In The News › BGR says budget falls short

Nov 29, 2007

Source: Times-Picayune

BGR says budget falls short

BGR says budget falls short
Form doesn’t follow rules of City Charter
Thursday, November 29, 2007
By Bruce Eggler
Staff writer

Two days before the New Orleans City Council is to vote on the city’s 2008 operating and capital budgets, a governmental watchdog group said Wednesday that the capital budget submitted by Mayor Ray Nagin’s administration fails to meet standards spelled out in the City Charter.

“For the second year in a row,” the nonpartisan Bureau of Governmental Research said in its analysis, the “administration has produced a capital budget and a capital improvement plan that provide only a partial report of where the city is investing the public’s money.”

Even taking into account the huge problems caused by Hurricane Katrina, the organization says, the administration’s effort “falls short of the City Charter requirement for a comprehensive capital budget and program” that will allow “citizens to follow the money, discover the city’s priorities and evaluate whether the city is properly allocating its resources.”

In response, the mayor’s press office released a statement by Deputy Chief Administrative Officer Cynthia Sylvain-Lear, who oversees capital projects for the administration, defending “the level of comprehensive capital planning that occurs as part of our daily tasks” and denying that the administration has “proceeded in an ‘ad hoc’ manner.”

At the most basic level, it is difficult to say how large the 2008 capital budget will be.

How many millions?

The budget ordinance introduced Nov. 1 and set for a vote Friday puts the figure at $80.4 million. But in another document presented to the council Nov. 1, Nagin wrote, “I am recommending a 2008 capital budget of $483,248,731.” A page further on, the same document breaks down the budget into “major components” totaling just $143.8 million.

Sylvain-Lear’s statement indicates that the budget ordinance will be amended, apparently on Friday, to change the $80.4 million figure to $483.2 million.

Much of the confusion results from post-Katrina accounting in which capital expenditures are paid for not only from city bond funds, as in normal times, but also with insurance proceeds, FEMA reimbursements, Community Development Block Grant money, state capital outlay money and what the administration calls “state revolving funds.”

The City Charter calls for the city to have a five-year capital improvement plan that is updated each year, with the first year of the plan forming the basis for the coming year’s capital budget.

The charter says the five-year capital plan “shall detail all permanent physical improvements that are planned to be financed in whole or in part from funds that are or may become subject to control or appropriation by the council during each of the ensuing five years.” The plan is supposed to identify the amount of money that the city has spent or expects to spend in the next five years for each project, as well as the sources of money for each.

The annual capital budget ordinance is supposed to show in detail the capital expenditures to be made in the coming year.

The constantly changing 2008 capital budget and five-year plan presented by the administration do not fulfill those charter obligations, says the BGR statement, which was released by the group’s president, Janet Howard.

Post-Katrina confusion

In 2006, because of continuing post-Katrina confusion, the administration and the council adopted a 2007 capital budget of a mere $150,000 and a five-year plan that simply restated pre-Katrina priorities.

At the time, the BGR report notes, “the administration maintained that revenues from sources such as FEMA reimbursements and insurance proceeds were too uncertain to include in the capital budget. With respect to the five-year plan, the administration indicated that it was awaiting the adoption of a citywide recovery plan by the City Planning Commission and the City Council.”

A year later, the report says, the citywide recovery planning process has been completed, with specific projects identified. “Yet the capital budget and the capital improvement plan remain unacceptably vague,” the report says. “The capital budget ordinance includes only $80 million in bond proceeds and $400,000 in miscellaneous capital funds. . . . The budget ordinance and the capital improvement plan provide no information on LRA infrastructure funds, Federal Highway Administration funds, federal matches, insurance or FEMA reimbursements.”

The BGR statement points out that the city “has more money to spend on capital projects than ever before. Given the variety of sources, uncertainty as to the timing and amounts of FEMA reimbursements, and the loss of manpower and experience in the corridors of City Hall, creating the capital budget is more difficult than in the past.”

Even so, it says, “The city must pull the various pieces of the puzzle together so that citizens can see one complete picture of capital finances. . . . It’s the law.”

The Sylvain-Lear statement released by Nagin’s office — a copy of an e-mail she sent to the BGR on Tuesday — attributes the $400 million difference between the ordinance submitted Nov. 1 and the amended version to be introduced Friday to “a technicality in formatting.”

Because of “ever-changing FEMA allocations, anticipated costs based on very early estimates, costs post-Katrina which have risen considerably, (and) unanticipated increased costs once we attempt to renovate facilities which have been under water for two months and shuttered for additional months, it is impossible to determine the full scope” and cost of recovery projects “until architects complete detailed assessments of the damages,” Sylvain-Lear writes.

“The recovery planning process is still in progress,” she adds. “This is an ongoing challenge. . . . We have pulled all the pieces of the puzzle together. However, the reality is that this puzzle changes in the shapes and sizes of the pieces daily.”

. . . . . . .

Bruce Eggler can be reached at or (504) 826-3320.

Nov 29, 2007

Source: Times-Picayune

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