2005 Annual Report - Erie County Water Authority

The Authority has joined a consortium of other municipal power users in an effort to lower costs. Theconsortium was formed to secure lower prices for electricity purchases through aggregation of purchasesin the open market. Erie County, who acts as the lead agency in the consortium, purchases electricity bycompetitive bid and bills the Authority on a monthly basis. The Authority is also investigating andpursuing favorable changes in State Law which could result in the Erie County Water Authority receivingpower allocations and/or reduced commodity costs.Security risks, disasters, and power outages have highlighted a need for infrastructure enhancements andredundancy throughout the system. Federal appropriations have been requested from various legislativecommittees to begin installing such infrastructure in vital areas.The biggest fiscal challenge on the horizon is to generate sufficient cash flow to help meet theinfrastructure needs of the system. The Board of Commissioners has subscribed to the practice of amodest increase in annual water rates. It believes that, except for grants or other Federal or State funding,a “pay as you go” approach is a better alternative than securing open market, external financing whichpushes the financial impact of improvements far into the future.MAJOR INITIATIVESInternally, departments are encouraged to establish standards for providing excellent customer service,and to set and monitor goals each year. The Authority recently participated in an industry widebenchmarking survey prepared by the American Productivity and Quality Center using Qualserveperformance indicators for water and wastewater utilities. The survey compared water utilities from thenortheast, midwest, south and western regions of the United States, as well as one water utility in Canada.The Authority’s participation in the survey was an excellent opportunity to determine what aspects of theoperation are working well and where attention needs to be focused to achieve more favorable results.The Authority has received the Association of Metropolitan Water Agencies’ (AMWA) 2005 GoldAward for Competitiveness Achievement. The award, which is AMWA’s top utility management honor,recognizes the accomplishments of public water utilities that apply competitive business strategies andeffective management practices to meet the expectations of drinking water consumers and municipalleaders.The Erie County Water Authority has promoted consolidation of water systems to those municipalitieswho have either managed or owned separate water treatment and/or delivery systems. The Authoritybelieves that through the economy-of-scale, the cost of potable water can be kept at a reasonable price forits rate payers and as an attractive tool for economic development purposes.AWARDS AND ACKNOWLEDGEMENTSThe preparation of this report would not have been possible without the dedicated service of the entirestaff of the Finance Department. We wish to express our appreciation to the Finance Department staffand all other members of the Authority who assisted and contributed to the preparation of this report. Wewould also like to extend our congratulations on the receipt of a Certificate of Achievement forExcellence in Financial Reporting for the 2004 report, which is presented on page 7.- 5 -