A couple ideas to jump-start the shutdown of the Erie County Water Authority

This blog has over the past three years commented on the excessive staffing at the Erie County Water Authority (ECWA) and its lack of openness to the public it serves. I have frequently pointed out the redundancy of Authority administrative staffing and have suggested converting the agency into a department of Erie County government. The release last week of a report by the New York State Authorities Budget Office (ABO) has now focused much greater attention on this issue.

When the ECWA was created in 1949 county government hardly resembled the county government we know today. A 54 member Board of Supervisors managed the government with no executive office. County government was mostly a highway department, some parks, a health department, the County Clerk and criminal justice operations. Much has changed.

The Water Authority was created because there was not a significant county government administrative structure in place that could manage a function that consists mostly of drawing water from the lake, making it pure and safe to drink, and delivering it to its customers. Erie County government in the 21st century handles much larger functions than those carried out by the ECWA.

The ABO got into the matter because it came to their attention that the ECWA has been inattentive to its duties to the public. Their report focuses largely on the way that the ECWA handles Freedom of Information Law (FOIL) requests. FOIL requests from the news media and citizens have frequently been ignored or handled in a slip-sod manner. For the record this blog has only filed one FOIL request with the ECWA, for information about Authority employees and contracts. I received the information that I had requested.

The ABO has suggested that the Erie County District Attorney’s office investigate the ECWA for possible criminal behavior. DA John Flynn is right to follow up on that, but I have never heard of anyone being prosecuted for violating the Freedom of Information Law. There probably would not be enough prosecutors, judges or jail cells available to handle a full scale attack on FOIL violations.

There are, however, some other ways to go after the ECWA that might bear fruit quicker than what has been suggested so far.

It is true that the County Legislature could request the introduction of state legislation to abolish the Authority. It’s not going to happen this year because the State Legislature will be adjourning for the year as early as this week. Special local legislation is a difficult process, involving the drafting of state legislation, properly vetted; a home rule message approved by the County Legislature; committee approvals followed by full votes in both houses of the Legislature; and then signing by the governor. Under the best of circumstances, this is a laborious process.

There has also been discussion of a county legislative resolution proposing to terminate ECWA Commissioner Jerry Schad for his involvement in the Authority’s actions which led to the Public Authorities Office report. Removing a public official in New York State is a lengthy and complicated process.

So here is an alternative, a two-step local process. It would help signal to the ECWA’s commissioners the seriousness that county officials are, as they have said, serious about making changes at the Water Authority. By the same token, advancing these proposals would be a test of the seriousness of the County Legislature in actually getting something done about the ECWA.

Section 1053 of the State Public Authorities Law, which is part of the ECWA’s enabling legislation, provides the following:

“The members of the authority shall receive such compensation for their services as shall be fixed by the board of supervisors and be reimbursed for all expenses incurred in connection with the carrying out of the purposes of this title.”

So the required action is very simple. I have taken the liberty of drafting a County Legislature resolution that would act on this section of the ECWA law. All that is needed is the identification of legislative sponsors and cutting and pasting the following:



Re: Setting the Compensation of the Commissioners of the Erie County Water Authority


Whereas the Erie County Water Authority (ECWA) was created by an act of the State Legislature in 1949 to provide consolidated water delivery services for residents and businesses of the County of Erie, and

Whereas the State Legislature provided for the appointment process for three commissioners of the Authority, and

Whereas the state legislation provides that “the members of the authority shall receive such compensation for their services as shall be fixed by the board of supervisors,” and

Whereas according to the State Authorities Budget Office nearly all directors, trustees or commissioners heading state and local authorities have for many years received no compensation for their service, and

Whereas the ECWA, unlike other agencies, provides commissioners with compensation in the amount of $22,500 each, per year, and

Whereas this Legislature wishes to indicate in the strongest possible terms that it is serious about reforming the ECWA with the goal of transferring the Authority functions to the direct management of Erie County government,

Now, therefore, be it

Resolved, that the Erie County Legislature does hereby set the compensation of commissioners of the Erie County Water Authority at $0.00, and be it further

Resolved, that this salary level shall become effective August 1, 2018, and be it further

Resolved, that a certified copy of this resolution shall be delivered to the office of the Chairman of the Erie County Water Authority.

Fiscal Impact: This action will save the ECWA’s customers $67,500 plus whatever payroll taxes and contributions to the State Retirement System that relate to the current compensation of the commissioners.

The second step is more complicated, but with the right buy-in by county government officials as well as the commissioners and staff of the ECWA, the process is doable, locally, without waiting for the State Legislature to act.

Section 1053.2 of the Public Authorities Law, again a part of the ECWA’s enabling act, provides the following:

“The authority and its corporate existence shall continue for a period of twelve years from the twenty-seventh day of April, nineteen hundred forty-nine, and thereafter until all its liabilities have been met and its bonds have been paid in full or such liabilities or bonds have otherwise been discharged and thereupon all rights and properties of the authority shall pass to and be vested in the county of Erie.”

What this means is that if the bonded debt of the Erie County Water Authority was paid off or has “otherwise been discharged,” then the Authority, having no debt, would pass out of existence and “all rights and properties of the authority shall pass to and be vested in the county of Erie.” The idea of an authority perpetuating itself by continuing to carry debt, something included in the enabling legislation of many public authorities in New York State, is time-honored tradition. The legendary powerbroker, Robert Moses, used that arrangement to create and maintain his control of multiple state agencies, at least until Governor Nelson Rockefeller had had enough of it and arranged for bonds of one of the major authorities that Moses ran to be paid off in order to take control away from Moses.

It is not likely that the ECWA will anytime soon, on its own volition, pay off all their bonds in full, and it would not be practical to do so since their current bonds were sold to finance its capital projects. But what if the County of Erie offered to pay off the bonds, with arrangements then to allocate the re-payment of the now new county bonds to the customers of the current Water Authority – something that those customers are already doing through their current billings?

If the bonds are paid off through county-sold bonds, then the Authority could become a part of the government of County of Erie. In order for this to happen, these steps, and undoubtedly a few more, would need to occur:

  1. The total dollar value of the current bonded debt of the ECWA needs to be identified, which shouldn’t be that difficult. The Authority’s most recent audit set that figure at approximately $43 million as of December 31, 2017.
  2. The county government should signal its intention to sell county bonds of the equivalent amount and provide the funds to the ECWA so that the Authority’s funds could be paid off.
  3. If the Authority cooperates and their bonds “have been paid in full or such liabilities or bonds have otherwise been discharged,” as provided in the Public Authorities Law, then “all rights and properties of the authority shall pass to and be vested in the county of Erie.”
  4. Upon transfer of the functions of the Authority to the County, the cost of paying off the new county obligations would be spread to the customers of the ECWA in the same manner as those customers are now paying the Authority’s debt through their payments for the water service. The County government already operates a number of sewer districts where the local residents and business customers pay for capital improvements in their respective districts.
  5. Further, upon transfer of the functions of the Authority to the County, staffing will be arranged by having the new county Water Department run its activities similar to the manner in which the ECWA presently does. Probably 90 percent or more of the current Authority staff who are transferred to the county would continue to do the jobs they presently do. This would mostly involve line workers and their supervisors, as well as engineering and water quality staff.
  6. Because administrative operations formerly performed by the Authority would now be merged with much bigger administrative staffs of the county in areas such as human resources, legal services, accounting services and the like, substantial reductions in former Authority administrative staffing would result. This would provide cost reductions for Water Department customers while improving the efficiency of the operation.
  7. As a department of the county government, accountability and transparency would be improved because elected officials who are responsible to the voters – the county executive; county legislators; and the county comptroller – would be obligated to operate the Water Department in the best interests of water customers or bear responsibility for issues that develop in the future.

I am certainly not suggesting that it will be simple to arrange for the county’s payment of ECWA bonds to facilitate the transfer of the Authority’s activities to the county government. But there is a path forward on this – a locally controlled path forward that can work and accomplish something that will save money while improving services and accountability. All it takes, in the interest of the residents and businesses of Erie County, is some cooperation.