New Orleans lawmaker files bill to take over S&WB, in line with Jeff Landry's task force plan

A New Orleans-based lawmaker filed legislation late Tuesday to dismiss the local overseers of the beleaguered Sewerage and Water Board in favor of a temporary board made up of state and local officials, a drastic step recommended by Gov. Jeff Landry's task force on the utility that had drawn a rebuke from the S&WB's executive director hours earlier.

On the final day that bills could be submitted during the Legislative session, State Rep. Alonzo Knox, D-New Orleans, proposed HB 941, which calls for the governing board of the S&WB — currently controlled by Mayor LaToya Cantrell — to be taken over for one year by an 11-member board that spreads power between appointees of the governor, state legislators and business groups as well as the City Council and the mayor.

The bill appears to be based on the "recovery district" proposed by Landry's 14-member task force that was asked to come up with reforms of the S&WB that could be enacted during this year's legislative session.

Shifting power toward the state, which is controlled by Landry and his Republican allies, and out of the hands of officials in the heavily Democratic city, has drawn criticism from some New Orleans political leaders.

And on Tuesday, S&WB Executive Director Ghassan Korban weighed in for the first time, telling City Council members during a tense, three-hour council meeting on the S&WB that a?proposed takeover?would be?a "terribly distracting, disruptive" idea.

“I’m all for help from all levels of government, where we ask for it and we can use it. But that concept seems very, very disruptive,” said Korban, who has run the utility since 2018.

Korban's remarks were the first public comment from S&WB officials since the report was released last week. Cantrell — who chairs the utility's board — has declined to comment on the task force report.

Landry hasn't commented on the task force's recommendations and didn't immediately respond to a request for comment on the bill.

Knox's bill, if passed by the Legislature and signed by Landry, would take effect in January. It spreads appointing authority for the proposed 11-member board more evenly between state and local officials than the recovery district, which would have put control firmly at the state level.

Landry and his allies — including the House speaker and Senate president — would get four picks. The mayor, City Council and district attorney of New Orleans would each select members, as would the city's Board of Liquidation.

The Public Service Commission, the Legislative Audit Advisory Council and Greater New Orleans, Inc., a nonprofit regional business booster group, would each select a member.

In response to questions about how his bill came about, Knox said in a text message that "the citizens (my neighbors in particular) of New Orleans have repeatedly requested that we do something that would comprehensively address the myriad of issues of SWBNO. That's what this bill aims to do."

A brief mention

The task force, formed by Landry last month, was directed to propose reforms that could address issues around the S&WB's billing and drainage that have plagued New Orleans residents for ages.

During a series of meetings last month, residents spoke about massive bills and a complicated appeals process, while public policy experts detailed the split oversight that has made it hard for the S&WB to fix its problems.

The prospect of a recovery district was mentioned only briefly during nine hours of public discussion. And when the recovery district appeared in the task force report released March 27, local officials?questioned whether a takeover was the best route to fix the S&WB's chronic problems.

In an interview last week, lobbyist Paul Rainwater, who briefly oversaw the S&WB and served as the task force chairman, said that Landry’s policy staff helped shape the recommendations. He said he believed a state takeover was unlikely, and the intent was to force the utility and city officials to take action on other recommendations.

Among those recommendations is a consolidation of responsibility for all drainage infrastructure within the S&WB, including the poorly maintained catch basins and small pipes currently under the purview of city's public works department.

Knox's bill mandates consolidation, which the S&WB has supported so long as it receives adequate funding to carry out the new responsibility.

The S&WB has estimated that it needs $25 million per year to take over the "minor system." Knox's bill doesn't provide a new funding source, but calls on the temporary governing panel to publish a report for a wide range of long-term reforms — including how it should be funded.

Questions on takeover

During the City Council meeting Tuesday where Korban addressed the task force recommendations, council members, as well as the Bureau of Governmental Research, a nonprofit, nonpartisan policy watchdog, also criticized any potential takeover.

Though BGR has long called for changes to the S&WB governing structure, CEO Rebecca Mowbray said in prepared remarks that a takeover would weaken local accountability and could disrupt recent progress.?

“The district’s new board members would face a steep learning curve. The current board has worked for several years to improve its governance of the utility and plan for the future. That momentum could be lost,” Mowbray said.?

A healthier relationship??

Most of the existing board answers to the mayor, while the council controls S&WB funding. BGR has said the board, however constructed, should oversee operations and funding. The group also wants a new process created to evaluate the utility's funding needs, after the council refused to consider recent proposals for increases in water rates and property taxes.?

Council Vice President JP Morrell, who has been a vocal S&WB critic, agreed on Tuesday that a predictable method for deciding on necessary funding — similar to how the council's Utilities Regulatory Office analyzes Entergy New Orleans rate proposals — would make for “a healthier relationship than what we have now.”

“It would be easier for the council and the public to accept the rate increase was necessary,” Morrell said.??

Billing questions

In addition to addressing the proposed takeover, council members on Tuesday raised questions about?a year-old council ordinance meant to improve the S&WB's billing system.

S&WB officials admitted they haven’t fully implemented that ordinance, which requires that estimated meter readings, long a source of complaints of inaccurate bills, be based on an average of the previous three uncontested "actual" meter readings.

The S&WB says all accounts are on a rotating monthly schedule of in-person “actual” meter reads and that it estimates because it doesn’t have the personnel to read all 140,000 meters every month.

Instead of abiding by the council's requirement, S&WB officials said they are taking an average of all actual reads — contested or uncontested — over the previous 12 months.?

Korban told council members that picking out the last three uncontested reads would require manual research of individual accounts, which he said has contributed to the inaccuracies.?

“We know that our manual process has failed us miserably, whether reading a meter or processing. Any time it involves humans has resulted in tremendous suffering,” Korban said.?

The S&WB is in the process of installing automated meters, and officials have said this will solve its billing woes. That project isn’t scheduled to be complete until the end of next year, though, and Morrell, along with Council members Joe Giarrusso and Lesli Harris, warned the S&WB not to promote the meter replacement as a panacea.?

“I get that you think that it’s going to be a silver bullet, but it really isn’t because you have to then clear up these past inaccurate bills,” Harris said.?

There were about 4,600 S&WB accounts in dispute and 26,000 delinquent active accounts as of the end of January, according to S&WB data. The disputed and delinquent accounts represent more than 20% of all S&WB accounts.

Short of target?

Council members also said they doubted the S&WB is in fact performing actual reads every other month. As part of the council’s new ordinance, meter readers are required to leave door hangers after conducting in-person reads. Morrell said he and his neighbors have rarely seen the hangers.?

S&WB data shows that it isn’t meeting its goal of conducting “actual” reads on half of the city’s meters every month, though the proportion is difficult to say exactly because data isn’t presented with precise figures. It appears that actual reads comprised about 45% of S&WB bills for 12 months through the end of January.

After the meeting, utility officials said meter readers must still resort to estimates when the underground meters are obstructed.