Mayor's Office responds to looming payroll problems

NEW ORLEANS — Thousands of city employees could go without pay as New Orleans faces a growing cash-flow crisis.

Already facing a multi-million dollar deficit, city officials warn New Orleans might not be able to meet payroll after federal reimbursements slowed during the government shutdown.

How exactly the city got to this point isn’t totally clear, but Budget Chair Joe Giarrusso says the shutdown played a role. New Orleans still is receiving federal dollars to fund Katrina projects across the city, and those FEMA reimbursements typically come after the city fronts the money.

“FEMA is a reimbursement project for the most part. So the city fronts the money, then FEMA reimburses,” Giarrusso said. He added that when the government shut down, it appears the reimbursements stopped coming.