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Coast Leaders Facing Unprecedented Challenges
What to Expect

by Keith Burton - GCN      Filed 1/11/06  updated 1/13/06

Coast governmental leaders are facing truly unprecedented decisions in the months ahead in light of the affects of Hurricane Katrina. While the first four months have been difficult, they know that the hardest decisions are before them, even with federal and state help.

Much of Hancock county, including Bay St. Louis and Waveland, have seen little progress toward recovery since the hurricane. Debris removal is progressing but restoration of homes and businesses are far behind. Many people are choosing not to rebuild. Hancock county recently slashed property taxes for this year in an effort to encourage people stay and pay their taxes. But this brings up a major issue affecting local governments.

Across the Katrina-damaged Mississippi Coast, many property owners are either not paying their property taxes or are delaying their payments that are due at this time. Coast cities and counties are becoming alarmed at the loss of revenue as they are seeing as much as a 30-percent reduction when compared to last year at this time.

What makes it difficult for local governments is that they are not receiving operations money, money to pay their workers and conduct routine business, which is what property taxes support.

 For most governments, nearly 85 percent of their budget is in payroll. Even before the hurricane, most local governments were operating at reduced employment levels and tight budgets. The federal assistance money, both from the current FEMA support and in the $29-Billion Katrina Aid package, does not include operation money for devastated communities. In addition, their existing money is going for prepayments for emergency services, such as temporary repairs on government buildings and toward debris prepayments, which are reimbursed. While some cities and counties have borrowed to help them get through the short term, much of those monies have either been spent or will run out in the near future.

Most people do not follow how or on what their local governments do in great detail, but services like street repairs, garbage removal, water and sewer and street lights cost money. The same for parks and maintenance, community services such as health and a lot more are paid out of property taxes. With a sharply reduced income, routine services in communities will not be returning to pre-Katrina levels, if at all, for a long period. This reduction will be more apparent as the months go by, even if more assistance comes from the federal government.

What even the most seasoned governmental workers are saying to GCN is that they have never seen, or could prepare for, what is unfolding before them. Most local governments in Mississippi are not fat with excess cash or bloated payrolls. This is a historically poor state, and even its most prosperous regions operate at levels that other states may find hard to believe. In a real sense, the area is used to getting a lot out of very little, but not with what has happened.

The nation and many of its leaders would like to say the Coast has moved beyond the need for help and that the billions of dollars is enough. But it is still too soon to think that. Except for debris removal and family aid, much of the federal money for any recovery has yet to reach the ground where anything can be seen. Almost all of the federal, state and volunteer efforts to date have focused on helping families displaced by the storm survive. That help is relief, not recovery - this is a distinction  people in government and too many journalists are missing.

The bureaucracy to even administer the federal recovery assistance will take time to be formed, and if anything FEMA has proven, is that time is measured differently within bureaucracies. But with bills to pay and services to render, local governments here don't have that time.

In Harrison County, a major political shift has been recorded with the selection by the Board of Supervisors to name District 5 Supervisor Connie Rockco president of the board of supervisors. This is not a minor political issue. The supervisors know that the county is facing some tough months and there will be some decisions that will be necessary but politically difficult. Rockco, who was elected by wide margins in her two elections, is perhaps the most resilient politically. Her political base is also in Biloxi's most populous and prosperous area, an area which also suffered the least in Katrina's wake. She replaces Bobby Elueterius as president of the board, who's district includes east Biloxi and D'Iberville, which were devastated.

D'Iberville, and Long Beach, and to a much lesser degree Pass Christian, have long been supported financially by the county. Most often in providing money for parks and recreation services, street repairs and sometimes more. The post-Katrina reality is that the support from the county will not continue. Not because Harrison County doesn't want to, but because it can't.

As District 2 Supervisor Larry Benefield told GCN recently, "If they cannot pay their own way, we can no longer help them."

Harrison County has tightened what it spends in everyway it knows, and this is still when they have money coming in. The supervisors and city officials across the Coast know that in 2007 when the total number of property owners with slabs for homes are subtracted from the tax roles, the reductions in budgets will be more severe.

Harrison County has already put off payments on its bonds, its debt on loans. They have frozen $7-million in Harrison County Development Commission funds and nearly $1-million in money held by the Harrison County Tourism Commission and ordered those agencies to spend only what they need to operate. The supervisors have already told those agencies not to expect any additional funding from the county for the foreseeable future.

The Sheriff Department is also facing budget cuts, but there is hope there that federal Katrina money specified for law enforcement needs will be available to offset some of the cuts from the county. But how much, and when the money will be available is still unknown.

Harrison County’s two largest cities, Biloxi and Gulfport have also tightened their belts and sharply cut expenses, but only Biloxi has reserves. Despite media reports and Mayor Brent Warr's recent statements that Gulfport’s financial condition is strong, the city took out a $16-million community emergency assistance loan from FEMA after the hurricane to use as operating money. Oddly, that borrowing was not mentioned by Warr or the Sun Herald in a recent news report that claimed Gulfport’s finances were in great shape.

In a recent WLOX report, the television station reported that, “Gulfport knows that Hurricane Katrina washed away an estimated five million dollars in gaming tax collections, two million dollars in property taxes, and seven million dollars in water and sewer collections. To offset the projected losses, the city implemented a hiring freeze, and it received a $16 million federal loan.”

Demery Grubbs, of Government Consultants Inc. in Jackson, recently met with Gulfport city officials and tells GCN that Gulfport is using the emergency loan to assist the city at this time. Government Consultants advises governmental entities on financial matters.

"They wouldn't be in as good of shape if they didn't have this money, but they would be in pretty good shape without that money," Grubbs said.

Grubbs said the real challenge is the future. Officials can make budget projections and make loans for the short term, but they don't know how much in property taxes they will receive. It is like making a guess on how much money you can spend when you don't know how much income you have. "Obviously, its a balancing act you will have to do," Grubbs said.

But for cities and counties at this point in time, estimating the income from taxes and the federal assistance is just a guess.

Warr is counting on future developments to replace what the city has lost and claims numerous businesses and developers are courting the city, but he has yet to publicly name them. Nor has he appointed members to the Planning Commission or Zoning Board of Adjustments and Appeals that are needed to hear cases involving development in the city.

The Katrina disaster is more than a single storm on a terrible August 29th day. The storm has brought a continuous series of growing problems as its true impact is realized. Much of what is now known was not anticipated by many in government. And just like residents who don’t want to visit the beachfront to see the damages, a sense of denial, even at the government level, exists.

When the present is difficult to handle, the mind automatically moves to a future day when things will be brighter, that is where government officials and the media continually cast their reports. But  strength at the present moment is what is called for and not the rose-colored, misty-eyed look toward the future. A future that won't occur if we don't get the present right.

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