NEW ORLEANS, LA – Today, Mayor Mitch Landrieu was joined by elected officials, business and civic leaders as he announced a series of proposals to reform the Sewerage and Water Board of New Orleans (S&WB) including recommendations on reforming its governance, increasing transparency, improving operations, and serving as a catalyst for job creation.
“The Sewerage and Water Board’s mission is to provide safe drinking water and protect homes from flooding,” Mayor Landrieu said. “As it currently stands, it is clear to me that it does not have what it needs in terms of infrastructure and funding to serve the city of New Orleans. Post-Katrina, the Sewerage and Water Board’s network of underground pipes is leaking at least 40 percent of its water and the East Bank of the city has faced multiple boil water advisories because of catastrophic outages at the power plant.”
Landrieu continued, “Repairing our city’s infrastructure is essential and with it comes an opportunity to create thousands of jobs for New Orleanians. But in order to move forward on a rate increase, we must reform the Sewerage and Water Board. Today, I am proposing a series of major reforms that are targeted at increasing performance and accountability of the Sewerage and Water Board so that all citizens of New Orleans can have peace of mind that they are receiving the highest level of service from this important public utility.”
In July, Mayor Landrieu requested that the management of the S&WB analyze options for reducing the proposed rate increase to ease impact on ratepayers. In September, S&WB staff reported back that the rate increase could be reduced to a 10% annual increase for water and sewer rates stretched out over the course of eight years instead of five, helping ratepayers achieve significant savings. S&WB was also asked to identify reforms and customer service improvements that would accompany a 10% rate increase which will include electronic meters, an additional customer service center, improved online account management, work order tracking and improved efficiency and reliability.
Among the key reform proposals announced today by the Mayor include a smaller board with shorter term lengths and term limits.
Currently, S&WB consists of 13 members that serve 9 year terms and are appointed as follows:
Four elected officials, including the Mayor, and three City Council members;
Two members of the Board of Liquidation, City Debt, each of whom is appointed by the Mayor on the recommendation of that board; and
Seven citizen members appointed by the Mayor with the advice and consent of the City Council.
Under Mayor Landrieu’s proposal, the S&WB’s board would be reduced from 13 to 9 members; removing the three City Council members and one citizen appointed by the Mayor from the board. The length of terms would be reduced from 9 to 6 years, and board members would be limited to serving two consecutive terms. The new board would include the Mayor serving as its President, 2 members from the Board of Liquidation appointed by the Mayor, and 6 citizens who each have expertise in at least one of the following areas: finance/ accounting, business administration, engineering, law, public health, or a consumer/ community advocate. These members would be selected by the Mayor from nominations put forward by local university presidents representing Tulane University, the University of New Orleans, Loyola University, Southern University of New Orleans, Dillard University and Xavier University.
Proposed Board Composition
Board of Liquidation Member appointed by the Mayor;
Board of Liquidation Member appointed by the Mayor;
Tulane President nominates three citizens, Mayor appoints one;
UNO President nominates three citizens, Mayor appoints one;
Loyola President nominates three citizens, Mayor appoints one;
SUNO President nominates three citizens, Mayor appoints one;
Dillard President nominates three citizens, Mayor appoints one; and
Xavier President nominates three citizens, Mayor appoints one.
The above proposals, like recent reforms to the Public Belt Railroad Commission, require changes to State law and the City Charter. Below are the steps that need to be taken in order to make the recommended changes in 2013:
March 8 – deadline to advertise twice for each proposed State law change;
April 8 – filing deadline for State law changes and start of 2013 Regular Legislative Session;
July – once Governor signs bill, introduce City Council ordinance to call for an election;
July 17 – deadline for State Bond Commission proposition;
August – State Bond Commission Meeting;
September – voting changes that are subject to an election must be approved by United States Department of Justice (the restructuring of board composition qualifies); and
October 19 – Citywide election on Charter Changes (must be at least 90 days after Council ordinance is introduced).
Senator J.P. Morrell and Representative Walt Leger III will handle the S&WB reform bills for the Landrieu administration in the Louisiana Legislature next spring.
Senator Morrell said, “I am happy to lead these Sewerage & Water Board reform efforts on behalf of our delegation. We have a real opportunity to make the S&WB more accountable, harden our infrastructure, and create jobs for New Orleanians.”
Representative Leger said, “Sewerage & Water Board reform is long overdue. The public expects more transparency and accountability, and this reform package is a step in the right direction.”
William Raymond Manning, President Pro-Tem of the Sewerage and Water Board of New Orleans said, "The members of the Sewerage and Water Board are prepared to undertake these reforms and support the Mayor in his continuing effort to make New Orleans a more livable and exciting place to live, work and raise a family."
Gary Solomon, Chair of the New Orleans Citizens Sewer, Water & Drainage System Reform Task Force, said, “The New Orleans Citizens Sewer, Water & Drainage System Reform Task Force applauds Mayor Landrieu's leadership in offering comprehensive reforms to how New Orleans governs, operates, and invests in the city's flood protection and water services. The Task Force strongly believes that it is critical to combine any increase in water rates with innovative and permanent strategies to improve customer service, reduce needless costs, and achieve more sustainable and durable water infrastructure. Today's proposed governance reforms, based on Task Force recommendations, are a key foundation for ensuring that New Orleans citizens’ investment in more effective water management will be rewarded.”
INCREASING TRANSPARENCY & ACCOUNTABILITY
As part of an effort to improve the accountability, transparency, and performance of the S&WB, Mayor Landrieu proposes that a public “S&WB STAT” meeting be developed to report on performance measures to the S&WB Operations Committee. During these meetings, senior leadership will meet in public with key department heads and program managers to review data to understand what works, what doesn’t, and what steps need to be taken to improve results. Implementing this performance management initiative will improve results for citizens. These meetings will be similar in structure to the City’s successful PerfromanceStat programs monitoring blight reduction (BlightSTAT), revenue collection (BottomLineSTAT), quality of life issues (QualityOfLifeSTAT) and City contracting (ReqtoCheck).
To improve the contracting process, Mayor Landrieu has proposed that S&WB memorialize good government contracting processes through a policy change stating that S&WB must abide by Executive Order MJL 10-05 on Professional Services Contracting Reform. This will ensure that a competitive selection procedure is established for the procurement and award of professional service contracts. Additionally, all meetings of selection committees are open pursuant to the open meetings law.
Mayor Landrieu said, “Once and for all, it will be clear that the Sewerage & Water Board members are not in the business of issuing contracts. This is the same level of transparency most City agencies already follow based on an executive order I signed in the early days of our administration. It’s what you know, not who you know.”
Further, the Mayor proposed today that the S&WB memorialize that all board members must abide by State financial disclosure and ethics code requirements. This will create a process that is both open and fair and increases the public’s confidence in the S&WB.
To ensure accountability to the public, the Mayor recommends that the New Orleans City Council continue to provide oversight of the S&WB within the Council’s current committee structure.
To improve coordination between S&WB and the City’s Department of Public Works (DPW) on the $200 million FEMA funded Recovery Roads Program that is repairing Hurricane Katrina related damages on and beneath City managed streets throughout New Orleans, a new joint S&WB-DPW project management unit has been created to better facilitate design review designs and coordinate on joint capital improvement projects. Literally, engineers from both the S&WB and DPW are now sitting in the same room.
After proposed rate increases are completed in 2020, the Mayor also proposed allowing the S&WB to increase rates annually by an amount tied to the Consumer Price Index (CPI). The CPI adjustment is used in many other jurisdictions, including Jefferson Parish which uses the change in the CPI to adjust both the monthly service charge and the usage fee. Other rate increases will continue to go before the City Council and Board of Liquidation.
According to the S&WB, a 10% rate increase will help fund a ten year, $3.3 billion Capital Improvement Program composed of over 600 projects that can support 26,959 construction jobs. In addition, S&WB’s management estimates that 74 permanent jobs would be created in 2013 at the S&WB for operating and maintaining the water and sewer systems from funds provided by the proposed rate increase. This would increase to a total of 186 jobs by 2020.