New Orleans Mayor LaToya Cantrell’s administration told the City Council last week that the city could need tens of millions of dollars more next year to fund all its programs, on top of millions in unexpected expenses that have already cropped up in this year’s budget.
But the warning included few details about exactly what that money would be used for, leaving an already blurry budget picture even more uncertain.
The talk of a shortfall comes amid sparring between Cantrell and the council over the timing of the release of the city's 2019 budget. Council members have pushed for the administration to step up its timeline and release its spending plan ahead of the Nov. 1 deadline to give them more time to review the proposal before they must vote on it by Dec. 1.
In a letter sent to the administration Monday, council members said adequate time “to hear and understand each department’s operating priorities is of utmost importance."
The letter, drafted by council Budget Committee Chairman Jared Brossett and signed by all the council members, added that “this can only be done with a comprehensive budget review process.”
The letter noted that most of the members of the council are new and should have time to fully review the budget.
Council members said it would be difficult to hold thorough hearings for all departments if there is just one month — including Thanksgiving week — between the spending plan's release and the deadline for the council to approve it.
Former Mayor Mitch Landrieu would typically release his budgets in mid-October, unlike previous mayors, who almost always waited until the Nov. 1 deadline set in the City Charter.
But an early budget likely won't be coming this year.
In a letter sent Wednesday, Cantrell balked at the council's request, saying her administration is grappling with between $19 million and $37 million in “unaccounted for expenses” next year, as well as more than $5 million in additional costs that need to be covered in the current year’s budget.
“I will not force conditions upon my team, or upon a critical process that deserves due diligence, careful review and assessment,” Cantrell wrote.
The letter did not identify what the unexpected new expenses for next year are, and Gilbert Montaño, Cantrell’s chief administrative officer, did not provide many details as a council committee met Thursday to discuss filling the $5 million gap in this year’s budget.
Montaño said the administration is still working through the budget and trying to deal with a decline in one-time-only revenue as well as increased costs for health care and other requests by city departments.
Departmental requests are the first step in the budget process and often represent a wish list of staff increases, new equipment and expanded programs that departments are seeking for the coming year. Typically, the administration trims those requests significantly as it puts together its actual budget to match projected revenue.
Councilwoman Helena Moreno questioned Montaño about how much of the additional expenditures are simply part of those wish lists, as opposed to truly unexpected costs needed to keep the government running.
“I think they’re a little more than requests,” Montaño said, noting that the figure includes the funds needed to cover the cost of a police pay raise that went into effect this year. That raise was proposed by Landrieu and approved by the council while Cantrell was one of its members.
“These are things that we actually have to be doing,” Montaño said.
At the same time, the Cantrell administration is asking the council to take more than $5 million from the city’s reserves to cover unanticipated costs that have cropped up this year. That money is expected to be repaid to the reserves at the end of the year if the city’s 2018 revenue ends up meeting expectations.
The Budget Committee greenlighted that move on Thursday, sending it to the full council for approval.
The $5 million includes a grab bag of items. The biggest is $2 million to cover the first payment for new radios for public safety agencies purchased during the Landrieu administration.
Montaño described the purchase of those radios as having an unusual payment structure that did not allow the city to spread the cost over their expected lifetime. “This is not the normal way to do operations or business for such a large operating expense,” he said.
Criminal District Court is to get $1.4 million to make up for its declining revenue. The court is facing two “debtor’s prison” lawsuits that bar it from collecting certain fines and fees that it has always used to cover court costs.
About $900,000 will go to cover increased fuel costs, with $600,000 to pay for higher costs of providing security at public facilities, about $105,000 for higher costs for janitorial services and $150,000 going to the Coroner’s Office to pay for more toxicology services needed because of the epidemic of opioid overdoses.
Montaño said the city is looking at bringing the security services in-house and rebidding the janitorial contract to save money.
Such midyear adjustments to the budget are not uncommon, though they often involve smaller sums and can be handled by moving money around within the existing budget rather than taking it from the city’s reserves.
The administration continues to find other unexpected costs as it goes through the budget, Montaño said.
“We’re having mushrooms of different expenses popping up to the tune of half a million to a million dollars,” he said.