The New Orleans City Council budget committee voted to advance a package of ordinances to temporarily take money away from four underperforming city departments until they can get their act together, especially when it comes to the large number of unfinished road construction sites that have become all too familiar to residents.
The ordinances, if passed by the full City Council, would temporarily de-appropriate $12 million in unused funds from the Department of Public Works, the Department of Safety and Permits, the Department of Law and the City Planning Commission.
Council members characterized the proposal as accountability measures, a way to force Mayor LaToya Cantrell’s administration to make progress and better communicate with the council and public. The council has recently stepped up its criticism of the administration for what members say is a lack of transparency and tendency to ignore council demands, and even city laws. The budget committee meeting closely follows a council resolution, passed last week, that pointedly urged the executive branch to “fairly follow and enforce” the law.
Thursday’s meeting included lengthy comments from members of the public complaining about stalled roadwork, the lax enforcement of short-term rental rules and irresponsible and unaccountable contractors.
Mayor LaToya Cantrell’s administration is strongly opposed to the ordinances. In a press conference on Wednesday, Chief Administrative Officer Gilbert Montaño called the move “dangerous,” “misguided,” “a loaded gun,” “a slippery slope” and “confusing.”
On Thursday, he acknowledged the noticeable problems in the departments, but said stripping funds would only make the problems worse.
“It would actually exacerbate and grow the problems,” he said. “Freezing the funding for these agencies allows the agencies to stay stagnant. It prevents them from hiring. It prevents them from moving contracts forward.”
Chief Financial Officer Norman White agreed, and said that the move seemed to be less about working with the administration, and more about flexing its budgetary authority.
“This conversation seems to be about control,” he said.
“I don’t think it’s so much about control, I think it’s more about making sure people are seeing results and that there’s a level of accountability,” Councilman Joe Giarrusso, who authored the package of ordinances, said.
Councilman JP Morrell said that the effectiveness of using the council’s power of the purse to force action was already on display.
“I’ve seen more department heads in this chamber today than ever before. Why? We’re talking about the budget.”
Councilwoman Helena Moreno agreed that a big issue, and one of the reasons she supported the ordinances, is that the council has struggled to get the administration to respond to its requests for information.
“I can’t even count the number of issues where we requested information and never got it,” she said. “The way we’ve gotten your attention and will continue to get your attention is through the budget.”
The five-person committee passed all four ordinances by 3-2 votes. Council members Giarrusso, Morrell and Moreno voted in support, while Council members Eugene Green and Oliver Thomas voted against.
Despite the narrow vote, the ordinances seem to have a fairly good chance of passing a council vote, since they are co-sponsored by a majority of the council — the three that voted yes on Thursday as well as Councilwoman Lesli Harris, who isn’t a member of the budget committee but was present at Thursday’s meeting.
“It sounds like the bill will pass,” Montaño said.
However, the council would need five votes to overcome a mayoral veto. Giarrusso said the full council would likely consider the ordinances on April 7.
Mounting frustration with city departments
Thursday’s meeting began with over three hours of public comment, where residents aired their grievances about the four departments, especially the ongoing roadwork and construction projects around the city.
Most of those roadwork sites are related to the city’s $2.3 billion Joint Infrastructure Recovery Response, or JIRR, program. The vast majority of that funding comes from settlements with FEMA for Hurricane Katrina recovery work, and the city is now coming up against an August 2023 deadline to complete JIRR projects, at which point it risks losing all unspent funds. The administration is rushing to get those projects done before the deadline hits.
“I don’t know if we’re going to get extensions,” said Joe Threat, director of the city’s Project Delivery Unit. “If we don’t, whatever’s unspent will be deobligated”
But the rush has led to quality of life issues around the city, with construction projects being started, only to stall for months without any noticeable progress, a problem the city pledged to address last year.
On Thursday, residents complained about a lack of communication and transparency on project progress, ambulances unable to reach some addresses, trees and green space damaged by contractors, residents trying to navigate torn up streets, and damaged property.
“You’re just tearing up streets,” Jerry Sun said. “Everyone knows how bad the streets are, everyone knows how much hardship it’s created.”
Some blamed the contractors, some blamed the city for failing to hold them responsible, and others said both shared the blame.
Andre Kelly, area manager with the Associated General Contractors of Louisiana, said that the main problem with those lingering projects is when crews dig up a street, they often find infrastructure or additional barriers that weren’t considered in the original project scope. He said that contractors face big delays when trying to get information and change orders from the city.
Aside from the construction complaints, residents and council members brought up several other issues that fall under the four departments in question, including short-term rental enforcement, street lights that have been out for over a year and contractors dumping cement into the drainage system.
“All these ordinances are borne out of the simple fact that many people dealing with these departments have completely lost confidence,” Morrell said.
The proposed ordinances would effectively allow the four departments to only keep the portions of their 2022 budgets that have already been dedicated to a specific expense, like salaries for existing employees. All other unspent dollars would be transferred to a separate account until the council feels the departments have sufficiently improved.
That would give the council the ability to “effectively review department progress, practices or other operations prior to the expenditure of funds,” the ordinances say.
Giarrusso, Moreno and Morrell said that the ordinances were a way to use the council’s budgetary power to hold the administration accountable and, if necessary, force it to make changes.
But Montaño maintained that this tactic would only weaken those departments.
“There’s so many different pieces to the actual solution that these pieces of legislation would prohibit,” Montaño said.
He said that the central cause of many of these issues is the extreme budget cutting the administration was required to do after the coronavirus pandemic caused a steep decline in revenues. The city instituted a city-wide hiring freeze, cut unnecessary contracts, and shaved millions from departmental budgets.
That began to change in 2021 when Congress passed the American Rescue Plan Act, or ARPA, which is expected to provide the city with $388 million in recovery funds. Because of that, Montaño said, the administration has only recently given the green light to all departments to begin hiring again and seeking contracts that had previously been shelved.
He said that the council’s ordinances would stop that positive momentum just as it’s getting started. Some council members insisted the departments could keep signing contracts and hiring people to improve the department. They said that in the interim, the departments can ask the council, on a case by case basis, to reappropriate a portion of the funds for specific new hires and contracts.
“If the departments need this money, they can come down and ask,” Morrell said. “We’re tired of simply relying upon departments to do the right thing.”
But Montaño said it was more complicated than that. He said that adding another step in the already arduous process of hiring a public employee would slow things down. Plus, he said, he wouldn’t allow the departments to go forward with new hires or contracts until the money was actually allocated, meaning they couldn’t even start the hiring and recruiting process until the City Council met and signed off on the funding.
“That is the legal way for me to operate under the charter, because I can’t allow deficit spending,” he said.
Green and Thomas both said they were torn between the need to keep those departments accountable, and the negative outcomes Montaño described. Ultimately they voted against the ordinances.
”When you start playing with funds that are already potentially put to good use, you’re playing a dangerous political game,” Thomas said. “You’re playing a dangerous game with people in our city.”
Giarrusso, Moreno and Morrell, on the other hand, said that although that would add another step to the process, it wouldn’t be as disastrous as Montaño described.
“I don’t think the ordinances as written will lead to these departments crumbling,” Moreno said.
Morrell said that although the steps would add another layer to the hiring and contracting processes, it had become necessary after months or even years of inaction from the administration. He said that although Montaño pointed to the pandemic as the central cause of the problems, that some of the issues long predated the pandemic, like Safety and Permits’ lax enforcement of the city’s short-term rental laws.
Montaño said he was also confused about what exactly the administration would have to do before the council put all the money back into the department budgets.
“I’m not hearing directly what would open up this funding again,” he said.
In an interview, Giarrusso said there wasn’t a specific criteria or predetermined threshold at which the money would be fully returned to the departments. He said the council would move to re-allocate the dollars when it sees improved communication with its members and the public, and most importantly, visible improvements in city operations and services.
“I just want to make sure that residents are getting these basic city services,” he said.