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Analysis: How the Erie County Water Authority landed in hot water

Over the past four weeks, the Erie County Water Authority has been beset by wave after wave of developments, controversies and criticisms that could lead to an overhaul of the organization.

The Erie County Legislature on Thursday will call in the authority's chairman, Jerome Schad, to account for past offenses by the agency. They also will explore whether it's feasible to dissolve the public authority and roll it into a county department.

A lot is at stake. Lawmakers are feeling pressure to reform the agency. Water Authority leaders are out to prove they're capable of cleaning up their own house. And Water Authority customers want low cost, clean water provided by a well-run agency that doesn't make headlines for failed leadership, political patronage and secrecy.

Here's a recap of what's happened, why it matters and what's coming:

Q: Why does the Water Authority matter and why is it making so much news?

A: The Water Authority is a $52 million utility responsible for providing clean water to more than half a million customers in Erie County. It is also a politically created public agency that has had a long history of providing well-paying jobs to political donors and party players.

The authority has long been a subject of criticism for its overtly political governance structure.

In recent months, The Buffalo News has published stories detailing how political contributions influence who gets jobs, the contractual perks granted to top appointees and how the organization has repeatedly flouted open government and public records laws.

Previous efforts to reform the agency have generally failed.

But earlier this month, the Authorities Budget Office, a state oversight agency, released a scathing report that found so many instances of lax governance and transparency violations that it censured the authority commissioners and recommended that any commissioner in 2016 or 2017 be removed from their position.

Schad is the only commissioner from that time who still serves on the authority board.

Though the Authorities Budget Office censured the authority, neither the ABO nor the county District Attorney's Office found evidence of criminal wrongdoing.

Q: Why haven't past efforts at reform been more successful?

A: The would-be reformers are politicians who rely on party support, and both parties have benefited from the patronage system that exists now. Moreover, authority oversight falls to the state, not to local government. That's why the report from the state's Authorities Budget Office has had such a big impact. A state agency explicitly recommended that the Erie County Legislature take action and replace Schad as a commissioner.

Until just recently, the Legislature said its oversight was limited to appointing authority commissioners. But the ABO has advised the Legislature that it has the power to vote commissioners out of their jobs, as well.

Q: Will Schad be fired?

A: It's no sure thing. Unsurprisingly, politics plays a role. Schad is a Democrat. Last week, the Legislature called for Schad to resign in a 6-5 vote, with all members of the Republican-supported minority and one Democrat voting in favor. Schad supported many of the decisions criticized by the ABO. But he says he has undertaken reforms at the authority since becoming chairman in May and has no intention of resigning.

Two legislators have put forward a new resolution calling for Schad to be fired, but it's not certain that this more forceful resolution will have the six votes needed to pass. Some Democrats, including the county executive, have said Schad is being made into a scapegoat for Republican failings.

The county attorney has also issued a legal opinion stating that only the Legislature chairman can recommend Schad's firing, and Chairman Peter Savage, D-Buffalo, has said he will not do so.

Q: Is Schad's claim that he's reforming the authority true?

A: Since Schad became chairman in May and fellow Democrat Mark Carney joined as a commissioner of the authority, the agency has made changes, including updating the authority's website, expanding committee participation and more promptly answering requests for public information. Their regular meetings now feature more open, public discussion and debate. Skeptics point out that these changes all came after the Authorities Budget Office issued its draft report to the commissioners.

Q: So what happens now?

A: A lot falls to the Legislature. At Thursday's meeting, the Legislature is expected to hear from Schad for the first time since the ABO report was released. Then a majority will have to decide whether he should stay or go.

The Legislature is also expected to gain an understanding of what would be required to turn the authority into a county department. As laid out by County Executive Mark Poloncarz last week, a takeover would require surmounting many logistical, labor-related and financial hurdles and could cost ratepayers more money in the long run.

The Legislature also needs to decide whether to support Poloncarz's authority reform proposals, which include expanding the size of the authority board, cutting commissioner stipends from $22,500 to $7,500, and demanding more reporting and accountability to local county leaders and the county's Ethics Board. If they support his proposals, they would need to pass a home rule request and gain state lawmaker sponsorship to change state statutes.

Finally, the Legislature needs to appoint a new authority commissioner to replace Karl Simmeth Jr., who retired earlier this month. Simmeth is a Republican who would be replaced by another Republican on the three-member authority board.

Q: Who's thrown their hat in the ring for the vacant commissioner's seat?

A: Seven candidates have thrown their hat in the ring for the vacant commissioner's seat, but two are Democrats who would not be considered because of the state law that governs the board's makeup. The remaining applicants are:

  • Ronald Pilozzi, Republican and former City of Tonawanda mayor
  • Dale Kepner – Republican and Orchard Park resident who works for Erie 2- Chautauqua-Cattaraugus BOCES
  • E. Thomas Jones – Republican and former Amherst town attorney
  • Dave Karb – Unaffiliated with any party, East Aurora resident who works as a Tops store manager
  • Alan Getter – Unaffiliated with any party, Clarence resident and an assistant superintendent in the North Tonawanda school district
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