Government & Politics

Inspector general rips S&WB as agency angles for huge rate hike

In a scathing denunciation of the Sewerage & Water Board, city Inspector General Ed Quatrevaux has advised Mayor Mitch Landrieu to hold off on a giant rate hike sought by the agency until key reforms have been implemented.

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No one doubts the need for infrastructure improvements sought by the Sewerage and Water Board, Quatrevaux writes in a letter to Landrieu dated today. But an assessment of the agency ranks it “second only to an entity where a criminal investigation was in progress at the time,” Quatrevaux writes. “The Sewerage and Water Board is the most likely of the city’s component entities to engage in fraud, waste and abuse, according to a standard risk-assessment methodology,” he adds.

Faced with the impending collapse of its poorly maintained and storm-damaged infrastructure, the  Sewerage and Water Board has proposed an 80 percent rate increase over the next five years, one that will nearly double customers’ sewer and water bills.

Quatrevaux’s harsh assessment of the agency is based on information provided by the SW&B, external audits, news accounts and law enforcement intelligence sources.

According to a Fox8 report cited by Quatrevaux, the the agncy’s executive director is scheduled to receive a life annuity of $175,000 and a lump-sum retirement payment of $877,000. With employees contributing just 4 percent of salaries toward their retirements, Quatrevaux calls the pension plan basically “unsustainable.”

Other signs of mismanagement cited by Quatrevaux:

– As reported by WDSU TV, the agency has 123 take-home cars, compared with 21 in Jefferson Parish.

-The SW&B reported that its 2010 employee medical insurance cost was $14.5 million, or $17,439 per employee, compared with a cost of $6,800 per city employee in 2010.

Along with accounting deficiencies, Quatrevaux is particularly dismayed by the agency’s failure to “fix the problem identified in the prosecution of its felonious former director Benjamin Edwards”: meddling in the procurement process. Citing recent efforts to secure insurance coverage, Quatrevaux writes: “… By all appearances, the finance committee merely used the disadvantage business enterprise to as a cover for retaining current contractors without competition, and in doing so the finance committee eliminated fair and open competition in favor of cronyism.”

Quatrevaux said political opposition to a rate hike could be lessened if the SW&B addressed its susceptibility to fraud and corruption. Necessary reforms include  adopting the city’s procurement policy and reviewing the sustainability of pension funds and other employee benefits, Quatrevaux said.

Ultimately, the Sewerage and Water Board should be made a part of city government under the mayor’s chief administrative officer, Quatrevaux writes. Meanwhile, he recommends appointing  an independent monitor to rein in waste and abuse.

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  • Millie

    Thank you for writing a much more informed story than the TP.

  • debi

    Thank you! Let’s hope and pray the mayor heeds this advice and DOES NOT allow the rate hike. S&W Board is always crying poor. The tax payers in New Orleans didn’t let their S&W systems deteriorate, and Katrina only made it worse. The S&W Board is responsible for the neglect. Every time I go to a S&W Board meeting, my hair catches on fire from anger what with their new schemes blaming of other agencies and poor mouthing. We deserve better. If they want a rate hike, we want to SEE what we are paying for. No more false promises. We want action. Fix the problems, fix them RIGHT and I am sure the tax payers will be glad to pay for the NEW system. Sheesh people.