NEW ORLEANS — Today, the board that oversees New Orleans’ bonded indebtedness has authorized the City to sell more than $300 million in General Obligation (GO) Bonds.
This authorization will lead to the largest, one-time, new money tax-exempt bond sale in the City’s history. The New Orleans Board of Liquidation and City Debt authorized the bond sale after acceptable ratings were issued to sell bonds at the current market rate.
“Today’s decision by the Board of Liquidation is a historic moment. Due to the City’s quick and thorough response to the pandemic and the prudent fiscal measures we took, the City is in a strong place to begin leveraging allocated federal and state dollars to restore operations and continue to make progress for our residents” said Mayor LaToya Cantrell. “The result of these efforts recently led to the affirmation of our Bond Ratings from Moody’s and Fitch with our outlook upgraded to stable.”
“The Cantrell Administration has spent the last 4 years working diligently to stabilize and strengthen the financial position of the City of New Orleans, and we have seen many successes,” said Chief Administrative Officer Gilbert Montano. “The investments we have made in infrastructure in recent years have boosted our resilience to environmental risks, and we plan to strategically use these bond proceeds to continue this critical work. Bond funds will also be leveraged to build affordable housing and purchase vehicles and heavy equipment to begin replacing the City’s aging fleet.”
In November 2019, voters approved the City’s plans to sell $500 million in GO Bonds to fund its long-term capital projects. The first tranche of $300 million in GO bonds will be sold in late September with work to follow later this year. More than half of the $300 million will be used for street and subsurface infrastructure improvements that are not funded by the federal government; the remainder will be used for various projects improving our public spaces, stormwater management, and affordable housing, as well as for vehicles and equipment.
GO Bonds play an important role in allowing the City to fill in funding gaps for projects that are receiving a majority of funds through the FEMA-funded joint infrastructure program, managed by the Department of Public Works and the Sewerage and Water Board of New Orleans, or other restricted sources, as well as ensuring that projects are both fully funded and completed on time.
Currently, the City has nearly 70 roadwork construction projects underway, valued at $671 million, and is applying past lessons learned from these projects to this future bond-funded work. Some of the procedural changes include canceling, redesigning and rebidding certain projects; initiating a “phased in” task-order contract approach, ensuring, for example, that the first ten blocks of work gets completed prior to the contractor initiating work on the next ten blocks; and publicly providing “report cards” on city roadwork contractors.
“Since day one, the Cantrell Administration has been committed to spending the federal funds dedicated to making our roads safer and our city dryer,” said Deputy Chief Administrative Officer for Infrastructure Ramsey Green. “We now have a multi-billion-dollar infrastructure program underway – good progress is happening each day and we are aggressively making the procedural changes necessary to better hold contractors accountable to ensure more rapidly completed projects and improve the impact construction projects have on residents and their homes. These new bond funds will also give us an opportunity to use our local dollars to invest in green infrastructure and science and nature-based improvements to our public spaces to better reduce citywide flooding.”
The City will issue the remaining $200 million in GO bonds during the next several years to fund its long-term capital projects.