Voters may get muted on S&WB decision

Wednesday May 14, 2003

By Gordon Russell

Staff writer New Orleans Times Pecuyun

If the Sewerage & Water Board votes to hire a private company to manage most of its operations, an outcome that appears increasingly likely, New Orleans residents are supposed to get an opportunity to bless the deal -- or deep-six it -- via a referendum. But it might not be that simple. 

Though voters amended the City Charter last year to require such an election, questions remain about whether the S&WB, technically a state agency, is subject to the charter. If it's not, as some believe, the results of the referendum could be challenged in court and thrown out, which could preserve a contract that a majority of the city's voters oppose.

Those who doubt the legality of the referendum include the board's attorney, John Lambert, who told his bosses about his reservations at a recent meeting.

"We've written several opinions as to the relationship of the board and the city," Lambert said in a subsequent interview. "In our opinion, the board is independent of the city and the charter. They can amend the charter all they want, but it doesn't affect us."

Among other precedents, Lambert cited a state Supreme Court decision from several years back in which a city police officer sued the S&WB after being injured in a wreck caused by a pothole. The board argued that the police officer was a "borrowed servant" of the board because the board and the city share a civil service system. But the high court disagreed and allowed the officer to sue.

Tulane law professor and 2002 mayoral candidate Vernon Palmer also fretted about whether the referendum envisioned by voters would have any legal standing. That was one of several reasons he sued the board last year, a case he settled after wringing a stipulation from the board that it would abide by the voters' decision. But it's unclear whether Palmer's settlement governs the current privatization process.

Some of those involved in it, notably lead consultant Tom Ingoldsby, have referred to the new request for bids as a new procurement process, not a continuation of the one that led to a 6-5 vote against privatization in October.

That distinction could be an important one. Both Palmer and Lambert said they can envision a lawyer making the argument that Palmer's settlement doesn't apply any more.

"This could be considered a new process," Lambert said. Questions about the referendum's legal weight have some opponents of privatization worried.

Wade Rathke, chief organizer of Service Employees International Union Local 100, which is hoping to represent S&WB workers, said he's confident that if a privatization contract goes before voters, they'll "smash it like a tomato in the street."

But the board should make sure voters have that right, he said. "Any bidder has to understand that they have to go to a vote of the people," Rathke said. "It's caveat emptor. If you belly up to the bar but you're not willing to be accountable to the city's voters, well, you should step down. To say that we would somehow go through this entire process and then there's no vote, that would be a scandal."

Lambert thinks all it would take to fix the problem is a little legal tweaking. The board simply needs to state in its request for proposals, now in draft form -- and later in the contract it awards -- that bidders agree that even if they win the contract, they still have to face the voters.

If that's done, because the contract is a legally binding document on its own, Lambert figures the referendum would have legal merit regardless of what the City Charter says.

In light of that, board member Henry Dillon, who has generally opposed privatization, said it may be time for the board to revisit the referendum issue.

"As it stands now, I think if you ask two or three people about it, you'll get two or three different answers," he said. "But my understanding is that the Sewerage & Water Board is not bound by the stipulations in the charter. I think we need to kick this around a little."

Gordon Russell: or (504) 826-3347.