The New Orleans City Council quickly and unanimously passed Mayor Mitch Landrieu’s 2015 general fund budget largely intact on Thursday. The council did not adjust the $537 million budget to provide extra money to a number of departments, including several whose budgets are the subjects of litigation. And the council left in place a 5 percent pay increase for police officers, half of what the New Orleans Civil Service Commission approved this week.
However, a last-minute decrease to the troubled firefighters pension fund, which successfully sued the city in 2012, left firefighters union President Nick Felton threatening further legal action.
The general fund budget is 6 percent higher than the $505 million budget approved at this time last year. That figure, though, later increased to $520 million due to better-than-expected revenues. The overall budget is about 11 percent above the $859 million budget adopted for this year.
The city’s total budget, including federal and state grants and special funds, increased by nearly $9 million today alone, to $966 million, largely due to additional workforce development grants totalling $5.8 million and $1.9 million from the Department of Justice for police recruitment.
Sheriff Marlin Gusman, who requested $62 million, more than double what Landrieu offered, did not appear before the council on Thursday to plead his case. Neither did Clerk of Criminal District Court Arthur Morrell, who requested $4.2, about $500,000 above the mayor’s proposed budget. In the end, Gusman will get $28.5 million and Morrell $3.7 million.
Both budgets are part of ongoing lawsuits. Morrell claims Landrieu’s budget does not provide enough to fully fund his office, as state law requires. And the sheriff’s budget is the major sticking point of the federal consent decree suit. The city could be on the hook for tens of millions more if ordered by U.S. District Court Lance Africk. Landrieu was counting on a ballot initiative that would have rerouted as much as $9 million per year away from Gusman’s capital budget and into his operating budget, but voters rejected the ballot proposal on Nov. 4.
The council also cut the Orleans Parish Juvenile Court’s budget by $175,000, using that money to fund a grant for the Orleans Public Defenders Office.
Earlier this week, the Civil Service Commission approved a 20 percent increase in police pay over three years, starting with a 10 percent increase in 2015. Landrieu’s budget funded the first across-the-board police pay increase in eight years, but the increase was only 5 percent.
Claude Schlesinger, an attorney for the Fraternal Order of Police, said the 5 percent increase “will not stop the hemorrhaging” of officers in the department, now at about 1,150 officers, far short of Landrieu’s goal of 1,600. NOPD officers make significantly less than those in similarly sized cities in the region, a Civil Service Department study found. Schlesinger said that without significant pay increases, the city’s recruitment drive is “just a bunch of fluff.”
Schlesinger dismissed the city’s claim that it can’t afford a larger raise, noting that it finished last year with an $8.3 million surplus, expected to grow to $17.4 million by the end of 2014.
“The money is available to fund a true pay raise for police,” Schlesinger said.
The most contentious issue before the budget approval was the fire pension budget. The city’s fire pension system is divided into two funds, one for employees and retirees hired after Jan.1, 1968, and one for those hired before that.
The old fund is financed on a “pay-as-you-go” basis. The city pays into it based on its current membership’s needs every year. With an aging membership, many into their 70s and older, the city’s costs should drop as old retirees die. However, due to cost-of-living increases, the city’s obligation has recently remained static at about $19 million per year. Landrieu’s budget originally allocated the same for 2015.
However, the fund has not approved cost-of-living increases in the past several years, and according to First Deputy Mayor and Chief Administrative Office Andy Kopplin, an actuarial report provided to the city showed that the fund only needs $17.2 million, a $1.8 million decrease. The fund for newer employees, meanwhile needs about $200,000 more than the proposed budget provided.
A 2013 audit shows that the old fund’s retirement obligations decreased by nearly $800,000 last year, to $18.2 million from more than $19 million in 2012.
Paul Mitchell, deputy director of the pension board, said the $17.2 million allocation would not cover the fund’s needs, including its administrative costs.
The firefighters pension board successfully sued the city for back pay, and the city has exhausted its appeal options. The two sides met in Civil District Court Thursday morning for a settlement conference. Speaking to the council, Felton indicated that an agreement may have been reached.
“We just left the courthouse an hour ago,” he said. “This absolutely takes away and diminishes the agreement.”
The case file at the courthouse did not show anything from Thursday morning’s conference. Felton and Louis Robein, an attorney for the firefighters, did not immediately return requests for comment on the settlement meeting.
“I just want to thank everybody,” Felton said in his closing remarks to the council, “And I guess we’ll just see everybody across the street in court.”