In The News › S&WB sends 10 percent rate hike plan to mayor

S&WB sends 10 percent rate hike plan to mayor

By Rob Masson
October 17, 2012

New Orleans, La. – Back in July, Mayor Mitch Landrieu kicked a proposal to raise water and sewer rates 12 percent back to the Sewerage and Water Board. Wednesday, the board sent back a proposal that calls for a 10 percent increase each year for the next eight years — and not everyone is thrilled with the idea.

“I don’t see the clear plan. Where does it say, ‘If you give us X, we will give you Y?’” wondered Councilwoman Stacy Head, who is a member of the board.

“Nobody wants to give us a leap of faith that we’ve got to go after this,” said S&WB Acting Board Chairman Cedric Grant.

The proposal would cause the current average sewer and water rate to go up from $52.50 a month to $86.26 a month by the year 2016. It calls for new electronic meters, a new customer service center, better work order tracking and hundreds of capital projects.

Critics say it does little to address over $1 billion in major infrastructure needs in the leaky, century-old system.

The plan comes just two months after the city’s inspector general issued a report saying the governance of the Sewerage and Water Board is ripe for corruption. Others say the board needs to change the way it does business before voters are asked to approve a half-billion dollar fee hike.

“There are fundamental problems with the structure of the board, the way it’s regulated and rate increases,” said Janet Howard with the Bureau of Governmental Research.

In the letter to the mayor, the board doesn’t propose changing its governance structure, but it pledges to set up a framework for looking into changes. Some of those include reducing the length of board member’s nine-year terms and changing the composition of the board from elected officials to appointed citizens.

Governance isn’t the only issue.

A jilted vendor whose bid for a water contract was $60,000 lower than the winner says disadvantaged business enterprise (DBE) contracts continue to cost ratepayers more money than they should. Paul Mack with Simco complained that the DBE system is being abused by people who jack up prices to pay minority business partners for work that they are not likely to perform.

If the mayor approves of the 10-percent rate hike plan, he will ask the council to put it on a ballot for voters to consider, perhaps next year

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