State of the City 2010: The end of the beginning

Here is the prepared text of Mayor A.J. Holloway’s State of the City address, delivered Jan. 27, during a Biloxi Bay Chamber of Commerce luncheon at the Beau Rivage Resort & Casino.

Good afternoon and welcome to the State of the City 2010.

I’m glad to see so many of you here today because I want to clear up a vicious rumor that I’ve been hearing for the last month or so.

Before I tell you about it, I’m reminded about a story about another mayor and how he dealt with rumors.

Vic Shiro was the mayor of New Orleans back in the 60s. One of the great stories about Vic was when Hurricane Betsy was threatening New Orleans. Vic was concerned that people might panic. So he went to one of the New Orleans TV stations and told them that he needed to go on live TV to address the citizens of New Orleans.

The story goes that Vic looked into that camera and said, “This is Mayor Vic Shiro. There’s a lot of rumors and half-truths about this storm. I don’t want you to believe any half truths or rumors unless they come from ME.”

Well, I’ve been hearing a rumor too for the last month or so.

I don’t know where it got started, but I’m here today to clear it up. The rumor is I’m going to resign in February. Well, to tell you the truth. I have given it some thought, and I MIGHT resign in February — February 2017.

Thank you.

Now, in all sincerity, some of you will notice that Macklyn is not here today. For 17 years, she has attended the State of the City address. She’s been a little under the weather of late, battling a pesky infection. She’s allergic to a number of medicines that would have already cured her infection; rest assured, she’s coming through. I would not be where I am today were it not for her. And I love her very, very much. And for the record: She’s not resigning either.

Now that we got that cleared up, let’s talk about Biloxi and the state of our city.

The state of our economy remains depressed but not depressing. The state of our city and the spirit of our people remain strong and vibrant. Encouraging and promising.

As I stand before you, we’re in the process of multi-million-dollar restorations of many of our surviving historic properties – the Biloxi Lighthouse, the Old Brick House, City Hall, the Magnolia Hotel, the White House Fountain, the Slay-Bernich House, the Creole Cottage, the fire museum, the Saenger Theater.

And the new structures that we’re building — the Visitors Center and the new downtown library and civic center – will be important community landmarks. They will pay tribute to and rekindle the architectural charm of our city.

All of these buildings – the old and new – represent huge investments – well over $50 million in all – and they’ll serve us for many years to come.

We do these things while we’re on the cusp of rebuilding infrastructure throughout our city. That $355 million in infrastructure work that you’ve been hearing about — you’re going to be seeing it this year, starting in a couple of months and growing to neighborhoods throughout the city through the summer and beyond.

What’s remarkable and extraordinary about all of these things is that we’re doing them in the economic times in which we find ourselves.

And before I go any further let me remind you of something. I’m a realist. I was a PLAYER, not a cheerleader. So, today, I’m not here to sugar coat things. Despite what some people might tell you, I am NOT a silver-tongued devil.

I’m here to tell you where we are, tell you how we got here, and tell you how we’re getting past it and moving forward.

You can pick whatever cliché you like, but the fact is, we haven’t turned the corner, we’re not out of the woods, and we’re not at the point where we can see light at the end of the tunnel.

The thought is not lost on me that we’re coming up on the five year anniversary of Hurricane Katrina.

As I stand here before you today, we must remember that we’ve faced two catastrophic storms in the past five years. The first was a storm that did massive physical damage. We could see that one coming in broad daylight. The second one was more of a slow-building storm that some would say is still with us today. It’s the economic storm that has done immense financial damage.

The economy has had a chilling effect – not on our recovery, but on our growth.

The most important aspect of city government – more important that even the basic services we provide – is the means we have to provide those services. We rely on three primary sources of revenue to operate your city government. That’s gaming taxes, sales taxes and property taxes.

Of the three, only property tax revenue improved over the past three years. We saw an increase of $3.1 million, which was due primarily to countywide reappraisal. The other two revenue streams – gaming and sales tax — actually dropped — dramatically.

At this time a year ago, gross gaming revenue at the Biloxi casinos was $56 million off the previous year. This past year, it was almost $120 million off. Those are staggering numbers, and by comparison we get a small percent of money from gaming taxes, but it’s still a third of our annual budget.

That figure is more than $3 million off over the past two years. That’s $256,000 down a year ago, and more than $2.8 million down in the past 12 months. Overall, it’s about 10 percent off.

For fiscal 2008, sales tax revenue was flat, but in 2009 sales tax declined by more than a million dollars. If you take out the year of Katrina, this past year we had the lowest sales tax revenue in the past 10 years.

We watch these numbers on a monthly basis, and we were taking action along the way to stop the bleeding as best we could.

For the fiscal year that just ended, we had a local spending budget of $76.6 million. Because of what we were seeing, I cut departmental spending by 20 percent, which saved $14 million. But even with that, the City’s General Fund, which is kind of like our checking account, declined by $7 million. It went to $20 million, and $2 million of that is in the City’s DUI and Drug Forfeiture Fund, which is restricted money.

All of this means something that I’ve said before: We have more money going out than we have coming in. That’s a dangerous trend, and one that cannot continue.

We’re seeing this because of the economy. Make no mistake about it. That depressing news that you see on the national news hits home. The freeze on credit nationally is definitely impacting the ability for the private sector to build in our market, and we saw clear evidence of that last year.

For the past several years, and going back to before Katrina, we’ve been averaging $4 million a week in construction permits. Last year, that figure dropped to an average of $1.8 million a week. In a city where $200 million in construction permits would be a typical year, we saw only $95 million in permits issued last year.

Our fire department inspectors, who review plans for new buildings, reviewed only 98 plans for new businesses this past year. That was a 38 percent drop from the previous year.

Our Community Development Department meets with developers to look over their plans, but it stops when they can’t get the financing.

And when you hear about the budget cuts in Jackson … let me tell you how that affects you. The shortfall in Jackson translates into cuts in our local school system. That’s because 63 cents of every dollar the state spends is spent on education. So when they cut the state budget, it hits education especially hard.

Biloxi Public Schools has seen its state funding cut by almost a million dollars so far. That’s about 5 percent from the school’s $20 million in state funding, and more cuts are expected this year. On top of that, the school’s gaming revenue is down more than half a million dollars, or 8.2 percent.

So there it is. That’s where we are and how we got here.

Now, what are we doing about it? How are we getting past it and moving forward?
The good news is that we haven’t raised anybody’s taxes in Biloxi. In fact, I’m proud to say that I’ve never raised your taxes in the 17 years I’ve been your mayor, and I don’t see any reason to raise them now.

I told you about how we tightened our belts in the past year, and another thing we did was bring our fees in line with the cost of providing services.

Some services – like water and sewer, and garbage pickup, and boat slips — are supposed to be operated like businesses. They’re called enterprise funds. We’re supposed to charge fees that generate enough money to cover the costs of providing the service. We bumped up water and sewer a little and we went up a couple of dollars on the garbage fee.
We hadn’t gone up on any of those things for a number of years.

Even with the adjustments, we still have the lowest fees of any city around us, and some of the lowest in the entire southeast.

You pay half or a third of what residents of other cities pay. And there’s no comparison on our recreation league fees. They are free.

Now, something I’ve said all along is that, YES, I like that Biloxi has the lowest fees. But it’s more important to have the fairest fee. We must recover the cost of providing the service, and the way we do that is run an efficient operation and charge a fair amount for that service.

But, you know, even with all of the revenue challenges we face, our partners and our city departments are seeing extraordinary success.

In our Community Development Department, right at 400 property owners received discounts of 20 to 25 percent on their windpool policies thanks to our building department getting a 4 rating.

That’s huge. 400 of our property owners saving between 20 and 25 percent on their property insurance. And this past year, our flood rating went from a 7 to a 6. That meant a 20 percent discount on flood insurance. You get these discounts because our inspectors have the training and are doing their jobs.

Our Biloxi Public School District will celebrate its 150th anniversary this year. I’m proud to say that all public schools in Biloxi are either meeting or exceeding federal standards. Congratulations to Dr. Paul Tisdale, the school board, our teachers, principals, parents and students.

I would also like to recognize a special guest here today. She’s the principal of the district’s Star school. It’s a school in east Biloxi that has traditionally scored extremely well on assessment tests. With us today on behalf of Nichols Elementary School is Principal Melissa Nance.

Keesler hosted more than 142,000 people for the Thunder on the Bay Air Show and Open House in April. Keesler had not done an air show in five years, and this was the first time in 14 years that they hosted the Thunderbirds. The show was so great that the Thunderbirds named it the best military show of the year.

In October, Keesler opened the doors to the first 95 students in its new cyber schoolhouse. It is believed to be the largest training development effort in the history of the Air Education and Training Command. This cyberspace project has 19 new cyber courses. It impacts two training wings, four training squadrons and one detachment.

To date, $6 million has been invested on the program, and it keeps Keesler on the cutting edge of technology, which is just where it belongs.

The largest military family housing project in the history of the Air Force — $287 million for 1,028 family housing units — should be complete early this fall.

And thousands of active military and retirees are anxiously awaiting the grand opening of Keesler’s new base exchange and commissary. This new $61.9 million complex is more than 95 percent complete and is set to open in 60 days.

Now, I know some of you may wonder how this is going to impact our sales tax revenue. Well let me say this: Frankly, the thousands of active duty military and retirees that we have in our city deserve this privilege. They have fought and continue to fight for our freedom, and they have earned this honor.

Just the other day, we recognized some of our own heroes.

In the past year, the Biloxi Fire Department made more than 6,600 calls for service this year, with 7 out of 10 calls being for emergency medical calls. That’s an average of 18 emergency medical calls every day, and the fire chief tells me that this is another sign of the economic times we’re in. Instead of going to the hospital emergency room or to see a doctor on a regular basis, more people are calling 911.

Just last month, we recognized three firefighters from our Bay Vista Fire station for saving TWO lives in one week. I asked them to be with us here today — firefighters Irvin Dement, Rodney Strickler and Mike Watts.

Over in the police department, we have a new police chief, John Miller. Now, I know it took us a little while to get to John, but let me say this about the police department: I am very proud of how far we have come over the years in the Biloxi Police Department. John is only the third permanent chief in my 17 years as mayor, and the other two retired. That says something about stability and continuity.

Our police officers do more than just enforce the law and keep our community safe. They raised over $40,000 for Special Olympics, delivered over 800 holiday meals, and touched the lives of over 600 students through DARE and GREAT. They used almost $3 million in FEMA grants to help us be even more ready in times of crisis. As an example, a new Early Warning Siren System will be functioning in the city by the start of the 2010 hurricane season.

While they were doing all of this in the past year, our Police Department also saw more than 73,500 calls for service. That’s more than 200 calls a day, almost 10 calls an hour — every hour of every day. When you dial 911 our emergency people are on the way.
We tend to forget just how dependable they are, until something happens.

Like back in March, when yet another a barge collided with the Popp’s Ferry bridge. We had dozens of emergency personnel and millions of dollars worth of equipment on the scene in a matter of minutes.

I’m continuing my push to get a new Popp’s Ferry bridge out there. I traveled to Washington a few months ago to discuss this issue.

Frankly, I know the real answer is a new connector from I-10 to Highway 90, and I’m getting done what I can get done. Right now, that’s a new bridge, with an eye to a new connector. We have a request pending for $75 million for a new bridge.

Improving transportation and maintaining our major thoroughfares is such an important part of the job we do. We have been successful in acquiring stimulus money through MDOT, the Federal Highway Administration, and our partners at Gulf Regional Planning Commission.

Last week, we received bids on adding lighting to the new Highway 67 within our city limits, and parts of Old Highway 67. This week, we’ll receive bids on a stimulus project that will see the repaving of all of Beauvoir Road.

We’ve acquired the necessary right of way and this Spring we’ll be out for bids on major improvements to intersections on Pass Road at Eisenhower, Big Lake Road and Stennis Drive.

We’ve acquired right of way to add turning lanes on Division Street at I-110. We’ll also add mast-arm traffic signals like we have on Highway 90.

That’s all with federal funds.

We also have acquired all the necessary right of way for the last phase of widening of Popp’s Ferry Road. This is the section between Cedar Lake and Lamey Street, where we will see some development once this widening is complete.

We’re awaiting environmental approvals from MDOT and the Federal Highway Administration, and my hope is that we’ll have them in hand by the time we wrap up our current construction on Brodie Road. That 3.5 million dollar project on Brodie is on track to be completed in several months – on time and on budget. The new Brodie will be a wider roadway, and will have new water, sewer and drainage lines and new curbing.

Even with all of the work to improve the flow of traffic, we realize that we can build only so many roadways.

An important part of any transportation plan relies on public transit, and I am happy to say that Coast Transit is enjoying record-breaking success. Last year, CTA carried 855,000 passengers, topping its record 802,000 back in the year 2000.

So why the jump? First off, the Beachcomber route is back with new Trolleys, and the new bike and bus operation is averaging 650 bikes a month.

Who would have thought? I’ll tell you who would have thought, and I want him to stand up right now and be recognized: Kevin Coggin, the director of Coast Transit. Thank you, Kevin.

Coast Transit’s most popular route in Biloxi is the Pass Road route, which averages about 20,000 riders a MONTH, and a close second is the Casino Hopper, another of Kevin’s ideas.

Now, in a sign of the times, let me remind you of this. The Beachcomber line had been Coast Transit’s most popular route before the storm. We had 161,000 passengers there in the year before Katrina.

In the past year, the Beachcomber had only 55,000 riders, which is more than Coast Transit thought we would get but still only a fraction of the 161,000 before the storm. The problem now is we don’t have those ridership generators on the front beach – the food and beverage, and apartments, and amenities. Coast Transit is expecting to open a comfort station on the beach in front of the Coliseum this summer, and another is in the works for Rodenberg Avenue some time after that.

I also want to recognize our Public Works Department for its accomplishments.
The department handled more than 872 work orders in 2009, and completed more than two dozen in-house construction projects on city streets. These included repairing storm drains or water or sewer lines on streets in all parts of Biloxi.

But to be candid, we’re only doing band-aid patchwork on streets and drainage. You’ll see the real construction begin this year.

In the past year, the city’s program manager, HNTB, worked to assign and oversee the design phase of the 14 areas in Biloxi where infrastructure will be replaced and repaired. And where are these 14 areas? Essentially any place that went underwater in Katrina.

To manage a project of this size, we broke the 14 project areas into 27 design phases. Twenty-five of these have been assigned to one of the 16 design firms selected for this work.

The good news is that the first of these projects is set to be advertised for construction bids in the next 60 days. We expect to have five or six construction contracts underway by this summer. This will be about 30 percent of the $356 million obligated for Katrina infrastructure damage.

This project will give us a water, sewer and drainage infrastructure system that will be stronger and more efficient than it was before Katrina.

Our harbors, marinas and piers all suffered major damages, and design and negotiations for eligible funding has taken more time and documentation than we initially estimated. But we are making progress that you can see.

In the past year, we completed 98 percent of the repairs at the Biloxi Small Craft Harbor. Right now, we are in the process of restoring the port administration building. Our big challenge has been how to build a fuel dock and bait shop and meet the elevation requirements — and still be functional and convenient. Point Cadet Marina, another major harbor, will also be finished in 60 days.

The Coliseum Pier should be completed in 60 days, and we’re awaiting FEMA approval to move forward with the Lighthouse Pier.

The Lighthouse Fishing Dock, a work boat harbor on Back Bay, is expected to bid early in 2010, and the major portion of that dock should be complete by the end of the year.

We’re hoping to begin removal of the old fishing bridges on Point Cadet and Back Bay in a few months. I want these to be under construction by this summer and be up and running 12 to 15 months after we start construction. These two fishing piers will be lit for nighttime fishing, they’ll have two lanes and turnarounds for cars, and they will be ADA accessible. Between removal of the debris, and design and construction, we’re talking about more than $12 million on these two bridges.

Like I said earlier, the amazing aspect of this huge body of work I’ve talked about today is that we’re doing it in times of a depressed economy. We have something that no other community in the country has – HUNDREDS of millions of dollars in federal funding.

I realize that this is onetime money, and we must create jobs and boost the economy.

So what are we doing in that regard?

Now Jerry Creel, our Community Development Director, will rightfully tell you that we do indeed have a great many things going on in terms of construction.

He’ll tell you about the 45-million dollar Palace Casino Resort expansion,

— the planned 4 million Biloxi Blues Club and Marina on Back Bay,

— the 100-unit seniors development called Bellemont Gardens off Popp’s Ferry Road,

— the 10 million dollar library at Beauvoir,

— the 7 million dollar Sheraton Four Points hotel, which is at the site of the old Gulf Towers and set to open in March

— or the 14 million dollar Kroc Center planned for Yankie Stadium,

— or the 20 million dollar Catholic Diocese of Biloxi senior housing in north Biloxi

— or the Church of the Redeemer that’s going to rebuild on Popp’s Ferry

— or the new Slavic Hall in East Biloxi

— or the RW development that’s been approved for Veterans Boulevard in west Biloxi

— or the new First United Methodist Church at old 67 and new 67 in Woolmarket

You see the real difference in Biloxi is that our development is not concentrated in one area.

You know, some people tend to overlook Edgewater Mall since it’s been here so long. I remind you that we’re talking about a MILLION SQUARE FEET of retail in a climate-controlled environment. You can see the 2 million dollar investment that Sears is making there now. You can see the 14,000 square foot Books-a-Million. And we expect to see some more exciting things happening at and near Edgewater Mall in the next several months.

At the same time, we want to make sure that we’re doing everything possible and reasonable to attract retail and commercial growth that would be a good fit for our market.

What we ARE doing is working with an industry leading firm that identifies retailers that are a natural fit based on consumer analytics. This firm has successfully recruited more than 20 million square feet of retail, so we have some high expectations. Another thing that we’re going to do is follow the suggestions of our comprehensive plan, which has the same recommendations that have guided us from Day 1:

— We must build responsibly.

— We must build in a way that preserves our charm and character.

— We must manage growth.

We should also remember the painful fact that Point Cadet and east Biloxi will never again be the melting pot of activity as before the storm.

Every report that we have seen – from Reviving the Renaissance, Living Cities, even the expert Andres Duany and our most recent comprehensive plan – all said that we should support more green space, more commercial and less residential development on Point Cadet.

There are no easy or quick answers there, but what I do know is that whatever happens we need infrastructure. There’s no doubt that Point Cadet and east Biloxi will have more of a commercial and retail flavor, whether through casino resorts or museums.

This fact is going to be demonstrated in the upcoming Census, which for Biloxi will be the most important census ever. This will be the first authoritative accounting of our population since the storm, and it’s vitally important that we get an accurate count. I call upon every resident and business owners in Biloxi to help make this effort a success. This census will be important to all of Biloxi, but especially important to areas like Woolmarket, with so much development potential.

Right now, we have $12 million in water, sewer and drainage work underway in Woolmarket. 75 percent of the people south of the Interstate – which is where most of the residents live – have city water and sewer service.

We’re running water and sewer lines from I-10 up Highway 67 right now, and going east and west on Woolmarket Road.

This work allowed us to provide water and sewer to the 209 homes that are being built at the 30-million-dollar Timber Creek subdivision and the 287 new apartment units at the Gates of Biloxi.

That, my fellow Biloxians, is what I think my message here is today: We have worked hard and we must continue to work hard. Over its long history, Biloxi has dealt with its share of adversity – adversity that has always been followed by success.

It was Winston Churchill, at a pivotal point in World War II, who looked at his war-ravaged country and people, and took stock of the situation. They had reached a turning point in their years-long struggle. Despite the difficult times, it was not the beginning of the end, he said. It was the end of the beginning.

And now, nearly five years after Katrina, the same could be said of Biloxi.

We’re past the days of seeking federal funding and insurance money. We’re past the days of designing new buildings, or drafting plans to restore old ones. We’re past the point of drawing up construction contracts, and we’re even past the point of hiring contractors. We have hired them.

Restoration and renovation are well underway. You can see the buildings coming up all around you.

We’re at the end of the beginning.

And, that, my fellow citizens, is what you are seeing here in Biloxi.

You know, tourism has been and in my opinion always will be our niche. We remain a strong destination. Over its long history, Biloxi has dealt with its share of adversity – adversity that has always been followed by success.

When the private sector get its financial house in order and things get back on track – and that WILL happen – we in the public sector will welcome them from a very strong position.

You can see it already in the public infrastructure that supports our tourism sector. Look at the new convention center. Look at the expanded airport and the new service there.

We have the product. The beaches, the deep-sea fishing, the golf courses, the seafood, the casinos, the Southern hospitality. We’re a great place to spend a weekend, or a lifetime. What we have to do is continue to promote our culture and our assets.

My message today is that we do have promise. We do have great things happening. My message today is that we need to be realistic. We’re in tough times, and they’re going to continue to be tough for a while.

We’ve been through tough times before and we’ve come through them and we’ve reached the mountain top before. And we will again. God bless all of you and God bless Biloxi.