S&WB’s Governance Problems and Reform Options

• Bureau of Governmental Research

Overview

After its establishment in 1899, the Sewerage & Water Board (S&WB) quickly became a jewel in New Orleans’ municipal crown. The water and sewerage systems significantly improved the health of a city that had been mired in unsanitary conditions. The inventions of drainage engineer A. Baldwin Wood opened large swaths of the city to development, made the city’s system an international model and inspired young engineers to flock to the S&WB. The innovation, scope and quality of the sewerage, water and drainage works built in those early years led Mayor Martin Behrman in 1914 to declare them “enduring monuments to the courage, determination and infinite resourcefulness” of New Orleans. For decades thereafter, those monuments were well maintained.
Today, however, the S&WB’s sewerage and water systems are in a deplorable state. The water system suffers from widespread leakage; 75% of the water treated by the S&WB passes through the system unbilled, and leaks are far and away the main cause. The leaks undermine the streets and drive up costs. The sewage collection system and treatment facilities do not yet meet federal standards; they remain subject to a federal consent decree mandating more than $220 million of upgrades and repairs by 2015.

Key Findings

The report demonstrates two key problems. First, unlike most independent water boards, the S&WB has little control over its financial destiny. It has responsibility for massive infrastructure systems, but lacks the powers to raise revenues to support those systems. Those powers instead lie with the City Council. Over the past few decades, the council has on multiple occasions delayed or killed rate increases, despite the S&WB’s pressing needs. Second, elected officials sit on the agency’s board, undermining its independence and infusing decision making with politics.

Recommendations

• The State Legislature should amend state law to authorize the S&WB to increase water and sewerage rates annually by an amount tied to a suitable index or other measure, without City Council approval. State law and the city charter should be amended to allow limited increases for drainage fees.
•The City Council should consider requests for larger increases using a formal review process, which at a minimum should provide for independent analysis of the requests, appropriate opportunities for public comment and clear timelines. The City Council should also adopt a formal process for considering S&WB requests to levy taxes and fees.
•The City Council should develop a comprehensive, ongoing process for regulating the S&WB, which includes reviewing the S&WB’s strategic and financial plans and reports, and regularly monitoring the S&WB’s performance.
•The State Legislature should amend state law to remove the mayor and City Council members from the board, reducing it from 13 members to nine. The City Council should initiate a corresponding charter amendment.
•The S&WB’s board should limit its role in the agency’s contracting primarily to broad issues of policy and oversight.
•The city should transfer responsibility for the maintenance and repair of its subsurface drainage from the Department of Public Works to the S&WB.
•The city and the S&WB should develop a new funding source for subsurface drainage.

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