Joint Budget and Governmental Affairs Committee Meeting.
Summary
Summary of Joint Budget and Governmental Affairs Committee Meeting — Date: 2026-08-05 | Start: 9:33 AM | Duration: 2h 51m — 1) Fiscal position and cash management plan (City CAO)
- Key points: CAO reviewed cash position and risk of a cash crunch. Timeline included: Nov 2025 revenue anticipation note request; state/auditor warnings; prior cuts; Moreno-era one-time ARPA/Wisner funding; March 2026 cash model showing ~$100M infusion; Caesars deal and NO Building Corporation efforts; July 2026 withdrawal of State Bond Commission application.
Outcomes cited as achieved/exceeded
- One-time revenue ≈ $75M; total ≈ $125M.
- Cash management fund ≈ $130M; Caesars deal in place.
- Plan characteristics: multi-bucket liquidity approach; access to GoMesa rainy-day funds; backstops if state funding unavailable; funds moved from capital accounts to the general fund as needed; emphasis on ongoing, flexible cash management and informing Council as new information emerges.
- Speaker: City CAO (primary presenter).
2) Audit findings and internal controls — Key issues identified by Alyssa (auditor)
- Reconciliations for fringe benefits and health insurance not performed regularly.
- Actual expenses diverged from monthly estimates; overspending and cash draws not properly tracked.
- Reconciliations for reimbursements back to 2019 not performed; cash constraints worsened.
- General fund used for capital expenses without reimbursement; need for repayment/correction.
- Debt service budgeted in a fund without revenue; draws from the general fund.
- Separate bank accounts exist for each special revenue fund and for rainy-day and Caesars funds, but overall monitoring needs improvement.
Planned corrective actions
- Complete reconciliations; budget terminal leave; ensure debt service is budgeted in the correct fund.
- Strengthen controls and timely reporting to prevent future shortfalls.
- Improve monitoring of grant reimbursements, health insurance, and fringe costs.
- Unresolved/ongoing issue: full implementation of stronger controls and reconciliations across funds.
3) Budget discussion: terminal leave policy and prospective exposure
- Council question: whether legislative auditor recommendations to cap terminal leave have been implemented.
CAO response
- No policy change yet; union meetings planned.
- Potential exposure could be as high as $91M if many employees depart.
- Discussion to stop accumulating terminal leave and to fund 2027 budget using averages.
- Other points: continuing to pay invoices from 2025 and earlier; need to budget health insurance and fringe costs properly.
Unresolved issues
- Whether and when a policy capping/reforming terminal leave will be adopted.
- Clarity on potential exposure if large retirements/resignations occur with substantial terminal-leave payouts.
4) Drone ordinance: introduction, amendments, and adoption
- Willard introduced ordinance 35,523 and amendments to require reporting on drone deployments by NOPD and other agencies.
Amendments require
- Disclosure of supervising officer for each flight.
- Creation of a public-facing database of drone deployments (transparency safeguards).
- Identify requesting agencies and context of deployments.
Public input highlights (summarized)
- Edith Romero (Ion Surveillance): supports ordinance with amendments; seeks penalties for noncompliance, demographic data on those surveilled, complaint mechanism; concerns about budget, software/training costs, weaponization risk; calls for oversight and investigation before program expansion.
- Dr. Sunny Moon: requests clear protocol; notes past misconduct and undocumented flights; calls for accountability and adequate budgeting.
- Alexandra Jauch: public trust concerns; wants stronger guardrails, oversight, and more public input; safeguards before expansion.
- Morgan Clevenger (Police Community Advisory Board): concerns about consent decree protections; calls for transparency and proper supervision.
- Sarah Whittington (ACLU): emphasizes purpose, data safeguards, and accountability; relates to Act 450 considerations for drone evidence.
- Outcome: The council adopted the drone ordinance with amendments, establishing guardrails and ongoing monthly/quarterly reporting for transparency and oversight.
5) Appointments and board governance
- Matthews (RKBA Matthews) introduced herself; described Nora as a bridge connecting land, opportunity, and community.
- Miss Polk expressed interest in serving on the New Orleans Public Library board (literacy and governance emphasis).
Action taken
- Matthews’s appointment to the New Orleans Redevelopment Authority (NORA) board was moved and approved.
- The council concluded Matthews would serve on the NOR (New Orleans Redevelopment Authority) board.
- Note: The material does not specify additional vote counts or other boards beyond NOR.
6) Adjournment and next steps
- Meeting adjourned with thanks; next meeting date not specified in the material.
Unresolved issues to monitor
- Terminal leave policy: whether/when a policy will be adopted; potential exposure if many employees depart.
- Audit/controls: timely reconciliations, proper budgeting for debt service, and ongoing implementation of stronger financial controls and reporting.
- Drone program governance: ongoing oversight, budgeting, and public input despite adoption of amendments.
- Public engagement and transparency: continued concerns about trust, consent decree-era standards, and safeguards before further program expansion.
Speakers of note
- Alyssa: audit findings on reconciliations and cash management.
- Willard: introduced drone ordinance 35,523 and amendments.
- Edith Romero (Ion Surveillance): supports ordinance with penalties, data, and oversight concerns.
- Dr. Sunny Moon: calls for protocols, accountability, and budget sufficiency.
- Alexandra Jauch: urges stronger safeguards and public input.
- Morgan Clevenger (Police Community Advisory Board): emphasizes transparency and consent decree standards.
- Sarah Whittington (ACLU): stresses purpose, safeguards, and Act 450 considerations.
- Matthews: introduced herself and secured NOR board appointment.
- Miss Polk: expressed interest in Library Board role and literacy initiatives.
Next steps (as indicated)
- Maintain multi-bucket cash management approach and monitor liquidity.
- Complete reconciliations; finalize terminal-leave budgeting; strengthen financial controls.
- Monitor terminal-leave policy discussions ahead of the 2027 budget.
- Ongoing drone program oversight, reporting, and public accountability consistent with amendments.
- Finalize Matthews’ NOR board appointment; proceed with related governance actions.
- Next meeting date to be announced.
Transcript
Transcripts may contain automated transcription errors. Verify important details against the official recording.
CAO budget presentation and financial update
The CAO opened with a comprehensive review of the city’s fiscal position, recounting the path to the current cash crunch. He described a chronology: in November 2025 the city sought a revenue anticipation note to cover payroll; the auditor and the state warned that cash would run out in 2026. After the prior administration submitted a budget with 30% across-the-board cuts, the Moreno transition team found about $75 million in one-time funding from ARPA and Wisner, with some recurring and some one-time. The administration presented a March 2026 cash management model showing roughly a $100 million infusion between April and July, and noted that the Caesars deal and the New Orleans Building Corporation renegotiations would bolster the unassigned fund balance and improve rating agency confidence. He emphasized the need for A, B, and C contingency plans. In July 2026 the city withdrew its application from the State Bond Commission. The 2026 plan has been met and, in many respects, exceeded: one-time revenue of about $75 million; $125 million brought in; a cash management fund over $130 million; and the Caesars deal in place. The CAO stressed relentless cash management and highlighted how cash is managed to pay vendors and deliver city services even when cash is tight. He walked through bond-eligible expenditures of $35 million, ARPA reclassifications up to roughly $5.5 million, and the ongoing potential to access GoMesa funds and rainy-day reserves if needed. The plan involves spreading funds across multiple buckets to avoid relying on a single source and to preserve liquidity through the end of the year. He also discussed backstops if State Bond Commission funding proves unavailable and stressed that this is a city-owned capital-for-operating funds concept—money moved from capital accounts back into the general fund to cover obligations the city has already incurred. The CAO underscored that a multi-bucket approach provides flexibility and resilience in a volatile environment and highlighted the need to keep conversations open with Council as new information emerges.
Alyssa: Financial reporting weaknesses and reconciliations
With the audit completed on time, the team identified material weaknesses in financial reporting. Alyssa discussed how reconciliations for fringe benefits and health insurance were not happening regularly, and actual expenses did not match monthly estimates. The city was overspending and drawing cash without proper tracking. The reconciling of reimbursements dating back to 2019 had not occurred, exacerbating cash constraints. The city had used general fund money for capital expenses and failed to reimburse the general fund, so repayment and correction were necessary. Debt service had been budgeted in a fund without revenue, forcing draws from the general fund. Separate bank accounts were created for each special revenue fund and funds such as the rainy-day fund and Caesars were tracked carefully. The team stressed the importance of timely reconciliations and closer monitoring of grant reimbursements, health insurance, and other fringe costs. The audit also highlighted failures to reconcile NDR reimbursements dating back to 2019, and the need to address 2025 invoices still being paid late. The plan going forward includes finishing reconciliations, budgeting for terminal leave, and ensuring debt service is properly budgeted in the correct fund. The overall goal is to implement stronger controls and timely reporting to prevent cash shortfalls in the future.
Terminal leave policy discussion
During the budget discussion, a council member asked whether the legislative auditor's recommendations to cap terminal leave have been implemented. The CAO responded that no policy change has occurred yet, with tomorrow’s union meetings planned, and that the exposure could be as high as $91 million if many employees depart. There is a push to stop accumulating terminal leave and to ensure the 2027 budget accounts for terminal leave using averages. They also discussed continuing to pay invoices from 2025 and earlier, and the need to budget for health insurance and other fringe costs properly. The council asked for clarity on policy adoption and the potential financial exposure if a large number of employees retire or resign with large terminal-leave payouts.
Drone ordinance amendments introduction
Willard introduced ordinance 35,523 and an amendment to add reporting requirements for drone deployments by NOPD and other agencies; amendments require disclosure of the supervising officer for each flight and create a public-facing database of drone deployments. The amendment aims to provide guardrails and transparency, including identifying the agencies requesting drone deployments and the context of those deployments.
Drone ordinance public comment - Edith Romero
Edith Romero, organizer with Ion Surveillance, expressed support for the ordinance but urged amendments: penalties for not following reporting requirements, demographic information on those surveilled, and a complaint mechanism. She raised concerns about budget implications, software and training costs, and the risk of weaponization of drones. She urged an investigation before program expansion and emphasized the need for greater oversight and accountability.
Drone ordinance public comment - Dr. Sunny Moon
Dr. Sunny Moon, a physician, voiced concerns about drone use in psychiatric emergencies and requested a clear protocol. He noted past concerns about police misconduct and domestic violence by officers and highlighted that 70% of 2025 drone flights lacked documentation. He called for accountability and argued that an initial budget of $750,000 may not be sufficient to ensure proper data, safety, and privacy protections.
Drone ordinance public comment - Alexandra Jauch
Alexandra Jauch thanked Willard for the ordinance but argued that public trust is low due to prior weaponization concerns and inconsistent reporting. She urged stronger guardrails, more robust oversight, and greater public input, noting that past assurances by NOPD have not fully alleviated concerns about drone misuse. She urged the council to tighten safeguards before expanding the program.
Drone ordinance public comment - Morgan Clevenger
Morgan Clevenger, Police Community Advisory Board member, warned that the consent decree was prematurely lifted and that trust is eroding. He argued for accountability and more public engagement, noting that the community often feels its input is sidelined and that the drone program should be transparent and properly supervised under consent decree-era standards.
Drone ordinance public comment - Sarah Whittington (ACLU)
Sarah Whittington of the ACLU criticized June/July policy changes that reduced reporting requirements, warning that surveillance tools must be used with clear purpose, data safeguards, and public accountability. She urged careful consideration of Act 450 provisions for drone evidence and promised to engage further at the August 31 Criminal Justice Committee meeting.
Drone ordinance adoption: council vote
The council moved to adopt the drone ordinance (as amended), thanking participants and noting that the guardrails and monthly/quarterly reporting provisions will enhance transparency and public oversight. The ordinance passed with the amendments, signaling a commitment to responsible drone use and accountability.
NORA appointment: RKBA Matthews
RKBA Matthews introduced herself and explained that Nora is a bridge that connects land, opportunity, and community. She highlighted the importance of transparency, equity, and neighborhood stability, and stated she is ready to bring her experience to the board to advance these goals.
Library board appointment: Polk
Miss Polk spoke about her background in education and her desire to serve on the New Orleans Public Library board. She emphasized the library’s role in literacy and access to resources and described how her experience on multiple boards would contribute to governance and partnerships to increase literacy in the city.
Board appointments: Matthews approved
Matthews’s appointment was moved and approved; the council concluded that she would serve on the New Orleans Redevelopment Authority board. The vote occurred after debates and public commentary, and Matthews was approved.
Adjournment
The council adjourned the meeting after completing the agenda, thanking attendees and announcing the next meeting.