Imagine your water being shut off – a terrifying thought, especially when you’re already in public housing. Now, picture that threat looming over hundreds of residents at Guste Homes, all because of a staggering $1.5 million water bill!
It sounds like a nightmare, but for the residents of Guste Homes, it's a very real possibility. The management company for this public housing complex is staring down a massive water bill, and the utility company is making it clear: no payment, no water.
The Sewerage & Water Board (S&WB) sent a stern email in late January, stating they "will no longer delay water shut offs within the Guste Community due to nonpayment." This means the taps could literally run dry for the 685 residents living in this Central City complex, which includes both a high-rise building and townhomes.
So far, the water has remained on. This is thanks to ongoing discussions between the Housing Authority of New Orleans (HANO) officials and the S&WB, who are trying to hammer out a payment plan. But this looming crisis is just the latest challenge for housing officials.
But here's where it gets controversial...
Adding to the pressure, HANO is already fending off an effort by the Department of Housing and Urban Development (HUD) to shut down the Guste Homes High Rise. HUD cites high vacancy rates and "distressed" conditions as reasons for this proposed closure. This high-rise specifically houses elderly and disabled individuals, making the threat of closure even more concerning.
To avoid immediate disconnection, HANO needs to make a significant down payment of $753,076 within 45 days of the January 27th notice, according to HANO director Marjorianna Willman. "The first priority is to protect the tenants and stop any immediate threat of disconnection," Willman emphasized. She explained that the massive bill has been accumulating over several years due to a combination of partial payments and disputed amounts that were never settled.
Now, here's where the plot thickens. Cynthia Wiggins, president of the Guste Homes Resident Management Corporation, believes the complex is being overcharged. Her corporation is responsible for the day-to-day operating costs, as per their agreement with HANO. "We don't believe that our tenants are abusing water like that," Wiggins stated. "Something is wrong." She pointed out that in 2021, the high-rise alone was billed $75,000 for one month's water usage – more than double the usual $33,000.
An inspector hired by the management corporation found no leaks, further fueling the suspicion of overcharging. By January 23rd, the outstanding balance had indeed climbed to $1,527,682.
The S&WB acknowledges that adjustments have already been made, reducing the bill by $436,000 over the past two years. They are open to considering further adjustments, but their primary goal is to get the accounts current and ensure future bills are paid on time.
A proposed payment plan is on the table, which would spread the balance over 12 months and require the property to keep up with current bills. However, Wiggins remains firm, stating that the management corporation and HANO should not pay the bill and instead, should investigate the water bills thoroughly.
And this is the part most people miss...
This water bill saga is unfolding alongside another critical issue: HUD's threat to close the Guste High Rise. If a building assessment reveals that the high-rise doesn't meet HUD's standards, HANO would be required to provide housing vouchers for all residents within five years. Currently, the building is about 77% occupied, but HUD requires at least 88% occupancy.
Willman is determined to fight the proposed closure, and HANO is taking a proactive step by commissioning a forensic auditor to scrutinize the management company's finances and operating costs for the Guste developments. While all HANO properties will be reviewed, Guste is the priority due to its exceptionally high operating costs, which are a contributing factor to HUD's targeting of the high-rise for potential mandatory conversion.
What do you think about this situation? Is the management corporation right to question the water bills, or should they prioritize paying the debt to avoid shutoffs? Share your thoughts in the comments below!
