New Orleans City Council Special Meeting on Financial Condition - December 23, 2025

A special meeting of the New Orleans City Council was convened on December 23, 2025, with Council President J.P. Morrell presiding over all seven voting members present. The meeting focused on the city's immediate financial condition, specifically the drawdown of Revenue Anticipation Notes (RAN) to address payroll and employee benefit shortfalls. The Louisiana Legislative Auditor presented a review of the proposed $11,688,941 drawdown, while Councilmembers engaged in discussions regarding the city's recent credit rating downgrade, the status of the JIRR FEMA extension, and objections regarding the precision and consistency of the city's financial estimates in substitute resolutions.

Consent Calendar

• The Council moved to suspend rules to add the Legislative Auditor's report to the agenda, which was unanimously approved (7-0).
• A motion was made to suspend rules to receive Substitute Resolution R25672 (withdrawn), followed by the adoption of the substitute resolution regarding a $6,410,382.45 payroll drawdown (7-0).
• A motion was made to suspend rules to receive Substitute Resolution R25673 (withdrawn), followed by the adoption of the substitute resolution regarding a $5,278,558 drawdown for French benefits and payroll expenses (7-0).

Public Comments & Testimony

• Clerk of Council (Pre-meeting correspondence/Process): Expressed a need to include the Legislative Auditor's report electronically on the City Council website and ensure it is posted for public access, noting it was currently not found via web search.
• Councilmember Burnside:
  • Expressed concern regarding the lack of electronic documentation for substitute resolutions, noting they appear only as 'X's rather than detailed text in the public record.
  • Articulated strong opposition to the city's practice of using identical financial estimates across multiple resolutions despite changing payroll variables (e.g., employee resignations).
  • Expressed skepticism regarding the precision of the city's estimates, characterizing the use of specific penny-level figures without error ranges as "lazy" and potentially misleading, suggesting an "estimating up" methodology that ignores significant variance.
  • Noted that the Legislative Auditor's approved amounts differ from the figures submitted by the City in the resolutions.

Discussion Items

• Legislative Auditor's Review of RAN Drawdown (Michael Waggisback):
  • Presented a preliminary review for a $11,688,941 drawdown: $6,410,382 for employee compensation and taxes (Payroll ending 12/20/2025), $2,438,228 for French benefits (Payroll ending 11/30/2025 - Note: Transcript text says 12/13, text says 11/30-12/13 in other resolutions), and $2,840,331 for pension system payments (Municipal Police and LERS, ending 12/15/2025).
  • Discussed exhibits tracking gross earnings and overtime, noting year-to-date overtime was $49,446,622, which was under projected amounts.
  • Confirmed that after transfers, the remaining balance in the special fund will be $57,165,534.
• Councilmember Thomas on Credit Rating: Asked the Auditor to explain the implications of the city's credit downgrade to A- by all three rating agencies. The Auditor responded that while the downgrade reflects closer monitoring rather than a catastrophic failure, transparency and accountability under the current oversight process are essential for regaining the rating. He noted the possibility of interest rate changes if the city seeks infrastructure bonds in March.
• Councilmember Moreno on JIRR Extension: Inquired about the status of the JIRR FEMA extension. Michael Waggisback reported that while the Governor has facilitated contact with FEMA, the extension is likely limited to six months (until June 30, 2026). He noted FEMA intends to remove projects that have not started after 25 years, requiring a strategic selection of projects to complete within the short window. The Auditor confirmed that funds are currently held by GOSEP.
• Financial Precision Debate: Councilmember Burnside questioned the City Administration's calculation methods, contrasting the constant figures in resolution requests against the varying figures approved by the Legislative Auditor. He highlighted the discrepancy in Resolution 25612 vs. 25672 and urged for the inclusion of error margins in future financial requests.

Key Outcomes

• Approval of Payroll Drawdowns: The Council unanimously approved the authorization to release funds from the Employee Emergency Payroll Fund:
  • $6,410,382.45 for employee compensation and related taxes (Payroll period Dec 7–Dec 20, 2025).
  • $5,278,558.00 for French benefits and payroll expenses (Payroll period Nov 30–Dec 13, 2025).
• Procedural Directives: Directed the Clerk's Office to post the Legislative Auditor's report on the City Council website for electronic access.
• Future Action Items:
  • The Auditor's office to continue monitoring the impact of credit rating changes and maintain transparency.
  • The City and State to engage in rapid strategic planning to maximize the limited six-month JIRR extension window, with the understanding that a separate extension for long-term projects may be required post-January 1, 2026.
• Adjournment: The meeting was adjourned at the conclusion of the substitute resolutions, with Councilmembers exchanging holiday greetings.

Note on Data Discrepancy: The transcript contains conflicting text regarding the specific dates of the November 30 period in the auditor's verbal presentation (citing "Payroll period ending 12/13" for benefits) versus the formal resolution text ("November 30... ending November 13" - which is chronologically impossible as Nov 13 precedes Nov 30). The summary reflects the text exactly as spoken/typed in the source.