Of?ce (504) 658-1040 Fax (504) 658-1048 JARED C. BROSSETT 1300 Perdido Street 0 Suite 2W20 COUNCILMEMBER - DISTRICT New Orleans, Louisiana 70112 April 16, 2020 Mr. Gilbert Monta?o Chief Administrative Of?cer 1300 Perdido Street, 9E06 New Orleans, Louisiana 70112 Mr. Norman White Chief Financial Of?cer 1300 Perdido Street, 3E06 New Orleans, Louisiana 70112 Dear Mr. Monta?o and Mr. White, I am writing to again request that you provide the City Council updated information on the City?s ?nancial status. As I detailed in my April 8, 2020 letter, the Council needs to receive updated reports that are typically presented to the Council?s Budget Committee including additional information listed as follows: Personnel Spending Forecast; Revenue Collections Report; Operating Expense Available Balances by Department; Fund Balance of the General Fund; Status of the Current Workforce and the Status of the Reconciliation of Revenues into the New Financial System. Additionally, please provide the Council With a list of COVID-19 related expenses the City has incurred year-to-date. Thus far, the Administration has not submitted any Budget related reports to either the Council or the Budget Committee this year. Each time the Council has requested this information, we are told the information is unavailable due to the December 2019 Cyberattack. However, in order to complete and submit an application to the State Bond Commission, as the Administration desires, or to complete the required annual audit, the Administration must provide much more detailed information than the Council is requesting. Accordingly, it is imperative for the ?nancial health of the City that the Administration ?nd a way to provide the requested budgetary information. In addition to the providing the budget reports, please answer the following questions from the City Council relative to the COVID-19 shutdown and the overall ?nancial health on the City: Revenue Loss 1) 2) 3) 4) 5) 6) What modeling has been done thus far to estimate the potential revenue loss for FY 2020 and the current projections? Is this a moving target ($100 million, $120 million $150 million)? Why? Can you provide a detailed, side-by-side comparison of the revenue estimates on which the budget was based vs. the current estimates? Can you specify which revenue items are most impacted as a result of COVID-19 closures and if any areas of city ?nances that have remained stable or have increased collections? Can you provide the underlying assumptions on which any revised estimates are based length of the estimated closure of non-essential businesses, impact of conventions/events that will be eliminated, decline in hotel occupancy etc)? Do you anticipate having a projected de?cit for the city for FY 2020? What basis and/or methods are used in developing this projection? What is the methodology used to calculate the projected $150 million budget de?cit? Fund Balance 1) 2) 3) 4) What is current estimated fund balance for the general fund? How much is currently set aside for the rainy-day fund? What criteria is established for use of this ?nding during an emergency/disaster? Is either the fund balance or the rainy-day fund calculated in the estimate of any projected de?cit for Have all of the collected property tax checks been deposited? If not, how many remain undeposited, and why? Expenditures (Operating Budget) 1) 2) 3) 4) 5) What is the current available balance within each of the department?s operating budgets? How long do you anticipate maintaining the current freeze on spending? What impact is this having on the operations of the city g. delays of street maintenance, drain cleaning, delivery of city services etc)? What impact on any projected de?cit will result from any expenditure savings during FY 2020? What operating expenses are we saving as a result of limited government functions and remote workspace efforts since the stay-at-home order? What is the overall status of operating and personnel expenses in light of the budget projections? a. What are projections for the rest of 2020? b. What are current funding priorities? COVID-19 Expenditure/Reimbursement 1) 2) 3) Can you provide an estimate of the projected COVID-19 related expenditures? Do you anticipate any or all these expenditures to be reimbursed in FY2020 as part of the recently passed CARES Act? Are you including any potential reimbursement of these expenditures in the calculation of any projected de?cit? Is there any other potential ?nancial assistance to the city as part of the CARES Act? Status of Workforce 1) The city budgeted for 100 new FTEs in 2020. How many have been hired so far? a. What is the total amount of salaries of those who've been hired? b. And of those not hired, how must was allocated for their salaries? 2) By department, provide a list of the current ?lled positions and a list of funded vacant positions (position title salary) which cannot be ?lled as a result of the freeze on hiring (Unclassi?ed vs. Classi?ed)? 3) The hiring freeze prohibits hiring budgeted positions. What are the projected savings from the hiring freeze? 4) How many employees are on civil leave? 5) What positions are on civil leave and what is the salary for each position? 6) Which department has the most individuals on civil leave? 7) What is the total cost of current civil leave employees? 8) What is the administration?s plan on implementing furloughs and/or layoff timeline, what positions, how determinations are made etc.)? 9) What are the anticipated ?nancial savings to be realized as a result from furlough vs. layoff? Use of Certi?cate of Indebtedness (C01) 1) Based on the request for Council approval of a COI What is the ?nal proposed amount of the bond issuance? What are the terms of issuance (expected interest rate, annual debt payment, payoff date etc)? 2) What city collateral is proposed to back the proposed COI g. general fund revenues)? Is the city?s current ?nancial shortfall expected to adversely impact the terms of the debt issuance? 3) What are the necessary costs that the $100 million COI will cover? And what methodology is used to ?gure out this amount? a. What criteria will be used to decide how regularly and for what reasons the COI will be drawn down on? As the city is paying down the COI, what revenue will be dedicated and/or what expenses will be cut to cover the amortized COI payments? 4) What is the status of the city?s current outstanding debt which is funded via the general fund? Pension System 1) What is the expected impact to the Employees? Pension System as a result of the city?s ?nancial challenges resulting from Speci?cally, what are the expected impacts if furloughs and/or layoffs implemented? 2) Are there varying negatives to fund based on layoffs of certain employees less tenured vs. long tenured employees)? 3) Can the city continue to make its employer contributions to the fund for 4) Is the fund currently in a solid position to meet the current retiree bene?ts? Cybersecuri?/Hard Rock Collapse 1) What is the current projected cost to the city as a result of the cybersecurity attack? Hard Rock Collapse? 2) How much has the cost estimates changed since last reported to Council Budget Committee? 3) Is the city still incurring costs from the cybersecurity issue? Miscellaneous 1) The restricted funds total about $46 million. The Clean-Up Ordinance will range between $7-10 million. We've received a little more than half of the Harrah?s payment due to the City ($22.5 million). How has this money been accounted regarding the projected budget hole? a. What needs to happen for the City to access the $46 million in restricted funds? 2) The City will see a $20 million reduction in bond indebtedness in 2022. How is that being factored into budget projections for the next few years? 3) The City has many pressing needs. What is the overall plan for the ?ve expiring millages? a. Can we narrowly tailor new millages to a speci?c period of time, aiding immediate recovery efforts? It is important that both the executive and legislative branches have clear understanding of the City?s ?scal health as we work together to combat the public health emergency. To this end, we look forward to receiving a complete update on the City?s ?nancial status. Please provide all the requested information to the Council by April 24, 2020. Sincerely, Jared C. Brossett Helena Moreno Chair, Budget/Audit/B OR Committee - Council President Jason R. Williams Joseph I. Giarrusso Council Vice President Council District A Jay H. Banks Kristin Gisleson Palmer Council District Council District Cyndi Nguyen Council District CC: Calvin Aguillard, Council Fiscal Of?cer