NOLa department leaders suggest layoffs, consolidation, suspension of curbside recycling and more to help plug city’s budget hole

26th May 2020   ·   0 Comments

By Michael Isaac Stein
The Lens

At least six city of New Orleans departments and other agencies have suggested employee furloughs or layoffs as a way to cut costs as the city faces massive potential revenue losses due to the coronavirus crisis, according to documents obtained by The Lens. Several departments are also suggesting cutting services, at least temporarily, including a proposed suspension of curbside recycling.

The city of New Orleans is expecting a budget hole anywhere from $130 million to $170 million this year, primarily due to lost sales tax revenues resulting from citywide business closures and a sudden halt to tourism. Last month, Mayor LaToya Cantrell’s administration began asking city departments and agencies to submit “budget reduction plans.”

“I want to be clear: nothing is off the table,” Chief Administra-tive Officer Gilbert Montaño said in an email to department heads last month. “Difficult decisions will need to be made in the coming weeks and months.”

The Lens has obtained the responses from 35 city departments and other city-controlled agencies funded through the city’s general fund. Suggestions from department leaders included suspending curbside recycling contracts, renovating the old Veterans Affairs Hospital building to house city offices and cut down on office leases and creating a Department of Motor Vehicles to consolidate work that is currently spread out over several city departments.

Instead of budget cuts, some departments suggested increased short-term spending that would yield long-term savings or new revenues. The Department of Property Management, for example, is recommending the city sign a $175,000 contract to improve energy efficiency in city buildings that would save the city an estimated $475,000 a year in utility costs.

All of these are still just suggestions. In an email, Cantrell’s office told The Lens that officials would review the options and come up with a final plan over the next two weeks. The administration also pointed out that there are several agencies that still haven’t submitted budget reduction plans, including the Orleans Parish Sheriff’s Office, the French Market Corporation and the Regional Transit Authority.

For several departments that did submit responses, the focus was on reduced personnel spending, including layoffs, furloughs and leaving vacant positions unfilled. The Lens found six departments or agencies that suggested either layoffs or furloughs — the Department of Finance, the Mosquito, Termite and Rodent Control Board, the New Orleans Recreation Development Commission, the Juvenile Justice Intervention Center, the Office of Police Secondary Employment and the Department of Public Works.

The Department of Public Works seems to already have initiated furloughs worth $2.43 million.

“The savings to this budget consisted of furloughing all parking and towing employees, including parking enforcement officers, ten hours a week for the remainder of the year,” an email from DPW Deputy Director Josh Hartley said. “This was decided based on the current reduction in demands of the community and the needs for parking enforcement.”

The Cantrell administration has warned of the possibility of furloughs and layoffs, but hadn’t yet announced that any were being implemented. In the same email that Montaño asked department heads for budget reduction plans, he also asked for lists of “critical” and “non-critical” employees.

A statement from Cantrell’s office said that the furloughed DPW employees were getting a special form of paid leave required during the coronavirus crisis under federal legislation. Once that expires, the director of the department can request 20 days of normal “civil leave” for qualifying employees.

“DPW is utilizing these leaves as appropriate and authorized to provide paid leave to their parking enforcement officers. Once their eligibility for paid leave expires, absent any further guidance from the CAO’s office, these employees will have the opportunity to either use their personal leave or be in a leave without pay status for hours not worked.”

The New Orleans Mosquito, Termite and Rodent Control Board suggested cutting four positions for nearly $200,000 in savings. The Department of Finance suggested cutting eight “auditor, assistant” positions for $616,000 in savings. The Office of Police Secondary Employment, which coordinates off-duty details for officers, suggested cutting three positions for $201,000 in savings.

The New Orleans Recreation Development Commission suggested cutting its IT department, but it’s unclear how many jobs that represents. On the section of the template that asks department directors to summarize potential cuts, the Juvenile Justice Intervention Center listed six employees who are currently on civil leave.

The Fire Department isn’t recommending furloughs or layoffs, but it is recommending $2.4 million in personnel savings by leaving 35 unfilled firefighter positions and four other department jobs vacant. It also suggests a $3.4 million cut to overtime pay.

To do this, the city would need to slim down on the number of firefighters assigned to each engine. According to the budget reduction plan sent by Superintendent Tim McConnell, the department usually aims to have four firefighters on each engine. But under the budget reduction plan, that would be reduced to just three for some stations.

“Reducing suppression staffing to this extent will lessen public safety considerably but given the stark fiscal realities you have described these cuts may be necessary and can be adjusted up or down as desired. For public safety reasons my proposal is that we ensure all stations remain open but that we operate about half of the pumps (16 out of 28) with four [fire fighters].”

New Orleans EMS is also suggesting reduced overtime to save $150,000 to $200,000. There are also four vacant positions at EMS that, if left unfilled, would save the city another $215,000.

Slashing city contracts

While city employees are facing the risk of layoffs and furloughs, so too are workers employed under city contracts that are now on the chopping block, including sanitation and janitorial workers.

The city’s Department of Property Management is suggesting $328,000 in cuts to janitorial services for city buildings, in part due to the number of vacant offices and newly-remote workers due to the coronavirus.

The New Orleans Department of Sanitation, meanwhile, is considering some big changes to waste pickup in the city. Already, Cantrell said the city has discontinued daily trash pickups in the French Quarter, yielding $3.2 million in savings this year. But the city may go further by reducing city-wide garbage pickups from two days a week to just one. Cantrell and Montaño have argued that twice a day pickups are unusual compared to other U.S. cities.

But as noted in the Department of Sanitation’s budget reduction plan, there are challenges to actually making that happen. The city currently has contracts with three solid waste disposal companies. Two of them — Metro Services Group and Richard’s Disposal — serve most of the city outside of the French Quarter and the Central Business District.

The Metro and Richard’s contracts, worth tens of millions per year, are in the fourth year of their seven-year contracts.

“Should the City decide to move to once per week solid waste collection, City Attorney would need to provide guidance on whether terms could be negotiated or whether contracts would need to be cancelled and re-bid,” the plan said. “Vendors may not be amenable to renegotiating contracts due to capital investment already made for contract (garbage truck fleet, trash roll carts).”

There are other practical considerations too.

“Higher daily collection volume would result in garbage trucks packing out faster, which would result in more trips to landfill. River Birch Landfill is located in Avondale, LA with each round trip taking 1 hour to 1.5 hours based on starting location in City and time of day. Once per week collection will result in additional debris being placed on the ground outside the roll cart. Debris may remain on the ground in between weekly collections for multiple days for locations generating higher volumes. Potential for additional litter and animal/rodent access to uncontained debris.”

The Department of Sanitation also suggested the possibility of cancelling curbside recycling services for Metro and Richard’s service areas. That would save the city $182,000 a month, although it would also cost the city $14,000 more in landfill costs every month.
Spend money to save money

Not all of the suggestions for department heads were focused on cuts. Some suggested departmental shakeups to consolidate resources, while others argued that the discontinuation of their services would lose the city money, rather than save.

The Department of Safety and Permits, for example, is suggesting the creation of a new city Department of Motor Vehicles that would consolidate divisions under sanitation, public works and the Chief Administrative Officer.

“Over the past twenty years both S&P and DPW have grown into large departments tasked with a variety of duties. Reassigning vehicle related duties from both into one department would allow S&P to focus on building inspections, DPW to focus on streets, sidewalks, and draining, and the new Department of Vehicles to focus on vehicle enforcement and the City’s fleet,” says a memo from Wesley Pfeiffer, the Taxicab Administrator within the Department of Safety and Permits.

The memo says the new department would combine the Department of Safety and Permits’ Ground Transportation Bureau and Motor Vehicle Inspection Bureau with the Department of Public Works’ Parking Enforcement Division and the Chief Administrative Officer’s Equipment Maintenance Division. The memo does not include an estimate of how much money that would save or how many positions would be eliminated.

The Department of Property Management — which oversees city-owned property and maintains historic real estate records — recommended the city go ahead with a $175,000 contract with GCE Services for HVAC preventive maintenance services. The contract has saved the city $250,000 in utility costs over the last 12 months, the memo says, and further services would save the city an additional $475,000 a year on its energy bill.

Property Management also recommended renovating the old VA Hospital — a city-owned property on Gravier Street — to house some city offices. The budget reduction plan notes that the city spends $1 million on office leases, warehousing and document storage. Last, the department suggested handing over the management of Gallier Hall to a private contractor through a lease agreement.

“Instead of spending funds to operate Gallier at a loss to the city, lease it to an operator with a number of days blocked for city use. The Mahalia Jackson has a similar agreement in place.”

The Orleans Parish Commun-ication District, which operates the city’s 911 and 311 systems, had some of the most ambitious ideas, recommending that the city increase its personnel count, rather than decrease it. In a memo, OPCD director Tyrell Morris suggested assigning his agency the task of managing the entry of warrants into a national criminal justice database.

“The City of New Orleans has several law enforcement and court agencies that issue and manage warrants and entries into the National Crime Information Center (NCIC). We estimate there are 20 [full time equivalents, or FTEs] dedicated to providing this service. …We believe we can provide this comprehensive service that is efficient with 6 FTEs.”

Morris also suggested using 311 services — which were moved from City Hall to the 911 call center last year — to replace department receptionists.

“Most city departments have receptionists that provide direct service to citizens and take general calls. 3-1-1 receives many calls looking for basic directory or switchboard information. OPCD could work with ITI to maintain an active directory of staff and provide contact information to the citizens.”

The Mayor’s Office of Utilities didn’t suggest increased funding, but warned that budget cuts today would lead to larger costs or revenue losses in the future.

“The Mayor’s Office of Utilities generally generates more revenue, cost-savings and account collections for the City than it spends each year. In addition to collection of regular Franchise fees, the Office regularly identifies past-due franchise accounts which are projected to bring in $2M-$5.5M of previously uncollected funds in 2020 and 2021.”

The budget reduction plan from the Mayor’s Office of Utilities said that it could leave vacant an unfilled utility attorney position to save $117,000 a year. But it didn’t recommend it, saying that “the currently unfilled Utility Counsel position in the Office should easily pay for themselves.”

Other suggested cuts and savings from city department budget reduction plans include:

• The New Orleans Police Department delayed one of its four recruiting classes for 2020, lowering the maximum number of new recruits this year from 120 to 90.

• The Office of Resilience and Sustainability will shift its “resident energy expert to focus on energy resilience projects” within the scope of the federal-grant-funded Gentilly Resilience District. Moving the employee to a grant funded position will save the city $75,000 from its general fund, according to the budget reduction plan. In addition, the office will leave its Urban Stormwater Man-ager position unfilled, saving the city $70,000 in salary and benefits.

• The Orleans Parish District Attorney didn’t suggest any clear cuts, and said in a memo that if its budget was cut, “diversion programs and Victim Witness Assis-tance would be most impacted.”

• The New Orleans Aviation Board’s budget reduction plan notes that there will be $9.2 million in reduced costs this year. Most of the cuts are related to the severe slowdown in air traffic since the coronavirus crisis began, including lower utility and security costs.

• The New Orleans Recreation Development Commission proposed reducing the number of staff present at playgrounds and a reduction in events and programs city-wide. It did not specify what these reductions would be or what savings they would yield.

• The city’s Office of Work-force Development said it will save $390,000 due to the temporary suspension of its YouthForce NOLA program, which seeks to connect New Orleans students with employment opportunities and training. The office also said it could save $88,000 by delaying filling a position for the city’s HireNOLA program, which aims to connect local workers with jobs created by city contracts.

• The New Orleans Health De-partment estimates $516,000 in savings from the temporary closure of the city’s new sobering center.

• The Office of the Mayor is suggesting a $233,000 budget cut, although its unclear where those savings will come from.

The above article originally appeared in The Lens on its website (www.thelensnola.org). The Louisiana Weekly enjoys a partnership with The Lens.

This article originally published in the May 25, 2020 print edition of The Louisiana Weekly newspaper.