Protecting the city’s 8% reserve isn’t just fiscal discipline, it may be the only thing keeping the city from paying an extra $29 million in borrowing costs while a 2040 pension cliff creeps close, city leaders said.
Mayor Tom Arceneaux said lowering the reserve would threaten the city’s AA-level bond insurance, instantly driving up interest rates for future borrowing.
“Should you choose to drop it below 8%, that’s a $29 million risk,” Arceneaux told the council…