$100M sale of Caesars leases is good, but New Orleans must protect its reserves, BGR says

By Sophie Kasakove

Source: The Times-Picayune | NOLA.com

May 4, 2026

New Orleans has raided its reserve fund too often, and before city officials boost the fund by $103 million, they should agree to only tap it during emergencies, according to a new report from the Bureau of Governmental Research.

The Monday report comes as the City Council prepares to approve a deal devised by Mayor Helena Moreno’s administration to boost the city’s depleted reserves by selling the rights to future lease payments from the Caesars Casino and Hotel.

BGR, a good government nonprofit, said the deal “makes sense for building emergency reserves.” But without adequate safeguards for the funds, “the City risks repeating the same financial mistakes that led to the crisis in the first place.”

BGR also urged the council to require Moreno’s administration to report regularly and publicly about how the city will use the deal’s proceeds.

In a statement Monday, Moreno said that her administration has “worked relentlessly to restore financial stability here at City Hall, and as I said last week, this cash infusion is an essential part of our creative thinking to rebuild our cash reserves and restore our key bond ratings.”

“I’m glad to see the BGR concurs and I welcome their support,” said Moreno.

The city’s reserves — a safeguard in case of a hurricane or other emergency — fell from $344 million at the end of 2022 to just $35 million, as officials drew from those funds to cover operating costs as the city faced a deficit.

Under the deal announced last week, the city would sell future lease payments from the casino to a private equity firm, TPG, for the next nine years. In exchange, the firm would pay New Orleans $103 million this year — around $46 million less than the full lease amount over that nine-year period.

It would be one of the biggest boosts to the city’s budget since officials revealed a $160 million spending deficit last year. Officials say that the cash influx will improve the city’s bond rating, which has been slashed by credit rating agencies in recent months because of the city’s cash flow issues and low reserves.

All seven council members back the deal, and the council expects to approve it at its next regular meeting on Thursday. The New Orleans Building Corp., the city entity that is the landlord for the casino, will also sign off on it on Tuesday.

But BGR said that before signing off, council members should amend the ordinance to require the city to report regularly to the council on its reserves and to direct the cash infusion only to the emergency fund, not regular spending. The original ordinance does not place restrictions on the use of the proceeds.

The city should also implement a policy on how to manage its reserves ahead of the 2027 budget season, BGR said. It also urged the city to develop a five-year financial plan.

“Such a policy is essential to establish the appropriate size of the reserves, the conditions under which an appropriation is permitted, and requirements to replenish the fund after an appropriation,” BGR officials said in the report.

The Moreno administration told BGR it has hired a financial consultant to develop both a reserve policy and a longer-term finance plan, the report noted.

BGR has raised red flags about the city’s lack of safeguards for its reserves repeatedly in recent years. In a September 2025 report, BGR said that the lack of a reserve policy contributed to the City’s fiscal crisis.

It found that the city “spent or appropriated more than $200 million from the reserves without a policy for managing its financial cushion” and that the “lack of a strategy for managing the City’s reserves was compounded by poor financial monitoring that left City officials and the public unaware that they were depleting the reserves.”

Experts recommend that cities maintain reserves equal to at least two months of expenses, or about 17% of the annual budget. The cash infusion would boost the city’s reserves to that minimum.

Moreno’s statement said that “the Mayor and Council are “already working towards the BGR’s key recommendations, including creating safeguards to ensure this cash infusion will not be used for ongoing expenses but will be kept in reserve.”

The statement did not address BGR’s suggestion to require regular reporting on use of the reserve fund or on proceeds from it, which the city said could total several million dollars a year through investing the upfront payment.

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