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Comptroller: Leaky Pipes Drain Municipal Revenues

  • 27 October 2017
  • scalera

By Matthew Hamilton, Times Union

Albany- Local governments are seeing millions of dollars in revenue flushed away because of water loss, inaccurate meters or improper billing, a new comptroller’s report on municipal water systems shows.

Audits of 161 local government and seven public authority water systems statewide between 2012 and May of this year conducted by Comptroller Tom DiNapoli’s office show that in some cases, water loss between the source and customers exceeded 50 percent of the water produced.  A review of 22 audits that found water loss was an issue for those systems estimated that as much as $2.2 million could be saved if the losses could be eliminated.

“Water leaks, broken pipes and aging infrastructure are costing local governments millions of dollars annually”, DiNapoli said in a statement Thursday.  “Across New York, my audits have revealed infrastructure problems, poor budget practices and a lack of long-term planning are straining municipal finances and increasing costs for taxpayers.  If these problems aren’t addressed, the issues plaguing water systems will only get worse.”

In some areas, money set aside of water operations actually was used for other purposes.  The report uses Troy as an example, with the city using its water fund to subsidize its general fund to the tune of $6.4 million over three years.

Troy City Deputy Comptroller Andrew Piotrowski said that transfers cited by DiNapoli totaling $6 million from the water fund to the capital projects fund in 2013 and 2014 were done with approval of the city council and were reflected in amended budget documents.

Piotrowski added that while the water fund balance did decrease, the city’s position is that “it did not leave the water fund in any precarious position in any way.”

“(By law) you cannot create a deficit in the water fund to subsidize a general fund,” he said.  “Every year of that transfer, after the transfer the water fund still had a surplus.”

Aging municipal infrastructure has been a point of keen focus of state elected officials in recent years.  The most recent state budget pledged $2.5 billion for clean drinking water projects statewide.  The bulk of that money is $1.5 billion specifically for water infrastructure improvement grants.

But that money scratches only the surface of need.  State Department of Environmental Conservation Commissioner Basil Seggos told lawmakers earlier this year that the total need over the next two decades for both drinking water and wastewater is near $80 billion.

The focus on water infrastructure follows some serious breakdowns in recent years.  In Troy, a 33-inch transmission main burst in January 2016, gushing 10 million gallons of water and flooding city streets and basements.  In August of this year, a $3.2 million water main replacement project was finished as the city opened the valve on the new pipe.

Other areas aren’t immune to catastrophe.  In Albany, an August 2016 water main break o9n Elberon Place created a sinkhole that swallowed an SUV.  Impacts from that incident also were felt in Guilderland, Bethlehem and Colonie.

As a follow up to this article Senator Jim Tedisco wrote:  A new report by the State Comptroller’s Office on the millions of tax dollars and gallons of water lost due to leaky pipes underscores the need for his SWAP – Safe Water Infrastructure Action Program – legislation that he has been advocating for to address the lurking monster in our underground infrastructure.

He says that we got our foot in the door this year with $2.5 billion in safe water infrastructure grant funding.  However, all town, village, city and county governments should have the peace of mind that they will receive a formula-based annual level of state funding to maintain and invest in the underground infrastructure that keeps the above ground roads and bridges stable.

SWAP is modeled after the popular and successful CHIPS program for local roads and bridges and would provide annual formula-based funding to all municipalities in the state to allow them to identify and swap out old, deteriorating pipes, water mains and gas lines to better maintain the state’s infrastructure.

The legislation (Senate Bill S.3292/Assembly Bill A.3907) is a top priority for the Association of Towns and the New York Rural Water Association.