The Erie County Water Authority goes on its merry, spending way

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.

26 thoughts on “The Erie County Water Authority goes on its merry, spending way

  1. I know the system but the salaries are out of control you are right. My god that is the spoils system at its worse Richie Krieger should be alive today to reap the benefits. Thanks for the enlightening post

    Michael J Stachowski From iPhone

    >

    Like

  2. 1) Our PR firm – Zeppelin Communications – was the lowest bidder; 2) we bid less than half the next highest bidder; and 3) Our contract is 35% cheaper than the last PR firm which worked for ECWA. considering all that savings, you’re welcome.

    Like

  3. OK, I agree. You’ve made you case very well.
    But to answer your second question, my water still tastes fine.
    I would hate to have to deal with county government if my water supply went bad.
    The need to buy water at the super market, as they need to do in California, Texas and Florida, is a frightening future.

    Liked by 2 people

  4. Will any of the radio or TV stations report on this?
    Doesn’t Michael Caputo work part-time for WBEN? Will he disclose the next time he is on the air that he works for the ECWA if he discusses any topics related to local government, government agencies, patronage jobs and “friends and family” jobs? I thought he was someone who despised waste and inefficiencies in government?
    Why would the ECWA need to hire outside people to do PR work? How many press releases do they normally publish in a typical year?
    Why would the ECWA need to hire outside people to do legal work?
    The whole thing stinks. Bravo to Ken for making this easy for the public to digest. Hopefully some of our local media outlets (maybe BuffaloPundit.com or City&State Magazine or InvestigativePost.org will do more digging) will interview Ken and present these facts in other forums for discussion and analysis so that taxpayers get a better understanding of the waste and abuse of taxpayer dollars.
    It is 2015. Time for change. This is gross!

    Like

  5. Clearly you’d rather pay more for less Chris. Good luck with that. The local employees of my PR company have the right to make a living, I never talk about the Water Authority on the air and if I ever did I’d disclose my work – I always do. And I’m quite confident WBEN doesn’t give a hoot what you think because you’re just a jealous blowhard without anything else to say but Argle Bargle. As for Buffalo bloggers checking into this: Bring it on, son. I’ll tie one hand behind my back to make it fair. Maybe two.

    Like

  6. Thanks for writing this article on the Water Authority. I agree completely with Ken and hope Channel 2 and The Public and Alan Bedenko continue to expose this, maybe even send a reporter to an ECWA meeting every once in awhile to keep an eye on everyone.
    People like Caputo who often complain about the size of government (I do too) should instead turn their attention to the public authorities, where waste, political patronage and complete and total unaccountability are rampant.
    The end result? Taxpayers are forced to pay the bill. Congrats to Caputo, his employees and the others on getting decent side jobs with the ECWA. They have bills to pay… and as taxpayers, we will help them pay them. What a shame.

    Like

  7. I see Ken’s article is on dailypublic.com and I look forward to seeing more on this from our investigative reporters in WNY. Steve Brown and Scott Brown at Channel 2 are going to be asking the tough questions so Caputo and Domagalski and the others better be prepared!

    Like

  8. Our job is, in part, to work with the media on behalf of the Water Authority. So thanks for the heads up. And again, you’re welcome for the 35% we’re saving ratepayers for PR services – not a side job for a PR firm, it’s our core business and just because the company co-founder is a Republican doesn’t disqualify us from bidding for work, being the lowest bidder by far and saving you money.

    Like

  9. I am a Republican. My niece’s best friend is also a Republican trying to break into the public relations business. If I had known this position was being advertised, I would have encouraged her to apply.

    Stop spinning things Michael. You rant and rave about how government spends too much and then accept a position like this because of your political connections. I’m sure your PR firm does spectacular work, but please… without your association with the NYS GOP and Erie County GOP this is something that gets offered to another patronage favorite before you.

    You are a Republican. You are a political operative. You are out to make money. Own it.

    And remember who is paying for it.

    Like

  10. Local Republicans need to hang on to the control they have of ECWA since they have a hard time winning elective office. Poloncarz clobbered Walter despite the efforts of Langworthy, Caputo and the like. It wasn’t even close. The late surge of money from the state GOP was wasted and now the locals have egg on their face trying to explain how they misread the voters strong approval of Poloncarz. He even beat Walter in Amherst!

    There will be no real efforts to introduce reform anytime soon. Too many people need landing spots.

    Let the good times roll…

    Like

  11. Ronald you’re paying 35% less for PR than the previous firm. So you’re welcome – unless you want to pay more for far, far less. And tell your daughter we’re hiring – ECWA is our smallest client by far. We’re even opening a Miami Beach office in January and hiring there too!

    Like

  12. To the fearful anonymous Dem(s) reading from your talking points: You’ve got to do better. Really. We’re saving ratepayers money and they’re getting the best PR within 250 miles. “Ranting and raving about government waste”? You need better strategists and MUCH better writers. I eat amateur attack poodles like you for breakfast.

    Like

  13. Republicans AND Democrats are taking advantage of the ECWA’s pork and patronage opportunities. When will the Erie County Legislature hold a special information session to discuss ECWA’s role in our community? Then maybe a few public hearings so we can all weigh in? What do you think about that Ken?

    Like

  14. Which legislator reading this will push for public hearings about ECWA?

    Paging Mr. Lorigo, Mr. Hardwick, Mr. Burke and Mr. Savage.

    One of those four should take the next step and put this on the agenda for the committee to discuss.

    Like

  15. How would a public hearing be scheduled? Would public input be given in writing or orally? This is intriguing. Maybe a new years resolution for our countywide elected officials in 2016? What do Poloncarz and Mychajliw think about this?

    Like

  16. Ron Plants did a story on the water authority couple weeks ago on channel 2 news but there wasn’t this much in depth and analytical research or? depth to the story. Thank you for the data. Maybe Scott Brown, who always finds a way to interview the heads of these authorities and little known agencies, can talk to some of the top dogs and ask why the need the outside help for PR work and legal work? Or what about Justin Sondel of City and State?

    Like

  17. Why are Mr. Caputo and Mr. Bedenko so snarky and crass about this? Why be so touchy just because Mr. Kruly has exposed something that you two choose to ignore? This is taxpayers money and you both claim to be looking out for us all, but then certain names are identified as being the beneficiaries of the ECWA pork & patronage/friends and family plan and you get snotty. Relax. Take a breath and walk away from your computer. People are asking legit questions and you are both avoiding them. What a shame.

    Like

  18. The Erie County Water Authority should not exist. Get the hearings started to decommission that authority. Who will make it a pet project of theirs in 2016? How about Legislator Mills, who appears to be ready to disagree with some of his colleagues in the legislative majority. Do it John! Do it!

    Like

  19. So if I read this correct:
    – 35% savings in PR, approximately $60,000 a year instead of $81,000, saving $21,000. Great!

    – but bloated & overpaid staff, resulting in hundreds of thousands of dollars unnecessary annually!!

    And we’re supposed to be happy & distracted that we saved $21,000, but spend many times more on bloated staff salary!

    Like

  20. Not to mention I’m being charged for water I’m not using.
    9000 gallons minimum, charge $28 ever quarter, when I only use about half of that.

    So that’s $56 I’m being ripped off every year.

    Like

  21. Pingback: Trumpkins, Pigeonistas, the Erie County Water Authority — the gangs that can’t shoot straight | Politics and Other Stuff

  22. Pingback: The Water Authority keeps digging | Politics and Other Stuff

Comments are closed.