Updated 09/12/13: Edited for typos
The City’s Capital Budget is a little understood and even less participated in process. It is, however, an important process, because on September 24, the City Planning Commission will recommend approval of a 5-year Capital Improvement Plan (CIP) with over $1 billion worth of projects. More information about the CIP can be found on the City Planning Commission’s website.
Capital Budget Process
First, a capital project is for a “permanent physical improvement.” It is a one-time expense that is expected to have a normal life of tens years or longer. Capital projects are investments in infrastructure (streets) and city facilities/buildings (City Hall, police & fire stations, parks, libraries, community centers, etc). The Capital Budget is for one-time spending on large projects, while the Operating Budget is for the City’s reoccurring expenses for things like personnel, office supplies, computers, vehicles, etc. This article will focus on the City’s capital projects and budget.
Here is how the process works. In April, all of the City departments submit their project ideas to Capital Projects Department, who work to turn the ideas into capital budget requests. In June, all of these capital budget request go to the City Planning Commission (CPC) staff, who review the requests, and hold public hearings with departments in June and July. City Planning staff then works with the Administration to produce a Capital Improvement Plan (CIP) that the City Planning Commission will vote on at its September 24th meeting.The CIP then goes to the Mayor for his final review, before he submits his 2014 Capital Budget to the City Council by November 1. City Council will consider the Capital Budget along with the Operating Budget, both of which need to be approved by December 1.
Input in Capital Budget
What about people’s opportunity to have any input in the process? There are two opportunities for public input: first with the City Planning Commission and then with City Council. In June and July, City Planning held public hearings on each department’s capital budget request. These meeting were open to the public. I attended about five to eight of these hearings, and they were very poorly attended. For Public Works, there was four or five people in attendance, but most of the time it was just me and maybe one other person. In one case the department representative did not show up and the meeting had to be rescheduled. After the department reviews, City Planning Commission holds public hearings on the CIP. The first hearing was at their September 10 meeting, and only one person spoke about the Capital Budget.
Those opportunities have passed, but there are a couple of remaining opportunities. On September 24, the City Planning Commission will hold a second public hearing on the CIP before they vote on their recommendation to the Mayor. If you want to provide input you can make an oral comment at the September 24 City Planning Commission meeting or you can submit a written comment by mail (1300 Perdido Street, 7th Floor, New Orleans, LA 70112) or email email@example.com by the close of business on Monday, September 16th. The final opportunity for input is with City Council, who review the Capital Budget at a Budget Committee meeting on the Capital Budget sometime in late October or early November. You can provide you input to Council anytime before the Capital Budget is adopted on December 1.
Need for a More Participatory Process
The City has this process to provide input into the Capital Improvement Plan, but there has been (and will be) very few public comments made about this $1 billion plan. I can see why. There is very little knowledge of the capital budget requests, and even less understanding of the process. All of the meetings take place during the day, so it is difficult for people to make it (if they even know about them). Finally, people do not feel empowered to provide their input. It is one thing to have public meetings, but it is a complete different thing to be proactive and go out to the community to educate them and solicit their input.
Other cities have a much more proactive process, that even gives the decision making authority to the residents for part of the Capital Budget. New York, Chicago, Vallejo, California, and other cities around the world have Participatory Budgeting (PB) to decide how to spend part of their Capital Budget. In these cities, residents come together to brainstorm ideas about how to improve their community. Then resident volunteers work with City Hall employees to turn these ideas in projects with a plan and a budget. These projects are then put on a ballot where residents vote on which projects they want the most. Then the City implements the projects that received the most votes. This 3-minute video does a great job of explaining the PB process.
PB completely flips the engagement and decision making dynamic. In New Orleans, most people do not have an opportunity to provide input, and those who do see that the decision makers are not accountable to their input. With PB, we would not be dependent on decision makers to consider our input, we would be the decision makers. Currently, the New Orleans Coalition on Open Governance and its Participatory Budgeting New Orleans campaign is working to bring PB here!
Capital Budget Revenue Sources
As previously mentioned, the City’s 5-year Capital Improvement Plan is over $1 billion. Much of this money comes from sources where the City does not have much control in how it is spent. The largest source of funding is $712 million of self-generated funds. This is money raised by quasi-governmental agencies, such as the French Market Corporation, the Upper Pontalba Building, and the New Orleans Aviation Board, and the money stays in the capital budgets of these agencies.
The second largest source of funds in from FEMA reimbursements. There is $261 million available for the City to repair roads, buildings, and parks that were damaged by Hurricane Katrina. Most of this money is for roads ($250 million), and FEMA determines what roads were damaged, so the City doesn’t have much of a say in where these funds are spent. There is also almost $30 million in Federal Roadway Funds and State Capital Outlay Funds. This money is tied to specific projects, so once again the City does not decide how these dollars are spent.
The only source of money where the City has discretion to decide which capital projects it will fund is with the General Obligation Bonds. Back on November 2, 2004, City voters approved a $260 million bond measure, and $56.6 million is what remains from the 2004 vote. All of the remaining bond money is allocated for 2014, so after next year, the City will not have any discretionary money to build capital projects in New Orleans. This means that the City will have to stop doing capital projects, or ask the voters to approve another bond measure (which will be payed for with a tax increase).
Capital Budget Expenditures
$1 billion will pay for a lot of projects, but this is much larger than it sounds, because two-thirds of that money ($706 million) is for a new terminal and other improvements at the Louis Armstrong Airport (Didn’t we just spends a few hundreds of millions of dollars renovating the Airport for the Superbowl?). Here is a breakdown of how much of the rest of the money is allocated:
- $308 million will go to Public Works for street improvement projects. Most of this money ($251 million) comes from FEMA with the rest from General Obligation Bonds and Federal Roadway Funds.
- $20.3 million for a new Civic Center at Charity Hospital. There are a lot of questions about this proposal, not the least being at a total cost of $300 million, where will the rest of the $280 million come from? There is also a question about how this proposal would work without Civil District Court. Finally, $7.3 million come from FEMA funds due to the damage of the current City Hall, so what happens if this money goes to Charity and the City Hall proposal does not work there?
- $9.5 million is for parks and recreation projects that will go to Parks and Parkways, NORDC, City Park, and Audubon Park.
- $5.7 million will go to public safety. About $3 million will go to new and renovated fire stations, and $2.2 million go to a new 2nd District Police Station (it is unclear how they will pay for the $5.5 million total project cost).
- $2 million will go to the libraries and the Museum of Art.
These are just the highlights of how the $1 billion Capital Budget will be spent. For more details and information on specific projects, you will need to look at the draft 2014-2018 Capital Improvement Plan.
Hopefully this article provided some insight in the City’s current Capital Budget process and how the process could be improved. To provide your input on the proposed CIP, you can email CPCINFO@nola.gov by Monday, September 16 or attend the Tuesday, September 24 City Planning Commission meeting. If you want to learn more about bringing Participatory Budgeting to New Orleans, you can visit https://www.facebook.com/pb4nola or contact OpenGovNola@gmail.com.
Nick Kindel is Citizen Participation Project Coordinator at Committee for a Better New Orleans. You can reach him at (504) 267-4665 or firstname.lastname@example.org.
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