The New Orleans City Council voted unanimously on Thursday to put a budget freeze on two underperforming departments — the Department of Public Works and the Department of Safety and Permits — until Mayor LaToya Cantrell’s administration presents and implements a clear and comprehensive plan to fix them.
The problems with those departments have reached a boiling point with residents and council members in recent months, especially when it comes to unfinished roadwork and unenforced short-term rental laws. At a hearing last month, residents spoke for more than three hours about the various problems they’ve faced with loved ones getting injured at open construction sites, city contractors damaging property and illegal short-term rentals seemingly operating with impunity.
Meanwhile, the relationship between the Cantrell administration and some council members has become increasingly tense. Some council members say they simply cannot get the administration to respond to their requests for information, or to even follow the laws they pass. The council recently passed a resolution, sponsored by Councilman Joe Giarrusso, that pointedly urged the executive branch to “fairly follow and enforce” the law.
Giarrusso, who also sponsored Thursday’s budget freeze ordinances, said that after numerous failed attempts to work with the administration to get more information and come up with a plan to fix the two struggling departments, the time had come to use the City Council’s power of the purse to force the administration to act.
The Cantrell administration has forcefully come out against the move. On Thursday, Cantrell’s Chief Administrative Officer Gilbert Montaño acknowledged that the problems raised by the public and council were real and needed to be fixed, but said that the budget freeze would only make it worse.
“There is significant work to be done in respect to the concerns brought forward,” he said. “[These ordinances] only exacerbate the problems that they aim to fix.”
Cantrell released a press release after Thursday’s vote condemning the move.
“I am disappointed by the Council’s action today. These ordinances will not help provide greater services to the residents of this city. While there have been well-documented challenges with the implementation of City programs, defunding City departments only adds an additional layer of complexity to already complicated work.”
Cantrell can veto the measures, but the council only needs five votes to override a mayoral veto. All seven council members voted in favor of the two ordinances.
Giarrusso had originally introduced four ordinances to target four departments: Public Works, Safety and Permits, the Law Department and the City Planning Commission. But on Thursday Giarrusso said that he was deferring the ordinances related to the Law Department and City Planning Commission. He said his mind was changed in part by calls with the heads of those departments, as well as conversations with Councilman Freddie King.
“We’re going to put those on the back burner for now,” Giarrusso said. “The department heads reached out as well and told us things about things they’re going to work on improving, namely communication and responsiveness, which I think are the hallmarks of what we’ve been seeing.”
King said that resident complaints his office has received were largely aimed more at Public Works and Safety and Permits.
“We don’t take calls about people complaining about CPC, we don’t get calls complaining about the Law department,” King said. “I think it’s important to focus on the departments that need change right now and use all of our energy and focus on those two departments.”
During the committee level hearing last month, the ordinances were narrowly advanced in a 3-2 vote, with Council members Eugene Green and Oliver Thomas voting against them. Both said they feared the administration’s warnings that freezing departmental budgets would lead to unintended consequences that would only make the problems worse.
But on Thursday, Green said that the value of using the council’s budgetary control to drive accountability and transparency was already on display.
“At the end of the day the very fact that we’re having these discussions right now is a result of the fact that the ordinances are out there,” he said. “Because of Councilman Giarrusso’s ordinances, there has already been a commitment that there’s going to be more communications. And that is sometimes what the power of the council’s budget does, it gets changes done that wouldn’t get done otherwise.”
And, he said, he now believes that the ordinances won’t significantly hurt these departments, or at least not to the extent described by the administration.
“The departments will be just fine,” Green said. “Things will work out and we’ll come back in the near future at a budget committee to get things done. But people are demanding change and demanding public services be delivered.”
The ordinances will temporarily freeze $7.5 million from DPW and $2.2 million from S&P. There is some disagreement between council members and the administration about what short-term effects the freezes will have on departmental operations.
Montaño suggested that the ordinances might prevent those departments from sending out future payments on contracts that have already been signed. But that wasn’t the intent of the measures, according to Giarruso’s office.
The intent was to de-appropriate the remainder of those departments’ budgets that hadn’t yet been “encumbered,” meaning money that hasn’t yet been spent, or dedicated to future payments for things like existing contracts and salaries. That would mean that the two departments can’t hire new people or sign new contracts using general fund dollars unless the council gives them special permission or until the freeze is done.
Giarrusso and other council members have said that if the ordinances unintentionally block payments on active contracts, or if there is a vital new hire or contract they need funds for, then the administration can return to council to make the necessary changes.
That freeze doesn’t apply to federal funds, including the money used in the $2.3 billion Joint-Infrastructure Recovery Request, or JIRR, program, a joint DPW and Sewerage and Water Board program. JIRR construction accounts for the majority of the roadwork residents see throughout the city.
The majority of the program is made up of FEMA funds granted for Hurricane Katrina recovery. But those funds are set to expire next year, and the city is now rushing to get the work done, or at least started, before it hits that deadline.
It’s unclear when the freeze will end. The general idea is to use the freeze to force these departments to improve and force the Cantrell administration to provide more reliable information and communication with the council and public. But there isn’t a particular set of criteria that the council laid out, or any specific boxes the administration needs to tick in order to unfreeze the budget.