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Audit rips Albany water system

Hevesi's scathing report says taxpayers will foot bill for bungled budgets and uncontrolled spending

Published on 9/29/2005 by the Times Union written by RICK KARLIN, Staff writer, Times Union

ALBANY -- The city's water system is spilling torrents of cash and rates may be going up to stem the tide of red ink.

Water officials have exhibited "poor financial oversight, inaccurate budgets and uncontrolled spending," according to an audit released Wednesday by state Comptroller Alan Hevesi.

"The Albany Water Board and Finance Authority are more examples of very poorly operated public authorities," Hevesi said of the two entities that operate the municipal system. "The result is huge deficits and fast-growing costs for Albany water ratepayers."

The water system finances have deteriorated from a surplus of $1.8 million in 1999 to a $10.7 million deficit in June 2004 when the audit ended. "This is a huge loss, given the Board had a 2003 operating budget of $16.7 million," according to the audit.

Water Commissioner Robert Cross disagreed, saying the priority has been to keep rates low while overhauling an aging infrastructure they inherited when the water system was formed and separated from the city government in the late 1980s. City residents pay $2.29 per thousand gallons of water, far lower than those in surrounding suburbs, said Cross and consultant Bill Kahn.