In late January, top officials in Mayor LaToya Cantrell’s administration were divided over a key question about a proposed multi-million dollar settlement with New Orleans schools: Could the city even afford the deal?
On one side was Romy Samuel, the city’s finance director. She warned in a draft letter to the City Council of a “serious deficit which is projected to worsen by mid-year,” and noted potential doomsday consequences, including the possibility that the city would falter on payroll and vendor payment obligations.
On the other was her boss, then-Chief Administrative Officer Gilbert Montaño, Cantrell’s budget chief. Montaño cast doubt on the problem’s severity in a Jan. 27 email to Samuel debating the letter’s wording. He favored presenting the situation in gentler terms — removing mention of a “deficit” and “severe financial instability,” while cautioning against overspending the city’s fund balance.
“I believe that it is too early in the year and our numbers are too imprecise to forecast such an extreme fiscal cliff to the council/rating agencies/or the public,” Montaño wrote in an exchange reviewed by The Times-Picayune. “Every year our projections fluctuate, there are sizable variances between our projections and actual revenues and expenditures, and we seem to end the year with a surplus.”…