Biloxi Seeks To Self-Insure - - The News for South Mississippi

Biloxi Seeks To Self-Insure

With insurance becoming harder to come by, the City of Biloxi is considering writing its own policy. Mayor Holloway told city council members on Tuesday that self-insurance is a major part of the city's $100 million budget.

The city no longer has a business interruption policy. The one they did have in 2005 shelled out  $10 million for gaming revenue loses after Katrina. In fact, the mayor says the city has less coverage now than it did before the hurricane, so it's important to be prepared.  

When Katrina turned the coast gaming industry upside down. Biloxi had a $10 million safety net.

"We were lucky enough to have that insurance," said council member George Lawrence. "We bought it at the right time and we got a break. "

Biloxi's mayor wants to hold on to that money as insurance against future storm damage.

Mayor A.J. Holloway said, "We could not get the business interruption renewed at a reasonable price this time, so we don't have it. We put $5 million of that $10 million in the gaming revenues and the $5 million in the insurance policy, because we're not covered as much as we were last year."

Some council members think the plan to save for the next stormy day is a good one.

"We had started a fund a few years ago where we put up several hundred thousand dollars a year for events like now. It's $2.1 million we had in that. Then this year they're talking about putting another $5 million into that from the insurance money," said Lawrence. "If it can create money for us in the long run, it just makes sense that you do that."

As more casinos re-open, Mayor Holloway expects the city coffers to move closer to pre-Katrina status, but he's says there's still reason to be cautious with the budget.

Mayor Holloway said, "We look for probably a shortfall of ad valorem taxes or property taxes of about 40 percent. We're hoping that our sales tax and our gaming tax to absorb that, but we don't expect it to absorb it all. We need to save that money we have in these extra funds to absorb that next year."

Mayor Holloway says in all the city has received $27.5 million of the $40 million it is requesting in insurance claims. The mayor plans to meet with agents this week and says he's hopeful Biloxi will receive the rest of the money soon.

by Danielle Thomas

Powered by Frankly