BGR report claims way S&WB is governed contributes to city’s water, drainage problems

By Cassie Schirm

Source: WDSU

May 17, 2023

NEW ORLEANS — The Bureau of Governmental Research says the way that Sewerage and Water Board is governed is creating key problems for the city’s water, sewer and drainage systems.

BGR’s latest report states that the S&WB’s current governance structure doesn’t work effectively because it has key features of a stand-alone utility with those of a municipal utility.

“The result is a complicated web of competing interests and weak accountability that works against long-term performance,” BGR President and CEO Rebecca Mowbray said. “The structure is inefficient, ineffective and ultimately to blame for many of the infrastructure problems New Orleanians experience.”

The S&WB was created more than 120 years ago by the Louisiana Legislature, operates separately from city government and manages its own budget of more than $450 million a year. But it depends on the New Orleans City Council for its funding sources, its 11-member board of directors is led by the mayor and includes a council member, and it must coordinate with the city’s Department of Public Works on street projects and management of the drainage system.

The watchdog entity said this hybrid governance structure creates several significant problems with serious consequences for residents.

The consequences listed in the report include:

• It threatens the long-term financial sustainability of the city’s water, sewer and drainage infrastructure. While the S&WB is responsible for operating and managing the three systems, the city council has ultimate control over the user fees and property taxes that support them. This misalignment between operational responsibility and control over funding, combined with the lack of a formal council process for reviewing S&WB rate, tax and fee proposals, has elevated politics in funding decisions. This has resulted in historical underfunding, contributing to today’s deteriorated infrastructure and shifting costs to current and future ratepayers.
• The governance structure divides responsibility for the drainage system between the S&WB and the Department of Public Works. The S&WB is responsible for the drainage system’s larger pipes, canals and pumps, while Public Works is responsible for smaller subsurface pipes and catch basins. This division of responsibility impedes the performance of the whole system. This was a root cause of the 2017 flood events in New Orleans. It is also unique among 51 peer cities reviewed by BGR.
• The governance structure also hampers effective coordination between the S&WB and City government on infrastructure projects, makes it difficult to hold officials accountable, and raises concerns about the long-term effectiveness of the S&WB’s board of directors. And the S&WB is governed by more than 80 Louisiana laws, giving state legislators –who often have little or no connection to New Orleans – substantial control over local water utility issues.

BGR, in the report, states there are two ways that can improve the way it is run.

The first one, improve the S&WB as a stand-alone utility. The second recommendation is to replace it with a new municipal utility.

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