Residents challenged the sitting board of the Water Authority of South East Nassau County recently on findings contained in its report issued in August 2014 that said the cost of a takeover of NYAmerican Water (Aqua) would be more costly to taxpayers in the long term than the takeover was worth.
The meeting, held at the Merrick Golf Course Clubhouse, highlighted the continued disparities between residents in the Bellmores and Merricks who pay higher costs for private water than surrounding communities who pay far less for water managed by municipalities such as the Town of Hempstead and the Town of Oyster Bay.
WASENC was reformed in January 2010 from an earlier committee formed in 2000 to first study the high prices of water being charged to customers of then-NYWater Corp. WASENC, at that time, determined it would be too costly to take over the corporation.
During the meeting, it was learned that NY American Water pays taxes to over 30 school districts, even though it does not service the majority of those school districts with water. The information set off calls for rebates to residents that could help recapture some of the costs being charged to them.
Board Chairman Richard Ronan said it was not the authority’s charter to attempt to argue for rebates, and that that decision would lie with the state legislature and the state Public Service Commission.
Claudia Borecky, president of the North and Central Merrick Civic Association, also raised the qualifications of consultant George Sansoucy, PE, LLC, who conducted the valuation report and feasibility study which the WASENC board members are relying on for their determinations.
She showed Your NewsMag documentation in which Sansoucy has been sued by other municipalities for over-valuing companies, which could otherwise deter a takeover of those companies.
The 2014 feasibility report floated a figure of $80 million for a takeover, which could rise substantially in a takeover bid through eminent domain to $200 million and more. John Reinhardt, secretary of the board, noted that NYAmerican Water is earning good profits so was unlikely to accept a takeover bid without a protracted challenge in state court. That’s why a worst-case scenario of $200 million was included by Sansoucy – which Borecky now challenges as necessary.
She also noted that, even at that surmised cost, residents would pay “about $130 more a year in taxes,” she told those assembled at the meeting.
But Ronan noted that the tax hike may only be the beginning of other cost hikes that could emerge, such as labor and plant operation costs, as well as maintaining the infrastructure.
“That’s what profits are for,” remarked Tom Kohlman, inferring profits made from the operation of the new utility could help pay down costs associated with the takeover, and other ancillary costs. But Ronan referred to the report, which said that the new public utility would not earn a profit, thereby reducing the rate to taxpayers. The report continued, however, that taxpayers would be held accountable for any new costs incurred.
But the issue of NYAmerican Water paying taxes to over 30 school districts struck the loudest continual chord among nearly all attendees, including Neil Yeoman, Jack Holzman and David Stern. Holzman maintained that cutting out at least 27 school districts could save ratepayers substantial savings, and perhaps make a takeover less necessary.
Ronan reminded attendees that NYAmerican Water had properties in those districts, even if it did not operate in them. He added that while taxpayers subsidized the construction of
NYAmerican Water’s newest Long Island corporate head office at Smith Street and Brooklyn Avenue, the sale of its building in Lynbrook would recoup those costs to residents.
2009-2010 figures showed the Bellmore, Merrick, North Bellmore and North Merrick school districts receiving $496,985 in taxes from NY Water Corp. The total tax bill to schools for NYWater properties was $2,846,658.
Steve Rhoads, Nassau County Legislator for the 19th District, told those in attendance he had contacted New York State Assemblyman Dave McDonough to inquire at the state level what legislation – if any – was on the books requiring NYAmerican Water to pay taxes to schools it did not operate in. An answer was to be forthcoming.
Joe Baker, president of the South Merrick Community Civic Association, concluded, “This still isn’t over.”
Residents can see the entire feasibility report by visiting www.wasenc.org.
Another meeting is planned by the board – which included Walter D’Amato and Maureen Fitzgerald, both from Oyster Bay – within the next month to address the new questions raised at the meeting.