Coastal towns say they’re counting on BP money to stay afloat financially


In the five months since the Deepwater Horizon rig exploded, BP PLC has paid $3.2 million to governments in southwest Alabama for claims of lost tax revenue and expenses blamed on the worst oil spill in the Gulf of Mexico. Officials in coastal towns, though, say they are relying on millions of dollars more in order to remain afloat financially for the rest of this year and next.

Gulf Shores Finance Director Cindy King said BP still owes the city at least $3 million for lost revenue.

That amounts to roughly the same as the city’s payroll for the rest of the year.

“It’s not like we can cut back on police or fire services. We don’t have the option of cutting staff,” King said. “But we are seriously going to have to look at what will happen if we don’t get that money.”

The oil giant has paid the city about $1.3 million for lost revenue, according to King, but the city believes it is owed $4.3 million.

The figure is down from a $7.5 million claim the city reported last month.

“But we still haven’t completely backed off that claim,” King said.

The city’s projected revenue losses were less than expected, she said, but the summer months account for the bulk of the beach town’s revenue.

The city has received about $560,000 of $584,000 requested for expenses.

In neighboring Orange Beach, Finance Director Clara Myers said the city is still owed about $3.6 million in lost revenue of the roughly $4.2 million claimed.

“We have been very frugal with our expenses, trying to prepare for (the loss), so there is a bit of reserve,” Myers said. “The question and the problems would arise next year.”

Myers said Orange Beach was still owed roughly $50,000 of $482,000 billed for expenses.

Orange Beach Mayor Tony Kennon said the oil giant promised to send cities a letter this week and pay lost revenue by the end of the week. The $3.6 million not yet paid accounts for more than 20 percent of Orange Beach’s annual budget.

“Timely claims mean nothing if they’re not adequate,” Kennon said. “We want exactly what we deserve, nothing more, nothing less. In my mind, it’s non-negotiable.”

BP spokesman Justin Saia would not confirm whether the payments were forthcoming.

BP has paid Gulf Shores $1.8 million, Orange Beach $1.1 million, Dauphin Island $200,000 and Bayou La Batre $130,000 for lost revenue and expenses, according to Saia.

City officials in Perdido Beach, a year-old town of about 500, said they had not filed any claims with BP as of late last week.

Dauphin Island Mayor Jeff Collier said his town is working on its claim to BP for lost revenues, but “the process has been so uncertain.”

“Municipalities are businesses, too, and we’ve got responsibilities,” Collier said, adding that he couldn’t yet estimate how much money has been lost.

“How much are they are going to owe us?” Collier said. “I really don’t know. We don’t know how long this is going to be going on.”

The town of Dauphin Island has paid more than $145,000 for expenses related to the spill, such as the added demands on its staff and public safety workers, city officials said. Only about $52,000 of that has been reimbursed by BP so far, he said.

Bayou La Batre Mayor Stan Wright said his city is also still working on a claim to BP for lost revenues, and he’s not sure how much they will request.

He said the city has received a temporary boost from oil spill cleanup activity in the area with sales taxes and lodging taxes up. But he said businesses, including shipyards, are struggling or shutting down, which means business license revenue will likely drop drastically when the fees are due in January.

Bayou La Batre received about $8.5 million in BP funds that were funneled through the state, along with other coastal communities, to respond as oil gushed from the well. City officials have said that paid for a program of hiring boat owners to lay and monitor boom, overtime for city workers and other response efforts.

As of Thursday, Foley has filed eight claims for a total of $88,852, Sandra Pate, assistant city administrator, said. The claims were filed between July 12 and Sept. 8. Most of the claims have been for personnel costs for spill-related work ranging from checking boom systems to crowd control Sept. 11 during the distribution of Bon Jovi and Brad Paisley concert tickets.

On Monday, the city received a check from BP for $34,904.45 for part of the first five claims. City requests for $18,801.50 in legal fees included in the first claim filed were denied, she said. The city did not file a claim for lost revenue, Pate said.

Officials with Daphne, Spanish Fort and Fairhope said that they have not filed claims with BP for lost revenue or direct expenses.

Baldwin County Clerk/Treasurer Kim Creech said the county has been paid for all but about $10,000 of the roughly $285,000 billed for direct expenses. The county sent another claim for $1.9 million on Sept. 10, and BP acknowledged receiving it, Creech said.

The county would continue to send claims to BP on a monthly basis as long as revenue losses are reported, she said.

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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