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Ghassan Korban, the executive director of the Sewerage & Water Board, talks at the New Orleans Advocate in New Orleans, Thursday, Jan. 10, 2019.

One thing is clear: Tens of millions of dollars in Sewerage & Water Board bills aren't being paid by customers.

But after Wednesday's S&WB board meeting, how many millions of dollars is anybody's guess.

A day after the New Orleans City Council estimated the utility is owed up to $134 million from unpaid bills, S&WB officials on Wednesday said the number is closer to $50 million.

The council's number was "way, way, way off," S&WB Executive Director Ghassan Korban told board members, while acknowledging that even the lower figure represented a huge chunk of potential funds for an agency that has been scrambling to find cash.

“We’re not diminishing the fact that $50 million is a lot of money,” Korban said.

The amount of money due for water and sewer services has become the latest flashpoint between the council and the S&WB amid a funding crisis at the agency.

The utility, which runs the city's water, sewerage and stormwater drainage systems, is forecasting that its drainage unit will run out of money by year's end without a big cash infusion that leaders hope will come from local tourism agencies and, in the longer term, a new drainage fee.

But S&WB and city officials may struggle to secure more funding if there are widespread doubts about how much the utility is owed by the customers who receive regular bills for water and sewerage services.

Korban didn't dispute the council's much higher estimate during a council committee meeting Tuesday, though he said it might not account for overbilling or other issues.

But a day later, and after a New Orleans Advocate report on the council’s estimate drew an angry response from Cantrell, the utility issued the sharply lower figure. Korban said a more detailed estimate would be provided when it is available.

Reporters from multiple outlets seeking to speak to S&WB officials after the board meeting Wednesday were prevented from doing so and told that the officials were not available for comment.

In a series of follow-up emails and phone calls, the agency declined to provide specifics on how the new estimate of unpaid bills was calculated.

City Councilman Joe Giarrusso, who first mentioned the $134 million figure during the Public Works Committee meeting Tuesday, was skeptical about the quick turnaround.

“How did the Sewerage & Water Board get to its numbers?” he said. “How did it first say, ‘We may be owed as much as $134 million’ and then 24 hours later say the numbers may be $50 million or less?

“We’re looking for an explanation, and the public is entitled to one,” he said.

Giarrusso said he arrived at his figure by looking at the difference between the amount the S&WB said it had billed and the amount it collected over the past three years. 

During Wednesday’s meeting, Korban pointed to an issue he said was overlooked in the council’s analysis: When the S&WB tallies up how much it bills each year, it includes what it would have charged for water that is provided free to public agencies, schools, parks and its own processing plants.

It’s not clear how much free water the S&WB now provides, but it would likely account for only a portion of the disparity. In 2016, the S&WB provided about $11.7 million in “free” water, according to figures it gave to the City Council last March.

That would shave about $35 million off the total amount of the council's three-year estimate but would still leave the two sides about $49 million apart.

In an emailed statement in response to questions about Korban’s presentation, S&WB spokesman Curtis Elmore said the utility “cannot speak to the amounts reported for 2016” since they occurred under a previous administration.

Elmore said the utility is “researching the free water and billed amounts in 2017 and 2018 to better clarify our finances to the City Council, our board of directors, the public and our customers.”

In addition to the free water issue, problems with the S&WB’s billing system also caused the figures for how much the S&WB billed to be inflated, Elmore said.

“The gross billing totals also included irregular billing amounts that later resulted in either a voided bill, which corrected an error before it reached a customer, or a credit to a customer who did receive a high bill,” he said. “This, coupled with accounts that went unbilled during the transition to the new billing system, likely account for the balance between the net amount of revenue reported Tuesday as collected each year and the gross amount reported as billed.”

Elmore’s email did not describe how much of the difference could be explained by those problems or how the S&WB determined the amount that was accounted for by those issues.

The utility did not answer a follow-up email with specific questions about how it came to its estimate. 

Additional money might simply be uncollectable, Korban said. The S&WB has a collection agency to go after those who owe it money, he said, but it has not yet been able to “utilize it in an effective way.” 

The agency is working to determine how much customers owe and will be ready to use the collection agency in the near future, he said.

The dust-up over the numbers is just the latest back-and-forth between a City Council that has sought to aggressively probe the S&WB over its billing, financial and infrastructure failures following the August 2017 rainstorm that left large swaths of Mid-City underwater.

On Wednesday, Korban apologized for not directly challenging the council’s $134 million estimate the day before.

“I do have to apologize for not being more responsive at the time during the meeting to recognize things I could have maybe clarified,” he said. “I wasn’t equipped to respond in a meaningful way.”

Giarrusso said his office provided its information to the S&WB a week ahead of the hearing, to ensure he was not “ambushing” agency officials with questions they were not ready for. “We wanted to make sure they were fully prepared to answer all of our questions,” he said.

The discussion of uncollected bills comes at a sensitive time. Mayor LaToya Cantrell’s administration has been seeking up to $75 million in a lump-sum payment from the state and to redirect to the S&WB $40 million a year that now goes to tourism entities.

So when online articles were posted Tuesday about the council meeting, Cantrell issued an angry rebuke, saying in a phone call that the stories were a “false narrative” that could “screw the city.”

She briefly addressed those comments at Wednesday’s meeting. "I’m kind of straight up and I speak from my heart at the time when it is needed,” she added.

“What was reported from the Public Works Committee wasn’t new information,” she said. “It was following up on financial stability matters — or instability matters — as it regards this utility as we began to report on seven months ago,” Cantrell said.

The S&WB’s latest figures for uncollected bills are far higher than any they’ve publicly discussed before. Last year, officials pegged the amount owed by delinquent customers at about $22 million.

The S&WB did not respond to questions about why the figure presented Wednesday was more than twice the previous estimate.


Follow Jeff Adelson on Twitter, @jadelson.​