KEY TAKEAWAYS: New Orleans’ monthly residential sanitation fee increased from $24 to $32.25 on Oct. 1, with annual cost-based adjustments beginning in 2028. BGR projects sanitation budget shortfalls of $22.4 million in 2026 and $6.4 million in 2027 despite the recent fee increase. A state au dit identified nearly 13,000 potentially ineligible trash collection locations, raising concerns about unnecessary contractor costs. BGR recommends regular contract reviews, monthly customer list checks and annual public reporting to protect residents from excessive fees.   The Bureau of Governmental Research is calling for stronger oversight of New Orleans’ sanitation contracts as the city moves toward a new fee structure that will pass the full cost of trash collection and disposal to residents beginning in 2028. In a report released Oct. 16, the independent research organization warned that without regular reviews of contractor costs and service levels, residents could face unnecessarily high sanitation fees. The report follows an Oct. 1 increase in the monthly sanitation fee from $24 to $32.25 for residential customers. Beginning Jan. 1, 2028, the fee will be adjusted annually to reflect the city’s actual trash collection and disposal costs. The first new rate must be published by Oct. 1, 2027, along with an explanation of how it was calculated. Although the new system is designed to eliminate a longstanding budget shortfall, BGR said the ordinance does not require the city to determine whether sanitation contract costs are reasonable before passing them along to customers. “Households across New Orleans just saw their trash fee go up, and starting in 2028, it will change every year,” BGR President and CEO Rebecca Mowbray said in a statement. “Residents should be able to see what they’re paying for and trust that they are getting a fair price.” New Orleans’ sanitation fees had remained unchanged since 2011, even as collection and disposal expenses increased significantly. According to BGR, those costs rose from $35.7 million in 2021 to a projected $61.2 million in 2026. The city has used money from its General Fund to cover the difference between sanitation revenue and expenses. BGR estimates those subsidies will total $80.6 million from 2021 through 2027, based on current budget projections. Despite the recent fee increase, the organization projects a $22.4 million sanitation budget shortfall in 2026 and an additional $6.4 million deficit in 2027. The cost-based fee structure is expected to eliminate the funding gap. The report also identified potential inefficiencies that could increase costs for residents under the new system. One concern involves the number of properties included in sanitation contractors’ collection lists. The city pays contractors based on the number of locations served, but BGR said those lists have not been regularly reviewed. A 2026 Louisiana Legislative Auditor report identified nearly 13,000 potentially ineligible collection locations, including vacant properties and duplicate addresses. The city is reviewing its sanitation customer lists and expects to complete the verification process by spring 2027. It also plans to establish guidelines for regular reviews before the new fee structure takes effect. BGR said removing ineligible locations could reduce the city’s projected sanitation deficit. Another concern involves the city’s curbside recycling program, which costs approximately $11 million annually. Although only 41% of households have enrolled in the program, its costs are shared by all sanitation ratepayers. To improve accountability, BGR recommends that the city review contractors’ collection lists monthly and conduct comprehensive evaluations of sanitation contract costs at least every five years. The organization also recommends more frequent cost reviews during the initial years of the new fee structure. BGR is urging the city to publish an annual report detailing trash collection and recycling performance, program expenses and affordability. It also recommends evaluating service alternatives, including twice-weekly garbage collection and changes to the existing recycling program. The recommendations come as city officials prepare to review sanitation spending for the coming year. The New Orleans City Council is scheduled to hold a hearing Oct. 19 on the Department of Sanitation’s proposed 2027 budget. The city is expected to complete its review of sanitation customer lists by spring 2027, several months before publishing the first cost-based fee. BGR, a private, nonprofit research organization founded in 1932, focuses on public policy and government spending in Greater New Orleans. The organization’s full report is available at go.bgr.org/more-cash-for-trash. ...read more read less