On the heels of an across-the-board raise for nearly half of the city’s 550 employees, including the three elected officials, those officials now say they are studying ways to “streamline” city operations in a process that could merge departments and eliminate jobs as early as the beginning of the year.

“I think we could cut payroll by $1 million by getting rid of some positions,” said Sid Beauman, who has been South Ward alderman since 2001. “The city has too many employees.”

Board members voted unanimously a week ago to give themselves 5 percent raises and about half of the city’s 550 employees 3 percent raises. The 5 percent raise was set in a 2002 ordinance calling for the mayor and two aldermen to automatically receive 5 percent increases on the first and second anniversaries of their taking office in four-year terms.

Since, all three of the elected officials have said they are focusing on cutting back to save money.

“We’re in the early discussion phases,” said North Ward Alderman Michael Mayfield, who is in his second four-year term. “Once we start with the process, it will involve several people sitting at the table.”

“We want to focus on streamlining,” said Mayor Paul Winfield. “I don’t envision a reduction in employees, but things can be done more efficiently.”

Winfield said talks include merging some of the city’s 36 departments, which would result in fewer department leaders reporting to the Board of Mayor and Aldermen.

“In certain cities with four times our work force, they only have 10 to 15 department heads,” said Winfield, who ousted eight-year incumbent Laurence Leyens in 2009.

Winfield and Mayfield declined to say how much the city hopes to save or when the process will begin.

The across-the-board raises for the rank-and-file employees, estimated by interim human sources director Walterine Langford to be 260 to 275, do not include members of the police and fire departments, whose compensation is determined by civil service rules and rankings.

The raises also were offered to compensate for the 1.75 percent reduction in paychecks due to an increase in retirement contributions set in July and required of all government employees.

City accountant Doug Whittington has estimated the raises will cost $312,302.18 and come from the general fund and leftover funds from last fiscal year in six of the city’s 36 departments.

The city’s projected revenue for the current fiscal year, which began Oct. 1, is $31.3 million, down about $200,000 from the 2009-10 fiscal year budget.

Nearly half of that comes from gaming and sales tax revenue, and both of those sources are down.

The city’s share of the 3.2 percent gaming revenue tax — which Vicksburg’s five casinos pay to the state and is divided among the city, schools and the county — fell 16 percent from $549,928 in October 2009 to $461,732 in October 2010.

In the last fiscal year, which ended Sept. 30, the city collected $6.6 million from gaming revenues, which was 1.19 percent shy of projections of $6.7 million.

The city’s 18.5 percent share of sales tax also fell, from $608,681 in July to $567,957 in September. The numbers are comparable to the same time frame in 2009, when $560,340 was collected in September, down from $613,056 collected in July.

“The fact is we’re still in the valley,” Whittington said. “We’re not coming up yet, and the only way this was going to happen was tighten the belt and we did it.”

That same type of tightening in the last fiscal year resulted in a $1.9 million carryover to this year, he said.

But taxpayers won’t be seeing any of that in the form of rebates or reductions in costs.

Beauman explained that parts of the carryover money is from payments that will be made in this fiscal year for purchases made in the previous fiscal year.

In March the board had voted to implement increased tiered surcharges for residential and commercial customers of Vicksburg’s water and sewer services to pay off a $4.9 million deficit within both utility funds, while freeing up money to allocate for other purposes. The rate increase went into effect May 1.

With income down, the three elected officials are optimistic about revenue projections, which are based on an average of past performances, for the current fiscal year.

“I feel pretty good about the financial status of the city right now with the exception of payroll,” Beauman said.

“We had already positioned ourselves to give those raises,” Mayfield said. “You can’t deny these people raises year after year based on “what if” situations.”