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City Council approves budget

Property, sanitation taxes are increased

Thursday, December 02, 2010
By Bruce Eggler
The Times-Picayune

The New Orleans City Council voted Wednesday to increase property taxes and sanitation service fees next year to help finance city government.

In approving a 2011 budget of more than $480 million, the council added money for firefighters, sanitation, public defenders, city planning, animal control and the arts. It reduced Mayor Mitch Landrieu’s proposed expenditures for economic development, technology programs, taxicab regulation, nursing services and the courts.

The council voted 6-1 to raise the city’s millage rate by 6.74 mills, 2 mills less than Landrieu requested.

The increase, amounting to about 5 percent of total property tax bills, will bring in nearly $18 million, $5.1 million less than Landrieu sought, but the council said it will make up that difference from other revenue sources, such as by increasing the sanitation fee even more than Landrieu proposed.

Councilwomen Stacy Head and Jackie Clarkson said they wanted to scale back the millage increase even further but could not gain support from a majority of their colleagues.

Councilwoman Cynthia Hedge-Morrell cast the lone vote against reducing the size of the millage increase, saying other council members were “nickel-and-diming us into mediocrity.”

In presenting his budget ideas in October, Landrieu proposed raising the sanitation fee from $12 a month per household to $20 a month, with the fee for small businesses jumping from $24 to $40.

Council members approved that increase Wednesday and said they plan to raise the residential fee further, to at least $22 a month. They could not do that this week because it requires a separate ordinance, which was not introduced until Wednesday and cannot be voted on for at least 21 days.

Even at $22, the fee would not cover the full cost of collecting trash, and council members said they might raise it to $24 or even more after they have a better idea of how much the city will be paying next year to its three sanitation contractors. Landrieu has renegotiated two of the three companies’ contracts, but it’s unclear what will happen with the contract now held by Richard’s Disposal.

Landrieu proposed a general fund operating budget of $483.4 million. After making numerous cuts and additions, the council approved a budget of $480 million, but that figure will be increased by at least $5 million in January after the higher sanitation fee and other revenues are added.

The general fund is the portion of the budget, raised through taxes and other self-generated revenue sources, that the city can spend as it pleases. The total 2011 operating budget, including federal and state grants over which the city has limited control, is projected at $797.5 million at the moment, though that figure also will rise in January when the additional revenue is added.

To cover the temporary revenue shortfall, the council voted to reduce the appropriation to pay the city’s utility bills by $5.2 million. That money won’t be needed immediately and will be restored in January.
The council cut $1 million from the 2011 budget for economic development, a change sought by council President Arnie Fielkow, even though he has long been a champion of economic development.

It also eliminated $1 million for technology programs, $700,000 for nursing services, $450,000 for the Ground Transportation Bureau, $300,000 from the council’s own budget and $150,000 each for performance audits, the Office of Homeland Security and the Civil Service Department.

Getting the most additional money was the Fire Department, given an extra $2.7 million for overtime and an effort to reduce firefighter attrition.

Also added were $1 million for Metro Disposal’s revised sanitation contract, including a new recycling program; $750,000 for the public defender’s office; $500,000 for the City Planning Commission; $200,000 for the Louisiana SPCA; $185,000 for the Arts Council of Greater New Orleans; and $150,000 for the Parks Department.

The revised SPCA total of $1.7 million is still almost $1 million less than the organization has said it needs to provide full animal control services, but CEO Ana Zorrilla said she “will be working with the city to determine what services we can provide” for the money available.

The council added $500,000 to the Criminal District Court budget for the Tulane Towers adult education program but cut $200,000 from the budget for court expenses. It cut $80,000 each from Municipal Court and Sheriff Marlin Gusman’s office.

Hedge-Morrell and Jon Johnson voted against the amendment incorporating the council’s long list of changes. They did not explain their votes during the meeting, but Johnson said later he was unhappy mainly over the decision to pay for the city’s new public-private economic development partnership, the NOLA Business Alliance, from a special fund rather than the general fund. He said that approach reduces the council’s voice in how the money will be spent.

Most items in the budget Landrieu presented were approved as he requested, such as extra millions for recreation programs.

He issued a statement after the council’s vote saying he was “pleased that next year’s budget funds citizen priorities including public safety, job creation, recreation, blight eradication, improved customer service at City Hall and vital repairs to roadways, catch basins and street lights.”

Though noting that the council “must still take additional steps in January in order to present a truly balanced budget,” Landrieu said the document “addresses the priorities of our citizens, funds critical services, cuts wasteful spending and is based on realistic projections of expenditure and revenue growth.”

In a long statement opening the three-hour budget debate, Fielkow said improved cooperation between the council and administration meant the budget review process “was far more productive than in years past.”

He said the mayor’s budget plan generally “received favorable consideration by this council because of its positive nature and also under the premise that, as a first-year mayor, he should be afforded the opportunity to put his agenda and vision in place.”

Only a handful of members of the public addressed the council during the debate.

Criticizing the tax increase, Steve Donahue said the city has wasted money in the past. “Where’s the proof the (new) money will be used where it’s needed?” he said.

Gail Glapion of the African American Leadership Project and Joan Heisser were critical of efforts to reduce the size of the trash-collection contracts held by Metro and Richard’s.

The council killed a request by the Sewerage & Water Board for a 6.16-mill rate increase for construction and operation of the city’s drainage system.

Fielkow, a member of the water board, said the council did “seriously consider” the agency’s “tremendous present and future infrastructure needs” but decided that “a full and comprehensive plan must be developed before throwing money at the problem.”

Bureau of Governmental Research President Janet Howard said such a plan is almost finished and the council should consider whether the water board’s need for more money is in fact greater than the city’s.

Aside from the two issues on which Hedge-Morrell and, in one case, Johnson dissented, the dozens of documents involved in approving the 2011 budget and setting the tax rates were approved unanimously, though Hedge-Morrell was absent for several votes.

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