NEW ORLEANS — Mayor Mitch Landrieu applauded the Bureau of Governmental Research’s (BGR) support for the proposed Rainy Day Savings Fund amendment to the Home Rule Charter, which will be on the ballot Nov. 18.
In supporting the measure, BGR wrote in part, “The proposed charter amendment to establish the Savings Fund is a sensible approach to safeguarding recent improvements in the city’s financial position. Setting aside a portion of the General Fund balance for fiscal emergencies will help make sure the money is available when the city needs it. The conditions for the use of the Savings Fund generally align with best practice recommendations.”
View the BGR’s full report on the charter amendment here
The amendment would require the establishment of a savings fund and set out how appropriations could be made only under certain restrictive and limited conditions and circumstances, including a two-thirds vote of the City Council in a declared emergency, economic downturn or in response to a federal mandate, city reps said.
Currently, the city only has a goal to maintain a fund balance of 10 percent of recurring revenue, but the City Council can tap into it for any purpose with a simple majority vote, they said.
Mayor Landrieu unveiled the proposal during his 2018 budget proposal.
Landrieu said, “In seven and a half years, together with the City Council, we have righted the ship of government, going from a budget deficit to a budget surplus. Today, our financial house is strong and our bond ratings were upgraded to their highest levels ever. But we have always lacked is a source of funding in times of emergency. So to that end, we’re proposing that those funds be used to establish the first ever rainy day savings fund – this would seek to set aside the equivalent of 5 percent of the general fund in the fund balance for cases of emergency, so we’re ready if, God forbid, disaster strikes. This measure will cement our major progress on maintaining our fiscal health that we have built up together and keep our city’s finances moving in the right direction. I thank BGR for their research and support.”
The ballot measure reads:
“Shall Sections 3-115 and 6-201 of the Home Rule Charter of the City of New Orleans be amended to establish a “Savings Fund” as an operating fund of the city, to provide that appropriations from said Savings Fund may only be made by the City Council upon a two-thirds vote of its membership and only when one or more of the following conditions have been met: 1) a City Council declaration of emergency due to act of God, riot, war, or a grave emergency which threatens widespread loss of life or grievous injury to health or property; 2) a City Council determination that a significant loss in city revenues due to an economic downturn of serious proportions has occurred or is occurring; and/or 3) a mandate by the United States Government that has been determined by the city attorney to be in accordance with law, and to require appropriations by the City Council to ensure a Savings Fund balance of at least five percent (5%) of the average of the previous five years of actual recurring general fund expenditures except where any of the above conditions have been met?”
Early voting begins today, Friday, Nov. 3, at four locations across the city and runs through Saturday, Nov.11, with the exception of Friday, Nov. 10 in observation of Veterans Day.
Election Day is Saturday, Nov.18.
