Task force releases report recommending replacement of Mayor’s board governing Sewerage and Water Board

By David Jones

Source: FOX 8

March 27, 2024

NEW ORLEANS (WVUE) – The task force appointed by Governor Jeff Landry to look at the myriad of issues with Sewerage and Water Board released its final, 24-page report detailing potential solutions to issues with billing, infrastructure maintenance, drainage, funding and governance.

Notably, the report recommends action from the legislature that would suspend the existing board that oversees strategy, governance, budget, and expenditures for the quasi-state/municipal agency and replace it with a state-run “Recovery District.”

The report said the Recovery District should be tasked with overseeing SWBNO management and operations for two years, before passing regulation duties to either New Orleans City Council, the Public Service Commission, or returning to a quasi-state/municipal structure.

“It’s already a quasi-state agency, so there’s no takeover, it’s just how you’re going to govern it,” said Paul Rainwater, chair of the task force. “I see some easier reforms that can happen very quickly and make a huge difference in that confidence level, and the other parts of it will happen in a longer period of time.”

Rainwater shook off concerns of privatization echoed by critics of the Governor and the task force.

“On the privatization side, there’s been no conversations about privatization of the Sewerage and Water Board,” he said.

The report said the Recovery District should consist of state agency heads (like DOTD and DEQ) and members who are industry experts but appointed by legislators on both the state and local level.

Suggested members include:

• the Legislative Auditor or his/her designee;
• the Secretary of DEQ or his/her designee;
• the Commissioner of CPRA or his/her designee;
• the Secretary of DOTD or his/her designee;
• a PSC Appointee from the Association of Louisiana Electric Cooperatives;
• a Senate Orleans Delegation Appointee from the Louisiana Associated General Contractors who is a qualified heavy civil construction contractor;
• a House Orleans Delegation Appointee from either the American Council of Engineering Companies of Louisiana or the Louisiana Engineering Society who is a qualified civil engineer;
• an Attorney General Appointee who is an approved register with the Louisiana State Bar Association’s Alternative Dispute Resolution Section;
• a Treasurer Appointee from the Government Finance Officers Association of Louisiana;
• a Mayoral Appointee from the Business Council of New Orleans and the River Region; and
• a City Council Appointee from Greater New Orleans, Inc.

The current governance structure invites politicization said task force member and local businessman and developer Paul Flower of Woodward Design+Build.

“If you look at politicization of the Sewerage and Water Board, which started in 1958, and you look at what’s happened to that utility and the way it’s been starved of funding, I think that’s the core issue,” Flower said.

Outside of governance, the report suggests some quick fixes to “low-hanging fruit” issues, like drainage and billing, which have consistently been cited as quality-of-life problems for residents in New Orleans.

“Billing is like the number one issue,” Rainwater said. “We think that can be fixed with a special master, and also possibly funding to help shore up that office.”

The task force proposes two immediate reforms: appointing a special master for billing disputes and consolidating the management of certain drainage system components under the SWB. The Department of Public Works (DPW) currently manages these components.

“I see some easier reforms that can happen very quickly and make a huge difference in that confidence level, and the other parts of it will happen in a longer period of time,” Rainwater said.

Flower pointed to a 1992 vote to rescind the millage providing funding for S&WB to clean catch basins, which, after the vote, became a DPW responsibility.

A report from the Bureau of Governmental Research notes this, writing:

“In 1992, following an economic recession that decreased New Orleans’ property tax base, the S&WB lost one of its drainage taxes when voters opposed the tax’s renewal. This was the lone tax used to maintain the “minor” part of the system, which includes catch basins and the smaller subsurface pipe network. As shown in Chart C, after adjusting for inflation, the S&WB’s drainage taxes currently produce less revenue than they did in the early 1980s.”

Flower said he would like a potential new Recovery District to look into alternative funding sources, including a stormwater management fee levied on all property owners, rather than funding drainage through property taxes.

“40 percent of the property owners that contribute to drainage, or the necessity to drain their properties, pay nothing,” he said. “We think it would be fairer if there’s a system where everybody pays something into the drainage cost because it costs us to drain water, we don’t drain by gravity, we have to pump it out.”

“This is nothing more than having everybody pay for a service that is being given to them.”

The task force’s report also calls for the potential future recovery district to reevaluate the SWB’s power generation methods and seek state assistance with maintaining outflow canals.

It also suggests exploring alternative funding sources to enable the SWB to settle judgments and bills, which could make the agency more appealing to contractors.

“We knew that it wouldn’t be a case where they would just allow everything to remain the status quo,” said Dillard University political analyst Robert Collins. “As to the political aspect of it, I think that we can expect that the recovery district is going to be put in place and it’s probably going to be in a long-term situation of state control.”

Collins said the move, if it potentially becomes a permanent one, would cement Landry’s legacy as governor as one of centralizing political control and wresting some power away from local municipalities.

“We’re about to have a constitutional convention coming up and I predict in that constitutional convention, you will see this governor and this state legislature continuing to expand state control into local government,” Collins said.

Both Rainwater and Flower said the mission of the task force was one of problem-solving and they’re confident in the solutions presented.

Meanwhile, a Sewerage and Water Board spokesperson released the following statement:

“SWBNO’s leadership team and Board of Directors are actively reviewing the recommendations put forth by the Governor’s Task Force.

Our utility has made significant strides in recent years on critical projects outlined in our Strategic Plan. We continue to improve our infrastructure and resilience through capital projects such as the Power Complex and Smart Metering Program.

We also acknowledge our challenges—many of which stem from decades of deferment due to a lack of funding and resources. We must continue to confront these issues head-on with a commitment to transparency, accountability, and meaningful change.

SWBNO remains dedicated to customer service, workforce development, and organizational improvements to become the model utility New Orleans deserves. We are committed to working closely with all stakeholders, including elected officials, community leaders, and our valued employees and customers, to achieve this shared vision.”

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