Members of the New Orleans City Council pushed back hard Tuesday against plans to begin shutting off water to local utility customers who are late on their bills.
The Sewerage & Water Board halted the practice last November amid a spike in contested monthly statements, something officials have attributed at least in part to a botched rollout of new billing software.
With its cash reserves dwindling, the agency said last week it would resume its normal collections process, shutting off water to delinquent customers as a last resort.
But given continued complaints from residents and confusion about how to challenge inflated bills, council members at a Public Works Committee meeting Tuesday urged agency officials to avoid the most punitive steps.
“You’re not going to get a consensus on this panel for shutting water off in the middle of a crisis,” Council President Jason Williams said.
He suggested utility officials should instead take the last undisputed bill for any particular customer and keep charging the same amount each month until the billing system is fixed.
At one point the committee’s chairman, Joe Giarrusso, polled the six council members present, all of whom said they opposed shutting off people’s water. Councilwoman Cyndi Nguyen was the only member absent.
There’s no direct way for the council to block the utility from cutting off water because of late bills. Its leadership answers to the agency’s own governing board, whose members are mostly appointed by the mayor.
But the pushback puts utility officials in an awkward spot just as a new executive director, longtime Milwaukee public works official Ghassan Korban, prepares to take over in September.
The Sewerage & Water Board’s cash reserve has dropped to about 106 days' worth of expenses, down from 132 days at the end of January. If the agency allows it to sink below 90 days, it would fall afoul of its bond covenants at year's end, jeopardizing ongoing projects and its ability to sell bonds in the future.
Having heard those figures, Councilwoman Helena Moreno asked the utility’s new finance chief, Yvette Downs, whether she is concerned.
“I am very concerned,” Downs said, adding later, “We also need to be able to pay our vendors.”
Collecting on late bills would be one obvious way of building back the reserve fund. Agency officials say more than 17,000 customers, or about 12 percent, are delinquent, defined as owing more than $50 for 60 days.
Officials said the agency billed about $22 million more than it actually collected last year.
About 6,600 or so customers are officially disputing their bills, meaning they are not counted as delinquent and would not face losing their water. And about 9,000 are not getting bills at all, most because they recently moved to new addresses, officials said.
Still, council members said they worry there are customers on the delinquent list who have not had time to formally challenge their bills, or who were told to simply keep paying what they thought they actually owed after their bills spiked.
They also quizzed agency officials about whether they have enough staff to deal with thousands of customers who all at once now face losing water.
Later in the day, Mayor LaToya Cantrell's office released a statement emphasizing that delinquent customers will have their water shut off only after they've been given official notice and had the chance to challenge their bills in an administrative hearing.
"Mayor Cantrell supports bringing accountability to delinquent bad actors who have taken advantage of the billing problems to avoid paying their fair share,” the statement said.
Separately, the council committee Tuesday took a procedural step toward putting one of their own members back on the Sewerage & Water Board, a move aimed at helping to restore public trust in the beleaguered agency.
Members voted unanimously to forward an ordinance to the full council that would set up a ballot measure asking voters to approve the change, which would be written into the city’s home rule charter.
The move has already won the necessary approval from state lawmakers, who passed a bill calling for the shift this spring.
It would partially reverse a series of changes put in place by former Mayor Mitch Landrieu, who pushed successfully to have council members taken off the board in 2013 as a means of distancing the agency from local politics and creating a more professional governing board.
That decision came into question after officials — including Landrieu himself — said they were blindsided by maintenance and other problems that left the city vulnerable to flooding during heavy rainstorms last summer.