The City of New Orleans will pay public schools $20 million and fund several programs for the next decade.
The agreement partially bails out the district from a $36 million shortfall and ends its long-running legal dispute with the city over tax revenue.
Katie Baudouin, president of the Orleans Parish School Board, said on Monday that the cash ensures schools will be "close to whole, if not whole, this school year."
District officials accidentally inflated revenue projections shared with school leaders in March to budget for this school year. The district's chief financial officer left before officials acknowledged the mistake in early October.
Last week, Superintendent Avis Williams said she would leave in just a few weeks. The district did not explain her abrupt departure but said her next chapter would include writing and consulting.
The board selected the district's deputy superintendent, Fateama Fulmore, to take Williams' place starting Dec. 1. Fulmore was hired in 2022 to serve on William's leadership team.
Fulmore worked as a teacher and principal at a large district in North Carolina and as an administrator in Philadelphia. Before coming to New Orleans, she held a top leadership position in the public school system in Omaha, Neb.
Dispute settled
The district sued the city in 2019, alleging it was keeping some tax money designated for public schools, likely totaling millions of dollars.
Under the agreement, the city will give all of the revenue earmarked for schools to the district moving forward.
The school board has agreed to dismiss the lawsuit when the City Council passes its budget later this week, which includes the one-time cash boost and some new sources of long-term funding.
The city will pay $10 million to the school district before the end of the year and another $10 million by the start of April.
"This agreement will ensure our schools get the money we are entitled to from now on," Baudouin said.
For the next decade, the city will give $3 million per year to ThriveKids, a partnership with Children's Hospital New Orleans that provides mental health services for students.
It will also provide $1 million yearly for 10 years for vocational training programs, including YouthForce NOLA and the New Orleans Career Center.
The city also agreed to share revenue from Caesar's downtown casino with the school district. That money, around $2 million a year, has traditionally gone to schools but hasn't been guaranteed since the city signed a new lease with the business in 2020.
The district keeps 2% of funding for central office costs and distributes the rest to schools through monthly payments.
Nyesha Veal, the district's interim chief financial officer, said last week that schools will not see a drop in money this month and that auditors are still confirming the exact size of the shortfall. Initially, officials thought the gap was $20 million.
Earlier this month, Baudouin and the board's finance chair Olin Parker proposed dipping into the district's reserves to close the $36 million gap by $5 million and using another $15 million to offer schools loans.
At its meeting last week, the board decided to hold off on that idea until it's clear how much help schools will need to avoid layoffs and program cuts.
Instead, they passed a resolution instructing the superintendent to work with a financial consultant and advisory groups to develop a plan to address the crisis and ensure the same mistake doesn't happen again.
The board plans to vote on that plan at its December meeting.
