PARRISH – With the Internal Revenue Service poised to sell off town property to cover a $161,000 debt, the Parrish Town Council voted Monday night to shut down its jail and dispatch …
PARRISH – With the Internal Revenue Service poised to sell off town property to cover a $161,000 debt, the Parrish Town Council voted Monday night to shut down its jail and dispatch office.
The town will now pay the city of Cordova $2,000 a month to handle dispatch calls and house inmates charged with misdemeanors. Those charged with felonies will continue to be transferred to Walker County Jail.
Mayor Heather Hall said the move, which is expected to save $100,000 a year, was necessary after IRS representatives made two visits to Parrish in the past six months to discuss ways to recoup payroll taxes that went unpaid from 2012 to 2014.
“It was either this or the IRS was going to do a tax sale and seize all the property in the town of Parrish. All the property we own downtown would be gone. This (City Hall) would probably be the only building saved,” Hall said.
Since the decision was made, Hall learned from the town’s accountant that the IRS has expressed a willingness to waive penalties and interest and work out a payment plan for the remaining debt of approximately $70,000.
“Doing what we did is what is saving the town of Parrish – as much as I hate it,” Hall said.
The situation is so serious that the IRS is requiring that the town provide its meeting minutes every month to ensure that elected officials are continuing down the path of financial responsibility, according to Hall.
The only other option discussed but quickly dismissed was eliminating health care and retirement benefits for all town employees, which would have saved approximately $60,000, according to Hall.
The decision will eliminate jobs for two full-time and three part-time dispatchers, though Hall said she intends to ask council members to retain one person for a clerical position.
The town’s auditor has been recommending the move for several years, pointing out that few towns with a population of under 1,000 can afford the expense of operating a jail and dispatch office.
“It was the one thing we could eliminate that doesn’t affect quality of life of people here. We’ll still have park and rec, the senior center, our police department and court. The only thing different is that when you pick up the phone and dial the number for the police department, it will be someone else on the other end,” Hall said.
The deciding factor in making the change now was the IRS debt, the latest in a series of financial difficulties for Parrish that Hall traces back to 2010, when town leaders took out a $1.2 million loan during a time of relative prosperity to build a splash pad.
Several months later, revenue from local coal production dipped dramatically. Without the $80,000 to $100,000 a year that the town had come to expect from coal revenue, making the $7,000 monthly splash pad payment became increasingly more difficult.
At the end of 2012, the town stopped paying payroll taxes that had been deducted from employees’ checks, according to Hall. The practice continued through early 2014.
Also in 2014, Parrish High School was closed, which dealt an emotional blow to town residents but also eliminated revenue from drivers who stopped for breakfast or to get gas after dropping their children off at school.
Town leaders passed a one-cent tax increase to deal with shortfalls in the budget. After ownership of the high school was transferred to the town, some of the revenue was needed to rehabilitate the building. It currently serves as the home of the park and rec department and as an event space.
The opening of a Dollar General in Goodsprings last year dealt yet another blow to the town’s finances. Sales tax revenue was down $63,000 last year, according to Hall.
In recent months, the town has also been paying damages awarded on lawsuits that were filed during the past two administrations.
“Just in the last two or three months, we have paid $22,000 in lawsuits,” Hall said.
Hall, who was elected mayor in 2016, received her first visit from the IRS in November 2017. The IRS returned three weeks ago just before high school graduations were held around the county.
At that time, IRS representatives were not inclined to work out an agreement with the town because it had previously had to pay back payroll taxes that were delinquent from 2001 to 2003.
“They wanted to see immediate cuts for them to be willing to work with us,” Hall said.
In 2014, the town began using Automatic Data Processing (ADP) for its payroll services, eliminating the possibility of another infraction.
Even before the IRS became involved, the town was living on credit, according to Hall.
Each year for the past several years, the town has borrowed approximately $50,000 at the end of each year to cover operating expenses.
Town leaders have already taken steps to cut costs, including $62,000 in payroll savings since last year.
Hall also began exploring other options for dispatch and jail services approximately one year ago.
The county’s most recent offer was $2,000 a month and $35 per night per inmate, compared to $2,000 a month and $15 per inmate at Cordova. The latter will only be charged if the town exceeds 30 inmate stays per month.
Members of the Cordova City Council approved the agreement on Tuesday night.
If Parrish's jail, which dates back to the early 1980s, had remained in operation, the town would have eventually had to pay to upgrade it in order to remain in compliance with state regulations, according to Hall.
“I hired each of the dispatchers who is here now. I hate this, but it is to the point that if we do this, Parrish will be here in five years. If we don’t do something now, I don’t know what the future holds for Parrish,” Hall said.