The New Orleans City Government will seek a second bond sales to shore up the city's budget, and the city says it will need the funds the bond sale will generate in the next few months.
"We knew that the city would be short on cash again," New Orleans chief administrative officer Joe Giarrusso said, noting that city leaders told the Louisiana Bond Commission the same thing when it asked for permission to sell bonds earlier this year.
Giarrusso says the funds from that initial bond sale will dry up in September, about a month later than originally anticipated. He told WWL's Tommy Tucker that unlike the first loan, which the city paid off in four months, the second one will be paid off over several years and in smaller chunks. Giarrusso says the long-term bond issue will allow the city to stabilize the budget over time.
"The difference this time is rather than taking out that short-term loan, we're almost going to do something like a mortgage, and we're going to do is we're going to mortgage or bond out against one of our millages," Giarrusso said. "Instead of paying all of the money back in four months, we'll pay it back in 10, 12, (or) 15 years.
"So, in other words, instead of having to be short $125 million, you're only having to pay back around $20 (million) per year, and that makes it much easier to smooth out your cash flow throughout the year," Giarrusso added. "If we kept on doing this loan we took out, it would probably take us years to get out of this. It would be $125 million, then maybe $110 million, then $80 million and $60 (million). It would be a long, painful, drawn-out process that we would have to over and over again."
This ask will come amid heightened tensions between state and local government, particularly after Governor Jeff Landry signed bills to eliminate three criminal court judges and consolidate the clerks of court offices over the city's ardent objections.
