Budget Committee: COVID-19 Update City of New Orleans May 5, 2020 - - PowerPoint PPT Presentation

City of New Orleans

Budget Committee: COVID-19 Update

May 5, 2020

Revenues

1. 1.

2

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e New w Financi ancial l System:

• Treasury Bureau has completed the posting of January property tax

revenues.

• February and March are complete
• Revenue Bureau has completed the posting of January and February

sales tax collections.

• Reporting is current
• Safety and Permits has submitted all their reconciled cash to their

respective bank accounts.

• Now focusing on crediting accounts and updating BRASS

3

FY2020 Revenue Projections Changes

• What modeling has been done thus far to estimate the potential

revenue loss for FY 2020 and the current projections?

• The Finance Department closely monitored the Sales Tax collections for January

through April. Also, the current year’s sales tax revenues were compared month to month for fiscal 2018 and 2019.

• Is this a moving target ($100 million, $120 million $150 million)? Why?
• Yes, it is a moving target. The potential revenue loss was based on data collected

from the City’s Revenue Sales Tax system and various bank accounts where sales tax payments are deposited. This information was used to compare month-to-month and year-to-year activities to get a better understanding of future

• collections. However, it is still an estimate. As more data becomes available, we

will adjust our estimates to reflect more accurate and up-to-date information.

UNAUDITED PRELIMINARY PROJECTIONS FOR ILLUSTRATIVE PURPOSES ONLY

4

FY2020 Revenue Projections Changes

• Can you provide a detailed, side-by-side comparison of the revenue

estimates on which the budget was based vs. the current estimates?

UNAUDITED PRELIMINARY PROJECTIONS FOR ILLUSTRATIVE PURPOSES ONLY

5

FY2020 Revenue Projections Changes

• Do you anticipate having a projected deficit for the city for FY

2020?

• The city is currently in the process of refining our revenue projections,

determining the level of state and federal support, reducing our expenditures by reevaluating departmental spending, and evaluating cash flow initiatives. It’s too early in the process to determine the

• utcome of FY2020.

UNAUDITED PRELIMINARY PROJECTIONS FOR ILLUSTRATIVE PURPOSES ONLY

6

FY2020 Revenue Projections Changes

• What basis and/or methods are used in developing this

projection?

• The estimated budget deficit was calculated as a result of the

projected $130 million in revenue shortfall (primarily sales taxes, fines, and forfeits) and the anticipated unbudgeted COVID-19 related costs of approximately $20 million.

UNAUDITED PRELIMINARY PROJECTIONS FOR ILLUSTRATIVE PURPOSES ONLY

7

Impact of COVID-19 on Revenue

• Can you specify which revenue items are most impacted as a result
• f COVID-19 closures and if any areas of city finances that have

remained stable or have increased collections?

• The two areas most impacted as a result of COVID-19 closures are sales

taxes and fines & forfeits revenue items. These two areas represent over 96% of our estimated losses.

• As of April 30, 2020, over 97% of property taxes have been collected,

currently representing the most stable revenue source for the city.

UNAUDITED PRELIMINARY PROJECTIONS FOR ILLUSTRATIVE PURPOSES ONLY

8

Impact of COVID-19 on Revenue

• Can you provide the underlying assumptions on which any revised estimates

are based (e.g. length of the estimated closure of non-essential businesses, impact of conventions/events that will be eliminated, decline in hotel

• ccupancy etc.)?
• With a high degree of uncertainty surrounding the pandemic, assumptions tend

toward caution.

• We assume official closures of businesses and public spaces will be approximately mid-March

through mid-May, in some instances possibly extending longer, and that schools will not reopen for the 2019-2020 school year.

• All major events are assumed to be canceled or postponed, and essentially all conventions are

assumed to be absent.

• We assume hotel occupancy rates will be less than 10% through June, and not more than 15%

by autumn; we base these assumptions of hotel occupancy on estimates provided by New Orleans & Company.

• Further, we assume that individual decisions will, on average, be cautious in response to the

lifting of restrictions; for example, flight bookings will only gradually increase throughout the year.

UNAUDITED PRELIMINARY PROJECTIONS FOR ILLUSTRATIVE PURPOSES ONLY

Fund Balance

2. 2.

10

Fund Balance

• What is current estimated fund balance for the general fund?
• In July 2019, we implemented several components of our new ERP (BRASS, AVL

Tax system, and INOVAH) systems. Six months later, the city experienced a cyber-attack that required most of our financial resources to dedicate our efforts to recover.

• As a result, we had to delay the submission of our CAFR by several months.

Based on a high-level estimate and consistent with the information submitted in the FY2018 CAFR, we anticipate the FY2019 fund balance to total over $100 million.

UNAUDITED PRELIMINARY PROJECTIONS FOR ILLUSTRATIVE PURPOSES ONLY

11

Fund Balance

• Is either the fund balance or the rainy-day fund calculated in the

estimate of any projected deficit for FY2020?

• No, the fund balance nor the rainy-day fund is calculated in the estimated
• f any projected deficit for FY2020.
• Have all the collected property tax checks been deposited? If not,

how many remain undeposited, and why?

• Yes, all collection property tax checks have been deposited.

UNAUDITED PRELIMINARY PROJECTIONS FOR ILLUSTRATIVE PURPOSES ONLY

12

Appropriations from the Savings Fund may only be made when one or more of the conditions have been met:

• 1. An emergency which threatens widespread loss
• f life or grievous injury to health or property
• 2. A significant loss in City revenues due to an

economic downturn of serious proportions has

• ccurred or is occurring
• 3. A mandate by the United States Government that

has been determined by the City Attorney to be in accordance with law

$27.0M $28.9M $31.0M $25.0M $26.0M $27.0M $28.0M $29.0M $30.0M $31.0M $32.0M 2018 Actual 2019 Forecast 2020 Forecast

Emergency Savings Fund (October 2019 REC Forecast)

Savings Fund of the City of New Orleans

City ordinance requires the Rainy Day Fund’s appropriation to be 5 percent of the average of the previous five years of actual General Fund expenditures

UNAUDITED PRELIMINARY PROJECTIONS FOR ILLUSTRATIVE PURPOSES ONLY

Expenditures

3. 3.

14

• 2020 data through pay periods

ending March 28th (Commissioned Officers) or April 4th (Administrative)

• No change in FTE count for any

department, except NOPD hiring for three (3) recruit classes

• Overtime Methodology: 25 percent

reduction in prior-year spending for all departments except Fire, EMS, and JJIC (no reduction)

• Terminal Leave Methodology: prior-

year spending

$23.3M $61.0M $92.4M$133.3M $169.1M $204.9M $240.7M $276.4M $312.2M $348.0M $383.8M $419.6M $0M $50M $100M $150M $200M $250M $300M $350M $400M $450M Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Spending ($M)

Budgeted YTD Spending Projected Spending

2020 Personnel Spending

Year-to-date personnel spending patterns suggest that the City will end the year in a surplus of $16.7M

UNAUDITED PRELIMINARY PROJECTIONS FOR ILLUSTRATIVE PURPOSES ONLY

Full-Year Budgeted:$436.4M PROJECTED SURPLUS: $16.7M

Model Assumptions Year-to-Month Total Personnel Spending in 2020

15

2020 Other Operating Spending

Departments were tasked with developing a thoughtful and comprehensive budget reduction plan

UNAUDITED PRELIMINARY PROJECTIONS FOR ILLUSTRATIVE PURPOSES ONLY

OBLIGATED FUNDS

$121.4M

46.1% of total budgeted

Three types of obligated funds: 1. Expenditure: money that has been spent for the delivery of goods or services 2. Encumbered: approved funding for a purchase order (PO) or a contract 3. Committed: funding tied to a requisition that has yet to be approved/processed and turned into a PO

UNOBLIGATED FUNDS

$142.1M

53.9% of total budgeted

The unobligated funds figure may be overstated because:

• Departments may have legal obligations or settlements that have not yet

been committed or encumbered

• Departments may have not encumbered expenses that are central to

fulfilling the essential duties of city government

TOTAL OTHER OPERATING BUDGET: $263.5M

16

Managing General Fund Expenditures

• Hiring and Spending Freeze: anticipate current freeze on spending lasting for the rest of the 2020 fiscal

year and possibly into Q1 or Q2 of 2021

• What impact is this having on the operations of the City?
• Besides closing City Hall, there have been no major impacts on the operations of the City (a mix of staff working onsite

and remotely to accommodate)

• Moved online for certain customer operations (such as Safety and Permits)
• Not reduced any activity for infrastructure projects or capital projects
• Current funding priorities:
• COVID-19 related expenses
• Personnel and benefits costs
• Core government functions related to public safety
• Core government functions that produce revenue

The significance of the COVID-19 public health crisis will require the City to rethink how we budget and finance operations

COVID-19 Expenses

4. 4.

18

COVID-19 RESPONSE EXPENDITURE SUMMARY

AS OF THURSDAY APRIL 30TH

TOTAL EXPENDITURES PERSONNEL $2,087,865.31 OTHER OPERATING $2,439,031.51 TOTAL SPEND $4,526,896.82

PERSONNEL SPEND 3.1.2020 to 4.25.2020

NEXT UPDATE PROVIDED 05.07.2020

DEPT REGULAR TIME OVER TIME TOTAL HOURS

CAO $116,959.29 $356.63 3,093 COUNCIL $182,040.37 $0.00 4,193 DPW $2,823.82 $0.00 51 ED $9,292.67 $0.00 214 FINANCE $9,223.93 $0.00 121 FMC $10,244.10 $0.00 255 LAW $19,725.08 $0.00 349 MAYOR $474,841.91 $1,137.50 12,157 MOSQUITO CONTROL $14,660.16 $361.08 504 MSY $62,363.58 $31.17 1,404 OCD $50,033.77 $0.00 1,523 PARKS & PARKWAYS $15,286.75 $1,552.11 1,346 PDU $75,330.89 $0.00 1,408 PROPERTY MGMT $3,743.54 $186.50 236 SANITATION $4,527.34 $588.54 505 WORKFORCE DEV $9,164.78 $0.00 177 TOTAL $1,060,261.98 $4,213.53 27,533

TOTAL EXPENDITURES EMERGENCY PURCHASES BY CATEGORY

PERSONNEL SPEND 3.1.2020 to 4.25.2020

NEXT UPDATE PROVIDED 05.07.20

DEPT REGULAR TIME OVER TIME TOTAL HOURS

CORONER $61,159.58 $1,613.55 2,444 FIRE $299,836.71 $94,421.52 25,411 HEALTH $153,069.04 $3,469.17 5,421 NOEMS $109,954.74 $9,016.03 5,059 POLICE $273,447.74 $17,401.72 10,336 TOTAL $897,467.81 $125,921.99 48,670 EMERGENCY PURCHASE SPEND BY CATEGORY

UPDATES PROVIDED DAILY

CATEGORY TOTAL SPEND

CLEANING SUPPLIES $54,371.77 FOOD $94,539.40 ITI $842,900.86 MEDICAL SUPPLIES $32,036.57 OPERATIONS $269,215.96 PPE $723,920.63 PUBLIC SANITATION $63,726.00 SOAP/SANITIZER $108,320.32 STAFFING $200,000.00 TRANSLATION $50,000.00 TOTAL$2,439,031.51

CLEANING SUPPLIES FOOD ITI MEDICAL SUPPLIES OPERATIONS PPE PUBLIC SANITATION SOAP/SANITIZER STAFFING TRANSLATION

46% 54%

PERSONNEL OTHER OPERATING

19

DETAILED OTHER OPERATING SPENDING

AS OF THURSDAY APRIL 30TH PM

CLEANING EANING SUPPLIE IES EMS $4,622.51 MTRC $22,207.79 NOFD $675.60 NOHSEP $5,675.14 OCD $2,576.31 PROPERTY MGT $14,403.40 PUBLIC WORKS $4,211.02 FOOD NOHSEP $94,539.40 TECHN ECHNOL OLOG OGY CAO-CREDIT CARD $98.26 ITI $800,411.23 MAYOR'S OFFICE $29,520.00 NOHSEP $290.97 OCJC $12,580.40 MEDICA DICAL L SUPPLI LIES ES EMS $9,755.22 NOHSEP $246.46 HEALTH DEPT $5,303.50 NOFD $16,731.39 TRAN ANSLA LATION ON HEALTH DEPT $50,000.00 OPERATION IONS HEALTH DEPT $6,400.34 NOHSEP $86,569.17 NOFD $1,010.10 PROPERTY MGT $18,560.95 CORONER $56,275.40 MAYOR’S OFFICE $100,400.00 PPE PPE EMS $187,234.45 EMS/NOPD $4,812.00 NOFD $4,284.25 HEALTH DEPT $24.40 NOHSEP $526,644.34 PROPERTY MGT $921.19 PUBLIC IC SANIT NITATION ION HEALTH DEPT $49,290.00 PROPERTY MGT $14,436.00 SOAP AP/S /SAN ANIT ITIZER IZER MTRC $62,326.00 NOHSEP $42,025.88 PROPERTY MGT $2,218.44 NOFD $1,750.00 STAFF AFFING ING NOHSEP $200,000.00

EMERGENCY PURCHASES DATE SPEND DATE SPEND 03/13/2020 $1,696.64 04/03/2020 $44,850.50 03/14/2020 $10,845.00 04/06/2020 $5,328.12 03/15/2020 $71,307.79 04/07/2020 $67,294.54 03/16/2020 $140,157.14 04/08/2020 $3,903.14 03/17/2020 $780,835.97 04/09/2020 $10,794.04 03/18/2020 $156,036.20 04/10/2020 $10,118.00 03/19/2020 $28,508.78 04/14/2020 $18,372.31 03/20/2020 $49,082.40 04/15/2020 $102,246.23 03/21/2020 $9,552.36 04/16/2020 $2,354.51 03/22/2020 $1,000.00 04/18/2020 $25,088.00 03/23/2020 $29,025.47 04/19/2020 $310.00 03/24/2020 $14,401.09 04/20/2020 $7,631.76 03/25/2020 $209,634.45 04/21/2020 $8,348.11 03/26/2020 $32,324.76 04/22/2020 $16,731.39 03/27/2020 $22,671.38 04/23/2020 $576.72 03/28/2020 $69,149.00 04/24/2020 $665.75 03/30/2020 $23,638.92 04/26/2020 $12,100.00 03/31/2020 $44,352.55 04/27/2020 $4,2000.00 04/01/2020 $284,523.28 04/30/2020 $7,963.81 04/02/2020 $111,411.40

• TOTAL: $2,439,031.51

$- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000

EMERGENCY SPEND PER DAY

20

DETAILED PERSONNEL SPENDING

AS OF THURSDAY APRIL 30TH 2020 NEXT UPDATE PROVIDED THURSDAY 5.07.2020

TOTAL PERSONNEL SPEND BY DEPARTMENT TOTAL HOURS WORKED BY DEPARTMENT

TOTAL HOURS TOTAL SPEND ($)

CAO Coroner Council DPW ED Finance Fire FMC Health Law Mayor Mosquito Control MSY OCD Parks & Parkways PDU Police Property Mgmt Sanitation Workforce Development 5000 10000 15000 20000 25000 30000 50000 100000 150000 200000 250000 300000 350000 400000 450000 500000 Sum of OT Earnings Sum of Earnings Sum of Hours

21

Federal CARES Act

• Since the declaration of a nationwide disaster, the City has been working with FEMA

to receive reimbursement for some expenses related directly to the COVID-19 response (Expenditure documents provided to Council anticipate that these costs will be reimbursed)

• Federal CARES Act includes significant funding that could be utilized by the City to

fund both incurred and projected expenses related to the COVID-19 response (Expenditure documents provided to Council do not currently account for any reimbursement from the CARES Act)

Expenditure documentation provided excludes FEMA-eligible expenses but does not anticipate CARES Act funding, as the funding level available is still uncertain

22

Federal CARES Act (cont’d)

• Louisiana received $1.8B from the CARES Act’s Coronavirus Relief Fund
• Fund can cover a wider array of expenses related to COVID-19 impacts but are solely

expenditure-based and cannot compensate for lost revenues

• City is working with the State to gain clarity on how much of this funding New Orleans will

receive

• City will also receive direct allocations of CARES Act funding via formula grant

programs, such as the HUD CDBG and DOJ Byrne JAG programs

• City is analyzing the regulations of these programs to ensure that funding is allocated to
• ur areas of greatest need

City is working to leverage federal assistance to the greatest possible degree to

• ffset costs related to COVID-19 response

Workforce Status

5. 5.

24

Total Vacancies: 290.58 FTEs (General Fund and Non-General Fund)

• In 2020, the 100 new FTEs that were allocated include:
• 71.00 grant-funded positions
• 28.95 General Fund FTEs
• Filled positions: 3,927.53 FTEs (current snapshot)
• Adopted positions: 4,116.01 FTEs
• Filled positions: 574.06 FTEs (current snapshot)
• Adopted positions: 676.16 FTEs

Vacancies and Full-Time Employees (FTEs)

Due to the hiring freeze, no current or future vacancies are filled unless expressly authorized by the CAO 2020 General Fund 2020 Non-General Fund

25

DEPARTMENT LEVEL CIVIL LEAVE USE – REPORTED BY ADP

THIS DATA COVERS PAY PERIODS WHICH ENDED BETWEEN MARCH 7 AND APRIL 25 LAST UPDATED 4.30.2020 NOTE: EMPLOYEES MAY BE USING CIVIL LEAVE FOR REASONS OTHER THAN COVID-19, SUCH AS JURY DUTY

Agency

Number of Employees who have Used Civil Leave Total Department Employees Percent Employees Who Have Used Civil Leave Total Civil Leave Used (Hours) Total Amount Spent

Agency

Number of Employees who have Used Civil Leave Total Department Employees Percent Employees Who Have Used Civil Leave Total Civil Leave Used (Hours) Total Amount Spent

Library 222 238 93.3% 15,906 $329,496 Clerk of CDC 78 85 91.8% 13,816 $186,581 EMD 30 37 81.1% 2,543 $52,641 Juvenile Court 22 28 78.6% 1,148 $23,771 New Orleans Aviation Board 147 202 72.8% 6,802 $150,105 Code Enforcement 29 43 67.4% 1,950 $41,338 Municipal and Traffic Court 77 119 64.7% 7,294 $163,038 French Market Corporation 31 50 62.0% 1,700 $30,633 NORD-C 130 238 54.6% 6,584 $88,731 Public Works 95 203 46.8% 3,651 $58,727 Safety and Permits 43 99 43.4% 4,412 $96,942 Finance 55 133 41.4% 3,011 $69,098 NOEMS 58 165 35.2% 2,540 $58,668 City Council 26 74 35.1% 2,307 $59,722 Municipal Yacht Harbor 1 3 33.3% 63 $963 Property Management 27 82 32.9% 1,748 $32,257 NOBC 1 4 25.0% 168 $4,780 Cultural Economy 2 8 25.0% 140 $4,058 Human Services 15 68 22.1% 865 $14,538 OCJC 2 10 20.0% 84 $3,071 Mosquito Control Board 8 44 18.2% 340 $6,623 Sanitation 11 72 15.3% 1,047 $12,567 Fire Department 87 591 14.7% 7,490 $131,635 Police 214 1454 14.7% 23,881 $555,605 Civil Service 4 28 14.3% 369 $5,601

Agency

Number of Employees who have Used Civil Leave Total Department Employees Percent Employees Who Have Used Civil Leave Total Civil Leave Used (Hours) Total Amount Spent

Health Department 12 96 12.5% 721 $12,625 Community & Economic Dev 6 57 10.5% 311 $10,258 ITI 4 47 8.5% 213 $6,479 Intergovernmental Relations 1 12 8.3% 133 $2,331 OPSE 1 12 8.3% 49 $1,999 NOHSEP 2 37 5.4% 150 $4,325 Chief Administrative Office 2 39 5.1% 133 $3,619 Parks & Parkways 7 142 4.9% 453 $11,793 Office of the Mayor 1 34 2.9% 63 $3,824 PDU 4 144 2.8% 210 $7,536 Law Department 1 69 1.4% 63 $1,235 Capital Projects 4 0.0% $0 City Planning Commission 20 0.0% $0 Coroner's Office 29 0.0% $0 Ethics Review Board 2 0.0% $0 HDLC 12 0.0% $0 Judicial Retirement 2 0.0% $0 Neighborhood Engagement 9 0.0% $0 New Orleans Museum of Art 2 0.0% $0 Independent Police Monitor 7 0.0% $0 Inspector General 15 0.0% $0 Resilience 3 0.0% $0 Supplier Diversity 7 0.0% $0 Vieux Carre Commission 6 0.0% $0 Workforce Investment 5 0.0% $0 Youth and Families 4 0.0% $0

26

200 400 600 800 1000 1200 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 03/07/2020 03/14/2020 03/21/2020 03/28/2020 04/04/2020 04/11/2020 04/18/2020 4/25/2020 Total Hours Number of Employees

CITY-WIDE CIVIL LEAVE USE – REPORTED BY ADP

THIS DATA COVERS PAY PERIODS WHICH ENDED BETWEEN MARCH 7 AND APRIL 25 LAST UPDATED 4.30.2020 NOTE: EMPLOYEES MAY BE USING CIVIL LEAVE FOR REASONS OTHER THAN COVID-19, SUCH AS JURY DUTY

CITY-WIDE CIVIL LEAVE USE BY PAY PERIOD

PAY PERIOD END DATE NUMBER OF EMPLOYEES TOTAL HOURS TOTAL COST

03/07/2020 10 73 $1,879 03/14/2020 10 185 $3,861 03/21/2020 313 8,558 $180,203 03/28/2020 237 9,221 $200,140 04/04/2020 1084 57,389 $1,149,970 04/11/2020 284 16,997 $358,762 04/18/2020 263 12,419 $180,714 04/25/2020 150 7,512 $171,683 TOTAL 112,354 $2,247,211

CITY-WIDE CIVIL LEAVE USE

EMPLOYEES WHO HAVE USED CIVIL LEAVE AT LEAST ONCE TOTAL EMPLOYEES PERCENT USING CIVIL LEAVE IN SELECTED PAY PERIODS TOTAL HOURS USED TOTAL COST

1456 4894 29.8% 112,354 $2,247,211 CIVIL LEAVE USE BY PAY PERIOD

TOTAL COST ($) NUMBER OF EMPLOYEES

CIVIL LEAVE COST PER PAY PERIOD

03/07/2020 03/14/2020 03/21/2020 03/28/2020 04/04/2020 04/11/2020 04/18/2020 04/25/2020

Use of COI

6. 6.

28

Certificate of Indebtedness (COI)

• Based on the request for Council approval of a COI - What is the final

proposed amount of the bond issuance? What are the terms of issuance (expected interest rate, annual debt payment, payoff date etc.)?

• The City, therefore, desires to incur debt and issue not exceeding One Hundred

Million Dollars ($100,000,000) of its Revenue Notes, in one or more series (the "Notes"), for funding operations and expenses in the current and upcoming fiscal years, to mature no later than fifteen (15) years from the date thereof, and to bear interest at a rate or rates not to exceed six per centum (6%) per annum. The Notes shall have such additional terms and provisions as may be approved by this Council, and the proceeds of the Notes may be advanced on an "as needed" basis.

29

Certificate of Indebtedness (COI)

• What city collateral is proposed to back the proposed COI (e.g. general

fund revenues)? Is the city’s current financial shortfall expected to adversely impact the terms of the debt issuance?

• The Notes shall be secured by and payable from a pledge of the City’s ad valorem

tax of thirteen and ninety-one hundredths (13.91) mills, to be levied and collected annually in each year in perpetuity, and additionally or all revenues to be received by the City. In contrast, the Notes are outstanding to the extent such revenues are available for the payment of debt service on the Notes.

• The City’s ad valorem tax is a stable revenue source as over 95% of taxes are

generally collected within the first three months of the year. Therefore, by pledging ad valorem tax to secure and make debt service payments should be looked upon as favorable.

30

Certificate of Indebtedness (COI)

• What are the necessary costs that the $100 million COI will cover?

And what methodology is used to figure out this amount?

• The funds, as a result of the COI, are anticipated to cover the approved

cost within the FY2020 budget. However, today’s action is only allowing the City to submit our application to the State of Louisiana Bond

• Commission. It doesn’t give the approval for the City to complete a

transaction with a lending institution. Besides, the $100 million represent a not to exceed the amount in which the actual amount will be determined after necessary budget adjustments.

31

Certificate of Indebtedness (COI)

• What criteria will be used to decide how regularly and for what

reasons the COI will be drawn down on?

• As funding is needed.
• 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?

• The Notes shall be secured by and payable from a pledge of the City’s ad valorem tax of

thirteen and ninety-one hundredths (13.91) mills, to be levied and collected annually in each year in perpetuity, and additionally or all revenues to be received by the City.

32

Resolution for $100M of Revenue Notes

• Gives preliminary approval to the issuance of $100M of revenue notes in one
• r more series
• Allows for the submission of the application to the State Bond Commission

(SBC) for approval, which is required before the City can borrow funds

• Loan Requirements:
• To mature no later than 15 years
• Interest rate to not exceed 6 percent annually
• Notes must be secured by and payable from a pledge of the City’s ad valorem tax of

13.91, to be levied and collected annually

The goal of the Resolution is to secure funding to ensure the continuity of essential government functions

33

Status of Outstanding Debt

• What is the status of the city's current outstanding debt which is

funded via the general fund?

• The city has three outstanding debts outstanding,
• Series 2012 issued for $195,885,000 (paid down to the current balance of

$145,250,000)

• Series 2018 for $10,000,000 (paid down to the current balance of $7,295,000)
• Series 2017 for 10,000,000 (paid down to the current balance of $8,565,000)
• The series 2012 will mature in FY2030, series 2016 in FY 2026, and

series 2017 in FY2027.

Pension System

7. 7.

35

Impact on NOMERS

• What is the expected impact to the Employees' Pension System as a result of

the city's financial challenges resulting from COVID-19? Specifically, what are the expected impacts if furloughs and/or layoffs implemented?

• Any furloughs or layoffs that may occur will not impact actuarial valuation results until January 1, 2021,

actuarial valuation. That calculates the actuarial determined contribution (ADC) for 2022. The City’s contribution for 2021 will be calculated in the 2020 valuation (as of January 1, 2020) and will not be impacted by any furloughs or layoffs that may occur after January 1, 2020. The impact on those valuations due to furloughs or layoffs will depend on how many employees are

• affected. Taking three factors in consideration.
• 1. Whether there is a permanent layoff or a furlough
• 2. The length of the furlough
• 3. How the service time is handled
• If there is a temporary furlough and employees are made whole as was done previously, there should be

minimal impact if the employer contributions are made as required in 2020. If there is a longer-term furlough, it will take employees longer to reach retirement eligibility, as well as additional employee contributions will not be made during that period.

36

Impact on NOMERS

• Can the city continue to make its employer contributions to the

fund for FY2020?

• Yes, the city will continue to make contributions to the pension fund for

FY2020.

• Is the fund currently in a solid position to meet the current retiree

benefits?

• Yes, the pension fund is in a solid position to meet the current retiree

benefits.

37

Retirement Eligible Personnel

There are 297 employees that are (a) funded through the General Fund, (b) enrolled in NOMERS (does not include commissioned police or fire), and (c) currently eligible to collect retirement benefits

Projected Savings $10.6M Terminal Leave Liability $5.6M

Projected Savings if Retired by First Week of May

• While the City saves money from salaries

and benefits when an employee retires, it is also responsible for paying out terminal leave (accumulated annual and sick leave)

• Therefore, even though the City would save

~$1M per pay period from retirements, it is liable for up to $5.6M in payments due immediately after retirement

Miscellaneous

8. 8.

39

Cyber Attack Recovery Expenses

• Anticipated total for cyber attack recovery: $7.5M ($4.4M has already

been spent or encumbered)

• During our last report to the Budget Committee, we anticipated a total of

$7.2M in expenses

• $300k change is primarily the result of obtaining more accurate quotes for work

related to NOPD networking (routers for vehicles)

• The City is currently in a spending freeze and we have stopped moving

forward with non-urgent items, including expenses related to cyber attack recovery

Spending on non-urgent purchases has halted during COVID-19 response

40

Cyber Attack Recovery Expenses (cont’d)

Committed Anticipated

Of the $7.5M in anticipated costs, a total of $4.4M has been encumbered to date

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Hard Rock Collapse

Cost estimates to the City have not changed since the last report to Council Budget Committee

Cost Type Item Amount

Damages

Street, subsurface, and drainage repair estimate for Rampart $1,200,000 Capital damage estimate to street cars, line poles, infrastructure $850,000 Roof repair estimate for Saenger

$750,000 Lost Revenue

Changes to RTA operations including new and alternate routes

$3,210,000

Lost fare box revenue

$1,605,000

Saenger estimated losses from wicked

$100,000 Personnel

Public safety, leadership, and support payroll

$2,219,000 Public Safety

24/7 Firewatch at Hard Rock site estimate

$927,801

Public safety vehicles, equipment, apparatus, etc

$256,115

Engineering consulting contract

$250,000

NOHSEP mobile command

$153,000

OPSE details from 10-25 through 11-12 (outstanding invoice owed by 1031 Canal Development)

$70,000

NOPD mobile command

$20,184

Public safety vehicles - fuel

$13,000

Trash collection at command center

$10,164

Light tower rental and fuel

$10,000

6x40 containers to protect Saenger (including delivery)

$8,000

Misc supplies (paper, printer ink, pens, markers, batteries)

$7,753

Towing vehicles out of garage next to Hard Rock site

$5,000

Door knocker warnings - English & Spanish

$1,446

LSP transportation bill - Crane

$1,210

Personal protective equipment (earplugs and respirators)

$433 ESTIMATED TOTAL $11,668,106

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Restricted Funds

• 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?

• The city is evaluating all funds, including the Harrah’s payments, to replace

the anticipated FY2020 shortfall.

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Restricted Funds

• What needs to happen for the City to access the $46 million in

restricted funds?

• A portion of the $46 million is the rainy-day fund. The action of City Council

is required before accessing these funds. The remaining dollars are restricted due to advance payments for HUD and FEMA related costs. To access these funds, the City requires reimbursement from the aforementioned grantor.

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Bond Indebtedness in 2022

• 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?

• All available funds will be factored into the development of the upcoming

year’s budgets.

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• Infrastructure
• Maintenance
• Housing
• Economic Development
• Library
• Early Childhood Education

Expiring Millages

In light of the COVID-19 pandemic, the City is developing a proposal for the group of millages that are set to expire in 2021 Potential Uses of the Millage

Millage 2019 Mills 2020 Mills

• Est. Revenue from

Authorization

• Est. 2020 Revenue

from Levy Neighborhood Housing Improvement Fund (NHIF) 0.91 0.91 $3.5M $3.5M Street & Traffic Control Devices 1.90 1.77 $7.4M $6.9M Capital Improvement Fund 1.82 0.56 $7.0M $2.2M Economic Development Fund 0.91 0.00 $3.5M

• Library

3.14 2.58 $12.2M $10M TOTAL 8.68 5.82 $33.6M $22.6M