When you are a monopoly, does it matter what you do to take in revenues or spend money? Sure, there are budgets and audits and all that good stuff. But when you are a monopoly that is a government agency, why doesn’t anyone seem to mind what the agency is doing?
The Board of Commissioners of the Erie County Water Authority (ECWA) recently approved their annual budget, with operating expenses totaling more than $60 million. They approved a $10 million increase in the capital budget, requiring new borrowing of $10 million. The rate for water will increase by 3.9 percent for 540,000 customers in 2016. In other news, Christmas decorations are popping up everywhere and the Sabres are not very good, but are no longer tanking.
In an era when most governments and elected officials are supersensitive about raising taxes, the ECWA goes on its merry way. We have a property tax cap in New York State which for 2016 is set in most cases at less than 2 percent. But the ECWA increases rates by 3.9 percent and no one in a position to raise some hell about it does anything. It is almost like the ECWA is the proverbial third rail of politics for local politicians. We know why, but still need to ask, why?
Bob McCarthy’s November 6th article in the Buffalo News about the 2016 ECWA budget approval highlights a few things:
- Effective Jan. 1, the price of water will increase by 3.9 percent annually, or 12 cents per 1,000 gallons, according to authority Chairman Earl L. Jann, Jr.
- The quarterly infrastructure charge will increase to $19.45, from $15.45, [Jann] added, providing money for several projects and repair of “an unprecedented number of water leaks” caused by two years of severe weather.
- “We’re forced to increase our rates and charges for a combination of factors,” Jann said. “The cost of keeping pace with system upgrades and increases to compensation and health care for our employees has led to a dramatic rise in overall expenses.”
Ahah! The old “combination of factors” defense!
- The authority is also planning $20 million in facilities improvements … as well as security upgrades. The borrowing plan, however, caused the disagreement in approaches that was reflected in Thursday’s 2-1 vote. Jann said the authority’s capital budget has climbed to more than $29 million as a result of the planned system and infrastructure upgrades, a significant increase from previous yearly averages of $17 million to $18 million.
I thought it strange that McCarthy’s story did not mention what the total budget will be for 2016. But then I looked at the board minutes for their November 5th meeting and saw that the resolution that approved the budget didn’t actually say what the size of the budget is.
Why wasn’t the budget approved with some announced cuts in the top heavy bureaucracy at the ECWA? For openers they could consider some reductions in the management personnel of the authority, which includes:
- Deputy Director $147,574
- Director, Administration $138,399
- Executive Director $132,763
- Deputy Admin. Director $126,750
- Business Office Manager $105,400
- Assistant Business Office Manager $88,577
- Administrative Assistant $87,969
- Administrative Assistant $81,187
- Comptroller $131,527
- Cash Manager $114,876
- Asst. Manager of Accounting Services $102,251
- Executive Engineer $158,687
- Senior Distribution Engineer $128,796
- Senior Distribution Engineer $122,256
- Electrical Engineer $111,790
- Production Engineer $110,011
- Distribution Engineer $104,345
- Distribution Engineer $101,512
- Distribution Engineer – 2 at $98,679
And then they could look at their human resources operation. The ECWA is incredibly top-heavy with people working in high-paying positions relating to human resources in any form you want to characterize it – personnel, labor relations, employee relations, human resources. Their budget for a 235-employee authority includes:
- Secretary to the Authority and Personnel Director $132,756
- Director of Human Resources $112,114
- Director of Employee Relations $105,978
- Coordinator of Employee Relations $99,547
- Employee Benefits Specialist $76,228
That’s a total of $526,623 in salaries for five HR people, plus fringes of course.
As previously noted, these salaries are very much out-of-line when compared with similar positions in the largest local governments in area, the County of Erie and the City of Buffalo.
The authority also likes to contract out some of their work which should be handled by the large group of high paid executive staff. In the past several weeks they approved contracts with the following:
- Zeppelin Communications LLC (ZeppCom), which authority board minutes indicate was previously operating under the name Caputo Public Relations. The contract, which is for three years with an option to renew for two more, identifies Michael Caputo as the managing director. The firm will be paid up to $5,000 per month, with Caputo’s hourly rate set at $125 and a $65/hour for an account executive. They will work as independent contractors.
- Barclay Damon LLP (BD) has a contract with the authority for an unspecified term while it works on a matter identified as “bond related transactions and general litigation and municipal law issues.” BD’s attorneys will work at a blended hourly rate of $225, with paralegals at $125. The contract was signed by James Domagalski.
- Raftelis Financials Consultants, Inc., a North Carolina firm, will work for a year to “prepare a water utility cost of services/rate structure” in an amount not to exceed $76,700. Hourly rates for staff of this firm range from $70 to $400. They tack on $10/hour for administrative expenses, and the hourly rates increase 50 percent “for services related to the preparation for and participation in depositions and trial/hearing.”
The basic function of the Erie County Water Authority can be summed up simply: they pump water from the lake; purify and test it; and send it to their customers. So here are some questions:
- What is the justification for such a large and extraordinarily high-priced management staff for such a small public works agency?
- Given the very basic nature of the service and product provided, why can’t some of that high-priced talent perform PR functions?
- Given that there are at least five attorneys working full or part time for the authority, why does Barclay Damon need to do legal work on “general litigation and municipal law issues?”
- Why can’t the high-priced in-house accounting talent take care of the cost of service issues?
Maybe there was a reason for the ECWA in the early ‘50’s when the agency was created and county government was still operating like it did in the 19th century, but there is no justification for the ECWA to exist in the 21st century. I have avoided mentioning the names or political affiliation of any authority employees whose job titles are listed above. We all know that the current crew at the ECWA didn’t invent the organization that exists there. These are systemic problems, and the place needs to be totally reformed.
ALL of the functions of the authority can easily be rolled into county government, which performs all these activities, except on a larger scale. That includes management of a public works function; accounting; legal services; public relations; human resources, etc.
The last two posts I wrote about the authority were followed by comments to the blog by a friend saying basically, “if it ain’t broke, don’t fix it.” Well, we need to agree to disagree on this subject John. It is broke, and it does need fixing.