NOLA Seeks Refinancing

The Louisiana State Bond Commission will consider a plan Nov. 17 to refinance some of New Orleans’ debt so the city can push into 2013 a total of $15.5 million of debt service now due in 2012.

Mayor Mitch Landrieu wants to refinance $75 million of 1998 certificates of obligation with short-term refinancing bonds that will mature in 2013.

The city would use debt service avoided through the refinancing to help fill a $25.2 million shortfall that Landrieu inherited when he took office in 2010.

New Orleans collected $19.2 million more in revenue in 2010 than in 2009, a recent audit found. But it ended 2010 with a $25.2 million general fund deficit that must be fixed by year-end 2012. The city operates on a calendar year.

New Orleans’ outstanding debt rose $12.9 million in 2010 to a total of $685.6 million, the audit found.

Chief administrative officer Andrew Kopplin told the City Council that the short-term bonds would be refinanced in March 2013, and at the same time the city would refinance $171 million of pension bonds issued in 2000.

The city’s spending in 2008 and 2009 exceeded revenues by $90 million, Kopplin said, and was $75 million more than the council had appropriated.

Budget director Cary Grant said debt service is scheduled to drop significantly in 2014, easing the strain on the budget.

The City Council unanimously approved the refinancing proposal.

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