New Orleans airport to choose consultant today
February 1st, 2012January 31, 2012
By Michelle Krupa, The Times-Picayune
New Orleans officials Wednesday are slated to choose the first of five consultants whose work would serve as a blueprint for overhauling oft-derided Louis Armstrong International Airport, which Mayor Mitch Landrieu last summer said he plans to transform into a “world-class” airport. Airport officials and top Landrieu aides in August suggested two plans that could satisfy the mayor’s wish: expanding the existing airfield by adding new terminals to the west, or constructing a new main terminal on airport-owned property between the current airport and Interstate 10, adjacent to dense Kenner neighborhoods.
View full sizeTimes-Picayune archiveUnder one scenario, the Louis Armstrong International Airport terminal would be converted into a cargo station.
Though both alternatives remain on the table, city and airport officials seem to be leaning toward the second option.
During an hourlong presentation Tuesday to the City Council’s airport committee, Aviation Director Iftikhar Ahmad rolled out a sophisticated presentation that showed a new passenger terminal along Veterans Memorial Boulevard.
A short animated video took viewers on a simulated flight down the Mississippi River, through downtown New Orleans and into Metairie, and showed the current terminal converted into a cargo station.
Besides highlighting rail and highway access to the site, the video featured arrows indicating the potential movement of goods from the stretch of river nearest the airport to the converted terminal — apparently through residential areas.
Though Ahmad emphasized the clip aimed to offer only one of many options industry experts might suggest, he said after the meeting that increasing cargo traffic could generate revenue to finance the construction of passenger facilities.
“If we could do intermodal, we could attract some more business here,” he said. “There are hundreds of millions of tons of goods coming to the Port of New Orleans. Can I take 1 million tons and send it out through aviation?
“I bet I would make more money than Gary LaGrange,” Ahmed said, referring to the port president. “And federal law … mandates that I must spend that money at that airport, and what that creates is opportunities.”
Landrieu’s top aide, Andy Kopplin, last summer touted a new terminal as the more affordable choice because construction would occur outside the existing flight security zone. He also noted the potential lucrative reuse of the current terminal, possibly as a cargo transit hub.
Airport officials today are expected to choose from among four firms competing to serve as project manager for a broad analysis of the two options, which were laid out in the airport’s long-term strategic plan long before Landrieu expressed his support.
The management firm would oversee other consultants that would handle architectural design, environmental assessment, land-use and development and a financial feasibility study, Ahmad told council members.
Together, the contracts are expected to cost $7.5 million and to all be awarded by May, he said, adding that completion of the work is hard to peg because environmental evaluations could delay the planning process from six to 18 months.
Ahmad has estimated that a new airport, or a significantly renovated one, could cost more than $1 billion, with financing coming from a patchwork of federal money, local airline fees and other sources — but almost certainly not a local fee or tax that would affect residents who don’t use the airport.
While supporting the concept of an improved Louis Armstrong International, Councilwoman Cynthia Hedge-Morrell emphasized that airport officials must figure out how to pay for the project themselves.
“The public has reached a saturation point on government asking for money,” she said.
Aviation Board Chairman Nolan Rollins sounded a similar theme. In soliciting firms to analyze the options, he said a key question the board wants answered is, “How do we make sure these costs aren’t passed on to the general public?”
Hotel industry looks for deal pace to pick up
January 30th, 2012...development is still a soft spot as tight credit conditions have limited new-hotel builds…
Fri Jan 27, 2012
By Karen Jacobs Thomson Reuters – reuters.com
(Reuters) – Hotel companies and real estate firms are optimistic that deal transactions will pick up this year despite concerns about Europe’s economy and challenges in obtaining debt financing.
While a business-led economic recovery has helped lift U.S. hotel occupancy rates, development is still a soft spot as tight credit conditions have limited new-hotel builds. Still, there is a growing sense that the hotel sector has momentum and performance will continue to improve.
“People are expecting 2012 to be a pretty positive year, with solid performance by the industry in terms of the demand for hotel accommodations and the ability to get deals done,” Arthur de Haast, chairman of Jones Lang LaSalle Hotels, said at this week’s Americas Lodging Investment Summit.
The hotel investment services firm has forecast that hotel deals in the Americas this year will at least match the 2011 level in value of an estimated $15 billion.
U.S. hotel deal activity picked up in the first half of 2011 but calmed in the latter part of the year as debt woes in Europe began dominating the headlines.
While Europe is still a risk, attendees at the three-day hotel conference said a continued recovery marked by rising room rates would make the sector attractive for investment.
“There’s a lot of money on the sidelines waiting to pounce and find opportunities,” said Christian Charre, president and chief executive of the Charre Group, a Florida-based hotel brokerage and consulting firm.
FOREIGN MONEY
Private equity funds that have capital will be in a good position to make acquisitions, some said. Real estate investment trusts were active buyers in the first half of 2011 but are expected to be quieter this year as their share prices suffered in the latter part of 2011.
“The mix of the investors probably will change,” said Sri Sambamurthy, co-founder of real estate firm West Point Partners in New York. He said Middle Eastern, European and Asian investors especially find the U.S. market to be extremely attractive now.
“The U.S. is still considered very safe, the dollar has performed extraordinarily well,” Sambamurthy added.
Hotel companies said they were looking to make acquisitions in a bid to expand their reach.
“No question that we’ll be active in the marketplace in 2012,” said Paul Whetsell, president and chief executive of Loews Hotels, which owns and/or operates 18 hotels. The unit of Loews Corp has committed more than $500 million to acquiring hotels or developing new properties.
Whetsell said Loews is looking for 4-star or higher-rated hotels in major cities where it does not have a presence such as Boston, Washington, San Francisco, Chicago and Los Angeles, as well as smaller markets like Charlotte, North Carolina, and Baltimore, Maryland.
Choice Hotels International, which franchises hotels focused mainly at the mid-tier and economy market segments under brands such as Comfort Inn and Econo Lodge, said it is in the hunt to acquire a value-oriented, full-service upscale brand that would help attract more business customers.
“We clearly would be a very aggressive purchaser of brands that come up,” Choice Chief Executive Steve Joyce said in an interview.
(Editing by Gary Hill)
New Orleans in great shape for a great Mardi Gras
January 30th, 2012
The New Orleans hospitality industry is geared up to treat visitors to a great carnival season.
Hotels in the city are ready for the influx as more and more of them are reopening, rehabbing, or starting out brand new.
Jennifer Day-Sully, with the Convention and Visitors Bureau, says accommodations are better than ever.
“The city is offering an extremely fresh hotel stock…lovely new renovations across the city…some new hotels.”
The New Orleans Hyatt Regency has gone through a $275 million renovation, with almost 2,000 all-new guest rooms available for the Hyatt’s first Carnival since Katrina.
The stock of French Quarter hotels now includes the fully renovated Hotel Mazarin, formerly the Saint Louis, on Bienville.
The Saint is a new hotel, poised to take advantage of its Mardi Gras proximity on Canal Street with 166 rooms.
Hotel Modern, newly opened on Lee Circle, is also a prime parade spot, with viewing stands located in front of the hotel directly on St. Charles Avenue.
The Monteleone’s Carousel Bar has expanded its seating area with windows now offering a view of Royal Street.
“Hotels across the city are really digging in and making sure that their properties look amazing,” says Sully.
And, hotel occupancy rates already look like there’ll be quite a Carnival crowd here to enjoy them.
“It’s looking like we’re in the high 80’s to low 90’s for all of the days,” Sully says.
She says the new airport concourse will offer visitors a much improved first impression of New Orleans.
She also says the transportation system is improving, and the hospitality industry has gotten very positive feedback from tourists regarding the taxicab situation.
The city’s newest form of transportation is also proving to be a big hit.
“We’ve gotten lots of feedback from our clients and our visitors that they really enjoy the pedicabs.”
New Orleans occupancy up week ending January 21, 2012
January 30th, 2012January 30, 2012
STR Reports
The U.S. hotel industry experienced increases in all three key performance metrics during the week of 15-21 January 2012, according to data from STR.
In year-over-year comparisons for the week, occupancy was up 3.9 percent to 51.4 percent, average daily rate increased 3.7 percent to US$99.96 and revenue per available room was up 7.8 percent to US$51.39.
Among the Top 25 Markets, Anaheim-Santa Ana, California, achieved the largest occupancy increase, up 29.5 percent to 73.1 percent, followed by New York, New York (+14.8 percent to 69.1 percent) and New Orleans, Louisiana (+14.0 percent to 62.1 percent). St. Louis, Missouri-Illinois, posted the only occupancy decrease of more than 5 percent, falling 7.9 percent to 40.2 percent.
Anaheim-Santa Ana increased 16.0 percent in ADR to US$123.73, reporting the largest increase in that metric, followed by New Orleans (+15.7 percent to US$126.87) and Oahu Island, Hawaii (+11.0 percent to US$179.21). Washington, D.C. (-3.8 percent to US$129.14), and Atlanta, Georgia (-1.1 percent to US$86.04) reported the largest ADR decreases for the week.
Four markets reported RevPAR increases of more than 15 percent: Anaheim-Santa Ana (+50.2 percent to US$90.39); New Orleans (+31.9 percent to US$78.74); San Francisco/San Mateo, California (+17.1 percent to US$110.14); and Oahu Island (+16.6 percent to US$160.62). Washington, D.C., fell 6.2 percent in RevPAR to US$61.94, posting the largest decrease in that metric, followed by St. Louis with a 4.9-percent decrease to US$31.25.
Super Bowl committee off and running
January 30th, 2012…but what’s so much more now is that positive media coverage…
January 30, 2012
By Nakia Hogan, The Times Picauyne
The New Orleans Saints might not have been able to play their way into Super Bowl XLVI at Lucas Oil Stadium on Sunday, but a team of 60 or so locals still will be in Indianapolis this week.
In an effort to promote Super Bowl XLVII, which will be played Feb. 3, 2013 at the Mercedes-Benz Superdome, and to get a final look at the inner runnings of hosting the NFL’s championship game and the events surrounding it, the New Orleans Super Bowl Host Committee will set up shop today in Indianapolis.
David Grunfeld / The Times-Picayune“We are not taking it for granted,” said Jay Cicero, executive director of the Super Bowl XLVII host committee. We wanted to make sure that New Orleans and the state of Louisiana are taking advantage of everything the Super Bowl can bring.
Jay Cicero, the CEO of the Greater New Orleans Sports Foundation and the executive director of the Super Bowl XLVII host committee, said this week will be a critical learning experience as New Orleans prepares to host its 10th Super Bowl.
“We are going to go there and either confirm the plans that we have in place, make adjustments to the plans we have based upon the reality of the event, or create a whole new plan based upon an event that may be happening,” Cicero said. “We learned from other cities’ successes, and we learn a lot more from their failures. Every city has its successes and failures as far as this event is concerned.”
The initial wave of host committee members arrived in Indianapolis on Sunday and began setting up a station at the Super Bowl XLVI media center, where they will start promoting next year’s game and the city.
“Our PR effort this time around is 100 times bigger than it was the last time (2002),” Cicero said. “The last time (New Orleans hosted a Super Bowl) we said this is New Orleans and it’s going to be wonderful, and it was and we got a ton of positive attention off of it. But now we have all these new messages that people don’t realize about New Orleans. It’s hard for New Orleanians to realize it.”
Later in the week, local law enforcement agents will arrive to observe security procedures.
Meanwhile, Cicero and other host committee executives will be meeting with potential sponsors and monitoring Indianapolis’ event operation staff.
Also among the New Orleans contingent will be celebrity chef John Besh, who’ll be cooking up some of his favorite recipes to showcase what visitors can expect when they arrive in the Crescent City. And the host committee will make sure there is plenty of King Cake on hand for those looking for even more New Orleans flavor.
Also, representatives from some of the host committee’s top sponsors will tag along. Cicero said the host committee’s goal of raising $12 million ($6 million privately) as part of its bid is going well, as the committee has already raised $3.5 million.
The host committee members said they aren’t leaving anything to chance.
“If you start from what we did with the bid, it’s much bigger, much more important than ever before,” Cicero said. “The event means that much more to us than it ever did. We are not really taking for granted that we have hosted it nine times before. This will be the third that the Sports Foundation has served as the host committee staff. We are not taking it for granted. We wanted to make sure that New Orleans and the state of Louisiana are taking advantage of everything the Super Bowl can bring.”
The Super Bowl is expected to bring with it more than $500 million of economic impact, but Cicero said the game means much more to the city and state than simply the revenue it brings.
“It was always before about economic impact and the number of people coming,” he said. “It is still about that, but what’s so much more now is that positive media coverage. We’ve all realized the value of that, having had such negative media coverage.
“The positive media coverage from the Saints coming back to New Orleans and the re-opening of the Superdome and that historic day in September of 2006, the Saints winning the Super Bowl and the parade after that, the Hornets coming back to New Orleans and the All-Star Game, the BCS championship and all the positive media publicity is as much or more valuable to us than the economic impact.”
Start your engines…
January 30th, 2012…$60 million facility south of the TPC Louisiana Golf Course is essentially a Disney World for motorsports enthusiasts…
January 30, 2012
By Paul Roux, The Times Picayune
A self-described “motorhead,” Bob Hennessey was one of the first in line recently to take some hot laps around the new racetrack at the NOLA Motorsports Park being built in Avondale. Riding a green Kawasaki Ninja ZX-10R motorcycle, the Mandeville resident roared down a straightaway at speeds above 160 mph and zipped through a series of daredevil S-curves, his knees nearly scraping the pavement as he leaned from side to side.
View full sizeSusan Poag,The Times-PicayuneA new Riley Technologies Track Day Car is tested Jan. 19 at the NOLA Motorsports Park in Avondale. After several laps on the 1.8-mile track, Hennessey took off his helmet and gave a glowing technical assessment of the track’s surface and layout before boiling his reaction down to layman’s terms.
“It’s awesome. Totally euphoric,” he said. “We’re just a bunch of big kids with fast toys, and this is our new playground.”
The sprawling 750-acre, $60 million facility south of the TPC Louisiana Golf Course is essentially a Disney World for motorsports enthusiasts, many of whom said they previously traveled up to 350 miles to get their thrills.
When a second track is completed in about 18 months, it will link to the first to form a 5-mile course, making it the longest racetrack in North America.
The park also has three go-kart or karting tracks totaling 1.4 miles and an 8-acre paved area for autocross in which drivers zig and zag around cones in a race against the clock.
And in keeping with motorsports being one of the most expensive hobbies, the park will have several high-end amenities, including a restaurant by chef Scott Boswell, a 34,000-square-foot clubhouse/event center and dozens of lots for members to build upscale condominiums over garages dubbed “Garage Mahals.”
The nearly finished park is attracting a diverse mix of speed demons, from well-heeled members paying $50,000 initiation fees to teenagers plunking down 20 bucks to zip around the world-class karting track.
Jefferson Parish President John Young predicted the park and several other nearby attractions, including the Alario Center and the Churchill Technology and Business Park, will serve as anchors for an anticipated boom in West Bank development sparked by the $1.2 billion project to widen the Huey P. Long Bridge, which is expected to be finished in mid-2013.
A regional attraction
“The racetrack is one of the most unique developments in the metropolitan area. It’s going to attract a lot of people,” Young said. “The magnitude of it all is simply amazing.”
View full sizeSusan Poag,The Times-PicayuneLaney Chouest, developer of the NOLA Motorsports Park in Avondale, was photographed Jan. 19. The project’s scope has even surprised developer Laney Chouest, a retired doctor who is self-financing the project.
Chouest faced plenty of skepticism when he announced plans in September 2009 to build a $30 million park in three phases. But a little more than two years after construction began, the project has doubled in size.
“When we began building it, people started saying, ‘We want this, this, this and this.’ It kind of snowballed,” said Chouest, co-owner of an offshore supply company with his brother, Gary, who previously had a minority stake in the New Orleans Hornets.
Chouest initially envisioned an exclusive country-club-style track catering primarily to wealthy car and motorcycle enthusiasts who could afford sky-high membership fees, even in a slumping economy.
But the business model has expanded to rely more heavily on day passes for nonmembers and hosting business retreats and team-building exercises.
40 family memberships
General manager Mitch Wright said the park’s location 14 miles from the New Orleans Central Business District positions it to become a stop on the local convention circuit. He said a national convention of about 1,000 Subaru dealers is scheduled to descend on the park in May.
“We’re looking at companies that normally do a golf getaway and want to try something different,” Wright said.
He said about 40 people have signed up for family memberships, which cost $50,000 for life or $9,000 per year. Those with more modest budgets can opt to drive on open-track days, paying $325 for cars and $225 for motorcycles for six 20-minute sessions. A 10-minute ride on the karting track runs $20.
Cafe du Monde vice president Burt Benrud, whose previous idea of adventure in the Crescent City was limited to sailboating on Lake Pontchartrain, was among the first to sign up for a lifetime membership.
“What guy is not into cars? It’s always, ‘When can I get my driver’s license,’ or, ‘How fast can this car go?’” said Benrud, who drives a Porsche Cayman R. “This is a safe environment to find out just how fast you can go. You’re not going to hit a tree, and no cop is going to pull you over.”
As a track member, Benrud recently got to test drive a $250,000 Daytona prototype race car capable of reaching 200 mph.
“I’ll take it!” said Benrud, who was too enthralled to check the speedometer during his drive. “I don’t know how fast I was going, but that was way cool.”
No big spectator events
The twisting track is not designed for large spectator events like NASCAR races. But when the park hosts the finals for a major motorcycle-racing circuit in October, temporary grandstands could be erected to accommodate crowds of 15,000 to 20,000, Chouest said.
The track has no walls, enabling motorists who go off course to come to a stop without crashing. A team of EMTs and two ambulances are stationed at the track, but Wright said the biggest risk is heart attacks for drivers overwhelmed by the G-forces and sheer speed.
Swampy soil was a challenge
The track’s designers faced a daunting challenge to build a racetrack on a former cypress swamp without having the pavement buckle like a Lakeview street.
The solution was to mix 200,000 tons of fly ash, a byproduct from coal-fueled power plants, with the first several feet of clay beneath the track.
“It basically turns the ground into concrete,” Wright said. “It’s expensive, but it’s what you have to do if you don’t want your racetrack to look like a typical street in southeastern Louisiana.”
With many of the buildings unfinished and roadways that need paving, the park is several months from being ready for its grand opening. But scores of high-performance car and motorcycle owners showed up earlier this month for the first two open-track days.
Many of the riders and drivers came with their families and made a day of it, setting up canopies near the track.
“I wasn’t thrilled when my husband got a motorcycle, but this is a safe way for him to go fast on it,” Sharon Meilleur said of her husband, Chris. “He’s 45 and can be a kid again.”
Chris Meilleur and his motorcycle buddies occasionally take weekend trips to tracks in Atlanta, Houston or Birmingham, Ala.
Kenny Cox of Metairie said that while the group was saving a lot of money on gas and hotels, there’s a downside when a weekend with the guys turns into a family affair.
“Usually we can run away and hide, but not anymore,” he said. “This is basically right in our own backyards.”
Louisiana tourism trending upward
January 26th, 2012“…tourist spending this year should also outpace 2011 by about $500 million…”
January 26, 2012
Ed Anderson, The Times-Picayune
Lt. Gov. Jay Dardenne, the state’s chief tourism booster, said Wednesday that the number of tourists and the money they spend “are trending in the right direction” this year despite a struggling national economy and lingering effects from hurricanes and the 2010 offshore oil spill. Dardenne’s assessment came during the annual Louisiana Travel Promotion Association’s Summit in Shreveport.
Michael DeMocker, The Times-PicayuneAs Lt. Gov. Jay Dardenne, left, looks on, Councilwoman Jackie Clarkson and Jeff Hathaway, Chair of the Men’s Division I Men’s Basketball Committee, unveil a countdown poster during a Final Four “Tip-Off” press conference Tuesday.
He said that 2012 could wind up being “a banner year,” with Louisiana celebrating its 200th anniversary of statehood, New Orleans hosting the NCAA’s Final Four basketball tournament, and the Shreveport area hosting the Bassmasters Classic fishing tournament next month.
Dardenne, who by law oversees the state Department of Culture, Recreation and Tourism, said the year started with a bang with the BCS national college football title game between Louisiana State University and the University of Alabama played at the Mercedes Benz Superdome.
Melody Alijani, director of research and development in the department’s Office of Tourism, said that based on a study by LSU and the University of New Orleans, 2012 should see an increase of about 500,000 visitors this year — from 24.7 million in 2011 to 25.2 this year.
Alijani said that tourist spending this year should also outpace 2011 by about $500 million — from $9.4 billion to $9.9 billion.
She said the numbers for 2011 are not yet final and are still projections. A revised study of the state’s tourism picture will be available in the spring, she said.
If the 2012 projections hold, Alijani said, the 25.2 million domestic and overseas visitors would mean the strongest tourism year since 2003 when 26.2 million visitors spent $9.4 billion.
The last time the 25 million-tourist barrier was reached was in 2010 when 25.1 million tourists visited Louisiana and spent $9.6 billion.
The study projects that 2013 will be stronger with 26 million visitors expected to leave behind $10.5 billion.
“Considering all of the events that have happened to us in the last four or five years, we are doing well,” Alijani said, referring to the hurricanes and a sluggish national economy. “We are seeing slow, steady increases. It is sustainable.”
The study said although the number of visitors to Louisiana in 2012 is expected to be the strongest since the baseline year of 2004, visitor spending is not expected to exceed the spending level of 2004 until 2013.
Louisiana Lt. Governor Jay Dardenne on economic impact of the Final Four Louisiana Lt. Governor Jay Dardenne spoke at a Tuesday news conference about the NCAA Final Four and it’s impact on the city of New Orleans and the state. Alijani said the study shows that New Orleans is not expected to reach pre-Hurricane Katrina levels of tourism until after 2014.
Although the city’s picture has been generally positive in recent years, the study said that 10.1 million people visited New Orleans in 2004, the year before Hurricane Katrina, and 8.3 million are expected this year, 8.6 million next year and 9 million in 2014.
The study does not make projections past 2014.
The report said that in the aftermath of Hurricanes Katrina and Rita, visitor spending declined statewide by about 34 percent. That was followed in 2009 by the national recession which slowed leisure and business travel and the oil spill of 2010.
The report said the spill “had a significant impact on the state’s tourism” but its “effects are yet to be seen.”
U.S. Hotel Sector Posts Performance Gains in Mid-January, New Orleans Leading the Way
January 25th, 2012Major events helped the occupancy rate rise for week ending January 14, 2012.
January 23, 2012
By David Barley, World Property Channel
According to STR, the U.S. hotel industry experienced increases in all three key performance metrics during the week ending January 14, 2012.
In year-over-year comparisons for the week, occupancy was up 4.9 percent to 52.1 percent, average daily rate increased 5.6 percent to US$102.99 and revenue per available room was up 10.8 percent to US$53.65.
“Several major events had a positive impact on performance this week, most notably in the Independent segment,” said Chad Church, senior director of operations and special services at STR. “The Consumer Electronics Show in Las Vegas, held 10-13 January with more than 150,000 attendees, had a favourable comparison as it shifted weeks in 2012 (6-9 January 2011). In addition, New Orleans hosted the BCS Football Championship game on 9 January.”
Among the Top 25 Markets, New Orleans, Louisiana, experienced the largest increases in all three key performance metrics. The market’s occupancy increased 31.0 percent to 70.2 percent, its ADR was up 60.3 percent to US$171.59, and its RevPar jumped 110.0 percent to US$120.38.
Two markets other than New Orleans, reported double-digit occupancy increases: Nashville, Tennessee (+12.0 percent to 54.7 percent), and Houston, Texas (+10.1 percent to 60.7 percent). Phoenix, Arizona, posted the largest occupancy decrease, falling 18.8 percent to 60.3 percent, followed by Anaheim-Santa Ana, California, with a 17.3-percent decrease to 58.9 percent.
Anaheim-Santa Ana reported the largest ADR decrease, falling 9.1 percent to US$108.74.
Three markets, excluding New Orleans, achieved Repair increases of more than 15 percent: Oahu Island, Hawaii (+17.6 percent to US$157.72); San Francisco/San Mateo, California (+16.7 percent to US$145.21); and Miami-Hialeah, Florida (+16.2 percent to US$145.12). Anaheim-Santa Ana (-24.8 percent to US$64.01) and Phoenix (-24.3 percent to US$71.57) posted the largest Repair decreases for the week.
Sewage and Water Board public hearings schedule
January 24th, 2012The Sewerage and Water Board of New Orleans will conduct a series of public hearings to present information relative to future proposed water and sewer rate increases and drainage funding.
The meetings will be held as indicated below. If you are unable to attend in person, the hearing that will be held at the New Orleans Council Chamber will be carried live on the local Cox Public Access Channel.
Thursday, January 26, 2012
City Council Chambers (and live on Cox Public Access Channel)
1300 Perdido Street
6:00 p.m.
Monday, January 30, 2012
Lindy Boggs Conference Center
(Next to UNO)
2043 Lakeshore Drive
6:00 p.m.
If you have any questions, please feel free to call us at 504-585-2169.
Proposed Sewerage & Water Board rate increases get public discussion
January 23rd, 2012Increase in rate are to help with significant infrastructure investments.
Monday, January 23, 2012
By Michelle Krupa, The Times-Picayune
With dire warnings that New Orleans’ aging drinking water, sewer and drainage systems face “serious risk” without significant infrastructure investments, Sewerage & Water Board officials today will begin trying to build public support for a plan that would more than double customer rates by 2016.
The proposal, which includes rate increases starting in July for water and sewer services, also calls for implementation beginning next year of a monthly parcel fee to support the city’s colossal drainage system, including new pump stations at the 17th Street, London Avenue and Orleans Avenue canals and a massive flood gate on the West Bank.
The revenue proposal varies only slightly from the blueprint presented in October by Raftelis Financial Consultants Inc., which the water board hired in 2009 to review its operating and capital needs for the coming decade.
Under the new plan, the combined water and sewer bill for a typical homeowner would jump from about $52.50 a month this year to $103.69 a month in 2016, plus an additional drainage fee that would top out at $23.61 in 2020.
Mid-size businesses would see their rates rise from an average $2,956 a month today to $5,831 a month in 2016, with the drainage fee reaching $27.91 by 2020.
The estimates do not include garbage fees collected on monthly water bills and remitted to the city’s Sanitation Department.
Raising water and sewer rates would require approval of the S&WB’s board of directors, the City Council and the city’s Board of Liquidation. The council and voters citywide would have to sign off on the drainage fee.
Public meetings on S&WB rates
The Sewerage & Water Board today kicks off a series of public meetings on its proposal to more than double customer rates during the next five years.
All sessions begin at 6 p.m. with a 45-minute presentation, after which at least 45 minutes will be allotted for questions and comments.
The meetings are:
- Monday at the Dryades Street YMCA, 2220 Oretha Castle Haley Blvd.
- Thursday at the City Council chambers, City Hall, 1300 Perdido St.
- Jan. 30 at the Lindy C. Boggs International Conference Center, University of New Orleans, 2043 Lakeshore Drive.
Additional neighborhood meetings are expected to be announced this week.
The consultant’s report that serves as the basis of the revenue proposal, as well as the rate-proposal presentation, will be posted this week at the S&WB’s website, www.swbno.org.
S&WB officials, in presenting their proposal Friday to The Times-Picayune, stressed that the agency in recent years has shaved spending to the bone — exhausting its emergency reserve in order to drain the city after Hurricane Katrina and restore water and sewer service within weeks, cutting its workforce by nearly a fifth, eliminating training programs and deferring routine maintenance.
At the same time, the agency has secured nearly $1 billion in grants and low-interest loans from federal and state agencies to pay down existing debt and to cover capital projects. The sum includes $200 million and counting from FEMA for Katrina-related repairs, officials said.
But those strategies have not made up for the fact that the S&WB in recent decades has invested far less in its infrastructure than experts have recommended, mostly because requested revenue hikes were rejected, Deputy Director Bob Miller said.
“We’ve reached a tipping point,” he said. “The board cannot continue to defer necessary operating and capital initiatives without seriously and adversely affecting its ability to deliver reliable, sustainable and necessary services.
“We’re hanging on by our fingernails,” Miller said.
Mayor Mitch Landrieu, who serves as water board president, has not weighed in on the revenue proposal.
His deputy for infrastructure, Cedric Grant, in a prepared statement Friday ticked off a long list of federal funding sources that the administration says it has helped secure to bolster the S&WB’s coffers. However, the income largely already has been factored into water board officials’ accounting in the revenue proposal.
A notable exception is Grant’s assertion that the federal government — not the S&WB — should pick up the tab for overseeing the three new outfall canal pump stations and the West Bank facility.
“We are working with the U.S. Army Corps of Engineers regarding the payment of operating and maintenance costs for the future permanent pump stations, which at approximately $16 million annually, represents a cost we believe is the federal government’s obligation,” he said.
In addition to hamstringing day-to-day operations, S&WB leaders said that without additional income, their ability to borrow money to finance major capital upgrades will grind to a halt.
Adoption of the revenue increases, they said, would allow the agency to “fully fund” a bricks-and-mortar program that includes the city’s share of more than $2 billion in federal drainage projects. Among the work is construction of nearly six miles of underground drainage canals Uptown.
The S&WB also would use the additional income to rebuild a cash reserve equal to 200 days of routine expenses, a key threshold that would improve the agency’s bond rating and thus its borrowing ability.
Other plans include hiring more skilled workers to repair and maintain machinery at the agency’s in-house electrical plant and water treatment facilities; hiring more employees to repair busted pipes and valves; installing automated water meters; and performing more inspections and maintenance of fire hydrants.
Additional revenue also would allow the S&WB to repay nearly $22 million that the city’s Public Works Department fronted for emergency utility repairs, as well as to settle legal claims worth almost $21 million, officials said.
S&WB members at a meeting last week seemed to anticipate the uphill trek in winning support for the proposed revenue increases.
Board president pro tempore Ray Manning asked the staff to stress in its presentations that the agency’s customer base has shrunk to 125,000 customers since Katrina, about 20,000 less than before the storm. Because the city’s physical size hasn’t changed, however, the S&WB must maintain the same expanse of infrastructure.
“We have less customers, and we have system that’s in disrepair,” Manning said.
Board member Beverly Wright said administrators should be clear that the S&WB “is not a profit-making entity. The perception is that the Sewerage & Water Board is making a lot of money.”
City Councilwoman Stacy Head, a water board member who is vying for the council’s vacant at-large seat, said that before the water board requests a rate increase, it should more aggressively target residents who have hooked up to the water and sewer systems illegally.
She also harped on the volume of free water and sewer services that the S&WB provides to public entities, including city agencies and public schools. The giveaways, which amount to about $5.5 million annually, largely are required under decades-old state laws, S&WB Executive Director Marcia St. Martin said.
Head also advised the water board to replace costly third-party contractors with in-house employees, and she suggested the agency charge City Hall a nominal fee for collecting sanitation fees.
“We need to fix our own house with the recognition that even if we fix our own house, we are still going to have some serious money problems,” Head said.
Meanwhile, board member Glen Pilie said the staff “should be prepared to answer why our rates are so much higher than Jefferson Parish.” The difference owes largely to the fact that the suburban government supplements water and sewer fees with property tax revenue, whereas the New Orleans systems rely almost entirely on user fees.
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