The New Orleans Sewerage & Water Board's drainage system has completely depleted its cash reserves as the utility's financial picture continues to worsen, officials said Wednesday.
Chief Financial Officer Yvette Downs said during a meeting of the board's Finance Committee that as of the end of September, the drainage system no longer had enough cash on hand to pay for a single day's expenses.
The situation could delay some payments, Downs told the committee, though she said after the meeting that she could likely shift money temporarily from the utility's other departments in order to minimize problems paying vendors or dealing with other cash needs.
The New Orleans Sewerage & Water Board’s cash reserves continue to slide as it still grapples with delinquent accounts, officials told mem…
Because the drainage system can borrow money from the utility's water and sewerage departments, the lack of funds doesn't mean the utility will stop manning the drainage pumps or doing other work aimed at keeping the city from flooding.
But it represents an ominous milestone in the S&WB's efforts to put its finances back on track after a year of billing problems and emergency expenditures that forced it to tap into its reserve accounts.
Overall, the utility now has about 53 days of cash on hand. The water system has enough reserves to keep itself running for 106 days, and the sewerage system has about 40 days worth of funding.
Executive Director Ghassan Korban has said the S&WB is trying to delay projects and find other ways to reduce or postpone expenses in order to rebuild its reserve accounts.
Downs said she'll be working on coming up with solutions for the drainage system.
"We’ll be strategizing over the next few weeks. We definitely need all our partners at the table with us to identify additional sources of funding," she said.
Both the water and sewer systems need to have at least 90 days of cash in their reserves by the end of the year in order to be in compliance with agreements attached to bonds issued by the utility.
The drainage system does not have that requirement.
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The utility's cash reserves have been spiraling downward since late last year, when it dug into its accounts to pay for about $83 million in emergency spending in the wake of summer floods.
The drainage system's accounts have been particularly hard hit because it bore the brunt of those expenses.
The drainage system is also funded primarily by property taxes, meaning that except for reimbursements from FEMA or other federal agencies, it will be unable to replenish its coffers until tax payments start arriving early in 2019.