Budget/Audit/Board of Review Committee.

Vigna in the final ordinance calendar number thirty five thousand four sixty nine and thirty five thousand four seventy by councilmember Morrell and this adds more money to the two current contracts we have with Barrazzo Houston for Wisner litigation and then the other contract for general legal services second hi and miss fears yes can you add me to the audience's it appears I'm the only member of the budget committee that's not on the audience except for the last one number ten okay you want to be added to one through nine okay yeah he should be yeah sorry about that we'll make sure IGR gets that straight all right number eleven are all of the civil service pay plan amendments I believe these are all being deferred these are all being deferred for now that brings us to the last item number number 12 CAO finance and budget presentation okay welcome up CEO while they're getting set up I'll just let you know that since we're past the agenda deadline all of these will be on the regular agenda for the council meeting on Thursday so you have to vote on them again already all right members good afternoon it's good to see everybody before I get through the presentation I just wanted to let the council know that the NOPD controller Charlene Rollins is here today so she is mine Charlene right there so if there's anything in specific you wanted to know from her she's here to help answer questions we're gonna keep this high level I think almost in a lot of feedback on this one I think almost all these matters the council is well aware of but we still want to go through everything I'm not going to read everything on these slides but I do want to make a couple of notes of interest the first is on the cash management fund it sits at sixty five point three million dollars I highlight that for two reasons one remember we originally were building the fund to be at originally a hundred million dollars through efforts of the city and consultation with the council the funds deposited to date are actually closer to a hundred twenty million dollars so that's why you see this number being higher the other thing too is remember based on what we showed a couple of months ago we would have expected this number to be closer to forty million dollars maybe even thirty million dollars at this point in the year and the fact that we're here is because of management that's gone on as well as additional money being put into it and the last note I would make with this is that we have one more eight million dollar payment from the assessor we're expecting in July. Infrastructure bond sale again I'm not going to read all these to you because the council is well aware about this the two most important things from my perspective are number one this has closed now and the cash is supposed to be in hand by the city of New Orleans so if if members are asking you where is my money when is this going to happen the money is here now it's just a question of putting the work out how we want to make sure that's thought in a thoughtful way I would also just ask members if they have certain projects at the top of their list please let us know as soon as possible that are part of this sale there obviously matters that we know of grave importance to your constituency the residents and to Mayor Moreno. The other thing too is you'll see in the last bullet point that the city got seven million dollars as a premium on this bond sale I want to credit both our financial advisors bond council and everybody else within the city who worked on this it's really a testament to their efforts to get it it was also a matter of how we time the market to get to this point and I'd also note that's notwithstanding the bond rating issue as well so I think ultimately really good for the city that we were able to get those additional dollars. The next slide talks about the Caesars proceeds of course the council had really good questions about those the last time we met I just want to really point out the very first bullet point which is this money is now sitting in a LAMP account and has already accrued over two hundred twenty five thousand dollars worth of interest so that's what goes to show you both when you have a lot of money you put into the bank and you keep it there and you grow it appropriately and of course I know the finance director and PFM will be talking to you about potential changes the financial advisement policy so we can see if this and other funds in the city can work even harder for us. The other thing to talk about today is the status of the 2025 audit all of that remains on track the biggest change for the council and I know something that I've perturbed me when I sat in your seat is that the previous administration did not share the audit until it became live a legislative auditor Mayor Moreno has instructed me and Councilmember Harris knew about this on Friday that as soon as we file it we're sharing it with the council we are not going to delay there's not going to be anything that takes longer as soon as it's done the council will have it too so that way you can see everything as well. And then my final slide is about revenue but I want to bookend it by saying two things number one the mayor and everybody inside her departments continue to look for efficiencies some of those are simply ways that we can scale back on certain things that are being offered on other ways it's how do we enhance services too and so the council may not be aware that on Friday civil service approved the creation of a single contracting group so that way contracting doesn't live separately in all these departments it will now have its own separate office that lives under CAF so that is something that will improve and then the last thing specifically the mayor wanted me to tell you that I have in my notes is that the mayor and obviously I know this has been an issue for the council as well wants City of New Orleans out of furloughs as part of the 2027 budget.

So with that members that's my presentation and I'm happy to answer any questions before I listen to councilors. Yeah thank you CAO Drew so I do have a couple of questions specifically around dashboards I know that we all are very concerned with public transparency making sure that we have all the same information the public has it in real time I know that my office has been working with Abby in your office to try to get these dashboards up and running so I'm just wondering about a timeline I also know that there's a draft ordinance circulated by Committee for a Better New Orleans that I've seen but I do think we need to get dashboards up and running sooner rather than later. Yeah I'm gonna answer at a high level and then let Abby not write a check that I can't cash which is we thank the council very much for the push on this I think a significant amount of data is already readily available it could be pushed out very easily as I understand from Abby I think the hard part will just be cash management which tends to be a Friday activity but if we have to manually update that's not a problem and now I'm gonna look to Abby to try and give a good timeline for the council and the public to be on the lookout for that. Yeah I think we could get some things set up in a matter of weeks and I'm looking forward to working with Dominique and the rest of your team to make that happen. Great and I know that the council central office has been working on this as well so the sooner we can get it up the better especially as we're going into budget season getting our priorities together and getting the public's input on what their priorities are. Any other questions for our CAO? Okay Councilmember King. First of all CAO Drew so great job with balancing the budget and increasing revenue. Can you forecast when the city will get out of its current furlough status? Councilmember I can at this point and one of the biggest reasons why is because of a word you just used forecast. I think everybody's concerned with hurricane season right now and the last thing I want to do is make a promise if hurricane season upends that. The goal is to get through the latter part of that and reevaluate. I know when I've been here in chambers I said we all have an eye towards the end of the year. We remain committed to that goal and want to make sure that we do it as easily and effortlessly as possible because I know what a big issue it is first and foremost for those who are bearing the brunt but also for the council as well. Okay and how much outside funding has the city secured since January 2026? Outside funding in terms of grant funding councilmember? Yeah. I think we'll have to get that answer to you. I'm not quite sure the total number at this point. You know generally and this is sort of in rough terms the budget has been roughly about 800 million dollars in general fund money and about 750 million in outside funds but we can also look to see not only where that number stands at this point what we projected it to be and also obviously I know we're looking at how we collect money for reimbursement as well. That's all I have. Okay. Councilmember Hughes. Thank you madam chair. Mr. CAO let me ask a question and this is kind of looking a little forward as a former appropriator we kind of thought about budgets well in advance so as we anticipate we know we have some votes coming up on the Omni Hotel and one of the key talking points that's being utilized is a five million dollar infusion of cash through safety and permits fees. So walk me through you know let's say hypothetically that five million dollars comes through. Does it stay parked with safety and permits? Does it go to the general fund? Is that money infused on this current fiscal year? Does it go to the next fiscal year? So just just walk me through so I can have a full understanding as I try to contemplate you know all of the talking points that's being thrown at me. I appreciate the question. I'm in two different places councilmember. Place number one is don't count your chickens before they hatch. Yeah. And so I hate to say hypothetically. That's right so I've been that place. I think number two it really depends on kind of where we are from a cash flow perspective and where we see the budget trending at year-end. I would also like as I think I've mentioned the councilmember King if it's the council's will to look at some of those funds as a way to escape the furloughs and make something smoother as we move forward that seems like an appropriate use of that money. We want to talk also about the fact the money is derived from economic development and how that is spent. I think we're open to those conversations. At this point I always just try to be careful because cash is king. We want to make sure that we're not spending unnecessarily but at the same time I hope as we can contain and make sure that we do our best work possible to use funds like that to potentially get out of furloughs early as we can. Okay and just from my understanding I'm gonna piggyback on councilmember King's point. So I know you brought up hurricane season and you know potential emergencies but correct me if I'm wrong didn't we infuse a significant amount of cash in the fund balance for emergencies? We have the hundred million dollars that sits there right now. Again the hope is to not have to touch that money. Right but if we get a major storm right we we would likely touch that money right? I'm trying to understand the correlation between furloughs and an emergency. Well I think I think the question though is we if we have one hurricane of minor magnitude it probably maybe even barely touches that. We have two to three it's a significant difference now we're trying to manage everything that happens and I'll just say councilmember just quite candidly when it's come to this I've tried to be as conservative as humanly possible when it comes to managing the cash.

You know you see right now and in just general fund there's three million dollars that is sitting there which is not a significant amount of money relative to eight hundred million. So I just want to make sure just just again that we're not spending funds that we need to come back later and have to use while at the same point making sure we all pick a really good time that we think is a sweet spot to try and handle this knowing how hard the situation is. What is the magic number and I know it changes you know every month as we get to the end of this fiscal year but in order to get our employees off of furloughs what what is that magic number as of today as of June? I think I think there's there's probably two different aspects to the councilmember. One aspect is making sure we feel like the cash management can be had good through year end even though I know Alyssa has a cash management model that goes out through the year. Basically what I keep on being told is only as good as every 12 weeks. So let me give you one example. We first got the cash management model it showed us running the city running out of money in August. As a result of more money being infused and getting more than anticipated that moved over to September. So it's a forecast and something we can't rely on and I think we obviously have to look on how money comes into the city's coffers whether through things like hotels other expenses we don't expect and other revenue raising measures as well and as we see all of that picture become clearer probably I would say members September, October then I think that's a perfect point to pick this up and I'm glad to keep on being reminded. Yeah and my final thing and I yield as you and I have talked about privately I'm going to keep you know just reiterating this as gas is sky-high as groceries are sky-high my fear is that our human capital you know is going to begin shopping around for better opportunities because we have a lot of people come to me privately and tell me that they're struggling and they just don't know how long they're going to be able to hold on so you know as new cash comes in I just want to make it clear for everybody and I'm one out of seven it's going to be a very high bar for me to dedicate money to anything other than our human capital because look we're always going to have priorities right everything's always going to be an emergency and urgent but the women and men who show up every day under very tough circumstances we've got to do everything that we can in these tough economic times to get them out of this furlough and I know you're thinking about that I know the mayor is thinking about that so I want to acknowledge that y'all are thinking about that but you know we just have to this is urgent at this point. Councilmember Hughes I totally agree with you I know the mayor totally agrees with you and as much as I know she's imbued with all the hope that she has for everybody's districts and willing to support people across the city the one thing that she has repeatedly said is use the word hate publicly and privately as those furloughs and which is why she specifically told me to add to the presentation that she's looking to end it for 2027 and then how we work with the council to end it. Great thank you Mr. Seale thank you Madam Chair. Thank you. Councilmember King. Thank you I want to if we can I want to change the subject just for a little bit I was at a meeting yesterday and in the 1100 block 1000 block of Decatur about the street construction thank you to councilmember Hughes for attending and taking some of those questions. One thing that came up and I promised the people that would ask and this is a good venue to ask I didn't have the answers then it was questions about probably if it's possible to alleviate some of the maybe the sales taxes or give those businesses some sort of break I told him I didn't have the answers but I will ask someone who may have and I hope that maybe that's the CAO's office this their logic is we can't pay sales tax if you don't make sales and they had three businesses that have went out of business as you may know but however is there any type of help sales tax property tax that you think may be legally feasible to help those who are you know making a fraction of what they've been making for years. You saw me lean over because Alyssa just whispered in my ear I think there's work being done on that okay so we're happy to work and see what answers we can have also know I saw your email this weekend about convening sewage and water for there to provide as much urgency as possible you know the mayor was with her team yesterday walking that as well and wants to make sure that's high priority for the businesses and residents who are there and to help as many people as possible. Okay so we're going to meet tomorrow at 430 at 1001 Decatur that's a French market restaurant again at 430 sewage and water will be there along with a lot of dozen or so affected businesses and if we could have maybe a outline of something that could help those businesses sale tax reduction permit reduction no answers no concrete answer but just a little framework of what's being talked about that'd be great. Thank you. Thank you councilman. Seeing no other questions we can move on. Councilmember Willer.

Thank You Madam Chair just a couple of questions I don't know if this is the right time and I had questions about the audit the I'll just ask them now to get yeah it's fine okay I'll probably look over Alyssa do you want that's fine but we're all team that's fine so when we get these reports I kind of just look for anything that seems to be off and I noticed a couple spots the beer wine and liquor tax is significantly lower than it was last year is there any policy change or something going on to cause that drop right now? No so I actually asked that question as well to my team and took them a little bit to find the answer to that but it's just been delayed processing okay I'll see it again in next month's report you'll see it on here. Okay and then for the traffic signal and camera enforcement on the next page under fines and forfeits we're at 10% of the budget right now I just thought it was on the next page under fines and forfeits yeah yeah actually I didn't have that one noted so I'm gonna have to give you a answer after the meeting on that. Okay that works and then my last question on the weekly cash management reports that we get there was an it's the property tax clearing expense it was for 3.7 million dollars could you explain what that is? So those are the funds that go out to the other agencies when we collect their portion of the property tax correct okay that's all I had thank you. And and council member to that point cash management report says that I didn't put it it maybe should have in the presentation look at a list of two if I get this wrong we're at 93% collection on property taxes and 39% collection of sales taxes so remember just a meeting or two ago is close to 20 or 21% so sales tax keeps on ticking. Okay so we're trending in the right direction on sales tax? Yes. Okay. We had a good month in May due to the French Quarter sorry Jazz Fest and then there were a few events that I guess was in June that Romy suggested could cause a little bit of an uptick but then of course we start to see it go down again in the summertime the rest of the summer before we can see any additional coming back up in the fourth quarter. Okay and you guys actively monitor this REC budget versus actuals just to yeah okay. Yeah and just council member you know I think council member Harris has asked about this we will have REC at the end of the second quarter primarily for the purposes of recognizing some additional one-time revenue namely the assessor's money oh and I forgot one other thing um I should have fled with this which is remember at REC we recognized as a city 29.5 million dollars from Sujan Water Board as a receivable they were going to collect as of today Sujan Water Board has reimbursed the city over 30 million dollars. How much? 30 million. Okay. So we're actually about 500,000 little over 500,000 head of what we anticipated being in June. Now I would not expect that to be 35 or 40 million by the end of the year but the fact that we're the middle of the year and already they contributed that much is also factor in managing the cash as well. Good deal. Thank you. All right. Alyssa you want to get through your report? Yeah sure. All right. Thank you very much Madam Chair and members of the council for having me back again. Today I'm going to be presenting on April's results so that's as of April 30th 2026. This report includes updates on our revenues expenditures over time and staffing levels and the city's overall financial position through the first four months of the year. So beginning with this first slide here through April revenues exceeded expenditures by approximately a hundred and six million year-to-date. In addition the city transferred approximately 68.2 into reserve and this is in our cash management reserve fund that we keep speaking about. After accounting for those transfers the net change in fund balance was approximately 38.2 which you'll see here on the bottom of the page toward the center. This distinction is important that the transfer out because it reflects a deliberate strengthening of the reserves rather than an operating deterioration. Moving to the next slide. At year-to-date revenues totaled approximately three hundred and thirty four million which exceeded the budget amount of three hundred and twenty four million by approximately nine point eight. Property taxes and sales tax revenues are generally performing in line while we had some miscellaneous revenues continue to trend favorably against the budget. One item to note here and you could see on the front on back on the executive summary page that April property tax revenues reflect an adjustment for the required contributions to the state retirement system and the assessor's portion of that. Overall property tax collections remain slightly above the budget year to date. As of April 30 at 2026 total year-to-date spending for personnel and other operating expenses was approximately two hundred and twenty eight point two million dollars. This represents about twenty eight and a half percent of the city's adopted annual operating budget while we are roughly one-third of the way through our fiscal year. Personnel expenditures totaled approximately one hundred and thirty seven point one million and other operating expenditures totaled approximately ninety one million. Both categories remain below the year-to-date benchmark established for budget monitoring purposes. These results reflect the impact of the administration's continued fiscal management efforts including the hire and freeze, expenditure controls, and ongoing review of discretionary spending. While spending patterns do not occur evenly throughout the year and certain costs will accelerate in later months, expenditures currently remain below projected year-to-date levels. For overtime in April expenditures totaled about 1.8 million dollars.

This was about 1 million below projected spending for the month and significantly below April 2025 overtime expenditures of approximately 4.19 million. Year-to-date overtime spending through April totaled approximately 12.3 million against a total annual overtime budget of 38.9 million leaving us with roughly 26.6 million of overtime budget authority remaining. These results continue to excuse me these results continue to demonstrate the effectiveness of the administration's overtime controls and centralized review process. Departments have been required to closely monitor overtime usage and justify operational needs which has contributed to spending remaining below both projections and prior year levels. For personnel at the end of April the city had 4451 field positions out of 4782 that were budgeted. This includes about 331 vacancies for an overall vacancy rate of about 7%. As of April 30th the combined unaudited general fund consolidated balance totaled approximately 211 million. I want to emphasize that this balance does reflect the transfer of funds into the reserves during the month and should not again not be interpreted as weakening of the city's financial position. And as CAO Durisso noted the city is continuing to work on our audit. The 2025 audit will be done by June 30th and you will be receiving a copy of that as soon as it's uploaded to the LLA site. In closing the city's financial results through April remain favorable. However it's important to recognize that the city's revenue collections are seasonal with the majority of the property tax revenues received during the first quarter of this year. As a result year-to-date surpluses at this point in the fiscal year should not be viewed as indicative of the city's year-end position and we will continue to monitor recurring revenue and its performance. That's about it. So thank you. I don't know if you have any questions. Thank you we do. Councilmember McCarran. I know Alyssa on the prior year property tax collections the actuals for 2026 is only 6,700 which is like less than 1% of the budgeted amount for of 720 K for the entire year. I know this seems like a small amount but what efforts are we doing to make those additional collections for prior taxes? So we are doing a delinquent tax reporting mail out I think by the end of this month that will go out and then it'll be due a month later. So I would like to think that those numbers those prior year delinquent notices will also be included in this to be able to get that collection up. Okay and on that note do we have any updates on the number of sales tax audits you guys have completed? You can always email it to us if you don't have it right now but and then what are we doing to try and collect those and if you have any idea of the amount that people are passed you or owed? I did recently get an update just the other day I can send that over to you once I get back to my office. Great thank you. Can you send that to all of us? Yes definitely. And council members I just leaned over to Abby as part of our application to the Bond Commission we had a number of materials that were due today I'm gonna send Abby's gonna send to you all on the narrative that we sent to the state about all the expenditure and revenue items the city's been so you all will have that too and the thing I like about it is it's the best cheat you have so if people are asking you constituents window for easy reference you can see where we've been where we are. Great any other questions from the dais? All right I think we have one more presentation on the investment policy. We do Sean Gannon from PFM asset managers are here is here today to present on that policy review. Sean do you want to come up? Good afternoon. So I'll be working through a brief presentation on the city's investment policy and the changes recommended to bring in line with state code as well as other industry best practices. At the outset you know please interrupt me if you have any questions or would like me to go into anything further in depth. So when we look at the best practices of an investment policy we typically utilize three guiding principles the first one being state code the second being the GFOA best practices of Government Finance Officers Association and the third being the APT the Association of Public Treasurers the United States of Canada. Additionally the legislative auditors will put out a Q&A so we incorporate that as well. So within those three sections I've included in this presentation a listing of the guiding principles within them the highlighted portions are really where emphasis is being placed on updating your the city's policy to again bring it in line with these three guiding principles. So the main one with Louisiana state code is just bringing it up to speed with the permitted investment language. So state code is has a greater allowance in the types of investments you can utilize so we are looking to really just bring those into the fold bring the city's policy up to the changes made there. Additionally the following two here a little bit more expansive you will have every section within these guiding principles but just looking to update them to 2026 standards so this is the GFOA's listing of requirements they again these are all included but there have been some slight changes and then last year of the three is the Association of Public Treasurers where we are looking to you know bring a few sections again up to current best practices.

So to touch on the main change for Louisiana state code this is a table highlighting the allowable investments for the city currently as the investment policy stands today and what is then allowed by state code so those yellow brackets there the outline highlights what we would be looking to add into the policy so the main one here being corporate notes this would allow additional income to be generated for the city's cash and increase the interest earnings to hopefully help help with the budgeting process and the revenues for the portfolio and then lastly my last slide here is just to touch on some of the highlights of the changes in policy so not just an increase in diversification to again allow for additional sector types but also a few other items related to to the scope related to the prudent investment rules related to the investment committee makeup so yeah a pretty brief presentation but if you all have any questions I'm happy to answer them. And council members just as a bookend to Sean's good presentation remember our investment policy is actually codified the city code in case anybody wants to take a look at what it is we will be sending you changes it's updated as Sean has identified it's in chapter 70 starting with part six zero. Any questions? All right hearing none can I entertain a motion to adjourn? Council Member King, seconded by Council Vice President Willard. All in favor? I thank you all for showing up today.