We need to keep doing the things we’re doing.

Here is the prepared text of Mayor A.J. Holloway’s
State of the City address, delivered Monday, Jan. 31, 2005 during a
Biloxi Bay Chamber of Commerce luncheon at the Beau Rivage Resort & Casino.

I’m delighted to come before you again to deliver
the annual State of the City address. Thank you for such a warm reception.

I appreciate those of you here today, and I appreciate
those watching this presentation on Cable One.

   It’s great that so many of you
are so interested in your city.

   Gary has already introduced the City
Council and other distinguished guests in the audience, and I’d
like to recognize a few people who help me run your city on a day-to-day
basis — the individual department directors.

   David Staehling, Administration; Jerry
Creel, Community Development; David Roberts, Fire; Ronnie Cochran, Legal;
Nathan Sullivan, Parks and Recreation; Bruce Dunagan, Police; and Richard
Sullivan, Public Works

I’d also like to recognize another person that
you could call a director, at least I do – and that’s my
wife, Macklyn.

   Today marks the 11 th occasion for me
to make this annual report on the state of our city.

Those of you who know me know that there are a lot
of things I love about this job. But public speaking ain’t one
of ‘em.

My fellow citizens and friends, as your Mayor I am
proud to report that the state of our city remains robust. Our local
economy remains vibrant. Our quality of life remains excellent and our
future continues to hold much promise.

We are doing the things that we’re supposed
to be doing here in Biloxi, and we’re seeing the exciting results
of our efforts.

We in Biloxi today have the rare privilege of being
a part of what will be viewed as one of the most historic periods of
our time.

In decades to come, our children and grandchildren
will view this era as when our renaissance began – when Biloxi
embarked on the most prosperous and most progressive period of sustained
growth ever seen in the city’s long history.

To find anything even close to what we’re seeing
these days you’d have to go back generations – to the birth
of the seafood industry, and when Biloxi was known as the seafood capital
of the world.

Today, I’m going to put things in perspective
for you. I’m going to detail the tremendous growth we’ve
seen in the past year, and tell you about the things we’re doing
to keep our city on the right track.

The bottom line, I think, is that we need to keep
doing the things that we’re doing.

The rest of the nation and the rest of the world have
watched how we’ve handled this growth over the past 12½ years.

And during that time, hundreds of millions of dollars
have been invested toward improving our community and our way of life.

No matter how you look at it, you can’t overlook
the many improvements that have taken place.

We’ve built new schools, new roads, new fire
and police stations, new parks and we’ve financed them in a responsible
way.

We’ve seen 18,000 jobs created here in Biloxi.

We’ve worked hard to deal with the issues that
come when you see 4 billion dollars worth of development and you see
the number of visitors to your city increase from 1 million a year to
between 10 and 12 million a year.

And through it all, we can say we still live in – and
we still love — this city we’re proud to call home.

In the past year, we’ve continued to attract
national and international recognition for the things we’re doing
here in Biloxi.

In November, three dozen Japanese educators spent
a week in our city, learning more about the Biloxi public school system
and its important role in our community.

In March, the White House named Biloxi as one of 20
Preserve America communities for our efforts in preservation and having
land-use ordinances that encourage the preservation of historic neighborhoods.

And earlier this month, a member of the British Parliament
toured our city and was very impressed with the growth and, frankly,
everything he saw.

Of course, we continue to face uncertain times – in
terms of the world and even here at home.

In the past year, almost 500 men and women from Keesler
served anywhere from 90 to 120 days in locations around the globe.

Our Biloxi folks are serving this country with honor,
and our thanks and prayers are with them and their families.

Back home here in Biloxi, Keesler got a new commander,
Brigadier General Bill Lord. Keesler was the first assignment for the
general and his new bride Cindy.

General Lord is out of town today, but his wife, Cindy
is with us.

Cindy, I want to welcome you and Bill back home.

We have an excellent relationship with Keesler because
we’ve worked hard to make day-to-day decisions — sound decisions
— that would fuel our economic vitality and also protect the things
that we all love about Biloxi – our small town charm, our historic
districts and our heritage, our low cost of living and our excellent
quality of life, our safe neighborhoods, and residents who are known
for their friendliness.

I introduced David Staehling earlier, who I made Director
of Administration a few months ago. I’ve known David for most of
my life, and I appointed him anyway.

David brings a wealth of experience in banking, mortgage
finance and commercial development. He’s one of the people I depend
on for advice, and sometimes it’s good advice.

David says that people in Biloxi believe two things.
They believe what they want to believe and they believe what they read
in the newspaper.

I don’t know about that, but something that
was in The Sun Herald the other day did catch my attention, and, in fact,
one of our council members was so impressed that she read it into the
record at a council meeting.

   In a nutshell, the editorial said that
the things happening here in Biloxi are not happening by accident and
not because of luck.

   Let me read a little of the editorial:

   “Biloxi officials were not lucky
when they decided to match the city’s infrastructure to the demands of
its newest industry — the casinos.

   “Rather, they were confident enough
to invest revenue from that industry back into the city.

   “The lazy look at Biloxi with envy.

“The wise look at Biloxi as an example.”

I want to thank The Sun Herald for those encouraging
words.

   For the past several years, I’ve
stood before you and said that our biggest challenge was moving traffic.

   Last year, when I came before you, we
had just finished the new Back Bay Boulevard slightly ahead of schedule
and slightly under budget.

I also told you that we would be finishing the new
Popp’s Ferry Road a year ahead of schedule.

And I also promised you that Caillavet Street would
be under construction by the end of 2004 and we would be driving on new
parts of it by the end of 2005.

Those things are all happening because I asked for
and the majority of the City Council supported the concept of construction
management.

The folks on Popp’s Ferry can tell you that
the process worked as far as getting things done on time, and instead
of hearing about cost overruns and delays, you’re seeing multi-million-dollar
projects coming in under budget.

And these new roads do so much more than move traffic – they’re
moving this city into a promising future.

I’ve always said that tourism is our niche here
in Biloxi.

In fact, property appraisals done by Harrison County
show that six of Biloxi’s top 10 property taxpayers are in the
gaming industry.

And the top 10 properties account for 43 percent of
our assessed value. That’s a concentrated economy.

For our economy to continue to thrive, and for our
quality of life to continue to improve, we must strike a balance in our
growth.

And that’s what we’ve tried to do – to
see growth in the commercial sector, growth in medical services and recreation
sectors, which are two key quality of life issues, and growth in residential
construction.

The work that we are doing – the work that we
need to keep doing – is making those things happen.

These road projects, with their new sidewalks, new
curbing and improved drainage, are one of the tools helping us grow existing
businesses and helping us create new businesses.

This means new and better paying jobs for our residents,
which means an expanded and more diverse tax base.

An excellent example is the Cedar Lake-Popp’s
Ferry area, where our 28 million-dollar traffic improvement project is
paving the way for that growth.

That’s the big story here. In March of 2000
we began four years of roadwork in the Cedar-Popp’s area.

We widened Cedar Lake Road to five lanes between the
interstate and Popp’s Ferry Road.

We added new shoulders and pavement from Cedar Lake
to Richard Drive, where we built a totally new road all the way through
to Popp’s Ferry Road.

And, of course, we widened Popp’s Ferry Road,
and added new sidewalks and curbing and new traffic signals.

   While we were doing all of that work,
we were also overseeing more than 170 million dollars in development
in the Cedar-Popp’s area.

That includes 33 million dollars in commercial growth.

Things like a Home Depot, new medical office facilities
offering state-of-the-art outpatient treatment, new bank branches and
other professional retail.

Those firms represent the creation of hundreds of
new jobs in the Cedar-Popp’s area.

The new high school, new elementary school, new sports
complex, expansion of the Margaret Sherry library and Mississippi State’s
Coastal Research Center easily represent another 70 million dollars in
growth.

We’ve also seen 2.3 million dollars in new apartment
construction, and here’s the really significant figure: We’ve
seen 522 new homes – 64.6 million dollars in new home construction.

More than 170 million dollars in growth. That’s
growth – diverse growth, and it’s in all sectors of the economy.
Make no mistake about it. Our road work sets the table for economic development.

   It’s the same story with our east
Biloxi traffic improvement program. The public investment in east Biloxi – 22
million dollars in new schools at Gorenflo and Nichols, millions in streets
and drainage, new fire stations at Back Bay and East End – these
are the things that helped lure the 35 million-dollar Hope VI affordable
housing project to east Biloxi.

   Last month, just before Christmas, the
City of Biloxi Housing Authority recognized the first of 233 families
that will be moving into the Bayou Auguste section of the Hope VI project.

By the end of this year, we’ll see a total of
387 lease-purchase and market rate homeownership units, which will mean
hundreds of new homeowners in east Biloxi.

These new homeowners will help attract new retailers
to east Biloxi, revitalizing the economy in one of the oldest sections
of our city.

I want to congratulate the commissioners of the Biloxi
Housing Authority for their work on this project.

I also want to thank our many partners on this project – our
local banks, realtors, contractors and everyone who has had a hand in
this success story.

Near the end of the year, the Salvation Army hopes
to break ground on the Ray and Joan Kroc Center of Hope at Yankie Stadium.

This 7.5 million-dollar facility, which will be supported
by a 15 million-dollar trust fund from the Kroc family, will include
an indoor lap pool, an outdoor recreational pool, a performing arts center,
a gymnasium and a centralized location for a number of social service
agencies.

You’ll find a daycare operated by Moore Community
House, after-school activities operated by the Boys and Girls Club, and
job training classes.

   Caillavet Street stands to be the most
ambitious phase of our efforts to use roadways to drive economic development.

We’ll have the four-lane boulevard as the centerpiece,
but the real story will be the 36 parcels of land and 7.3 acres we’re
revitalizing on Caillavet’s east side.

The eight-foot wide sidewalks and attractive landscaping
will help this area be a success.

   As you know, the Hard Rock Hotel and
Casino will open next door in August or September.

About the same time or sooner, 400 new hotel rooms
and a new, larger casino will be coming online at the Isle of Capri.

And two casino resort projects are now going through
the permitting process in east Biloxi – one on Caillavet Street
and one on Back Bay Boulevard.

These projects promise thousands of new jobs and a
significant boost to our economic base.

   As Mayor, I know that my primary responsibility
to you is to provide the basic services that you expect – safe
neighborhoods for you and your family, good schools for your children,
good recreation, a clean city, and, most importantly, do all of these
things without raising your taxes.

   That’s why economic development
and striking a good balance in our local economy are such important issues.

   There’s been a fair amount of talk
over the years about the good fortune that the gaming industry has brought
to our city, particularly our city government.

Make no mistake about it, city government and providing
essential services have become big business in Biloxi.

   Over the years, some have said that Biloxi
was a wealthy city. I’ve always maintained that Biloxi is healthy,
not wealthy — and we faced years of catching up before we could move
forward, before we could see the improvements like we’re seeing
now.

   Let me give you a brief explanation of
how your city government operates. We have three main sources of revenue:
Gaming taxes, sales taxes and property taxes.

   Gaming revenue accounts for 35 percent
of our annual city operating budget, and sales tax collections represent
almost 24 percent.

To be exact, 58.6 percent of our annual revenue comes
from gaming and sales taxes.

   And most of that money is coming from
those 10 to 12 million visitors now coming to our city each year.

Only 17 percent of our annual revenue comes from property
taxes.

   See what I mean when I say tourism is
our niche here in Biloxi?

That point hit home for many of us back in September.

I traveled to Pensacola with several of you here today
to bring hot meals to those who were overwhelmed by Hurricane Ivan.

Our hearts go out to those who are still recovering
on the Florida and Alabama coasts, but, at the same time, we can clearly
see that a direct hit here would have been – and would be — devastating.

That’s why the work going on right now to protect
the waterfront gaming industry is so important to our city and to our
state.

   We’re seeing some promising trends
in our local economy. Monthly reports show gaming tax revenue has increased
10 of the last 12 months.

Our monthly sales tax revenue has seen increases in
12 of the last 15 months.

I see promising trends in our property taxes, too.

I told you about the growth in the Cedar-Popp’s
area, but overall we’ve seen 756 new homes built in Biloxi in the
past four years, and we’re seeing tremendous growth in a related
area — the condominium market.

Right now, Biloxi has 561 condominiums. When they
were built years ago, those condos represented about $11 million in construction.
Right now, we have 215 condo units under construction – representing
43.9 million dollars in construction.

And developers have proposals to build more than 1,000
more units – investing more than 120 million dollars in new construction.

This is not to say that we’ll see all of those
proposed condos move forward, but the units under construction right
now will represent a significant boost to our property tax base.

And, most importantly, they signal a diversification
in the appeal of our city, and they’re something else we have to
offer.

Consider this: An upscale condo in Destin might go
for 800,000 dollars. You could easily get that upscale condo right here
in Biloxi for half that.

People considering retiring to Florida are going to
start looking here, and they’re going to like the lower prices,
along with our overall lower cost of living and better quality of life.

Protecting and growing those three revenue sources
is important to us because they help us grow the economy.

Ten years ago, in 1995, we spent 6.1 million dollars
on major projects.

In the past few years, we’ve averaged spending
between 18 and 22 million dollars a year on capital projects.

By the end of this year, the so-called surplus that
you’ve heard about for the past few years will be down to a 10
percent cushion.

   Does gaming have a big impact on our
city? You bet it does, and I submit to you that this is the way it was
supposed to work.

Gaming was designed to revitalize our economy, create
jobs and help improve the quality of life for all of our residents.

   That’s why it was so alarming a
few months ago to hear rumors that our Legislature could look at revising
the current gaming laws, reducing the share of gaming taxes for local
communities.

This would be catastrophic to us, and I appreciate
the Biloxi Bay Chamber’s recent resolution telling our legislature
how much of a mistake this would be.

To give you an idea of how much we’ve grown
in the past few years, we’ve gone from a city operating budget
of 25.5 million dollars in 1995 to 51.8 million dollars a year ago.

Police and Fire Department spending has gone from
10 million dollars 10 years ago to 22 million dollars a year ago.

If we want to see these services continue at their
current level, we need to keep doing the things we’re doing.

   The road work I’ve talked about
today is not the end of the road, so to speak.

In fact, major road construction and drainage improvements
will continue in ’05, too.

   Design work is underway right now and
we hope to begin construction by the end of the year on widening Popp’s
Ferry Road from Cedar Lake all the way to the D’Iberville line.

We’re also expecting to begin right of way acquisition
so we can improve several key intersections on Pass Road.

We want to add turn lanes and better synchronized
signals at Eisenhower, Popp’s Ferry, Beauvoir Road and other major
intersections on Pass Road.

   We’ve been successful in having
4 million dollars in federal funds budgeted toward a new Popp’s
Ferry bridge, one that will not be subject to repeated openings for marine
traffic, and one that will be a dependable evacuation route in times
of need.

   And we’re continuing on our promise
to deliver city-quality services to the Woolmarket community.

The engineering work has been done on the first phase
of installing water and sewer service in the Eagle Point area and the
Highway 67 corridor.

Construction is underway right now on a new elevated
water tank and a new water well to enhance water pressure.

A new fire station on Oaklawn will be in operation
in the next few weeks.

   All of these things I’ve told you
about up to this point are the major initiatives we’ve been working
on.

It’s a pretty ambitious program of public works,
but everything I’ve told you so far is only part of our success
story.

In the past year, we’ve invested more money
than ever in delivering the services that you depend on.

And we’re talking about services that can mean
life or death.

In the past year, for instance, the Biloxi Fire Department
saw a 24 percent increase in the number of calls it received last year,
and the biggest increase of the calls was for emergency medical responses.

Research shows that heart attack patients suffer the
most long-term damage in the first few minutes of a heart attack, so
immediate attention is vital.

A few years ago, we equipped all of our fire trucks
with defibrillators, and we gave our firefighters training to be first-responders.

With eight – soon to be nine – fire stations
strategically located throughout our city, the Biloxi Fire Department
is usually on the scene before AMR – and we’re saving lives.

We’re up to 176 firefighters today, and to help
better oversee our firefighting efforts, we doubled the number of battalion
chiefs.

For the first time in our city history that I know
of, we have a battalion chief on duty for south of the Bay and one for
north of the Bay.

This is important because the Battalion Chief is the
one responsible for directing fire combat since they arrive on the scene
with the first trucks.

I’m also proud of the job our Police Department
is doing in light of the tremendous increase in traffic and people in
our city.

An area of importance is the drug interdiction efforts
out on Interstate 10.

In one four-day period last month, our officers confiscated
38 pounds of marijuana, and over a quarter million in suspected drug
money.

In all of last year, our police officers confiscated
almost 900 pound of marijuana, 85 pounds of cocaine, and 800,000 dollars
in drug money.

They took away these drugs and that drug money before
they made their way to our streets and neighborhoods.

The truth of the matter is we’re finding better
ways to occupy our children – with education.

I’m happy to tell you that with completion of
the new stadium at Biloxi High, the Biloxi Public School System has now
completed its seven-year 70-plus million-dollar capital construction
program.

These improvements are showing results in the most
important place – in the classroom.

If you look at the benchmarks in the federal No Child
Left Behind initiative, you’ll see that Biloxi students are either
above or well above the national averages for elementary schools.

On state testing, our students have among the highest
scores in state.

I congratulate Superintendent Paul Tisdale, our school
board members, our faculty and staff, and, most important, our students
and their parents.

As Mayor, I am also proud that the school board and
administration have been able to accomplish all of these things while
keeping our city school taxes the lowest you’ll find on the Coast.

In fact, our millage rate is half of some Coast districts.
We’re doing the things that we need to be doing, and things are
working the way they’re supposed to be working.

   Education is the key to raising good
children, and we’re doing that, but to have a well-rounded quality
of life, children need good recreation programs. And I’m proud
to say, we’re doing that, too.

   In the past year, we saw a 16.8 percent
increase in the participation in our youth leagues.

We had almost 5,800 kids in our various youth leagues.
That’s almost triple the 2,000 youngsters we had four years ago.

To handle the increase, we’ve built new recreation
facilities and upgraded existing ones.

In fact, this year you’ll be seeing the final
phases of construction wrapping up on the 11 million-dollar sports complex
off Popp’s Ferry Road.

Soccer, softball and baseball teams have been playing
at the sports complex for two years now.

This year, we’ll begin playing on five new Little
League fields, and we’ll wrap up work on concession stands and
restrooms to support those fields.

In all, this 67-acre complex will have four softball
fields, a baseball field, five Little league fields and enough soccer
fields to play eight soccer games at the same time.

We’re also going to add tennis courts, a maintenance
facility and a walking trail.

   At Causeway Park, construction is underway
for a waterfront boardwalk and nature trail through the marsh, new lighting,
parking, a concrete fishing promenade, upgraded boat ramps and fishing
piers to enjoy the beautiful sunsets.

I want to thank Supervisors Bobby Eleuterius and Connie
Rockco for their help and support on the sports complex and causeway
park projects.

   You’ll also see design work underway
for a new Community Center to replace the current Community Center on
Howard Avenue, which has served us so well for more than three decades.

We expect to dedicate a new Mardi Gras Museum at the
Dantzler House this fall.

We’re expecting this beachfront location to
significantly increase the annual attendance at the museum.

And, as you can see, the Ohr-O’Keefe Museum
continues to go up.

We’ll also begin construction of a new downtown
plaza and stage area at the former site of the Golden Fisherman in the
Vieux Marche.

In May, as part of the Blessing of the Fleet, we hope
to dedicate the new site of the Golden Fisherman at Point Cadet.

Just think about it. Coming across the bridge you’ll
be greeted by the Golden Fisherman throwing his net and then you’ll
come to the Frank Gehry museum dancing with the oaks.

   These type projects are important to
our efforts to preserve and promote our colorful past and our great quality
of life.

They are what prompted First Lady Laura Bush to name
Biloxi as one of those 20 Preserve America communities last year.

   Another reason we received that honor
is because of the work we’re doing in upgrading the appearance
of our neighborhoods.

Our Community Court and code enforcement efforts oversaw
the cleanup of 1500 properties throughout our city in the past year.

That’s a 133 percent increase over 2003.

   These are important quality of life issues,
and are vital to continuing the success of our city. These are the kinds
of things that we need to keep doing.  

   And one of the most important things
that we city leaders need to do as stewards of your tax dollars is to
make sure that we are getting the best return on the money we spend.

   We had that thought in mind when we became
the first city in Mississippi to accept a challenge from President Bush
to help formulate plans to end chronic homelessness in the next 12 years.

   The challenge is to have an organized
and coordinated effort among the growing number of social service agencies
that serve our community.

   Social service spending by your city
has grown from less than 100,000 dollars 12 years ago to more than a
million dollars a year for the past several years.

   This idea of getting the most out of
the resources that we’re spending is a challenge that we face these
days.

   As many of you know, the city is now
managing our harbors and marinas, which were previously the responsibility
of the Biloxi Port Commission.

   With this change, the city took on more
than two dozen employees, and a 1.3 million dollar annual operating budget.

In the past year, the city also assumed a bigger role
in how we operate our water

department. We picked up almost two dozen employees
as a result, and we created two in-house construction teams in our Public
Works Department. Those two teams have completed 30 neighborhood streets
and drainage projects in the past year.

We’ve taken on all of these responsibilities
at a time when we were already spending more money than ever before on
major projects and providing the enhanced services you have come to expect.

It’s a matter of accountability – and
accountability, of course, starts at the top.

You will be holding me and the City Council members
accountable this year, in elections that are going to signal the significant
population shifts that we’ve seen in our city.

   A number of you may be voting at new
locations or in new wards because of the growth in west Biloxi and north
Biloxi.

I hope that all of you take the time to vote, and
get involved in your city government.

In closing, let me say this:

We are truly blessed here in Biloxi, and we just need
to keep doing the things that we’re doing.

The things that keep our city on the right track.

The things that keep our city the place that we call
home, and millions of visitors call paradise.

   God bless all of you. God bless Biloxi,
and God bless America.

*******

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