Biloxi Administration Budget Proposal Includes $41 Million in Major Projects and No City Tax Increase
From: City of Biloxi, Vincent Creel Filed 8/2/07 GCN
Mayor A.J. Holloway Tuesday morning presented the Biloxi City Council a budget that proposes to continue the 13-year trend of no increase in city property taxes and includes $41 million in capital improvement projects
The budget projects that Biloxi’s revenue from casino gaming and sales taxes would reach 87 percent of its pre-Katrina level, but property tax revenue, the city’s third primary revenue stream, would be off 30 percent, reflecting the storm’s destruction of a quarter of the city’s 25,000 pre-storm homes and businesses.
Holloway’s budget also proposes to set aside $10 million in proceeds from the city’s much-discussed business interruption insurance to offset the lack of similar insurance, as well as cushion a reduction in the level of property insurance and to minimize any interruption in gaming revenue this hurricane season.
“For years, we’ve talked about being conservative in the event of a storm,” Holloway said, “and, of course, not even I could have been conservative enough to prepare for a storm like Katrina. We are in moderately good shape financially -- considering everything -- but it’s going to be a few years before we’re comfortable financially.”
Holloway delivered the proposed budget to the City Council Monday afternoon and budget hearings were held this morning at 10 and this evening at 6. The budget would cover the Fiscal Year 2007, which runs from Oct. 1, 2006 to Sept. 30, 2006. It must be in place in September.
Director of Administration David Staehling told council members that the projected $6.5 million beginning fund balance for the budget actually ballooned to $37.8 million. Said Staehling: “Cost-cutting measures invoked in the wake of the storm – a hiring freeze and suspension of all capital projects spending -- reduced expenses by $5.5 million, and the $6 million ending fund balance we originally projected to have in hand at end of the FY turned into $37.8 million, thanks to that measure and $27.5 million in insurance proceeds.”
Staehling and Holloway also noted that more than $70 million in FEMA reimbursements has flowed through city coffers since the storm for debris removal and other recovery issues, and another $60 million is pending in requests.
Additionally, FEMA requires the city to use any insurance payments to match FEMA revenue intended to repair or replace damaged city assets.
The budget includes a 2.5 percent pay increase for city employees, but no funding for non-profit organizations, which had grown to more than a million dollars a year in the past several years.
“We still have a huge number of pressing needs, as much as $50 million in rebuilding the decimated drainage systems under streets throughout our city,” Holloway said, “so we’re far from out of the woods. It’s going to take a few years, but we’ll get there.”