BGR Outlook on
Orleans

Agency Functions

The Sewerage and Water Board of New Orleans [“The Board”] was created by the Louisiana Legislature in 1899 as a special board independent of City government. Under state law, the Board is charged with the construction, operation and maintenance of water, sewerage and drainage systems for the City of New Orleans. By intergovernmental agreement, approximately 2,550 acres of Jefferson Parish is served by the Board’s drainage facilities, for which Jefferson Parish pays its pro rata share of expenses. The Board also provides water service to the Plaquemines Parish Industrial Park.

Relationship of The Board to the City

While created by state law, the Board is also listed in the Home Rule Charter of City of New Orleans as an unattached board within the executive branch. The Home Rule Charter
specifies that the Board may not be eliminated or merged with another department or board without a public referendum on the proposed charge. The Home Rule Charter also stipulates that “The powers, duties and functions… are provided by applicable state and municipal law.” The Home Rule Charter requires the Board to “…coordinate its repair, maintenance and construction projects with City agencies including the City Planning Commission and the Departments of Public Works and Parks and Parkways in order to minimize disruption of the City’s streets, sidewalks and other public spaces.”

Governance

The Sewerage and Water Board is governed by a 13-member Board of Directors. The Mayor of New Orleans serves as the President of the Board of Directors which is composed of three representatives of the New Orleans City Council, two representatives of the Board of Liquidation, City Debt and seven citizens appointed by the Mayor and subject to ratification by the City Council. Two of the citizen members are appointed from the city at-large and one from each of the five council districts. The appointed members, who serve for nine year staggered terms, can only be removed for cause. All members serve without pay.

Personnel

The Board employs a staff of approximately 1,500 workers, the vast majority of whom are included in the City’s classified civil service system. The Board appoints the Executive Director, Deputy Director, General Superintendent, Deputy General Superintendent, and Special Counsel who serve at the pleasure of the Board.

Finances

The Board has an annual operating budget of approximately $100 million. In 1998, the Board’s operating funds were allocated as follows: $33 million for sewerage functions, $46 million for water, and $19 million for drainage functions. The City Council does not review or approve the Board’s operating or capital budgets.

The Board’s sewerage and water systems are funded primarily by user fees. Water fees are based on the size of the meter and the amount of water used. Sewerage fees are determined by the size of the meter and a quantity charge multiplied by water use.

The drainage system is funded by revenues from three, six and nine mill ad valorem taxes. After millage adjustments, the three ad valorem taxes now total 22.59 mills per year, which provides approximately $30 million per year for drainage services.

The Board’s capital budget (1999 – 2003) lists total expenditures of $633.6 million. Of this total, $204.5 would go for water system capital improvements, $189.3 would be spent for sewerage system improvements, and $229.8 would be used for drainage projects. (These figures do not include approximately $410 million in anticipated federal grants.)
Based on the Board’s current user fees and millage rates, the Board will generate only $190 million for capital projects, leaving a gap of $443 million in its proposed capital budget.
The sewerage fee increase and the new drainage fee have been proposed to fill this gap between desired capital improvements and funds available.

The Board of Liquidation, City Debt, has responsibility for the administration of the Sewerage and Water Board’s debt. Drainage debt service payments are supported by ad valorem tax collections, while user fees support the revenue bonds issued for the water and sewerage systems. The Board had $46.8 million in bonds outstanding as of December 31, 1997. In December 1998, the Board issued an additional $25 million in sewerage revenue bonds, $16 million in water revenue bonds, and $10 million in drainage system bonds.