New Orleans' Downtown Development District claims city may have improperly diverted special funds to pensions

By Justin Stoltzfus | May 23, 2018

A May 15 report from KSLA-TV said the Downtown Development District of New Orleans, a local agency working on economic growth and revitalization, filed a lawsuit in Orleans Parish Civil District Court claiming the city of New Orleans is diverting funds meant for other activities to its pension funds.

Like other municipalities all over the country, New Orleans has a problem with pension costs. But is it robbing Peter to pay Paul to pay down pensions?

A May 15 report from KSLA-TV said the Downtown Development District of New Orleans, a local agency working on economic growth and revitalization, filed a lawsuit in Orleans Parish Civil District Court claiming the city is diverting funds meant for other activities to its pension funds.

In its legal efforts, the district is contending that special tax revenues have to go toward specific mandated activities and not used just anywhere in the city’s budget. Critics of less transparent spending policies have asked why money is kept in separate funds at all, unless it’s to maintain good fiscal stewardship.

A response from the city in the KSLA report cites the opinion of some city officials that the Downtown Development District is quite late in filing the suit since a 2007 decision was supposed to resolve some of the funding issues.

The city is also calling for more time to help get the mayor’s department caught up on understanding the tax allocation process.

In comments May 22,Downtown Development District Director Kurt Weigle, told the Louisiana Record he is very limited in what he can say to the press.

Weigle did offer an official statement exclusively to the Louisiana Record.

“The Downtown Development District has a fiduciary responsibility to the taxpayers of the downtown,” Weigle said. “That is the reason for this lawsuit.”

Weigle referred the Louisiana Record to the court reports. “Anything else you want would be in the pleadings,” he said.

As for the pension funds, many who have been reading the news know that New Orleans' pension funds have been under pressure for a while. Many factors are cited by analysts, including outsized disability payouts to retired firefighters. Meanwhile, officials in local agencies are following the suit as it works its way through the courts.

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