I-Team: Water surcharge "not going down," but where is the money going?

Posted at 3:09 PM, Nov 06, 2017
and last updated 2017-11-06 23:06:17-05

The flat surcharge on nearly 170,000 Erie County Water Authority customers’ water bills is not going anyway anytime soon, according to ECWA Executive Director Earl Jann.
“I don’t see it going down, let’s put it that way,” Jann told 7 Eyewitness News.
For Lancaster resident Rosie Kuznicki, this news means more than half of her water bill will continue to go towards charges she doesn’t truly understand.
“Why am I paying this?” Kuznicki asks.
The Infrastructure Investment Charge was implemented in 2011.  It started off being $3 per quarter, but has steadily grown year over year, and in 2016 it reached $19.65 per quarter – or $80 per year. 
The increase is explained as a way to help pay for the aging infrastructure and to help offset the losses from water conservation efforts.
"With the decline in the use of water due to water saving devices, washing machines, toilets, etcetera, [customers] use a lot less water than they used to. The Authority was faced with a shortfall in replacing infrastructure," Jann said.

There are also significant infrastructure costs that the Authority has to pay for.  According to Jann, the number of leaks per year reached nearly 1,400 in 2015. 

The Infrastructure Investment Charge has brought in more than $51 million since 2011.
Where is all this money going?

There is no clear picture of what exactly the Infrastructure Investment Charge is paying for. A 7 Eyewitness News I-Team investigation found that there is no list of projects that the $51 million has paid for.  The funds are not restricted to infrastructure-related projects.  The money goes into the ECWA’s overall operating revenue.
Capital expenditures have indeed increased since the Infrastructure Investment Charge was born.  In 2011, the capital expenditure was $15.6 million.  In 2016, the capital expenditure grew to $19.9 million.

However, operating expenses have also grown over the years.  Salaries for top management and executives have risen too.  The I-Team analyzed salaries of the nearly 280 employees, and found 10 per cent - or 28 employees – earned more than $100,000 in 2016.

Click the image above to enlarge & see more details on expenses over the years

The lack of clarity about where the money is going does not sit well with Kuznicki, an Erie County Water Authority customer.

"There's water breaks all over. So what is [Infrastructure Investment Charge] fixing?" she asked.

Jann says the costs to repair infrastructure far exceed the current revenues. Currently, there are 529 miles of old cast iron pipe that accounts for 80 per cent of leaks, which will require an estimated $1 billion.

"It's very expensive to replace this type of infrastructure. If you want to do more of it, you have to spend that kind of money, and you have to get that money from somewhere."

Finding efficiencies in the existing budget does not bring in enough money, Jann says.  Instead, the ECWA finds the funds through the customer, via the Infrastructure Investment Charge and water usage charges.