New Orleans Mayor Mitch Landrieu declared Tuesday that “budgeting is not for the faint of heart,” and he proved it by proposing a $504.3 million general fund operating budget that includes no money at all for two potential multimillion-dollar bills the city may have to pay.
The 2014 budget, about $9.5 million more than the city will spend this year, adds money for the Police and Fire departments but calls for cuts to many other agencies.
Those cuts stop short of employee layoffs or furloughs, but there are enough large question marks hanging over the spending plan to render any such promises less than ironclad.
Much of the initial reaction to Landrieu’s proposals centered on the two areas where the budget provides no money: implementing a federal consent decree mandating major improvements to conditions at Orleans Parish Prison and carrying out a Civil District Court judge’s ruling last year that the city owes $17.5 million to the firefighters’ pension plan to cover unmet obligations from 2012.
Landrieu and Chief Administrative Officer Andy Kopplin said the city is still fighting the firefighters ruling in court and hopes not to have to pay the money. If it does, Landrieu said, the result will be “devastating consequences for our budget.”
As for the jail consent decree, Landrieu and Kopplin essentially tossed the ball to the City Council, urging it to hold “robust” hearings and come up with its own estimate for how much the city should have to pay in 2014 to implement the program to improve conditions at the long-troubled lock-up. Kopplin said he is hopeful that U.S. District Judge Lance Africk, who is overseeing the prison decree, will accept whatever figure the council decides on after hearing from both the administration and Sheriff Marlin Gusman.
The council will begin holding hearings on the budget Oct. 23 and is scheduled to adopt a 2014 spending plan on Nov. 21.
Landrieu and Kopplin suggested the first place the council should look to find more money for Orleans Parish Prison is a proposed $4.25 million “positive fund balance,” or surplus, that the administration projects having on hand when 2014 ends.
It would be the first time in many years that the city would end a year with a surplus, and it would be a first step toward building a reserve fund of about $50 million, which financial experts say New Orleans should have stashed away for emergencies and hard times.
The city expects to end 2013 with a negative fund balance of $4.5 million, having reduced the cumulative deficit from $20 million at the end of 2012, so ending 2014 with a surplus of a few million would be a major step forward.
Council President Jackie Clarkson touted the value of such a surplus in boosting New Orleans’ standing with bond ratings firms like Fitch and Moody’s as it prepares to sell $65 million in new bonds next year — a possible indication that she would oppose sacrificing the planned surplus to pay for unbudgeted expenses like the prison consent decree.
Landrieu warned that any other course “would mean even further cuts to our city agencies.”
In contrast to the jail consent decree, the administration is proposing to spend $11.9 million in 2014 to continue implementing a consent decree mandating sweeping improvements to the Police Department.
That figure includes $6.1 million in the capital budget — $5 million for an “early warning” computer tracking system to identify problem behavior by officers, plus $550,000 for in-car cameras.
It also includes $5.8 million in the operating budget, $2.1 million of which is dedicated to paying a firm to monitor how well the city is doing in implementing the decree’s numerous demands.
Kopplin noted that the city had favored a less expensive firm, but a federal judge chose the firm recommended by the Department of Justice.
Overall, the Police Department is scheduled to receive $128.6 million in the operating budget, an increase of about $1.8 million from this year.
The allocation includes money for five Police Academy recruit classes of 30 officers each, to be supplemented by a $300,000 recruiting campaign, and two new Civil Service Commission employees to handle all the paperwork.
Even if the city manages to find 150 qualified recruits, however, they are unlikely to do much more than offset the loss of older officers through retirement or other causes, keeping the force at about 1,260 sworn officers.
The department will get 100 new police cars next year, on top of the 100 it received this year, and money for “long-overdue promotions for hundreds of good officers,” Landrieu said.
The Fire Department is also in line for a budget increase, about $1.3 million more than the $84.9 million it is getting in 2013, to cover higher workers’ compensation payments for injured firefighters.
The department’s manpower will not increase.
Besides more money for public safety, Landrieu said, residents who attended the five “budget priorities” meetings he held several weeks ago said they wanted “more job creation, more recreation, more blight reduction.”
His proposed budget, he said, responds to all three demands, such as by “fully funding our economic development efforts” and adding $900,000 to the Recreation Department budget to staff newly reopened facilities like the Lyons, Treme and Joe Brown centers.
Not all departments are in for more money, however.
The Planning Commission is due to lose almost 30 percent of its 2013 general fund appropriation, and Safety and Permits will suffer an 11 percent cut. Kopplin said that in both cases the administration plans to make up the difference with Disaster Community Development Block Grant money.
The Mayor’s Office — excluding the criminal-justice and homeland-security functions it oversees — will get just 86.5 percent of its 2013 total, while the Law Department will get 93.4 percent and Information Technology 92.6 percent.
The Historic District Landmarks Commission will lose 16 percent of its 2013 budget but will keep all of its employees.
Landrieu and Kopplin repeated their previous call for eliminating what they consider to be unnecessary judgeships at local courts, though most of the courts are in line for at least as much city money in 2014 as this year. The big exception is Juvenile Court, which is due to lose $600,000. Kopplin said the court’s judges have agreed to the cut, which will be partially made up by money from the court’s Judicial Expense Fund. The judges have not agreed to an even deeper cut the administration plans for 2015, assuming Landrieu is re-elected next year.
On the other hand, Municipal Court is due to get an extra $180,000.
Elsewhere in the criminal justice system, the District Attorney’s Office, Criminal District Court and the court’s clerk are slated to get the same amounts as this year.
The pre-trial services program will get an additional $100,000, the Coroner’s Office another $112,000 and the Public Defenders’ Office an extra $232,000 to hire outside attorneys to handle racketeering cases filed against multiple defendants, primarily alleged gang members.
Landrieu last year proposed a long-term plan for funding streetlight repairs that involved what amounted to a tax increase. The council refused to approve it, and the administration used one-time money to pay for the repairs this year. For 2014, it is proposing to rely on another one-time revenue source: $14.6 million that Entergy New Orleans is expected to pay the city. The money could not be used in Algiers.
Kopplin said streetlight outages, long a chief complaint of both residents and council members, are at the lowest level since Katrina.