NEW ORLEANS - Today, Sewerage and Water Board of New Orleans (SWBNO) clarified to its board members and the public what it hopes to collect in unpaid bills for water and sewer service.
A three-week internal inquiry showed that customers owe approximately $73.4 million in past due charges as of Dec. 31, 2018. Approximately $50 million of that is considered delinquent, or due for longer than 60 days.
This figure has grown since 2016 as SWBNO endured more than two years of hardship and emergencies. A new billing system, inaccurate bills, a moratorium on shutoffs and emergency spending in the wake of the August 2017 flood event all contributed to a less than stable budget.
The owed amount also does not impact the progressively larger needs of the drainage system, which is funded separately by annual property taxes. The drainage budget for 2019 could expire by mid-year if new funding sources aren’t identified.
The need to clarify that the figure for unpaid water and sewer bills, also known as the estimated accounts receivable, arose after questions from the City Council’s Public Works Committee on March 27. That discussion has led SWBNO to find ways to improve how it reports its financial data going forward.
“We are grateful to the Council for its due diligence,” Mr. Korban said. “The information we were giving them about our collections wasn’t delivered in the proper context. That’s on us, and we’re correcting it.”
The figures given to the council appeared to estimate that $134 million in water and sewer service bills had gone uncollected from 2016 to 2018. That total, however, was a bulk number that included not only what customers owed, but also the costs of services that SWBNO did not charge for and doesn’t expect to collect.
It was also a number arrived at by adding up the totals on the last day of each of the past three years. But those totals are snapshots in time, while the accounts receivable amount is a dynamic, rolling number that changes every day. In much the same way you don’t add your bank account balance on one day to the balance of another day to reach a total, these numbers shouldn’t be added together.
SWBNO is setting aside these past accounting practices. Going forward, all reports will be based on confirmed, audited figures. The 2017 Comprehensive Annual Financial Report, completed in December, will be the benchmark for this reporting. The 2018 CAFR, which will be completed by the end of June, will add greater confidence to the utility’s accounting.
“We are working with the City Council to ensure that future reports are not only accurate but also meaningful,” Mr. Korban said. “I’ve been saying since Day One that accountability and transparency must be our top priorities for us to regain our credibility with the public.”
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