New Orleans S&WB needs sweeping changes if it wants to avoid more pitfalls, BGR says
By Ben Myers
Source: The Times-Picayune | NOLA.com
May 17, 2023
The New Orleans Sewerage & Water Board is overseen by a board controlled by the mayor. Its funding is determined by the City Council, and it is regulated by the Louisiana Legislature’s laws.
That serving of three masters is the reason for historic neglect of the city’s water infrastructure, leading to drainage failures, boil water advisories and a lack of accountability that worsen the risks of living in an already vulnerable city.
That is according to a new report from the Bureau of Governmental Research, which called for sweeping changes to the S&WB’s governing structure. Either the S&WB needs to be abolished and folded completely into city government, or it needs far greater autonomy, the report said.
“The status quo is not serving us well. We really need to choose one path or the other,” said Rebecca Mowbray, BGR’s chief executive. “The structure of the Sewerage and Water Board is really the root cause of a lot of the water-related problems that New Orleanians experience.”
Many of the recommendations are a repeat from 2011, when the BGR suggested a series of measures to strengthen the S&WB’s independence. The report, issued Wednesday, reups some of those suggestions, such as creating metrics for the City Council to approve rate proposals and tax levies.
Converting the utility to a city department is a new suggestion, one that BGR previously said was a bad idea because of City Hall dysfunction.
Mowbray said city leaders, including Mayor LaToya Cantrell, seem to have grown more focused on drainage after repeated street flooding in 2017. Still, the report says consolidation would require extensive planning to ensure City Hall is capable of subsuming 1,300 employees, an annual capital budget $440 million and another $580 million in outstanding debt.
Officials open to changes
Cantrell and four council members who responded to inquiries said they were still weighing the report, but they were either open to consolidation or didn’t reject it.
“Placing the Sewerage & Water Board under city control as a city department would seem to be the best solution for coordination of systems,” District D Council member Eugene Green said in a statement.
A spokesperson for City Council President JP Morrell said he was still reviewing the report, but said that the legislature has too much control over the local utility.
Cantrell said the BGR is “saying what the Sewerage and Water Board has been saying for years, which is that our governing structure is too complex.”
During a news conference Wednesday, Cantrell said she would work with the board to come up “the best next steps.” In a statement, the S&WB said the report “accurately characterizes the challenges we face, and we welcome the recommendation of an assessment of our governance structure, including either path forward the report suggests.”
Catch basin issue
Folding the S&WB into city government would end the division of labor between the S&WB and City Hall when it comes to different parts of the drainage system. The S&WB controls the primary pipes and pumping stations that push storm water out of the city, but the Department of Public Works maintains catch basins and smaller pipes that feed into the parts that the S&WB controls.
That arrangement — unique among 51 peer cities, according to BGR — has been a coordination nightmare and contributed to the 2017 floods, according to an analysis.
City Council Vice President Helena Moreno has long championed giving control for all drainage components to the S&WB, in line with the BGR. But Moreno and the BGR differ when it comes to giving the S&WB funding for the additional workload.
The BGR says a storm water fee is likely needed. Moreno said merging the two systems would create cost savings.
“This remains a no brainer situation,” Moreno said in a prepared statement. “The operations and efficiency of (the S&WB) must improve and a drainage merger is a critical step that can’t come soon enough.”
The S&WB is subject to more than 80 state laws, giving lawmakers from every corner of the state a say in how the city’s water systems are regulated.
And with the mayor serving as the board president of a state-created utility, there is confusion over who is ultimately accountable for its management, .
Water rates and tax levies are approved by the City Council, which, according to BGR, tends to cave to political pressure to keep rates low. That political pressure increases as infrastructure and public confidence erodes, and the cost burden gets kicked to future generations.
“The City Council’s hand in setting rates, it now injects too much politics,” Cantrell told reporters on Wednesday. By the same token, the council lacks other ways to hold the S&WB accountable, the report says.
“One of the few cards that they can really play is to raise hell about funding,” Mowbray said.
That dynamic surfaced last year, when the council refused to consider rate hikes until the S&WB fixed a meter reading system known to produce wildly inflated bills. The utility also has faced criticism for its difficult-to-navigate appeals process.
To take politics out of utility funding, BGR recommends the council adopt a matrix for evaluating the S&WB’s funding proposals. District A City Council member Joe Giarrusso said he’s not opposed to the idea, but that council members’ discretion should not be discarded entirely.
“If billing isn’t fixed, how do you go to the public who feels like they’re paying more money than they should, and then say, by the way, we’ve increased your sewer and water rates?” Giarrusso said.
Mowbray credited Cantrell for hiring the S&WB’s current executive director, Ghassan Korban, a civil engineer who previously ran Milwaukee’s public works.
Under Korban’s leadership, the S&WB has initiated capital projects to replace its drainage power and underground meters, both considered critical to improving the utility’s service.
Those two projects alone will run more than $350 million, however, and are part of the reason the S&WB is looking for more revenue.
As he has before, Giarrusso said the S&WB should do more to collect on delinquent bills. The S&WB says it was owed $60 million from bills more than 60 days late at the end of March.
The S&WB and City Council relationship is at a low point, with the council voting unanimously on May 11 to sue the S&WB for refusing to comply with some parts of new city ordinances related to billing.
That vote prompted Cantrell to order District C City Council member Freddie King to leave an S&WB executive session on Thursday about the possible upcoming litigation.
King serves as the council’s representative on the S&WB, and the episode illustrated another issue identified by the BGR: the City Council representative on the S&WB is inherently conflicted, according to the report.
Giarrusso said he understood why Cantrell booted King from the executive session, but disagreed that a council representative on the board is problematic.
Still, he agreed there are too many cooks in the kitchen at the S&WB.
“When you have multiple responsibilities in government for a single function, you’re almost destined for failure,” Giarrusso said.
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