New Orleans City Council poised to absorb sweeping regulatory powers over SWBNO under proposed state bill

New Orleans City Council poised to absorb sweeping regulatory powers over SWBNO under proposed state billSubstitute House Bill 1243 would strip the existing university-led board nomination process and grant the local council sweeping authority over the utility's rates, capital budgets, and drainage operations.

The proposed legislation would classify SWBNO as a separate state entity while localizing its governance under the New Orleans City Council.

The City Council would gain the authority to regulate rates, approve capital improvement plans, oversee contracts, and dictate the hiring of the utility's executive director.

Statutory language changes would allow the council to potentially transfer city drainage operations to another public entity.

A motion to enter an executive session to discuss the legal implications and potential litigation risks of the bill failed due to Open Meetings Law concerns.

A proposed legislative overhaul in Louisiana could fundamentally reshape the governance and operational structure of the Sewerage and Water Board of New Orleans (SWBNO). During an April 20, 2026, Governance Committee meeting, utility officials reviewed Substitute House Bill 1243, which would transfer sweeping regulatory and oversight authority from the state legislature to the New Orleans City Council. According to a presentation by Assistant Special Counsel Theron Levi Bacay, the bill would formally classify the utility's water, sewerage, and drainage systems as a state entity separate from the city, while simultaneously localizing its regulation. The legislation grants the City Council the power to regulate and require approval for SWBNO's rates, fees, annual operating budgets, capital improvement plans, major contracts, and the hiring of its executive director. The bill would also dismantle the utility's current board nomination process, which relies on local university presidents, allowing the City Council to prescribe new rules for board appointments. Furthermore, it strikes the requirement that the mayor serve as the ex officio president, allowing the board to elect its own leadership. A significant operational shift in the bill concerns regional drainage. The legislation changes the city's statutory obligation to transfer drainage employees and equipment to the utility from mandatory to optional. It also establishes legal authority for the City Council to assign drainage operations to a different public entity in the future. Addressing concerns from committee members about how the ambiguity of future drainage responsibilities might impact the utility's borrowing capacity, Adam Swanczyk, representing the mayor's office, noted that the bill includes express guardrails. The legislation dictates that the City Council cannot enact ordinances that impair the board's existing legal and contractual obligations, ensuring that current bond covenants remain protected. Swanczyk explained that the overarching policy goal is to bring the utility's governance closer to the ratepayers, removing the need to lobby the state legislature in Baton Rouge for annual regulatory adjustments. The shift could eventually lead to SWBNO rate-setting functioning similarly to a traditional utility docket, offering a more holistic regulatory approach. The committee's attempt to enter an executive session to receive legal advice regarding the bill's potential litigation exposure and regulatory risks ultimately failed. Swanczyk and others voted against the closed-door session, citing strict interpretations of the state's Open Meetings Law and arguing that discussions regarding pending legislation did not qualify for an executive session exemption.