The Louisiana State Bond Commission approved a $125 million revenue anticipation note for New Orleans so it can make payroll in November and December.
The panel approved the note Wednesday, subject to conditions, including that Louisiana Legislative Auditor Michael Waguespack approve any disbursements of the RANs.
The city arranged a private placement with JP Morgan at a 3.5% interest rate for a term no longer than 12 months.
Waguespack said at a Louisiana Fiscal Review Committee meeting Wednesday morning, he was pleased to see the 3.5% interest rate.
This is the first time the state has required Waguespack to directly approve any disbursements for a RAN to a municipality, he said.
New Orleans Mayor-elect Helena Moreno said she is taking several steps to address the city's budget shortfall and has a transition team working on the 2026 budget. The city's fiscal year coincides with the calendar year. The city has two privately funded outside financial groups advising it, she said.
Moreno said all 660 "unclassified" employees of the current administration will have to reapply if they want to continue working for the city, since some offices will be downsized or absorbed into others. Moreno is seeking better deals from vendors.
"Next year's budget will be an austerity budget," said City Council President Jean-Paul Morrell.
This year's general fund is about $850 million and Mayor LaToya Cantrell has been preparing a $725 million budget for the coming fiscal year, Moreno said, which is larger than she expects to be finalized.
The city will probably have to return to the bond commission for between $75 million and $100 million RANs in August or September, Waguespack said.
Waguespack will perform an investigative audit of New Orleans finances from 2022 to 2025 and present the results in about three months.
The city will need about three years to return to healthy finances, Waguespack said, and should target about $150 million for fund balances, which would be about 17% or 18% of expenditures.
Attorney General Liz Murrill said the city engaged in "phony budgeting" for the current fiscal year by allotting $57,000 for overtime when about $50 million would be necessary.
Moreno responded that her current planned budget includes $50 million for overtime.
Morrell said the city was taking steps to introduce a balanced budget amendment to its charter.
In October, city officials discovered the city couldn't pay city employees in November and December and planned to
City officials rejected this and
