Introduction
The Sewerage and Water Board of New Orleans has proposed that sewerage
user fees be increased by approximately 38 percent over the next three years and that a
new drainage fee be levied in 1999. The proposed increase in sewerage fees and the new
drainage fee, when combined, represent a 44 percent increase for the typical residential
customer. The proceeds from the fee proposals would be used to fund the City’s
portion of a $1 billion upgrade of the city’s sewerage and drainage systems over the
next 20 years.
The two fee proposals were unanimously approved by the Sewerage and Water
Board in August of 1998. Before the higher fees can be collected, however, the proposed
user charges must also be approved by the City Council of New Orleans and the Board of
Liquidation, City Debt. Ordinances to approve the new drainage fee and raise the sewerage
fee were introduced into the City Council in September of 1998. When the City and School
Board jointly agreed to hold the December 5, 1998 election on a proposed property service
charge, the City Council decided to defer action on the Board’s proposals until after
the December 5 election. As of this time, (February 4, 1999) both ordinances are still
pending on the Council’s agenda. It is unclear when the City Council will act on the
proposed ordinances.
The Board of Liquidation, City Debt, is not expected to act until the City
Council has made its decision on the proposals.
Even though the Sewerage and Water Board held three public hearings on the
proposed fee increases in August of 1998 (as required by law), there has been little
public discussion on the measures now pending before the City Council. Therefore, BGR will
devote this issue of Orleans Outlook to an examination of the proposal for a sewerage rate
increase and a new drainage fee. In this report, BGR reviews the details of the proposed
fees, examines the underlying rationale for the fee increases, and explains how the funds
would be used. Without endorsing or rejecting either proposal, BGR presents some of the
arguments for and against the proposed revenue measures. Before addressing the two revenue
proposals, the report presents a brief agency profile of the Sewerage and Water Board. |
