City of New Orleans trumpets balanced budget in 2011
For the first time since Hurricane Katrina, New Orleans balanced its budget in 2011 from current revenue sources, meaning it did not have to dip into its meager reserves or now-exhausted federal loans, Chief Administrative Officer Andy Kopplin told the City Council'sBudget Committee on Wednesday. Kopplin noted that he was basing his claim on preliminary, unaudited figures, but he said he does not expect the final spending and revenue numbers to change substantially when the 2011 audit is completed in a few months.
Kopplin contrasted 2011, Mayor Mitch Landrieu's first full year in office, to the situation the new administration found when it took office in May 2010. Inheriting a prospective shortfall of $97 million, officials responded by cutting and renegotiating several major contracts, imposing unpaid furloughs for city workers, reducing overtime and spending tens of millions in dollars in unexpected one-time revenue.
Kopplin said he does not foresee a need for furloughs this year unless an unexpected emergency, such as a hurricane, results in reduced revenue and higher expenditures.
The unaudited numbers show the city spent $484 million in general fund dollars in 2011, a $44 million reduction from 2009 and down $12 million from 2010.
The 2011 spending total included $17 million in one-time or nonrecurring revenue, down from $35 million in 2010 and from $56 million in 2009, Kopplin said. In addition, the 2009 and 2010 budgets included a total of more than $80 million from federal loans or from the city's fund balance, or reserve account, while in 2011 no money came from those sources.
"Our preliminary indications show that we balanced the 2011 budget while dealing with increased employee health-care costs and skyrocketing pension obligations," Kopplin said. "With the City Council, we passed a balanced, responsible budget for 2011, and then the administration made adjustments timely and as necessary so that we lived within it. For the first time since Hurricane Katrina, it appears we have balanced the budget without taking charges against our fund balance. We also created budgetary stability for our city by dramatically reducing the amount of one-time revenues in our budget."
Kopplin said he wanted to "applaud the hard-working employees of city government for taking decisive actions to live within our means while producing added value for taxpayers."
Landrieu issued a written statement saying: "We took decisive action to help close the massive gap we inherited and now have reduced city government spending by nearly 10 percent by cutting smart, reorganizing and investing in those things that return value to the taxpayers."
For the first two months of 2012, the Budget Committee was told, the city had total revenue of $162.8 million, a sharp increase from the $149.2 million received in the same period in 2011. Much of the rise was due to faster recording of property tax payments, which showed an increase of $7.3 million for the two months.
Sales and hotel tax collections for the same period totaled $26.8 million, a gain of $2.2 million from January and February 2011. In addition, sanitation fee collections were $2.2 million higher than for the same two months in 2011, when higher fees approved by the council had not fully taken effect.
Personnel spending for January and February was on track to end the year more than $9 million in the black, although several individual departments were running deficits in their accounts. Officials said the shortfalls owed to factors such as expected high overtime during Carnival and a lag in receiving some federal money.
Bruce Eggler can be reached at firstname.lastname@example.org or 504.826.3320.
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