2001 was another successful and progressive year at the Authority as we continued to improve efficiencies and reduce operating costs on behalf of our customers.

Much of the Authority's efficient operations can be attributed to our financial commitment to infrastructure improvements over the last five years. During this period, the Authority has invested more than $65 million in system upgrades that have significantly improved service delivery. Due to this investment, our system will reliably meet the demands of an increasing customer base resulting from our sustained efforts to regionalize Western New York's public water systems.

Last year, we assisted several local governments in their attempts to provide water more cost-effectively. Following three years of talks and a significant financial commitment from the Authority, the City of Tonawanda has decided to merge its system with the Authority. The merger will result in 6,000 new customers and increased revenues for the Authority, and significant savings for Tonawanda's ratepayers.

In cooperation with the County of Erie, the Authority also helped fund a design study for the Southtowns Water Consortium that will determine the feasibility of supplying public water to seventeen communities in southern Erie County.

As a result of the positive impact the consolidation of public water systems has had on our community, the Authority will continue to pursue regional opportunities that will achieve our mission of providing safe, high quality water at an affordable rate.

It is an exciting time to be a part of the Authority, and we look forward to your continued support.

Sincerely,

Robert A. Mendez
Chairman