Special City Council Meeting: Payroll Funding & Financial Review (2025-12-10)

On December 10, 2025, the New Orleans City Council convened a special meeting to address the city's critical financial condition, with the primary focus on approving payroll funding to prevent employee payment delays by 10:00 a.m. The session featured a report from the Louisiana Legislative Auditor, the unanimous approval of resolutions to release funds for employee benefits and payroll, and the renewal of the City Park Tax Increment Financing. Councilmembers expressed deep concern regarding long-term fiscal accountability, calling for investigations into past accounting failures and demanding testimony from the CAO.

Consent Calendar

• Suspension of Rules: The Council unanimously voted to suspend rules to advance the 9 a.m. start for Military Day (6-0-0).
• Receipt of Reports: Moved and seconded to suspend rules to receive the Louisiana Legislative Auditor's expenditure report (7-0-0); subsequently suspended rules to add the report to the agenda (7-0-0).
• Ordinance 35-318: Councilmember Gerusso moved to renew the City Park Tax Increment Financing designation for an additional six years; the motion was seconded by Councilmember Green and passed unanimously (7-0-0).

Public Comments & Testimony

• Michael Svack (Louisiana Legislative Auditor):
  • Position on Auditor Relationship: Stated that the Auditor's role is multi-faceted, serving as an overseer for the bond issuance, a trusted advisor to find efficiencies and savings, and an investigator to determine the causes of the fiscal crisis. Expressed that the advisory relationship would continue to play a more backseat role once the $125 million loan is repaid.
  • Position on Further Investigation: Expressed strong agreement that hearing from the CAO or subpoenaing him would be "very helpful" to determine how the city arrived at this deficit, noting a lack of timely monthly financial reports and budget amendments.
  • Position on Financial Oversight: Stated that failing to pay attention to the checkbook and budget variances is a primary reason the city is in crisis.
• Barnes (Resident at 2215 Felicity):
  • Position on Payroll Distribution: Noted that police and fire employees receive three times the per-employee cost compared to other city employees ($6,900 vs. $2,180), and highlighted that retirees of the fire department receive $3.9 million, a figure exceeding the total annual allocation for the City Planning Commission ($1.5 million).
  • Position on Bond Transparency: Expressed frustration regarding the lack of transparency on RAN note purchasers, contrasting the city's single-page summary with the Airport's detailed list of 14 recipients.
  • Position on Council Accountability: Demanded that the Council cut the salaries of elected officials and City Hall employees rather than protecting friends; specifically urged Councilmember Morel to remember he owes his office to the voters, not his Spanish-speaking constituents, warning against political neglect.
• Morgan:
  • Position on Neighborhood Funding: Expressed that residents feel neglected and believe city budget percentages are not being spent in their neighborhoods, which are described as "trashing."
• Council President Morrell:
  • Position on Public Comments: Stated that the comments made by Morgan were "ridiculous" and "absurd," and moved to adjourn the meeting.

Discussion Items

• Payroll Funding Status: Michael Svack presented a preliminary review of a $13,786,533 payroll drawdown request. The breakdown included $6,539,997 for the Chase payroll card account (compensation and taxes for the period ending Dec 6, 2025) and $7,247,000 to reimburse the General Fund for prior period fringe benefits and pension contributions. Svack noted that the remaining balance in the special account would be approximately $78.1 million following these transfers, sufficient to cover January payrolls until tax revenues are received. He also noted that overtime expenses were lower than projected.
• Fiscal Accountability Concerns:
  • Councilmember Thomas: Expressed deep concern regarding the city's accounting, stating that projected revenue not meeting expenditures is a fundamental accounting failure. He argued that the current lack of timely information and the failure to amend the budget to reflect variances led to the crisis. He emphasized the need to understand where the overspent occurred and if any individuals were complicit.
  • Councilmember Burnside: Expressed skepticism regarding the $19 million figure mentioned in Resolution 25610, noting that the sum of the specific line items ($6.5M + $7.2M) only totals approximately $13.8M, creating a discrepancy in the reported figures.
  • Councilmember Jerusalem: Moved to approve the resolutions and ordinances, citing the City Park Board's prior support and the need for the Park Tax District to generate internal revenue without hitting the city coffers.

Key Outcomes

• Approval of Resolution R25611 (Substitute): Unanimously approved (7-0-0) to release $6,539,097.91 from the Employee Emergency Payroll Fund to cover payroll-related expenses for city employees (excluding Police and Fire) for the pay period Nov 23, 2025 – Dec 6, 2025. This action is subject to concurrence by the Legislative Auditor.
• Approval of Resolution R25610: Unanimously approved (7-0-0) to release $7,024,435.64 (noted as 7.2M in motion text, with specific breakdown in report) from the Employee Emergency Payroll Fund for friends benefits and payroll expenses for the period Nov 16, 2025 – Nov 29, 2025. This action is subject to concurrence by the Legislative Auditor.
• Withdrawal of Original R25611: The original R25611 was withdrawn to be replaced by the substitute resolution mentioned above.
• Deferral: Ordinance 35-305 was deferred to December 17, 2025.
• Adjournment: The meeting was adjourned following public comments and the affirmation of the unanimous votes.