Vicksburg city employees are not getting a 3 percent pay raise.

“I owe the city employees an apology,” Mayor George Flaggs Jr. said. “I once stated that they would get a raise. I have tried every way I possibly could, working with the budget committee (but) it is absolutely no way, no way, we can do a raise in this budget year. It won’t happen.

“I took the full responsibility of announcing a raise without looking at the full totality of the budget and the audit report, which I have, but have not read.”

His announcement came at Friday’s meeting of the Board of Mayor and Aldermen before the board approved an $846,833 general fund budget amendment to cover a shortfall in the city’s projected 2017 costs for employee health insurance.

Flaggs also served notice the board will be looking at other areas in city government to save money, including the possible privatization of the city’s wastewater treatment plant on Rifle Range Road.

And one of the first places to look will be insurance.

“We can’t have an $846,833 increase in insurance. It doesn’t make sense to me to put $484,000 (for raises) on top of $800-and-some-thousand dollars that you know you’ve incurred. To me, health insurance is more important than a 3 percent increase in raise.”

He said the increased insurance costs were a primary reason the raises are not coming, because the money to shore up the insurance has to come from general fund revenues, which would have been used to fund the raises.

Flaggs said the state’s financial situation, which was caused by a reduction in revenue, is also affecting county and city budgets.

He said the Warren County Board of Supervisors raised the county millage by 3.11 mills to provide sufficient funds for county operations.

“Raising taxes is no option for me,” he said.

Looking at the increased insurance costs, he said, “I don’t know how we could have budgeted for the increased cost of health care coverage in city. I never thought we would have an $846,833 increase in insurance.”

The city’s insurance plan is administered by Blue Cross/Blue Shield, which charges the city a monthly fee to administer the insurance plan and handle the claims.

The city receives records of employee insurance claims every 10 days.

Over the last three to four years, city accounting director Doug Whittington said, the claims averaged about $75,000 to $125,000 every 10 days.

In the last two years they have increased, with the lowest at $91,000 and the highest at $352,000 for 10 days worth of claims.

Flaggs placed part of the blame for cost increases on city officials, “Because we haven’t gone shopping and we haven’t looked at our insurance package.” That, he said, is going to change.

“We’ve been told for four years that we have a Cadillac policy for the city of Vicksburg. I’m going to try my best not to interfere with that. But there are two areas other than administrative costs, such as pharmacy. We don’t do copay when you go to the emergency room. We’re going to look at that.”

The city in 2016 approved a contract with Georgia-based ESG Operations to operate and manage the city’s water treatment plant on Haining Road.

Flaggs said Friday he is considering investigating doing the same thing with the wastewater treatment plant, but gave no details.

He said, however, contracting the plant’s operations was one of several areas the board will consider as it looks to reduce the cost of running the city.

“We’re going to look and examine other city contracts and look at others for services such as landscaping and gas services. I don’t know if we won’t be better off contracting (those services),” he said. “That’s not to say I’m laying off or doing anything, but I’m going shopping.

“I’m not raising taxes, not when I see there can be some adjustments in how we budget and how we pay for the services. I don’t think it’s fair to the taxpayer that we just past this (cost of government) on to them like other cities, when I know for a fact we can run this government cheap. We’ve got to something.”