S&WB fixes could face sharp Capitol scrutiny
18th March 2024 · 0 Comments
By Greg LaRose
Contributing Writer
(lailluminator.com) — Any solutions the task force Gov. Jeff Landry created to address the myriad problems of the Sewerage and Water Board will more than likely need the approval of the Louisiana Legislature, the body that created the utility 125 years ago.
That will put more cooks in a turbulent broth of drinking water risks, neglected drainage infrastructure and botched customer billing. Lawmakers, who began their regular three-month session last Monday, are certain to bring up the Sewerage and Water Board’s recent history of corruption and mismanagement.
Its executive director was forced to resign after damaging floods in 2017 after it was learned he went public with misinformation about the city’s drainage pumps. Among its more recent scandals, an S&WB plumbing official was charged with embezzlement for stealing more than $100,000 in permit fees.
In 2022, a whistleblower complaint accused managers of building a “secret sex room” where certain employees would bring people to sleep, even during work hours.
For these and other reasons, any proposals the task force recommends to the Legislature will face the typical added scrutiny saved for all things New Orleans-related, especially from lawmakers wary of any resources or seemingly favorable treatment the city seeks from the state.
Yet more money for the troubled utility will be among the suggestions from the task force, whether it comes from state funds or locally derived taxes and service fees. Right off the bat, nearly $30 million is needed for the remaining cost of a new Entergy power station to replace the Sewerage and Water Board’s outdated, frequently offline turbines.
Also high on the list is some form of governance restructure for the multi-tasking utility, which has a board led by the New Orleans mayor, employees with civil service protection and a customer rate structure that requires City Council approval. That’s in addition to the Legislature, which must give its blessing to any significant structural changes.
“Either you have to have a board that has total control and authority so they can be held responsible and accountable, or you need to have some other authority,” Walt Leger III, a task force member and former state representative, said at the group’s first meeting on March 7 at University of Medical Center.
The task force will meet twice more before providing a report of its suggestions to the governor and Legislature, which must adjourn by June 3.
Drainage disconnect
At an earlier meeting this month, multiple task force members mentioned New Orleans’ bifurcated, disjointed approach to drainage as a significant factor behind frequent flooding. Giving a single entity control of the entire system was floated as a within-easy-reach solution.
Currently, the city’s Department of Public Works handles upkeep of surface-level drainage. That includes some 72,000 catch basins to capture storm runoff. Also under the city’s domain are more than 1,500 miles of smaller drain lines that feed water into the larger Sewerage and Water Board network of canals and pumping stations.
The primary task for the Department of Public Works is construction and repair of more than 1,500 miles of New Orleans streets. Task force members noted most cities set up separate agencies to handle drainage and streetwork, and that most municipal water systems aren’t tasked with drainage like the Sewerage and Water Board.
The DPW’s inattention to catch basins has been evident for years. The New Orleans City Council provided $10 million for upkeep at the end of 2022, and only 6,000 catch basins had been touched as of early February, WDSU-TV reported.
The city claims it needs another $20 million for equipment and personnel to keep up with catch basin demands. Without routine cleaning, the street-level grating gets clogged with leaves, debris and trash. In addition to decomposing greenery, it’s highly common for basins to be packed with things that won’t rot or dissolve – everything from Mardi Gras beads to yard signs – to the point they won’t function. As a result, an average summer storm can cause rainwater to rise on the street and into vehicles and buildings.
“You can have the best toilet they make, the best fixtures. If you have hair in the line, it’s not going to drain,” said Roy Glapion, a technical adviser to the task force who’s a civil engineer and sixth-generation New Orleanian.
There appeared to be significant consensus among task force members that moving street-level drainage from the city to the Sewerage and Water Board would help address neglected catch basin maintenance and repair. S&WB executive director Ghassan Korban agreed, with one important condition.
“We are 100 percent ready to take on that responsibility, provided the money to do it comes along with it,” Korban said.
The Sewerage and Water Board collects three separate property taxes for its drainage system. Together they generate about $65 million, from which $10 million comes off the top to pay for a series of massive drainage projects built in Uptown New Orleans over the past decade.
The Department of Public Works, which has no dedicated funding source, receives allocations from the city’s general fund.
Vacuum trucks are the main assets used to keep catch basins clear, and their frequent need for repairs and the resulting downtime were shared with the task force. They’re also expensive, ranging from $100,000 to $500,000 based on a cursory internet search.
As for staying on top of the most acute drainage problems, St. Charles Parish chief administrative officer Michael Palamone, also a technical adviser, offered a low-tech solution to the task force. Its drainage personnel drive around looking for where excessive rainwater gathers and attacks the problem.
Big ask in lean times
Just days after taking office in January, Gov. Landry instructed state agencies to plan ahead for a significant dropoff in state revenue starting in mid-2025. That’s when a 0.45 percent portion of the state sales tax expires and additional sales tax breaks go back into effect.
The Republican supermajority in the Legislature looks as though it will go along with the governor’s belt-tightening advice, potentially making any significant expenditures for the Sewerage and Water Board in the state budget a hard sell.
But the governor also pulled together the task force within his first two months in office. In an interview, Leger said Landry’s willingness to consider changes to the Sewerage and Water Board’s structure and control could also signal his acceptance that it will take a significant investment to cure its many ills.
Whether that means the state plays a more direct role – or any role at all – in righting the ship could depend on the extent of that investment, he said.
“I think that if you want to exert control, then you should act as an owner acts and make investments necessary to get the system to where it needs to be,” Leger said. “If you want to be a partial owner, then you should make partial investments into that system and support it so that it can get the results that it needs.”
Not surprisingly, The extensive laundry list of Sewerage and Water Board needs comes with correspondingly high prices. Much of its infrastructure — especially its in-house power plant and drainage equipment – is already decades beyond outdated.
Replacement parts are no longer made for much of its machinery, so costly and time-consuming fabrication becomes necessary during crisis situations. The 25 Hertz-cycle electricity its turbines generate is antiquated, yet many of its drainage pumps only run off power frequency.
To use modern 60-cycle electricity from Entergy, the Sewerage and Water Board relies on frequency converters, equipment that costs millions and is prone to malfunction. Even once its new, more reliable power station goes online, the city’s drainage, drinking water and sewage treatment systems will still be at the mercy of the converters’ reliability.
Based on its recent 10-year forecast of drainage system upgrade needs, Korban said the Sewerage and Water Board will need $939 million. Based on current projections, only seven percent of the projects on the 10-year plan can be funded.
These calculations don’t include the money needed to take over catch basins from the city. “With the current funding, things aren’t going to get any better,” Korban said.
Father Time and money
The Sewerage and Water Board maintains more than 1,600 miles of water mains throughout the city, and more than a third are at least 100 years old by its own estimate. When repairs are made to a compromised section, they often expose a weakness down the line. It’s a ripple effect that puts utility crews in Dutch boy mode, plugging one leak while waiting for the next to emerge.
In the meantime, the utility also is in the midst of determining what it will take to renovate its main water treatment plant, a facility that hasn’t been significantly updated since Dwight Eisenhower was president.
The Sewerage and Water Board recorded $348 million in 2023, with water accounting for about a third of those collections. As of this month, the total amount of uncollected bills is nearly $58 million – equal to 17 percent of collections from last year.
There are questions, though, as to whether the utility is actually cash poor. It reported having nearly three times the liquidity on hand it needs for its water and sewer bond obligations, the money it borrows to pay for major projects. State lawmakers could press the Sewerage and Water Board to put this cash to use, or they might applaud its leadership’s decision to save for a figurative and literal rainy day.
Last year’s state capital outlay budget included $29 million for the new Sewerage and Water Board’s new power plant, but it was designated as a Priority 5 project. That status basically amounts to a promise to fund the project at a future date.
The task force meeting included discussion of making that allocation Priority 1 in this year’s capital outlay budget. That legislation has yet to be filed for the upcoming session, and it will be Gov. Landry first opportunity to have a hand in crafting it.
The Legislature has a strong track record of putting state dollars into major infrastructure projects for New Orleans, Leger said. In 2018, when he was in the House of Representatives, Leger helped craft what was called the Fair Share deal. It gave the city $67.5 million immediately to address pressing needs and set up a recurring $22 million allocation for Sewerage and Water Board work and other projects.
“There’s a demonstrated history of support from the state over the years,” Leger said. “There is substantial capital outlay dollars that have flowed from the state to the city to support critical projects, and so that needs to continue.”
This article originally published in the March 18, 2024 print edition of The Louisiana Weekly newspaper.
