Clean Water Advocacy - Newsroom - NACWA in the News
Ratepayers May Foot Bill For Upgrades FEMA Won't Finance Improvement Work
Sunday, March 18, 2007
By Michelle Krupa
Even with help from FEMA, ratepayers may be on the hook for more than $1 billion of the projected cost of repairing and modernizing the sewer system in New Orleans.
Sewerage & Water Board administrators say they expect the Federal Emergency Management Agency to pay about $150 million for sewage repairs, but disputes over how much FEMA can disburse -- federal law bars the agency from paying for upgrades or damage due to deferred maintenance -- suggest the sum could be far less. Meanwhile, a water board consultant estimates the job will cost $1.26 billion over the next 25 years.
Traditionally, the S&WB has relied on user fees and property taxes to pay for improvements in the city's century-old sewer network. But with the city's population cut in half by Katrina, fees and taxes aren't expected to produce nearly the amount of revenue they previously did.
Water board officials have not yet broached the subject of rate increases or raising property taxes, saying they first want to exhaust all other resources, including a limited pool of federal grant dollars controlled by the Louisiana Recovery Authority and direct allocations from Congress.
"We're going to plumb every source we can, but so far, we don't have a handle on it," S&WB spokesman Robert Jackson said. He also confirmed management consultant Black & Veatch's assertion that current S&WB revenue from taxes and fees is not enough to cover the cost of repairs.
Without added funding sources, "the S&WB will not be able to sustain the systems that are essential to the public health and continued recovery of the city," according to a December 2006 report from Black & Veatch.
The pinch likely will come soon. Capital projects slated for the next two years, including work required under a federal court order to bring the sewer system into compliance with clean-water laws, will cost $361 million.
The S&WB has no idea how it will cover that bill, Jackson said.
Even if the water board were to raise rates, the city's post-Katrina population would generate far less money than a commensurate increase before the flood, throwing another hurdle into an already difficult rebuilding plan.
"There's a thinner ratepayer base to make up the money needed to reinvest in the sewer system," said Adam Krantz, a spokesman for the National Association of Clean Water Agencies. "The costs that are needed to repair and replace the system is a dark cloud."
. . . . . . .
Michelle Krupa can be reached at mkrupa@timespicayune.com or (504) 826-3312.