St. Tammany Parish utilities rate study required by state grant would raise parish utility rates, officials say

St. Tammany Parish Department of Utilities Director Chris Tissue told the council the parish must adopt rate changes recommended by a state‑selected consultant as a condition of accepting an $82,000,000 Water Sector Program award.

The rate study, prepared by a consultant assigned by the state after roughly 18 months of data collection, models operating costs, capital plans and debt service and recommends metrics such as a minimum sustainability ratio of 1.15, a debt‑service coverage ratio of 1.25 and increasing reserves to six months from the current three. "This is not a tax," Tissue said, adding that rate revenue is intended to fund capital improvements and day‑to‑day operations that will be reinvested in the system.

Why it matters: Parish staff said the Department of Utilities operates 55 wastewater treatment plants, more than 300 lift stations, 32 water wells across 16 public water systems and more than one million feet of utility main. Officials said current and projected operating costs are outpacing the incremental inflation adjustments the parish has used since 2012, leaving no budgeted money for capital improvements in the 2025 and proposed 2026 budgets.

Tissue told council members the consultant recommended moving toward a uniform parishwide rate for customers served by the Department of Utilities; adopting the consultant's recommendations would result in higher monthly bills for affected customers. He emphasized that the proposed increases would apply only to customers served by the parish Department of Utilities — not customers of private utilities or other municipal systems — and would not be imposed as a parishwide tax.

Council questions focused on timing, precedent and grant risk. Councilman Laughlin asked when rates were last changed; Tissue said the last ordinance changing rates was adopted in 2012 and that the parish thereafter used an annual municipal cost index adjustment, capped at 4 percent, which did not fully cover post‑COVID cost jumps for chemicals, equipment and construction. Asked what would happen if the ordinance proposed for a December vote failed, Tissue said the grant agreement obligates the parish to comply with the rate‑study requirements and that, under the agreement, the parish could be required to reimburse the state for award funds if it failed to adopt the required measures.

Public outreach and next steps: Tissue said staff plan to hold community meetings in November (including a session the week of Nov. 17 at the Lehi Building) to discuss structure and timing and to answer customer questions. He also said the consultant lowered the minimum billing tier from 4,000 gallons to 2,000 gallons in an effort to reduce the burden on fixed‑income residents; Tissue estimated the change would equate to about a $10 monthly increase for customers on the west side of the parish under the model presented.

Officials flagged next steps: adopt an ordinance consistent with the consultant's recommendations, continue community outreach and ensure compliance to avoid jeopardizing Water Sector Program funding. Tissue noted staff would provide more detailed locality‑level impacts at public meetings and in future council briefings.