Sewerage and Water Board Rate Proposal
The Sewerage and Water Board provides safe drinking water, protects homes from flooding, offers water to fight fires and treats wastewater.
Threat to Public Safety
The system is in dire shape, threatening our public health and safety. The city is bleeding over 40% of our treated water through cracks in underground pipes. The S&WB power plant has suffered multiple catastrophic failures since Hurricane Katrina, and we know all too well what a boil water advisory means for our businesses and families. Since 1998, the sewerage system has been under federal consent decree with the Environmental Protection Agency.
Bond ratings are at junk or nearly junk status. In fact, it failed to meet its bond covenants for water and sewer system bonds. Consequently, in December 2009, the S&WB authorized a comprehensive financial plan and rate study. Expert consultants suggested a 15% annual rate increase for water and 14% annual rate increase for sewer, based on the funding needs for the water and sewer systems alone.
Since taking office, the Landrieu Administration worked to secure federal resources to keep rates as low as possible. The Administration secured over $200 million in new funding from FEMA for repairs to thousands of water and sewer lines, power plant equipment, pumps and pump stations. The Administration secured nearly $150 million in FEMA Hazard Mitigation funds to help repair the aging S&WB power plant. The Administration is working with our Congressional Delegation and the EPA to reduce our burden for necessary costs related to the consent decree.
Through all of our efforts, the Administration reduced the rate increase to 10% annually for both water and sewer rates and stretched it out through 2020. For elderly and those with low and fixed incomes, S&WB will significantly ramp up its Water Help assistance.
Rebuilding Infrastructure and Creating Jobs
The rate increase will generate at least $583 million, which will help fund a large portion of the S&WB $3.3 billion infrastructure improvement program. This is one of the largest infrastructure projects that the City of New Orleans has ever seen, and it is projected to produce over 25,000 construction and nearly 200 permanent jobs.
Delgado Community College will offer training program in partnership with the S&WB to ensure we have a pipeline of locals that can compete for these jobs. In short, the people of New Orleans will rebuild New Orleans.
We propose reducing the size of the board, shortening term lengths and imposing term limits. A selection committee of local University Presidents will recommend a slate of residents for appointment that have professional expertise. To improve accountability, we will memorialize good government contracting processes, as well as financial disclosure and ethics code requirements.
Customer Service Improvements
The rate increase will help pay for customer service improvements including Electronic Meters, an additional Customer Service Center, Online Account Management allowing online bill payment, and an Online Work Order Tracking System with appointment scheduling capabilities. S&WB and city public works engineers are literally sitting room together for the first time. This coordination will make roadwork more efficient and consistent.
There have been over 30 publicly-noticed S&WB meetings where the need for rate changes has been discussed since December 2009. These meetings are also broadcast on public access television and can be watched here.
The S&WB also hosted 6 public meetings across the city in 2012 for residents and businesses to discuss the rate proposal, including:
January 23- Dryades YMCA;
January 26- City Council Chambers;
January 30- UNO Lindy Boggs Conference Center;
February 6- Behrman Center;
February 7- Household of Faith Church; and
February 9- Bethel A.M.E. Church.
An important City Council Budget Committee meeting has been scheduled to discuss the proposal at 2pm on Wednesday, December 5th in the City Council Chamber.
Impact to Average Households
Independent Groups Agree Rate Increases Are Necessary
Bureau of Government Research- "Unfortunately, significant rate increases are necessary… Over the past few decades, the City Council has on multiple occasions delayed or killed rate increases, despite the S&WB’s pressing needs."
New Orleans Citizen Sewer, Water & Drainage Management Task Force- "The Task Force urges city leaders to support S&WB’s improvement plan. This plan is a long-overdue investment towards addressing lingering hurricane damage and decades of deferred maintenance..."
The Times-Picayune- “The massive infrastructure needs of the New Orleans Sewerage & Water Board are well-documented. Study after study has laid out in detail the upgrades that needed to be made. Despite that understanding, and despite a federal consent decree mandating repairs to the system's crumbling sewer pipes, the problem has mostly been left to fester. That was never wise and, simply put, can't continue.
The Advocate- "While there seems to be a lot of complexity to the issue of the New Orleans Sewerage and Water Board’s obligations, the bottom line is pretty simple: Unless customers’ bills increase, there won’t be enough money to fix New Orleans’ pipes."
The Gambit- "There’s no getting around the need for a rate hike, and there’s likewise no excuse for postponing this decision... The council should bite this bullet and act this week to approve the new S&WB rate structure."
Business Council – “The Business Council of New Orleans & the River Region supports the proposed governance reforms of the Sewerage & Water Board and the accompanying rate increase proposals.”
Chamber of Commerce – “The New Orleans Chamber of Commerce Board of Directors voted to support the proposed Sewerage and Water Board Rate Increase and reforms.”