City Council to vote on spending budget surplus as advocacy groups decry lack of transparency

By Michelle Liu

Source: Verite

May 23, 2023

The New Orleans City Council is set to vote Thursday (May 25) on a plan to spend tens of millions in city surplus dollars on city vehicles, affordable housing and assorted other projects as well as the last $54 million in unappropriated federal pandemic aid.

At a Tuesday budget committee meeting, the council was still discussing details of the proposal by Mayor LaToya Cantrell’s administration and fielding criticism from community groups who say the city’s process of allocating the American Rescue Plan Act, or ARPA, dollars has not been transparent.

Community advocates have said the city is sitting on millions of dollars from its total $388 million ARPA allocation, a significant chunk of which was moved to the fund balance, which is drawn from unspent surpluses, due to higher-than-expected tax revenues and lower-than-expected expenses during the pandemic. That factored earlier this year into the advocates asking for $147 million — taken from both ARPA and the fund balance — for projects aimed at building affordable housing, funding youth programming and other solutions for the city’s social ills.

At issue is exactly how much money the city has left to spend on one-time projects. Chief Administrative Officer Gilbert Montaño told the council Tuesday that New Orleans is projected to have about $26 million to $46 million left over for such projects in its fund balance, once already-committed funds are subtracted. Those commitments range from fulfilling open purchase orders to financing the city’s rainy-day fund.

The calculations take into account some planned allocations, like $50 million meant to be directed to replace aging city vehicles and equipment and money to plug anticipated budget shortfalls — more than $70 million in total from the fund balance.

The council will also consider an appropriation of about $54 million from remaining ARPA funds, for other projects. That represents the last of the city’s unappropriated ARPA dollars.

The city’s current plans include proposals to spend $2.5 million for a pilot program making public transit free for children and young people seeking work opportunities, $8 million toward a gap financing fund for affordable and workforce housing projects, and $2.5 million to help construct a football field and stadium at George Washington Carver High School in the 9th Ward.

“That is what gets us public safety long term,” said Sarah Omojola, associate director of the Louisiana office at the Vera Institute of Justice.

Advocacy groups at Tuesday’s budget meeting said the city’s piecemeal approach to the spending plan, along with last-minute amendments, has made public engagement difficult. They also criticized the city for continuing to direct more money in general fund and pandemic aid expenditures on the New Orleans Police Department over the groups’ solutions for tackling the root causes of violence.

The Bureau of Governmental Research, in a letter to Cantrell and the council, has also urged the city to provide more public accounting on the status of the city’s general fund balance and to develop a comprehensive plan for the general fund through 2025.

“BGR has concerns that appropriations from General Fund balance are continuing without adequate public information, planning and accountability,” the nonprofit watchdog group wrote.

Councilmember and budget chair Joe Giarrusso said Tuesday that the city has indeed allocated more than $100 million in pandemic aid to quality-of-life issues that don’t involve the NOPD on things like blight remediation and catch basin cleaning.

Correction: An earlier version of this story incorrectly referred to the “Vera Institute for Justice.” The correct name is the Vera Institute of Justice. The article also misidentified Sarah Omojola’s title as associate director of Vera’s New Orleans office. Omojola is the associate director of the group’s Louisiana office. The story has been updated.

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