New Orleans — Sewerage & Water Board customers will begin receiving larger bills starting in January after the City Council voted Thursday to increase rates for water and sewer services.
The 5-2 vote happened despite recent pleas for a deferral by Council President Stacy Head and others who argued the decision was being made too hastily and before public discussions on the matter. Other council members, though, and the Landrieu administration said that the city can’t wait any longer to take action on funding repairs.
District E Councilman Ernest Charbonnet joined Head in voting against the increases, agreeing that more time was necessary before making a decision.
The plan calls for raising rates 10 percent each year for the next seven years and is expected to generate $583 million as the S&WB begins rebuilding its finances and enacting a $3.3 billion rehabilitation project of its aging and deteriorating infrastructure.
According to officials, the average monthly residential bill, based on 5,300 gallons, will increase from $52.50 this year to $112.67 in 2020. An amendment to the ordinances calls on the S&WB to work with low-income customers who will have trouble paying the higher bills.
Business customers will see substantial increases by the end of the eight-year period, according to estimates by the Bureau of Governmental Research. Small businesses’ bills would go up from an average of $215.56 in 2012 to $462.33 in 2020, while light industrial businesses would see an increase from $2,955.66 to $6.336.05. Large industrial bills would soar from $54,549.27 to $116,631.07, according to the BGR.
The rate increases begin Jan. 1.
There was little disagreement that the increases, while large, were necessary. Head, however, had pressed for a delay in the vote. She contended a decision that will result in doubled bills needed more public vetting and insisted several questions she had about the increases were not answered.
Mayor Mitch Landrieu responded that there were nearly three dozen meetings about the rate increases during the past several years and on Thursday told the council that the vote might be the most important one its members would cast.
“What today really is about is political leadership,” Landrieu said.
Responding to concerns from Head and the BGR about how the money will be spent, Landrieu said he will work to make sure spending is done properly.
“We are committed to ensure no dollar is wasted,” he said.
That, however, wasn’t enough for some citizens who want to see change of the board’s management before handing over more of their money to the utility.
Viola Washington, who spoke on behalf of the New Havana Place Neighborhood Association, said she was skeptical that the current leadership would be good stewards of the money, citing how some hurricane disaster recovery funds were spent.
“Look at what happened to the Road Home dollars,” she said. “The same thing’s gonna happen here.”
The council aimed to tie a proposed governance revamp to the ordinances that will allow the rate increases by amending the legislation to “strongly request” that the changes be made.
Because the S&WB is a state political subdivision, any change to its governance must be approved by the state Legislature, which means the earliest changes could happen would probably be next fall. There are several proposals about what the new structure might look like, but most call for a smaller board, shorter terms and the removal of City Council members and the mayor.
That late amendment, written Wednesday, is what Charbonnet said led him to vote against the increase.
“If we can improve this overnight, imagine what we can do in a few days or in a week or two,” he said.
Another concern some people voiced was that Charbonnet and Councilwoman Diana Bajoie would be voting on a long-term increase but will be gone within days since they are interim council members. A runoff election Saturday will decide the permanent replacements for those district seats.
Despite concerns the council heard on Thursday and during a meeting on Wednesday, several members said they couldn’t justify putting off the decision since the infrastructure is in such bad condition and dug in their heels on their decisions to approve the rate increases.
“We are, in effect, a ticking time bomb,” Councilwoman Susan Guidry said.
Council Vice President Jackie Clarkson, who pushed hard to ensure the vote happened on Thursday, said that for too long there have been delays.
“We now find ourselves in crisis,” she said.
Head said she has scheduled a Public Works Committee meeting for March in an effort to make the S&WB more accountable.