New York's water systems may require nearly $40 billion in repairs and improvements over the next two decades, according to a report issued today by State Comptroller Thomas P. DiNapoli.

"Many drinking water systems in New York are over 100 years old and operating far beyond their useful life," DiNapoli said. "Too many places are dealing with water main breaks, leaks, contaminated drinking water and other problems that can result in public health threats, property damage or inconvenience for residents and businesses. New York needs to significantly invest in this area, or we're going to suffer the consequences. Unfortunately, paying for these solutions presents a considerable challenge."

Recent high profile water system failures and problems in places such as Hoosick Falls, Syracuse and Newburgh are the latest signs of the need to spend more on water delivery systems. The Executive Budget for State Fiscal Year 2017-18 proposes a $2 billion capital appropriation for water quality improvements. However, the estimated price tag from the Environmental Protection Agency to just maintain the existing infrastructure is $22 billion through the year 2030. The state Department of Health, meanwhile, puts the estimate much higher and concluded the state will need as much as $39 billion in capital financing for drinking water projects.

In New York, it generally falls to cities, villages, towns and a few counties to operate and fund the systems that supply residents and businesses with water. It is paid for primarily from fees and property taxes. In addition, water authorities and private water companies also provide these services in several communities. The state and federal government regulate public water systems, but also provide some funding for improvements.

DiNapoli's report highlighted several areas that need attention and resources, including contamination of water systems that can cause public health emergencies and can come with a large price tag. Water contamination can originate from industrial sites as well as from inadequate treatment, improper separation of sewage, and agricultural and storm water runoff. Aging pipes or other structural problems can cause corrosion of materials that can release lead into drinking water.

Audits by DiNapoli's office have identified municipal water systems that experienced excessive water loss, in some cases exceeding 50 percent, which is likely coming from undetected deterioration, breaks or other malfunctions in the water distribution system. The water delivery infrastructure is also vulnerable to the emerging threats of climate change and cyber-attacks, as Internet-connected industrial control systems become more common.

The Comptroller's report also highlighted important financial information for local water systems. This includes:

• In 2015, 939 local governments reported collecting a total of $1.1 billion in water fund revenue. Most of this revenue was spent on the day-to-day operation of the water systems, including routine maintenance.
• New York's 27 local water authorities reported $4.6 billion in revenues, with New York City's water system accounting for $4 billion of those revenues.
• The largest water suppliers outside of New York City are the Suffolk County Water Authority, the Monroe County Water Authority and the Erie County Water Authority.

The report recommended that local officials prepare for the challenges ahead by developing and maintaining multiyear financial and capital plans; establishing legal capital reserve funds when appropriate; and keeping taxpayers informed about system needs and options for paying for them—including federal and state resources. Setting and managing water user rates to meet system expenses is also central to the financial stability of water services.

To read the report "Drinking Water Systems in New York: The Challenges of Aging Infrastructure," go to: http://www.osc.state.ny.us/localgov/pubs/research/drinkingwatersystems.pdf

For access to state and local government spending and more than 50,000 state contracts, visit www.openbooknewyork.com. The easy-to-use website was created by DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.