After public housing complex racks up $1.5M water bill, hundreds of residents could face shutoffs

The taps could run dry at Guste Homes if the management company that runs the public housing complex doesn’t make a dent in its $1.5 million water bill. 

The utility “will no longer delay water shut offs within the Guste Community due to nonpayment” wrote Sewerage & Water Board revenue administrator Renelle Brown in an email to public housing officials in late January.

The water has so far kept running at the 685-unit Central City complex — made up of both a high rise building and townhome developments — as Housing Authority of New Orleans officials have worked with S&WB to develop a payment plan. 

But the threatened shutoffs come as another blow to housing officials as they fend off an effort by the Department of Housing and Urban Development to shutter Guste Homes High Rise, which houses elderly and disabled people, citing high vacancy rates and “distressed” conditions.

S&WB has “agreed not to disconnect services” if a $753,076 down-payment is made within 45 days of the Jan. 27 notice, said HANO director Marjorianna Willman in an email on Monday.

“The first priority is to protect the tenants and stop any immediate threat of disconnection,” said Willman, who said the bill has been accumulating for several years “due to partial payments and disputed amounts that were not paid.”

Cynthia Wiggins, president of the Guste Homes Resident Management Corporation, which works with HANO to manage the complex as the only resident-led public housing management company in the city, said that the company had not paid recent bills in full because she believes the complex is being overcharged. The management corporation is responsible for day-to-day operating costs, per its agreement with HANO.

A spokesperson for S&WB did not respond to a request for comment.

Wiggins said S&WB bills have skyrocketed in recent years, saying that the company was charged $75,000 for the 385-unit high rise for one month of water usage in 2021— more than double the typical bill of around $33,000 a month. 

“We don’t believe that our tenants are abusing water like that,” said Wiggins. “Something is wrong.”

Wiggins said the management corporation had hired an inspector to search for leaks, but the inspector found none. 

By Jan. 23, the outstanding balance at Guste had reached $1,527,682, Brown wrote to Willman and other officials on Jan. 29.

“Our objective is to reach a resolution that will bring these accounts current, with an anticipation that future monthly bills be addressed on time,” wrote Brown. She said that the utility would “consider adjustments where applicable” but noted that the development had already seen its bill reduced by $436,000 over the previous two years through adjustments. 

S&WB officials will appear at a meeting of HANO’s Board of Commissioners on Tuesday to discuss a proposed payment plan. 

Under that plan, S&WB would require that the balance is paid over a 12-month period and that the property keep up with its bills going forward. 

But Wiggins said in an interview Monday she still does not intend for the management corporation to pay the bill and doesn’t think HANO should either. 

“You should not be paying it— you should investigate what is going on with our water bills,” said Wiggins.

The board will also discuss a December letter from HUD telling the public housing authority that if a building assessment shows that Guste High Rise has failed to meet HUD’s rules, the authority must give every resident a voucher to find housing elsewhere in New Orleans over the next five years.

Residents fill about 77% of the 12-story building’s apartments. But HUD mandates that at least 88% of the apartments be filled. Willman has vowed to fight the proposed closure of the building.

Willman said Monday that HANO is commissioning a “forensic auditor to review the management company’s finances and operating costs involving the Guste developments.”

She noted that the housing authority will review the finances for all HANO properties but “Guste will take priority because the development’s operating costs are the highest and one of the reasons that HUD targeted Guste High Rise for mandatory conversion.”