In The News › New Orleans S&WB is an aging, leaky water system that needs help, group says

Oct 26, 2011

Source: The Times-Picayune

Filed under: City Government, Governance, Orleans Parish, S&WB

New Orleans S&WB is an aging, leaky water system that needs help, group says

October 26, 2011
By Martha Carr
The Times-Picayune

Hoping to shake up the city’s major utility before it reaches deeper into residents’ pocketbooks, a local watchdog group is proposing a slate of reforms aimed at depoliticizing and professionalizing the Sewerage & Water Board, including granting the agency limited power to raise rates without City Council approval.
A report issued Tuesday by the Bureau of Governmental Research is the first of two to be released by good-government groups in the coming weeks. The Business Council of New Orleans and the River Region will also make governance recommendations in response to a request from Mayor Mitch Landrieu for an outside review of the agency’s finances and management.
BGR’s report recommends removing the mayor and three City Council members from the water board, which would reduce its size from 13 to nine members. It also suggests shortening terms from nine years to four and restricting members to three consecutive terms in office. There are no term limits now, allowing some long-serving members to gain substantial political power, the report states.
One such member, minister Benjamin Edwards, served almost 20 years on the board. He pleaded guilty last year to steering substantial work to S&WB contractors in exchange for more than $2 million in kickbacks, and he was sentenced to 22 years in prison.
BGR is also proposing that the Legislature require seven of the board’s nine members to have extensive experience in areas related to running a public utility, such as finance, engineering and law.
Similar reforms have been suggested in the past, and all failed.
In 2004, at the behest of Mayor Ray Nagin, legislators proposed two bills, one that would have removed elected officials from the board and reduced members’ terms, and another that would have abolished the agency and brought water, sewer and drainage under city control. When it became evident the bills lacked support, Nagin gave up, calling the water board “an organism that repels change.”
Deputy Mayor Cedric Grant said the mayor is prepared to make tough decisions to get the water board on sound financial footing and is open to some of the ideas in the BGR report, including shortening members’ terms and instituting term limits. But Landrieu believes that “the elected officials who are accountable to taxpayers and ratepayers should remain on the board,” he said.
The S&WB is plagued by widespread water leaks, a sewer system that is still under federal consent decree, and an aging power plant that has suffered two major outages since Hurricane Katrina, one of which prompted a boil-water order.
To deal with the problems, a consultant recently mapped out a 10-year, $3.5 billion capital program that includes $1 billion in possible tax, rate and fee increases for customers.
But the agency has a long way to go in increasing the public’s confidence, the report states. Rather than pass gradual rate increases to properly maintain its systems, the board has succumbed to political pressure from its elected members to put off rate increases until crises emerge. Such chronic underfunding has created a “monstrous problem,” according to BGR.
Among the group’s other recommendations:
• Give the water board limited authority to raise water and sewer rates, as well as drainage fees, by reasonable amounts. The increases would be tied to an annual index or other measure. For larger increases, the board would still have to get City Council approval.
• Consolidate drainage functions under the water board. Currently, the water board is responsible for drainage canals, pump stations and pipes 36 inches or larger. The rest of the drainage system, including more than 85,000 catch basins and 1,600 miles of smaller drainage pipes, is managed by the city’s Department of Public Works.
• Reduce the board’s role in approving contracts.
• Institute an annual review of the agency’s top administrators, including executive director Marcia St. Martin.
BGR considered recommending that the water board be folded into the city, as are most water and wastewater utilities in the United States. But the group decided the troubled state of the city’s financial management, technology and personnel management systems would complicate a merger.

Oct 26, 2011

Source: The Times-Picayune

Filed under: City Government, Governance, Orleans Parish, S&WB

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