New Orleans Council calls emergency budget hearing

NEW ORLEANS (WGNO) — An emergency budget hearing was called by the New Orleans City Council. As of now, there’s no guarantee that city employees will get paid through the end of the year.

“Worst case scenario, we could take the rainy day fund, as I understand it, and pay through November essentially. Which still leaves us in the apocalypse for December,” said New Orleans Council President JP Morrell.

Currently, New Orleans receives federal funds for FEMA projects across the city. The money is part of a grant that was for road projects after Hurricane Katrina.

But lately, the city has paid upfront for the projects, expecting FEMA reimbursement.

Threat says that in August, the city applied for funds through the FEMA program, but the money has yet to come through.

“Prior to the government shutdown, Region Six, FEMA Region Six, said ‘Hey, Joe, we’re moving. We approved 2028.’ I didn’t feel the need to come to council because I thought that was going to get approved,” said Chief Administration Officer Joe Threat.

The Cantrell administration is calling on the council to approve a resolution requesting that the state bond commission approve $125 million in short-term revenue bonds.

This concerns Councilman Morrell, as usually the request is made months in advance.

“Those bonds, when we have a crisis next week, are not going to be seen as financially sound budget planning. It’s going to be seen as a crisis in which the state has to rescue us,” said Councilman Morrell.

Another possibility would be tapping into the city’s $38 million emergency savings fund, leaving the city with basically no spare funds.

Mayor-elect Heleno Moreno would rather not use the revenue bonds, but says it may be the only option.

“It’s going to be, you know, very challenging and difficult to create a more efficient government. What we’re hoping is that we can get this revenue loan really kind of more of a bridge loan,” said Moreno.

If the city does get the loan, the expectation is to pay it back within a year.

In addition, the council is hoping money owed to the city could start flowing in, one being $87.5 million that the Sewerage and Water Board has to repay the city, for its help with certain projects.

And that’s not all that’s owed to the city.

“There is a $35 million fine for Uber. That demand letter should have been sent yesterday, even if they pay us pennies on the dollar,” said Councilman Morrell.

Tomorrow, the city council will vote on whether to approve a request to the state bond commission for the $125 million in revenue bonds.

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