GULFPORT -- BP has responded to Gulfport’s demand for $11.8 million in compensation for oil catastrophe losses with a five-page letter that says, in essence, claim denied.
BP says the city has failed to document any sales or property tax losses from the Deepwater Horizon oil-rig explosion that poured oil into the Gulf through the height of the 2010 tourist season. The city sought almost $4.2 million in lost sales taxes, $1.5 million for property taxes and $6.1 million in “community damages.”
Dutko Grayling, hired by the Gulfport City Council to negotiate a settlement, will continue working on the claim, said Karen Yeager, who heads the lobbying firm’s Gulfport office. The council has retained Dutko for another year. The company would be paid 15 percent of any settlement recovered above $76,000.
City officials hope the claim can be settled without a lawsuit.
BP initially offered the city $76,000 for tax losses, but the city previously rejected that offer.
The city’s latest bid for reimbursement, compiled by Dutko experts, resulted in BP’s denial of the claim. BP has paid only two loss of revenue claims to local governments in Mississippi, spokesman Ray Melick confirmed. BP records show the city of Moss Point was paid more than $57,000, while the city of Ocean Springs received almost $133,000. Melick said a total of 60 loss-of-revenue claims have been paid to governments Gulfwide.
In a Dec. 13 letter the city released Monday to the Sun Herald at the newspaper’s request, BP said that Gulfport failed to follow the accepted methodology for calculating its sales-tax losses and failed to document a loss of property taxes. The letter also cited other issues with the city’s methodology.
The city also asked for future sales and property tax losses that the federal Oil Pollution Act does not cover, the letter said.
“OPA contemplates payment for actual damages suffered by a government entity as a result of an oil spill,” said the letter, signed by Claims Vice President Geir Robinson. “Attempts to project prospective future loses related to the spill are purely speculative and therefore not recoverable under OPA.”
The city is unable to recover lost gaming revenue, the letter said, because “gaming does not involve a natural resource or the right to use a natural resource.”
BP also said OPA does not pay “community damages” to government entities. Instead, damages to natural resources will be covered through OPA’s natural resource damage assessment process, with the Mississippi Department of Environmental Quality designated as the trustee for the federal government in restoring those resources.
“They’re taking a tough position,” council president Ricky Dombrowski said. “We’re just going to continue to push them. That’s why we hired somebody.
“How could (the claim) be worth zero when it was originally worth $76,000? I think they’ve just drawn a line in the sand.”
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