New Orleans — Mayor Mitch Landrieu on Monday announced a series of proposed changes to the governance and operating structure of the Sewerage & Water Board as the agency tries to raise customer rates for the next eight years to help finance a $3.3 billion rehabilitation of its aging infrastructure.
“This is a problem that cannot be denied,” Landrieu said of the needed upgrades that have been put off for decades. “It’s impossible to kick this can down the road forever.”
Landrieu and other outside agencies have said residents want the changes since there is distrust of the utility, and that reorganization is the only way to restore confidence in the utility, whose proposal would see residential bills increase more than 100 percent by 2020.
Landrieu’s proposal would reduce the board of directors from 13 to nine by removing three City Council members and one resident the mayor appoints. Landrieu also proposed cutting the length of terms from nine years to six years with a limit of two terms.
The new board would include the mayor as its president; two mayor-appointed members of the Board of Liquidation, which is responsible for selling bonds; and six residents who have experience in the areas of finance and accounting, business administration, engineering, law, public health and consumer advocacy. The resident positions would be selected by the mayor after he reviews nominations from the presidents of the four-year universities in the city.
Responding to a Bureau of Governmental Research report that suggested all elected officials be removed from the board to avoid politics interfering with operations, Landrieu said feedback found that people want the board to run as a public-private entity, though the agency is a public body.
“We didn’t want to re-create the wheel,” he said.
City Council Vice President Jackie Clarkson, who is a board member, said she supports the proposal.
Council President Stacy Head, who also sits on the board, said she only has a few ideas different from Landrieu’s proposal.
“Generally I think it’s a great move,” she said.
Ray Manning, S&WB president pro-tem, said he supports Landrieu’s management reorganization proposal.
Though the S&WB’s board of directors is expected to vote Wednesday morning on adopting a new governance structure, it would take at least a year to enact any changes since the state Legislature would need to give its approval, and the city charter would need to be amended and approved through a public vote.
While council members would be removed under Landrieu’s proposal, that governing body still would provide oversight of the S&WB.
“I look forward to carrying this forward in the Legislature,” state Sen. J.P. Morrell said.
According to the BGR, the recommended 10 percent rate proposal would begin Dec. 1 and increase the average monthly residential bill by 136 percent in 2020, generating $582.6 million during its lifespan.
The government watchdog agency noted that while the new revenue will fund operating costs, ongoing sewer rehabilitation and upgrades to water treatment plants, it won’t properly cover repairs to stop leakage problems.
Landrieu said about 40 percent of the city’s water supply “bleeds” from the pipes daily.
Landrieu said the city has secured several hundred million dollars in FEMA funding in the past several years and will continue to seek federal funding to make sure the proposed rate increases are “justified.”