Thursday, October 15, 2015

Budget Day

The Mayor's 2016 budget proposal just dropped this morning.  You can find it here.  It looks like they worked really hard on their booklet and Powerpoint so take your time and look through them.  Mitch is presenting to City Council now. We'll spend the next month watching various departments run up before the council and beg for extra money.  The final budget is expected to be approved on November 19.

Here are a few quick observations just from glossing over the budget proposals and the early reporting.

  • Police are clearly a big priority.
    New Orleans Mayor Mitch Landrieu on Thursday (Oct. 15) presented a 2016 budget that calls for a $10.5 million increase in spending for the New Orleans Police Department.

    The mayor said the increased budget, along with previously approved pay raises totaling 15 percent, will help the department meet its goal of increasing department staffing levels and reducing violence in a crime-weary city.
    Police expenditures 2016 Budget

    This is the sixth consecutive year that Mayor Landrieu has increased NOPD's budget.  Nearly one quarter of all general fund expenditures in 2016 will go to the police department alone. And, yet, you can rest assured critics will continue to wail that the mayor is "not focused on crime" because bike lanes or monuments or.. whatever.

  • The budget includes about $60 million for Sheriff Gusman's operation.
    A big part of Mayor Mitch Landrieu's 2016 spending plan will hinge on the costs Sheriff Marlin Gusman estimates to incur to run the city's newly opened jail well into the future.

    Under pressure from a federal order to bring the jail up to constitutional standards, Landrieu has proposed spending $60 million on its operations next year, a sum that more than doubles the $28.6 million his administration had initially put aside for 2015.

    "Now $60 million ... ought to give him the best jail in America," Landrieu said Wednesday during a meeting with NOLA.com | The Times-Picayune's editorial board. "And there is no statistic you can show me that doesn't reflect that that is as much money and more per capita than most cities this size are getting and that ought to be something that resolves that particular issue."
    Yeah, well, Gusman isn't likely to see it that way. In fact, he's asking for more than that just to build a "Phase III" addition to the prison.  
    Gusman asked the city for $84.9 million this summer to build the third building, the so-called "Phase III," but rescinded his request a few days later. Landrieu pegged the overall cost of building the jail, which FEMA financed with disaster aid grants, at $250 million -- a portion of which, he said Wednesday, could be better spent elsewhere.

    Landrieu also said Phase III will cost as much as $40 million a year to operate on top of what the city is already paying to the sheriff, although that figure is very much a rough estimate.

    "If we have to build another building for mental health reasons, there's no reason for that building to be anything but small," Landrieu said. "But there is no reason to build another $80 million facility that houses 300 to 400 people."
    So this isn't over yet. Gusman and Landrieu will continue to negotiate with and sue one another for the forseeable future.

  • Also emphasized during the mayor's budget presentation was the work the city did to improve its credit rating.  Thanks, in part, to its decision to put $36 million from its share of the BP settlement into its reserve fund, the city now has just over the $60 million in reserve the finance people recommend.  The reason all of this matters is Mitch wants to ask voters to approve a new $100 million bond issue to pay for infrastructure improvements.
    It's hard to say whether the city would be able to issue the full $100 million during the remainder of Landrieu's term without raising taxes, Gernhauser said. Interest rates could go up. Assessments could underperform. "It's hard to predict more than a year out how much room you're going to have," he said.

    In any case, $100 million will only begin to address the city's pitted and sagging street grid.

    Landrieu said he estimates it would take $9.9 billion to fix everything.
    Which is why no matter what he does year over year to #FixMyStreets, the folks at the community meetings will still complain that the mayor is "not focused on potholes" because bike lanes or monuments or whatever.

  • Another thing they mentioned the bond issue might pay for is this $36 million backlog of unpaid judgments against the city.  That doesn't even include the firefighters, though. They are their own special problem.  This morning the mayor issued the latest in a long series of dueling ultimatums from various parties to this dispute in recent years.
    “If we do not get to a result today I’m going to turn my attention to other matters and leave this issue to the courts,” Landrieu said. The unrelated suits against the city involve a dispute over back pay that dates back decades as well as a Landrieu administration decision not to fund the firefighters pension fund until it fixed issues that nearly bankrupted it. The administration has tied those two issues together, saying it will not agree to a deal to pay the $142 million in back pay and interest in the first suit until firefighters agree to make changes to their pension system.

    Representatives of the firefighters union and the administration have been in mediation for months trying to reach an agreement. While most of those negotiations have occurred behind closed doors, two settlement proposals offered by the city were made public, and both were rejected by the firefighters as either being too stingy or stretching out payments for up to 30 years.

    The mayor had been holding out hopes that a settlement could be reached in time to include it in the city’s budget as late as Wednesday, but no deal materialized.
    As of this posting, they still haven't announced any sort of deal.

  • Finally, the mayor stuck this little bit on the last page of the Powerpoint today.
    To pull in more revenue next year, Mayor Mitch Landrieu's administration on Thursday (Oct. 15) proposed to increase parking meter rates on New Orleans' streets.

    The plan, quietly tucked alongside the administration's budget proposal for 2016, would see hourly prices rise from $1.50 to $3 in the French Quarter and to $2 everywhere else. It would also extend metered hours from 8 a.m. until 10 p.m., Monday through Saturday.

    Vehicles presently can park for free after 6 p.m. Sunday parking on city streets would continue to be free.

    The administration estimated the increase would add to the city's revenue stream $2.4 million collected from meters and another $1.9 million in tickets meted out to parking violators.

    The city's revenue estimating conference projected last month that the city should collect about $4.8 million in parking meter fees this year.
    You can see here in the budget that they've already plugged the estimated revenue bump into the 2016 general fund.

    Parking revenue increase 2016

    If you work in the evening shift in the Quarter, this means a huge chunk out of your take-home pay. In the absence of anything resembling efficient and affordable public transit, this amounts to a $2 - $3 per hour tax hike on the wages of city service industry employees. For others headed downtown during the evenings, it's an incentive to become better acquainted with the joys of Uber price surges.

    Tonight the Saints are playing the Falcons in a Thursday night primetime game at the Superdome. Imagine the ticketing bonanza in such an event this time next year under the proposed new rules.  By mid-year 2015, the city had already issued 163,000 parking tickets. A night like tonight might bump that number up by 10-15% at once.

All this and more will make for good fun at the City Council's department by department budget hearings. (Oct 26 - Nov 11 on the calendar.) Anyone can attend these. You're on your own for parking, though.

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