Less than two days before the New Orleans City Council decides whether to double water and sewer rates over eight years, Mayor Mitch Landrieu and city officials haven’t explained exactly how the $583 million in extra money would be spent.
The Lens has asked the Sewerage & Water Board for concrete answers since Thursday but has gotten a stiff-arm in response.
The mayor’s spokesman has told The Lens that the water and sewer system is “in crisis,” with a $3.3 billion backlog in projects and 40 to 50 percent of the water being lost through leaky pipes.
But spokesman Ryan Berni has not provided specifics on how much of the $583 million would go toward that backlog, toward shoring up the agency’s cash reserves — which was highlighted in a January consultant’s report — or toward keeping sewage and clean water running through the current pipes.
The Bureau of Governmental Research, a nonpartisan research group, hasn’t been able to get clear answers either from the sewer and water agency. The nonpartisan research group, which has lamented the agency’s “dysfunctional governance,” will release a report Wednesday morning with its best estimate of how the money would be spent.
Update: The organization’s report estimated that the Sewerage & Water Board would spend almost half of the $583 million on its aging infrastructure, with the remainder going for day-to-day expenses,boosting cash reserves and borrowing more money.
Requests to delay Thursday vote
Landrieu is trying to muscle the rate increase through the City Council over the objection of its president, Stacy Head. She has asked her six colleagues to postpone the vote for two to four weeks while they obtain a full explanation of spending plans from the mayor and the Sewerage & Water Board.
“I fully believe that the public has not fully grasped what is coming down,” Head said in an interview Tuesday, adding that she believes at least some money needs to be spent to overhaul the system.
The Bureau of Governmental Research also wants a delay.
“We don’t think there’s clear information in the public domain on how the money would be used,” said Janet Howard, president of the organization. “There is not detailed information.”
Under the plan before the City Council on Thursday, sewer and water rates would rise annually by 10 percent for eight years beginning in 2013. Under the plan, the average homeowner who spends $52 today per month would spend more than $100 by 2020.
The water board had sought a larger increase over fewer years, but dropped it to 10 percent at Landrieu’s request. The board voted for the increase in November.
So exactly how would the city spend the extra money?
On Thursday, Sewerage & Water Board spokesman Robert Jackson directed The Lens to two studies buried on the agency’s website. Those studies outline the agency’s spending needs but are based on a different proposed rate increase.
Berni was asked on Monday to document how the Sewerage & Water Board would spend the $583 million. He emailed The Lens a copy of a document cited by Jackson, a September 2011 consultant’s report.
Berni said the water board would use some of the money to guarantee bonds that would pay for additional projects. But he could not explain how much would go for the bonding. He did not respond to two interview requests on Tuesday.
In dismissing Head’s deferral request, Berni on Monday noted that the city held six public meetings in January and February to explain the need for a rate increase.
Palmer: ‘There’s a need for tough decisions’
Councilwoman Diana Bajoie and Councilwoman Kristin Gisleson Palmer both said in interviews Tuesday that they expect the City Council to vote on Thursday.
“The public has known about this decision for some time,” Palmer said.
“The infrastructure is in bad shape,” Bajoie said.
Neither voiced support for Head’s request to defer the vote.
Palmer said the rate increase will be a tough decision.
“I don’t think anybody wants to vote on it Thursday, two weeks from now, a month from now or three months from now,” she said. “But we were elected at a time when there’s a need for tough decisions.”
Bajoie dismissed Head’s belief – stated Monday – that Landrieu wants the vote to take place Thursday because he appointed her to the council in June and can count on her support.
“I voted for everything on the merits in 32 years in the state Legislature,” Bajoie said. “That’s how I’ll vote Thursday.”
She confirmed that the mayor has sought her vote on the matter.
Council members Ernest Charbonnet, Cynthia Hedge-Morrell, Susan Guidry and Jackie Clarkson did not return calls Tuesday asking for comment. (Update: Clarkson said Wednesday via email that she supports the rate increase.)
Clarkson will hold a special budget meeting Wednesday at 2 p.m. in the City Council chambers to discuss the rate increase. Howard and Head said that doesn’t give the council enough time to digest any new information before Thursday’s vote.
Thursday is the final council meeting for Bajoie and Charbonnet. Bajoie will be replaced by the winner of Saturday’s District B race, featuring LaToya Cantrell and Dana Kaplan. Cantrell (endorsed by Head) opposes the rate increase now, while Kaplan (endorsed by Landrieu) is open to the idea.
Charbonnet will be replaced by the winner of the District E race, featuring state Rep. Austin Badon and James Gray. Badon opposes the increase. The Lens has not been able to reach Gray.
Chamber of Commerce supports increase
In another development Tuesday, the board of the New Orleans Chamber of Commerce voted to support the rate increase, which should strengthen Landrieu’s hand against Head.
“The Board voted to support the rate increases with the caveat that the Mayor follow through with the governance changes he has proposed and that there be ample oversight by him and [the Inspector General] to avoid any waste, abuse, and mismanagement at S&WB,” chamber board chairman William Aaron Jr. said in an email.
Landrieu wants to reduce the water board, shorten the board members’ terms and strengthen their credentials, to improve how the agency operates.
Berni noted that the mayor has been making the case since he took office in 2010 that the city needs to spend millions more on New Orleans’ crumbling water pipes, pump stations and catch basins. The federal Environmental Protection Agency is demanding $300 million worth of construction work and repairs to put the city in compliance with clean-water statutes.
“We have discussed this at length for over 2 years, since I joined the board,” Ray Manning, the water board’s pro tempore president, wrote in an email sent Monday night. “We are now at a critical juncture in terms of fulfilling the EPA consent decree on the sewerage system, as well as being able to meet our bond covenants and repair our ailing water and sewer infrastructure.
“Delay is exactly what got us into this situation in the first place. The ‘can’ cannot be kicked down the road any longer. The time to act is now.”
