New Orleans voters may be asked to approve a new multimillion-dollar general obligation bond issue in the next year, as the major sources of funding for the city’s infrastructure projects are depleted, Deputy Mayor for Infrastructure Cedric Grant told the City Council this week.
“We are at a crossroads in the capital program,” Grant told the council Wednesday while presenting the city’s 2015 capital budget and five-year capital spending plan. “We are about to sell the last tranche of the bonds that were authorized by the voters in 2004.”
A decade ago, voters gave the city permission to issue $260 million in bonds to pay for construction and improvement of streets and public buildings. The city expects to sell the last $65 million of those bonds in early 2015, senior city planner Dale Thayer told the council.
On top of that, the city will be receiving less money from the Federal Emergency Management Agency as it crosses more and more Hurricane Katrina-related projects off its to-do list.
Grant said New Orleans needs to have “at least another several hundred million” dollars available on an “ongoing basis” to invest in capital projects. As it is, the city on its own will generate only about $250,000 annually, through donations and the sale of property, in the next five years to use for that purpose.
According to the five-year Capital Improvement Plan, $883 million will be available to spend on capital projects from 2015 to 2019. Sources of funding include FEMA, other federal and state grants, and airport revenue bonds.
The bulk of the funds, $609.5 million, is dedicated to building the new terminal at Louis Armstrong International Airport. The rest will be used to repair streets and make improvements to city-owned buildings such as City Hall, the French Market and fire stations.
The plan includes no money for parks and other recreational facilities or for libraries and museums.
It also does not include any money from new general obligation bonds.
“We will be entering into a very robust process here in the coming year to figure out what’s the next program,” Grant said. “Truth of the matter is, we will not see major addition of federal dollars infused in the capital budget in coming years.”
The most viable way to make up the gap in funding is through the issuance of general obligation bonds, he said.