The New Orleans City Council passed sewerage and water rate increases of 10 percent a year over the next eight years, starting in January. That will double New Orleans Sewerage and Water Board (S&WB) bills for customers by 2020. The rate hike passed 5-2 during the Dec. 6 Council meeting, with City Council President Stacy Head and Interim District E Councilman Ernest Charbonnet as the dissenters.
Councilmembers amended the original proposed ordinance, tying it to a S&WB governance reform initiative that will include the elimination of three councilmembers and one mayoral appointee from the board's membership and reduce the terms of S&WB members from nine years to four. The change in governance will require legislative action in the spring.
The S&WB rate increase received strong support from Mayor Mitch Landrieu, the Bureau of Governmental Research (BGR), the hotel and lodging industry and the New Orleans Chamber of Commerce.
Head and Charbonnet said they weren't opposed to the rate hikes per se, acknowledging that the city's sewer and water lines need more than $3.3 billion in repairs. Both, however, questioned how the money will be used, the public's trust in the S&WB and what they characterized as a negotiations-to-approval process that didn't give the public enough time or information.
"Yes, we have unity of the governmental community, unity of the business community. What about the people?" Charbonnet said, asking for the issue to be pushed to the next council meeting on Dec. 20, giving councilmembers and the public "a couple weeks to properly vet this."
Councilmembers who supported voting last week, however, argued that city government had delayed long enough. District C Councilwoman Kristin Gisleson Palmer pointed out that the S&WB is under a federal consent decree with the Environmental Protection Agency to improve the water system. It risks fines and loss of federal funding if it misses current deadlines set by that agreement. "We cannot risk the loss of hundreds of millions of federal dollars if we do not have this as a match," she said.
The increases will generate about $583 million in additional revenue for the S&WB. Of that, only about $100 million will go directly to pipe and water system upgrades, as The Lens reported last week. Another $100 million will go to toward a bond issuance expected to generate more than $600 million for upgrades. The nearly $400 million remaining is planned to be used for day-to-day operations, S&WB debt and shoring up its reserve fund.
Even BGR President Janet Howard, who supported the increases overall, expressed some doubt about how the money will be used. (The BGR issued its endorsement of the measure one day before the vote.)
"Less than half of it will go to infrastructure. ... Very little is going to the pipes and water system," Howard said. "Having said that, I reiterate BGR's support of the rate increases." — Charles Maldonado