City of New Orleans Press Releases

FOR IMMEDIATE RELEASE
October 9, 2009

Mayor Nagin Hosts Meetings with City Council Members Regarding $68 Budget Deficit for 2010 Budget

*MAYOR PLANS TO CONTINUE MEETINGS WITH COUNCIL BUDGET COMMITTEE* NEW ORLEANS - (October 9, 2009) -- Mayor C. Ray Nagin hosted a series of initial budget meetings this week with members of the New Orleans City Council to address the 2010 Budget proposal, the pending $68 million deficit and possible cost-savings initiatives. Chief Administrative Officer Dr. Brenda Hatfield, Chief Financial Officer Reginald Zeno and representatives from the city's budget office also attended the meetings. In these meetings, the cost-cutting ideas were shared with the Council members, who offered additional input and suggestions. Although the $68 million shortfall could be dramatically reduced if these changes are implemented, a remaining budget gap of at least $12 million would still exist. At this time, no final decisions have been made, and the Mayor and members of the Administration will continue meetings with the Council Budget Committee throughout this process. The potential cuts are citywide, with a considerable impact on city employees, including work furloughs, continuing citywide hiring and spending freezes, freezes in the increased pension payments, a 10 percent cut for all departments and agencies and a 10 percent reduction in the Mayor's Office and various other cuts. Other cost-savings initiatives discussed were aggressive collection and enforcement of fees (Public Works, Safety & Permits); a decrease in the city's contribution to non-contract based and non-judicial agencies; and inventory and sale of assets, among others. Although the concern remains that there is the absence of adequate recurring revenues, which the Chief Financial Officer warned in 2008 would lead to a sizable deficit, Mayor Nagin is trying to prevent further employee layoffs. Addressing Misinformation The meetings also provided an opportunity for the Administration to address misinformation regarding spending for sanitation services. There have been allegations that the City overspends by $20 million annually for sanitation services. This is not accurate. The city's landfill costs are approximately $10 million per year and enhanced "Disney-like" services in the French Quarter cost an additional $4.6 million per year beyond the cost of garbage pickup. If the remaining amount were reduced by $20 million, the City would have only $8 million left to pay to clean the entire city and handle a plethora of special events. The City's pre-Katrina 2004 budget for Sanitation was $37 million. Services were once per week and manual rather than semi-automatic as they are today. Unlike New Orleans, the cities that the Office of the Inspector General compares New Orleans to in order to reach this $20 million difference do not host 8-10 million tourists annually and are not recovering from a major hurricane. This week's budget meetings will be followed by of the Administration and Budget/Finance staffs with city agencies and the community in the coming weeks. Mayor Nagin's annual budget address is scheduled for October 30th in the City Council Chamber.
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