NEW ORLEANS — Today, Mayor LaToya Cantrell signed a Cooperative Endeavor Agreement (CEA) between the City and the Sewerage and Water Board of New Orleans (SWBNO) that articulates how recurring funds are collected through Mayor Cantrell’s Fair Share Initiative will be allocated.
The CEA was passed by the City Council during its regular session June 18. Read the CEA by clicking on this link.
“Last year we made a commitment to the people of the City of New Orleans that not only would we fight for their fair share of the tax revenue that they help generate to fix our aging infrastructure, but also that we would ensure that their money would be spent efficiently. This CEA reaffirms our commitment to manage our taxpayer revenue with transparency and accountability,” said Mayor Cantrell.
“The Sewerage and Water Board of New Orleans believes this structure will help improve and maintain the water, sewer, and drainage infrastructure for the City of New Orleans, and in turn improve the health, welfare, and safety of the citizens of New Orleans,” said Ghassan Korban, Executive Director, Sewerage and Water Board of New Orleans. “Securing funds for our critical infrastructure takes a community effort. We are thankful for the partnership of both Mayor Cantrell and the City Council.”
Mayor LaToya Cantrell, Gov. John Bel Edwards, and representatives of the hospitality industry reached the historic Fair Share Agreement for one-time funding and re-dedication of several taxes toward supporting New Orleans’ most critical infrastructure needs last year. The one time-funding ($35.6 million transferred from the New Orleans Ernest M. Morial Convention Center and State revolver loan forgiveness, as well as $16 million in State Hazard Mitigation grant funding under State/Federal review) has already been transferred to SWBNO. The recurring annual revenue of up to $26 million flows into the City’s Infrastructure Maintenance Fund (IMF) to support SWBNO projects and infrastructure work by the Department of Public Works.
The IMF includes collections from the lost penny tax as well as collections from short term rental and local privilege taxes, which are both pending other agreements.
Though COVID-19 has significantly decreased the recurring revenue portion, approximately $8.2 million has been collected since July 2019 from the lost penny tax. An Infrastructure Advisory Board (IAB) comprised of mayoral and gubernatorial appointees was made to support the SWBNO and provide oversight of the Fair Share dollars. The IAB, which has been meeting quarterly since September 2019, serves four major functions:
- Reviewing spending of revenue deposited into the Infrastructure Maintenance Fund (“IMF”) as provided for by a Cooperative Endeavor Agreement between the City and SWBNO for the benefit of SWBNO;
- Providing Quarterly reports to the Mayor and SWBNO board of directors on the group’s activities;
- Making recommendations as needed to the Mayor, the Governor, the New Orleans City Council, and the Louisiana Legislature regarding any identified improvements or reforms necessary to ensure the SWBNO is a high performing utility;
- Facilitating meaningful discussions within the Advisory Board by a process adopted by the Infrastructure Advisory Board.
Under the terms of the CEA:
- 75% of revenue deposited into the City’s Infrastructure Management Fund (IMF) would go to SWBNO; and 25% would go to DPW;
- SWBNO communicates the intended use of IMF funds to the Infrastructure Advisory Board, who then makes recommendations.
- The City remits funds to SWBNO on a monthly basis.
- SWBNO provides expenditure reports to the City and Infrastructure Advisory Board, including a report due before each Advisory Board meeting and a year-end report.
- The City will not be liable for SWBNO expenses beyond funds remitted to SWBNO and can seek return of funds in the event of non-compliance by SWBNO.