New Orleans city council creates special fund ahead of possible bond revenue approval

NEW ORLEANS (WGNO) — In an attempt to address the city’s $160 million deficit, the New Orleans City Council passed an ordinance to create a dedicated fund to account for money provided by the bond commission, if it approves the city’s $125 million loan request.

Councilman Joe Giarrusso says this will reassure lawmakers that the money will not be mismanaged.

“I think it goes a long way to showing the public as hopefully as well as the state, our commitment to accountability, transparency and guardrails,” said Giarrusso.

“All hands are on deck, we will meet this challenge, we will get out of this mess,” said Mayor-Elect Helena Moreno.

Moreno says by allowing the legislative auditor to see where money is going it will show state lawmakers that there is no waste and that certain levels of control are in place.

“This was a big part of us really getting the confidence of state leaders yesterday as we walked them through this ordinance. And then also additional potential reporting items that they were seeking as well,” said Moreno.

With council approval, the money can only be used for certain reasons, such as payroll and emergency expenses. The council will hold weekly meetings with the legislative auditor through January.

In addition, the city’s chief administrative office will need approval from the legislative auditor in order to withdraw money from the fund.

Even if the money is approved, Council President JP Morrell says they will likely have to request another loan in June of 2026. He emphasized the importance of the charter amendment passing.

“The hope is that as we balance the budget going forward, the loan for cash flow will be smaller. The charter amendment, which did not move today because I want to get more public input, is the definitive way we fix the budget going forward forever,” said Morrell.

Other council members agreed.

“I think the trust needs to be established with the citizens is that if the council adopts a budget, if money is moved, then it’s not ghost money. It’s real money,” said Councilman Oliver Thomas.

The council also plans to get property tax bills sent out early to bring in more revenue. Moreno says this is all a challenge and that it will take some time as the city continues to recover.

“It’s not going to be overnight that I can clean all of this up. And in fact, it will likely take me a couple of years to like dig us out of all of this. But we can still meet this challenge. That is why partnerships at the state level are so important to me,” said Moreno.

The council will go before the bond commission on Wednesday. They also have to explain to the fiscal review committee the guidelines set by the new ordinance and how that will affect state funding moving forward.

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