Last fall, New Orleans voters approved $510 million in bonds to pay for infrastructure, drainage and stormwater projects, and affordable housing. In simple terms, a bond is a loan that the City takes out to pay for large projects now, then repays over time with interest using a dedicated property tax.
As the City prepares to issue up to $185 million in new bond debt this year, BGR has shared a letter with recommendations for the Mayor and City Council focused on one core question: How do we make sure this money delivers results without creating unnecessary costs for taxpayers?
Here are the key issues residents should be paying attention to:
1. BORROWING COSTS ARE NOT FIXED.
Recent credit rating downgrades could make it more expensive for the City to borrow. Choices about how bonds are issued and how quickly the money is spent can either limit interest costs or increase them for decades. When bonds are managed well, taxpayers save millions — the 2019 bonds are projected to generate $88.5 million in interest savings over 30 years. When they are not, the bill grows quietly over time.
When new bonds are proposed, residents can ask how long the debt will be repaid and how interest costs factor into the total price tag.
2. SPENDING NEEDS PUBLIC VISIBILITY.
Residents shouldn’t have to dig through multiple ordinances to understand where bond money is going. BGR recommends a public-facing dashboard that clearly shows what projects are funded, how much has been spent, and what those projects are supposed to deliver.
Residents can look for this information when bond spending is discussed publicly and raise questions if it is difficult to find or incomplete.
3. BUILDING IS ONLY PART OF THE INVESTMENT.
New roads, drainage projects, and facilities only hold their value if the City commits to maintaining them. BGR has found that every dollar spent on street maintenance can save $4-5 on long-term repair and reconstruction costs. Without reliable maintenance funding, projects wear out faster and cost more to fix later. Long-term planning matters as much as construction.
When projects are announced, residents can ask whether there is a plan to pay for maintenance once construction is complete.
4. BONDS ARE MEANT FOR BIG PROJECTS, NOT ONGOING BILLS.
Some bond funds are being used to support ongoing needs. For example, the City is reallocating $6.3 million in bond funds to hire and equip 50 new Public Works employees. While a worthwhile investment, it’s one that needs a sustainable funding source once those bond dollars run out.
Additionally, the City plans to use bond proceeds to cover its mandatory annual Housing Trust Fund dedication, roughly $16 million per year to support affordable housing. Bonds can serve as a short-term bridge, but borrowing to meet an annual budget obligation is costly: that same $16 million, financed over 30 years, ends up costing taxpayers $26.6 million.
Clear, sustainable funding plans are essential. Residents can pay attention to whether the City outlines long-term funding plans alongside these temporary uses of bond dollars.
With major bond issuances coming this year, now is the time to engage. Residents can share questions or concerns with their City Councilmembers as bond proposals come up for consideration.