The city of New Orleans gets its loan from the state of Louisiana.
The Louisiana Bond Commission approved New Orleans's request for $125-million loan to cover the city's payroll for the remainder of the year. The commission approved that bond on the conditions that the city establishes a dedicated fund for the loan, that the Louisiana Legislative Auditor will oversee the withdrawal and disbursal of funds from that fund, and that city leaders abide by city and state budget laws.
Meanwhile, legislative auditor Mike Waguespack says his agency is still investigating how the city wound up in its budget hole.
"The city was proactive in adopting the ordinance that basically asked the auditor as well as the New Orleans (Office of Inspector General) to go back and to do a deep dive into the spend when it comes to overtime, et cetera, and determine what happened," Waguespack said during Wednesday's bond commission meeting. "What was the lack of budget practice or lack of oversight or the lack of amending budgets?"
Some members of the commission expressed skepticism that the city would get its financial act together.
"You know there's been known to be a little theft every now and then in New Orleans, Monroe Senator Jay Morris said, adding that he wants the state to keep an eye on what the city of New Orleans does with the bond money it's about to receive as well as its future budgets.
Mayor-Elect Helena Moreno says she's already looking at making cuts at city hall, including personnel reductions and cancelling contracts, to reduce the city's budget.
"Everything, Senator Morris, is being looked at at this point. I do not have a cent to waste," Moreno said.
City council president J. P. Morrell said the council is working on a city charter amendment requiring the city to have a balanced budget.
"The goal is to put it on the ballot this (coming) fall during midterm elections where turnout will be the highest," Morrell said.
Governor Jeff Landry, who said he's pleased that Waguespack is investigating how the budget deficit came to be, noted that the cuts he wants the New Orleans City Government to make to bring its budget under control are similar to the cuts he's looking to make in state government.
"We're not asking y'all to do anything that we are not already doing," Landry said.
The council will vote to approve the bond sale on Thursday.