NEW ORLEANS – The Bureau of Governmental Research supports the Sewerage and Water Board’s proposed rate increase due to chronic underfunding and deferred maintenance, damage caused by Hurricane Katrina and deteriorating financial conditions, according to a statement released Wednesday.
The average customer would see an increase in the monthly bill from $52.50 to $112.67 between 2012 and 2020.
“However, the average residential customer’s bill would remain in line with similar customers in peer cities. And they would meet basic affordability standards,” according to BGR projections.
The rate increases would allow the S&WB to make critical investments in treatment plants, sewer networks, new technology for meter reading and customer service.
Less than half of the revenue from the rate increase would go toward infrastructure and other capital improvements. A large portion would be spent to position the S&WB to issue bonds at reasonable rates, the report said.
The rate increase would not cover drainage system needs, which are estimated at $356 million during the next eight years, and make no more than a dent in the leakage plaguing the water distribution network.
Developing a clear spending plan, which the S&WB has not done, is a high priority so that waste and inefficiency do not occur.
“There is no question that the Sewerage & Water Board is deeply underfunded,” said BGR Chairman J. Kelly Duncan. “While the rate increases will be painful, they are clearly necessary.”
Read the entire “Time to Pay the Pipelayer” Report.