REGIONALISM: County, city agree on water merger

[Night Owl]

REGIONALISM
County, city agree on water merger
3/26/2004

An agreement has been reached for Erie County to take over Buffalo's water system, the second large-scale merger agreement reached in the past month.

The deal, crafted over three years of negotiations, still needs approval from the city Water Board, Buffalo voters, the Common Council and the state.

In addition, the control board has to approve the plan, and the takeover must be negotiated with city unions.

Thursday, the head of the blue-collar union called the plan a "bad deal" for the city. The agreement would provide Buffalo with $31.5 million over six years and see the Erie County Water Authority assume $124.2 million in existing debt.

The county also would commit to making up to $15 million in annual repairs to the city's century-old water system, which contains 780 miles of pipe. The city typically has borrowed between $7 million and $8 million each year to pay for repairs.

County Executive Joel A. Giambra and Mayor Anthony M. Masiello are scheduled to sign a memorandum of understanding at a news conference this morning.

"This is a significant step toward regionalism," said Masiello. "It's going to bring more investment into the water system and help to reduce operating costs."

"There's no other service in the county that begs more for regionalism than water and sewer services," said Giambra. "It's the right thing to do for this community."

County Water Authority Chairman Mark G. Patton also has committed to signing the agreement on behalf of the agency that would assume responsibility for Buffalo's system. As of late Thursday, no officers of the city Water Board had committed to signing the agreement. Masiello said he remains optimistic that the board - to which he makes all appointments - will look favorably on the plan. Advocates claim city water rates under the new system would increase at a "substantially lower" pace than under the current operation. Officials also argued that the city would be relieved of a substantial debt and spared from having to make costly repairs to an aging system as Buffalo struggles to regain fiscal stability.

The county, they said, would benefit from integrating two large systems in a way that reduces costs and improves efficiencies.

Advocates also admit there are still hurdles. Negotiators have yet to disclose how many city jobs would be eliminated under the merger, an issue that is likely to be a major concern for the five unions involved. "Our business model definitely envisions us operating the (city) system with fewer employees," said Robert A. Mendez, executive director of the Erie County Water Authority.

About 120 employees work in the city water division, and many of them are represented by the blue collar union. City and county officials said they hope to offer any employees displaced by the merger other jobs.

AFSCME Local 264 President William Travis said Thursday the water system generates about $4.2 million in annual revenue to the city.

"It's a bad deal," said Travis. "I'm no accountant, but I wouldn't sell something that's making over $4 a million a year for only $31 million."

Several Council members also have said they would rather keep the water system and find new ways to make money. One suggestion involves trying to sell excess water, a notion that county water officials branded Thursday as unrealistic, given the capital investment that would be required to serve customers outside the city.

Merger proponents further argue that Buffalo is making money on the water system only because it has routinely underfunded repairs. The practice can't continue without causing fallout, they alleged. The takeover is also contingent upon the county obtaining financing through the state Environmental Facilities Corp. Officials said the project has been deemed eligible for such financing.

Following are some of the plan's key elements:

The county hopes to take over the city system in the summer or fall of 2005. The city operation would be a separate division, at least in the foreseeable future. The move would maintain the current rate structure, including a commercial rate that gives breaks to high-volume water users such as hospitals and manufacturers. Buffalo would receive $31.5 million, payable in six annual installments. The first $4.9 million payment would be made next year. Subsequent payments between $5.1 million and $5.4 million would be made through 2011.

There would be a gradual phaseout of a water discount forincome-eligible senior citizens in the city. Currently, about 7,100 seniors take advantage of a 40 percent break in water rates. Officials are still negotiating a phaseout schedule, but they said it might be done over three or four years. Mendez said he's confident that even when the discount is abolished, rates for seniors will be more favorable than if the takeover hadn't occurred.

Earlier this month, Masiello and Giambra announced an agreement that would see all Buffalo parks transferred to the county under a takeover that they claim will save the city $3.5 million a year. A not-for-profit conservancy would run most of the big city parks. The plan requires approval from the Council and the county and state legislatures.

Masiello acknowledged this week that he's concerned about possible delays in obtaining state authorization to transfer city parkland to the county. But Assemblyman Sam Hoyt, D-Buffalo, said he has yet to see a detailed plan that documents the projected savings and other key components of the parks merger.

Article from the Buffalo News

[citymouse]

Here we go again.
Masiello relinquishing responsability and Giambra strengthening his position and powerbase,
It is not a "win win".
The Buffalo water system needs massive repair and maintaince.
The county says it will pledge 15 million to do it. All they are going to do is pay for the water authority to finish installing the meters in every home like the state mandated.
This move will also, I am sure, require one or more new appointments to the Erie County Water Board with the new car that goes with it.
They are saying upfront that city and county water rates will go up. If they are being that honest with you how much aren't they telling you?
The water aurhority in Buffalo was sold to itself a few years back and that was the answer then.
A private Company was brought in to run it and that was the Answer.
Now they are selling the only asset the city has that generates revenue and giving it to the county.
Joel is not interested in any thing the city has that does not create patronage or generate revenue, If he really wants to help Buffalo than share the sales tax.
Masiello just wants to give things away so he has less responsibilty. he feels his only duties should be cutting ribbons and kissing babies.

[morphinebrian]

" Masiello just wants to give things away so he has less responsibilty. he feels his only duties should be cutting ribbons and kissing babies."

You forgot kissing King Joels ass as well.

[WNYresident]

I dont know why buffalo doesn't sell water out of the city and under cut the county water system. Business is business. The extra profit could go to build the older city infrastructure.

I heard the water authority is laden with patronage. Should be easy to beat thier going rates for water.

[Night Owl]

I dont know why buffalo doesn't sell water out of the city and under cut the county water system. Business is business. The extra profit could go to build the older city infrastructure.

Because in doing it that way, it would be too easy, too effective and too logical.

[WNYresident]

It's almost like the politicains are pulling up lame in buffalo and selling out to the county and the suburbs.

The county is most likely lying that they can do the work for less. Once taken over in a few years the rates will go up a percentage or 2 and before you know it 10 years from now we'll be paying more for water but the county handles it instead.

2 percent a year and before you know it the rates are 20% higher. Did the city water people like raise thier rates 3 times so far this year?

Why are we allowing the "local water company",
the "local town goverment company",
the "local school companies",
the "local county company",
the "State Company",
slowly nickel and dimeing the tax payer.

2% here 3% there.. before you know it they doubled the taxes over a 20 year period. I got 3 20 more year periods left in my life and by that time i will not able to pay a 180% tax increase.

If taxes go up 3% ever year times 60 years that is 180% increase. It all ADDS up.

OH time for a new thread. We need to learn to focus

[morphinebrian]

"If taxes go up 3% ever year times 60 years that is 180% increase. It all ADDS up."

That is about the rate of inflation. It's not like candybars, automobiles, and housing haven't gone up about 180% in the same amount of time. Of course it all adds up. If the average salary was the same now as it was 60 years ago, you might have had an argument.

[WNYresident]

THe average retirement salary is the same. IT's NOTHING when you are retired your not earning a salary.

You live off your investments and SSI. When i retire i would like not to work to only cover my property taxes. Other taxes are based on what you earn, property taxes we are stuck with.

Lets say my property taxes are $4000 a year now. 50 years from now they are $12000 a year. I'm going to have to make sure that my investments give me a high enough return in order to keep my home?

Think SSI is going to increase enough for me over 50 years to cover the cost of property tax? Think the way investments have been lately too.

To make $12,000 a year to keep my home you would have to have about $100,000 at 12% or $200,000 at 6% or $400,000 at 3% to make $12,000.

You better start looking at the big picture.

[morphinebrian]

I'm not going to even bother checking my facts, but the stock market has definityly gone up 3X in the past 50 years. Inflation usually is greater than 3% a year, this year and last an exception. So taxes, water rates, etc., went up only 3% a year, we'd be making off like bandits because we'd actually be paying less in real dollars. The price to provide services isn't costing government the same now as it did 20 years ago, so why would you expect the same rates.

[citymouse]

Who has gotten a raise in income of Three percent a year for the last ten years. Any of you?
Not me.
The last four under with the current federal administration have been an abomination. Working people have been set back more than any other time in history since the Great Depression.
He stole the election and now he is robbing us blind, of our jobs, our childrens jobs, and thier childrens jobs.
He has done gerat things for the econemy of China.
What does this have to do with water. Nothing. I just wanted to get it off my chest.

[morphinebrian]

I'm talking more about long term world economic trends than any 5 year or even 10 year period.

[citymouse]

Part of the problem with water and the big picture with the city is for the past fifty yearslittle has been invested in infastructure. Instead they used the revenue to take care of thier friends with cush jobs and trying to keep the political pressure off them by end of the year surpluses in the budget by not spending in areas that needed it.
Water is a prime example. Lines have not been replaced equipment has been in disrepair and not replaced and water treatment procedures have not been modrenized.
The city knows it can't handle what needs to be done so it tried to pass it off to an "authority".
When that didn't work they tried to pass it off to a private managment firm. That still did not relive them of the responsibility so know theey are trying to pass it off to the county that can't afford it either.

[WNYresident]

So aparently the people running the water department weren't smart enough to budget for maintance and upgrades or downgrades as needed? They are managng thier company reactively not pro-actively.

The local governments really do go a lot of money but seeing they are the same people year after year it doesn't dawn on them.

We should stop all pet projects the politicians started and let the chips fall where they fall and then restart at a normal level.

I wonder how many pet projects we all could do without.

[citymouse]

I actually think it is a number of things that cause these situations.
The first one is the "Emporers New Clothes Syndrome".
No one who wishes to keep his job is going to tell the Mayor he dosen't budget enough for the department. So they will short change replacing things.
Making cheap and temporary repairs instead of doing it right in the first place and saving money down the road.
You can only patch a pipe so many times and it has to be replaced. Instead of spending the money to do it right the first time and avoiding five extra service calls.
They all want to stay under budget to please the mayor.
City departments are only budgeted so much for repair so they only do so much. They don't look past the current budget year.
The second reason is that they use money for patronage jobs that they don't need in order to keep there friends working instead of using it to invest in infastructure. this is only a small part but it is a part none the less.
The third is that there are no votes in replacing water pipes underground where no one can see them.
It is kind of like the peacebridge and the tunnel. Politicians want a signiture bridge so they can stand under it for a photo-op.
Wouldn't work with a tunnel.
Third money that was taken in as revenue was never re-invested in the department. It was thrown in the general fund and used at the budget directors discretion. This situation changed a few years ago when the city sold the water department to itself and set up the water authority, but by then it was too far gone.
This was only water the rest of the city departments are pretty much the same due to years of poormanagment caused by political concerns.
The chickens are coming to roost and the mayor is trying to pass the buck.

[Admin]

No one who wishes to keep his job is going to tell the Mayor he dosen't budget enough for the department. So they will short change replacing things.

Well that has to change seeing it will bite you in the arse in the long run. Oh! that's what is happening now.