New Orleans Mayor LaToya Cantrell appears to have decided against honoring a $20 million, City Council-authorized settlement agreement with the Orleans Parish School Board, councilmembers announced on Saturday (Feb. 1). 

The agreement, which was intended to help the city’s schools pull out of an estimated $36 million deficit and settle a long-running lawsuit filed by the School Board against the city. Chief Administrative Officer Gilbert Montaño took part in settlement negotiations, and the council voted to approve the agreement in late November without any objection from the Cantrell administration. 

In a Saturday statement, councilmembers blasted the administration, saying the city is legally and morally obligated to carry out the agreement. 

“The refusal to fund the settlement is illegal,” Councilman Joe Giarrusso, who chairs the council’s budget committee, said in a statement. “The Council not only made this deal to help the children of New Orleans, but also expected it to be honored. The Administration’s refusal to help children is indefensible.”

Under the terms of the agreement, the $20 million was to be paid out in two payments, the first of which was supposed to go out before the end of 2024. As The Times-Picayune reported last month, the city missed that deadline

In a Friday email exchange with Giarrusso obtained by Verite News, City Attorney Donesia Turner indicated that Cantrell believes the settlement is too costly for the city. The city’s revenues are in flux after a series of executive orders by President Donald Trump signaled that federal funding to the city could be in jeopardy – a move that could threaten hundreds of millions of dollars that the city budgeted for 2025. Giarrusso and Montaño are expected to meet to review the 2025 budget in light of this.   

Turner also claimed that the council vote did not bind the city to settle.

“It is the Mayor, as the chief executive, who must decide whether to settle this litigation and, if so, the terms upon which it is to be settled,” Turner wrote. “The Mayor recognizes the services that the School Board provides and stands on her record of supporting school children and the School Board over the years. Likewise, she recognizes the City of New Orleans provides essential services that also require significant funding.”

Turner added that Cantrell met with NOLA Public Schools district leadership on Thursday “to discuss assisting them with their financial crisis.” Turner said Cantrell hoped to secure a settlement “that is also financially feasible for the City.” (On Saturday evening, Cantrell’s office released a statement containing the same language as Turner’s email.)

Turner’s email came in response to an inquiry from Giarrusso about the missed $10 million payment.

Giarrusso pushed back, pointing out that the administration participated in the agreement through Montaño, who even participated in a press conference outlining the terms of the deal.

Giarrusso said he would file legislation to allocate the money to the schools. He then threatened to cut executive branch budgets, eliminating “unnecessary spending,” including travel. 

“It will also become necessary to review every department that is not revenue generating to see if its existence is worthwhile,” he wrote. 

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Katie Jane Fernelius reports on the local government for Verite. Prior to joining Verite, she was an independent journalist and producer. Over the course of her career, she’s reported for and worked...