Gretna utilities fare better after rate hike

Advocate staff photo by JOHN McCUSKER Gretna has upgraded its wastewater facility after increasing rates. The main clarifier tank is one of the upgrades.
Advocate staff photo by JOHN McCUSKER Gretna has upgraded its wastewater facility after increasing rates. The main clarifier tank is one of the upgrades.

When the Gretna City Council approved large increases to the city’s water and sewer rates in 2010, politicians said the rate hikes were needed to keep the city solvent and fix long ignored infrastructure problems.

While those rate increases remain controversial three years later and are an issue in current municipal campaigns, city residents have begun to see a return on their investment. A rash of capital projects have been completed or are under way at the city’s water and wastewater treatment plants due to increased revenue and recent borrowing.

Now, as the city prepares to finalize another budget, Gretna Public Utilities Director Michael Baudoin said the city’s water and sewer plants may have a long way to go, but they are in much better shape than in 2010.

“There are millions and millions of dollars of sewer repairs that we need to do, but we’re doing a little bit at time,” Baudoin said. “It’s going to take some time. These things don’t happen overnight.”

In 2010, council members agreed to raise the sewer rates by 150 percent and the water rates by 44 percent. That decision came after a consultant warned Gretna that without increases, the city’s utility plants could have a cumulative deficit of $23 million by 2017.

The facilities, which are supposed to operate as independent businesses, were already in debt to the city’s general fund for $5 million because fees collected from residents couldn’t cover operation costs. At the time, Mayor Ronnie Harris called the rate increases a difficult but necessary decision.

Baudoin said that for years, Gretna residents enjoyed artificially low utility rates even as operation costs rose due to aging facilities and cost increases. The city’s sewage plant was in particularly bad shape after years of neglect, he said. Gretna has a property tax millage that generates about $450,000 to $500,000 for the sewer maintenance and capital projects, but that money was being used for operations because of the low rates, Baudoin said.

With the rate increase, Gretna has been able to eliminate that practice. In addition, the city has stopped tapping the general fund, which in turn was pulling money from other funds that have dedicated property tax millages such as the city’s ambulance fund. Baudoin said the city is catching up on a backlog of repairs to buried sewer lines. It’s replacing water meters and improving lift stations.

“The money is more readily available to us,” Baudoin said. “(Residents’) rates are a little bit higher, but we want to make sure their money is going to good use. ... When things cost more for us, it’s a shame, but we have to supplement that cost somehow.”

One of the key uses is preventive maintenance, he said. In the past, the city could only respond to a sewage backup and didn’t have the time to seek out collapsed lines and replace them before they became a huge issue. Baudoin said Gretna has hired a private contractor who’s doing a survey of the city’s sewer lines to identify trouble spots so repairs can begin immediately.

“The water and sewer basically generates its own revenues, and it doesn’t have to depend on the city’s revenue anymore,” Baudoin said. “It’s pretty much self-sustaining. … We really didn’t have the funds to identify and do what they call preventive maintenance.”

When Gretna made the rate increases, council members were leery of the possibility that residents’ costs would rise, but they wouldn’t see any benefit from the spike. There also was widespread indignation that funds with dedicated revenue sources had been raided to subsidize the plants. Councilwoman Belinda Constant said she’s still surprised at how long the city went without raising rates and noted that as she campaigns for mayor residents are still upset about the abrupt, hefty increases.

Councilwoman Raylyn Beevers was one of the harshest critics of the decision to subsidize the plants with money from other funds, but she said it appears those funds will be repaid ahead of schedule. She also praised two sewer projects in her own district and looks forward to more to come.

“We’re actually doing well with that,” Beevers said.

Gretna’s decision to raise its rates had a bit of a ripple effect in the area with Westwego approving its own sewage rate increase a year after Gretna’s and Harahan approving one earlier this month. In both instances, officials in those cities pointed to the size of Gretna’s increase to offset indignation at their own increases.