The City of New Orleans announced on June 2 a new phase in its effort to stabilize municipal finances, moving forward with a medium-term loan as part of its ongoing response to an inherited fiscal crisis.
According to the city, this step is being taken in collaboration with and with support from the Louisiana Legislative Auditor. The plan involves advancing an expected medium-term loan from a banking institution as part of the city’s cash flow management strategy. This approach aims to move away from immediate crisis-response revenue anticipation notes used over the past six months.
“Seeking this medium-term financing option is a substantial step towards restoring the fiscal health of the City and signals our transition from crisis towards stability,” said Mayor Helena Moreno. “This financing package steps us away from immediate crisis-response revenue anticipation notes over the past six months into a cheaper, more advantageous option.”
Chief Administrative Officer Joseph Giarrusso said, “Thanks to relentless and careful management by our team, we’re finally on a path towards mitigating the financial crisis. There is still more work on the finances being done and to be done. The proposed cash management plan will ease the City’s immediate cash flow while also protecting against repaying the loan all at once.”
Louisiana Legislative Auditor Mike Waguespack said, “Under this Mayor, the City’s made real and clear progress in tightening its fiscal belt and restoring sanity to its bottom line. This latest financing arrangement is evidence that their management has helped move the city out of a critical stage and towards sustainability and fiscal health. I’m glad to see it and support their approach,”
The proposed $110 million loan will be presented by resolution to City Council this week. Backed by city tax revenue, it represents what officials describe as a transition away from short-term fixes toward longer term stability until regular revenues are sufficient again. The next step requires approval from the State Bond Commission before finalizing later in summer.