solvency, nicknamed the “TIPSy,” advisory committee.
“The city needs breathing room and the bottom line is we cannot default on payments to our employees without violating the law,” Mayor Hayward said while driving off the 18th tee. “LB has to raise the money before my American Express bill comes due.”
Other Offer Fails
On the eve of Hayward’s announcement, Mexican billionaire Carlos Slim, whom Forbes has listed as the richest man in the world, appeared to be interested in buying the airport, port, gas utility and city hall.
Had it worked out, the city’s immediate cash flow issues would have resolved. However, Slim balked when he was told that he had to keep the swave logo.
It was the fifth economic development that the mayor has failed to bring to his city—the others being the fish hatchery, candy company, off-shore repair company, Project Stallion and the teeth-bleaching vocational institute.
The city had made a bid to lure The Gene casino away from Perdido Key but the name Pensacola Beach had already been taken. Apparently the word “beach” is crucial to the development.
If the telethon fails, Mayor Hayward said that he will establish another advisory committee which will ask the city council to authorize the city attorney to seek federal bankruptcy protection.
Bankruptcy experts say the decision in Pensacola could sound an alarm to cities across the state and country that are grappling with weak property and sales tax revenues as their pension obligations continue to rise.
In some instances, cities like Harrisburg, Pa., and Mammoth Lakes, Calif., have considered bankruptcy as a way to cope with bond debt. Other towns, like Stockton, Calif. and Central Falls, R.I., have sought bankruptcy to deal with the negative financial outlooks due to rising costs and stagnant revenues.
In the past year, Hayward has spent over a million dollars rebranding the city, hiring someone to run his personal Facebook and Twitter accounts and flying around the country soliciting businesses to the area.
“I rolled the dice,” said Hayward before he drove off in his golf cart, “and we hit snake eyes (on economic development).”
One potential buyer of the city, if it files bankruptcy, is Escambia County.
“People were upset when we stopped the consolidation,” said Commissioner Wilson Robertson, “but now we could get the city for pennies on the dollar.”
Interim County Administrator George Touart has placed a proposal on the agenda for the next meeting of the Board of County Commissioners. Commissioner Gene Valentino has been seen walking the seventh floor of city hall checking out his new office space.