New Orleans — The Sewerage & Water Board on Wednesday unanimously passed two resolutions that send to the City Council a proposed rate hike plan for water and sewer service, the next step in a three-year process with a goal of raising customers’ bills to help fund a multi-billion dollar rehabilitation program and to increase revenues.
Meanwhile, discussions about the future governance of the S&WB, something officials say is necessary to improve public perception of the water board, will continue in an effort to combine what one City Hall official said are the best aspects of several proposals designed to revamp the operating structure.
The water board’s plan identified the need for annual rate increases of 10 percent for the next eight years. The S&WB says it needs the additional money to embark upon a $3.3 billion overhaul of its aging infrastructure and to increase revenues for operating and maintenance costs.
The resolutions the board passed Wednesday will be introduced during today’s City Council meeting but cannot be acted upon for about another month at the earliest. At that point, they are likely to be heard at a council committee meeting before being voted on during a regular council meeting.
The proposal would raise the average monthly residential bill by 136 percent in 2020, generating $582.6 million for the agency, according to an analysis by the nonprofit Bureau of Governmental Research.
The board authorized a financial plan and rate study in December 2009 after it failed to meet bond covenants in 2008 and 2009. According to a summary of the plan and rate study, the S&WB doesn’t have enough money to properly operate, which leads not only to increasing issues with aging water treatment systems and distribution infrastructure, which leaks at least 40 percent of the city’s water supply every day, but makes financial institutions unwilling to lend money.
After the board conducted public hearings last year in regard to the proposed increases, it received feedback that found several areas in which it needed to improve, including its efficiency and management.
To that end, several proposals to rework the management have been presented.
Everyone seems to agree change is overdue, but no one can quite yet agree on what that change will look like.
The S&WB’s board on Wednesday voted to adopt the agency’s executive committee’s plan to reduce the board from 13 to 11 members by cutting the three City Council members who sit on the board and replacing one of those spots with a mayoral-appointed member.
Other plans have come from Mayor Mitch Landrieu, the BGR, a citizen’s advisory group and City Council President Stacy Head. The general idea with each plan is to reduce the size of the board and to reduce the length of terms, which are nine years at present.
Even if the City Council loses its representation on the S&WB, it would retain its oversight of the water board.
Deputy Mayor Cedric Grant said after Wednesday’s board meeting that the administration hopes to come to a final resolution in the coming months on the future board.
Because the water board is a state political subdivision, it requires action from the state legislature to make any changes. Additionally, the City Charter would need to be amended to reflect the updated rules.
State Sen. J.P. Morrell and state Rep. Walter Leger on Tuesday said they would work to lead the reform efforts in Baton Rouge. The deadline for filing state law changes is April 8 to have them heard during the regular 2013 legislative session.
Ray Manning, S&WB president pro-tem, said there needs to be one management plan agreed upon so that proposed changes can happen.
If the changes pass the Legislature, the council would have to then set a citywide vote to amend the charter. That vote would take place Oct. 19.