$275M federal loan given to New Orleans S&WB to modernize aging sewer system
The New Orleans Sewerage and Water Board announced Tuesday that it will begin modernizing sewer pipelines across the city, thanks in part to a $275 million federal loan.
The loan comes from a program by the Environmental Protection Agency called the Water Infrastructure Finance and Innovation Act (WIFIA). The funds borrowed will go toward replacing pipes damaged by age and storms. Ghassan Korban, the executive director of SW&B, said the project will be divided into 160 projects and will ensure resilience in the face of changing climate.
“The main purpose of the program is improving the conditions of the sewage and water system, to minimize sanitary sewer overflows and to improve efficiencies in conveying wastewater to our treatment plant,” Korban said.
Mayor LaToya Cantrell called the loan a "historic milestone" and commented that the projects would create 1,800 jobs for the city.
The $275 million loan is around half the money needed to finalize the entirety of the SW&B plans; the remaining funds will come from local funding, Korban said.
The loan's interest rate is 1.85%, and the city will have 30 years to pay it back after the entire loan is withdrawn. The loan, Korban said, will save the city money as it will not have to sell bonds to come up with the funding to replace the sewer lines.
Both Cantrell and Korban thanked City Council member Jay Banks, who also attended the presentation, for his involvement in bringing the program to the city. Banks said he learned of WIFIA at a National League of Cities conference and was excited about the opportunity.
Banks told the crowd that residents may never need to call the police department or the fire department, but every resident inside Orleans Parish uses the same water system
"The big common denominator in Orleans Parish is the water system," Banks said. "We have one water system: sewer, water and drainage. Some other places have them separate, but we have one."
According to the board, the project will involve replacing some lines that are 50-100 years old and will affect 390,000 residents, roughly the current population of the city. The aged lines that serve multiple purposes, including delivering water and disposing of waste water, have been put to the test in recent years due to heavy rain, excess flooding and busy hurricane seasons that have worsened the city’s infrastructure.
When asked if the projects will be done in conjunction with the Department of Public Works repaving roadways, Korban said the departments would coordinate to keep streets drivable. Korban also added that the board would notify residents of project timelines and delays.
Cantrell interjected to say that the city is improving its contractor accountability and that road closures should not be oversimplified into just repaving roads.
"What happens underground is so complex, and we have to do a better job of getting our people to understand the complexities around infrastructure in our city given the fact we've never done this before," Cantrell said.
She added that the unprecedented federal dollars available right now are crucial to the city's future, with climate change already affecting the city.
The SW&B is still under investigation by the Federal Bureau of Investigation after a report from WWL-TV found its plumbing department to be illegally using contractor licenses. Korban declined to comment on the matter.