NEW ORLEANS — Now that the Sewerage & Water Board has begun to enact several years of rate increases, the City Council has started to press the utility about how it will spend that money and to begin discussing how it can further change its operations.
The goal of any changes, Council President Stacy Head said, is to reduce costs to customers while increasing revenues for the utility.
During a two-hour meeting of the council’s Public Works Committee, council members and S&WB officials discussed ways to reduce pension plan costs, the number of agencies that receive free or discounted water and account review practices.
The City Council in December approved a plan that calls for raising rates 10 percent each year for the next seven years. That 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.
Head noted that about 43 percent of that increase will be spent on operation and maintenance costs.
A large cost the S&WB faces is its pension plan. Last year, it paid $6.1 million into the plan while employees paid $1.1 million, according to S&WB officials. Head said the utility should consider raising the employee contribution since, she said, the plan offers benefits that are high when compared with the private sector.
“I don’t know if we can keep asking the rate payers to pay for such lucrative benefits,” Head said.
Council Vice President Jackie Clarkson said the practice of giving those benefits packages came from trying to recruit those who would otherwise work in the private sector.
Marcia St. Martin, S&WB’s executive director, told the committee she supports a gradual increase in the amount employees would have to pay into the pension plan.
In terms of free or reduced water service, S&WB Deputy Director Robert Miller said there needs to be a discussion about what changes could happen there.
Right now the city gets free water, while other agencies, such as Audubon and City parks and the New Orleans Museum of Art also get free water unless they use more than a certain amount. Meanwhile, the city’s school’s pay a reduced fee.
The Orleans Parish Sheriff’s Office used 93.5 million gallons of water last year, the equivalent of at least $707,000, Miller said.
The rules about free and reduced water service are governed by state statute, something only the Legislature can change.
“This is an incredibly important issue,” Councilwoman Kristin Palmer told the S&WB officials. “We have to have a high level of accountability. ... We need to get a handle on this pretty quickly.”
For those customers who do pay for water, S&WB General Superintendent Joe Becker said there has been progress in the area of field account review. That process determines if meters are working accurately and that bills are being computed correctly.
Field account review results wound up netting the S&WB an additional $883,797 in revenue last year, Becker said.
Becker said the utility will begin an automatic meter reading pilot program this year that will enable remote reading of residential and commercial customers’ meters.
Right now meter readers fan out across the city and walk neighborhoods to note defects.
“Now we won’t have to rely on that much legwork,” Becker said.
Other progress S&WB officials noted included:
- Work to update governance practices with board-approved recommendations that are ready for the state Legislature to approve.
- Customer service improvements.
- Operational changes that include better coordination with the Department of Public Works.
- Job training through Delgado Community College.
- 2013 capital projects begun.
- The introduction of WaterStat, a new quarterly program for public reports and better City Council oversight.