Nagin pushing bills to restructure S&WB

One measure would eliminate agency

Thursday March 18, 2004

By Martha Carr and Frank Donze
Staff writers

In his latest attempt to radically restructure the New Orleans Sewerage & Water Board, Mayor Ray Nagin said Wednesday that the city is considering pushing two bills in the upcoming legislative session: one that would remove City Council members from the 13-member board, and another that would make the quasi-state agency a part of the city's Public Works Department.

Nagin also said he will make a decision "shortly" regarding the proposed privatization of the city's sewer and water systems, announcing that after almost five years of debating whether to hire a private operator, it is "time to fish or cut bait."

"We allowed the privatization process to continue to go forward, with the thought that if we could have three companies that would bid and could guarantee us a certain amount of savings, we would continue," Nagin said at a City Hall briefing where he outlined his agenda for the Legislature's regular session, which begins March 29.

"We've had at least that number of companies express interest. It's just a matter of whether they are going to formally bid or not."

Since he took office almost two years ago, Nagin has been sharply critical of the water board's inefficiencies, and has made no secret of his intention to wholly change the way it operates.

The question remains, however, whether Nagin can get the legislative support he needs to eliminate one of the city's most highly politicized boards, which is laden with appointees from multiple mayors.

State Sen. Lambert Boissiere, D-New Orleans, who Nagin said had agreed to sponsor both bills in the Senate, said he has yet to sign off on either of the mayor's proposed reforms. While he believes some changes are needed, Boissiere said, he's not convinced the water board should become part of the city bureaucracy. He also said he has questions about Nagin's proposal to model the S&WB after the New Orleans Dock Board, a much smaller agency that operates without elected officials.

The deadline to pre-file bills for the upcoming session is Friday.

"Just changing the board's structure will not solve the problem," Boissiere said. "And I don't think I'm ready to support making it a city agency. I want (the Nagin administration) to make their case and I will listen. But I think most of our constituents would have some concerns about putting the board directly under the mayor and seven City Council members."

Different membership

The least radical of Nagin's reforms is a proposal to downsize and depoliticize the water board, which now consists of the mayor, three council members and nine mayoral appointees who serve nine-year terms.

For years, board critics have said the governing structure is unwieldy and unproductive, mostly because members have competing political alliances depending upon which mayor appointed them. City Council members on the board are also regularly conflicted, because the council must approve water and sewer rates as well as the agency's annual budget.

Nagin said he thinks the board would work better if it were structured like the Dock Board, which consists of seven members who serve staggered five-year terms. Appointees are nominated for the job from a slew of agencies, including maritime industry organizations, academic institutions, and chamber of commerce groups. A committee then whittles the list to three, and sends those names to the governor, who has the final say.

It was unclear Wednesday whether Nagin intends to follow the Dock Board structure strictly.

Councilman Eddie Sapir said he's overwhelmingly in favor of removing council members from the board -- even if it means losing his appointment.

"However it's done, I know it's in the best interest of the citizens and the ratepayers," he said. "I told the mayor I will hold his hand, go to Baton Rouge, and do anything to make it happen."

But Councilman Marlin Gusman, who also serves on the board, said he's more skeptical about the idea.

"I would be extremely wary of any proposal that seeks to insulate voter participation with something like the Dock Board," he said. "That is something controlled at the state level without any involvement of any (local) elected representatives. Anytime we are talking about major issues involving rates and things as important as water and drainage, it's important for the people to have a voice in that process."

A new structure

Nagin's second, more controversial, proposal is to abolish the quasi-state agency and fold it into the city's Department of Public Works, an arm of city government headed by a mayoral appointee whose primary duty is oversight of street construction and maintenance. In the long run, the mayor said, it would be a more efficient and less expensive way to provide basic services to residents.

"We've looked around the country and we've seen lots of municipalities that have a sewerage and water board as part of their public works department," he said.

The mayor said the timing is right for such a merger, now that the agency has been stabilized financially -- at least for now. Last year, the City Council approved three years' worth of sewer rate increases. The board also hired Morgan Stanley to refinance much of its debt, and hired RIS New Orleans to begin running fiber-optic conduit on sewer lines -- infrastructure that Nagin believes the city will be able to lease to telecommunications providers.

Nagin said the prospect of savings from the refinancing and the potential of new revenue from the fiber-optics proposal have lessened "the pressure" to privatize.

Nonetheless, he said the privatization debate will soon be settled, when he gives private companies interested in running the city's sewer and water systems a deadline to say whether they will submit bids.

"We will be settling that very soon -- very soon," he said.

The water board began entertaining the idea of hiring a private operator in 1999 as a way to stave off rate increases while financing millions in sewer improvements mandated by the federal government. The city's first bid process ended abruptly in October 2002, after a coup by privatization opponents resulted in a 6-5 vote to reject all bids. Nagin restarted the process last January, but it's been stalled for at least six months.

Nagin's other ideas

Other proposed legislation that Nagin hopes to push in the upcoming session would:

-- Create a new agency to oversee development of dormant sections of the city riverfront. While details are still sketchy, Nagin said the board likely would include representatives of City Hall and the Port of New Orleans, which owns the vast wharf space along the Mississippi River. In the past, government, business and civic leaders have argued that the city should take a more aggressive approach to developing waterfront property into everything from parks and event venues to residences, hotels and cruise ship terminals.

-- Change state laws that prohibit international banks from operating in New Orleans. Nagin said banks based in foreign countries are prospering in cities like Miami, Houston and Dallas. He estimates that each bank that could be lured here would create 75 to 100 jobs.

-- Secure the full $3.6 million reimbursement from the state that the city says it is owed for expenses related to Harrah's New Orleans Casino. While the city has made the same request in past years to pay for extra expenses it incurs, such as increased police, fire and sanitation costs, the Legislature has been reluctant to comply.

In 2002, Nagin's first year in office, the city got nothing and last year it received only $1 million. Administration officials said they will seek a total of $9.8 million this year in an effort to recoup the money the city failed to get the past two years.


Martha Carr may be reached at mcarr@timespicayune.com or (504) 826-3306. Frank Donze can be reached at fdonze@timespicayune.come or (504) 826-3328.