Can NYAmerican Water Rates Be Lowered?

Clean Air Water and Soil Ltd. of Merrick, an environmental group seeking to reduce NYAmerican Water rates in the Merrick district through at least two avenues, provided updates to over 30 residents at a recent meeting at the Merrick Clubhouse.  Residents in the water district currently pay three to five times the water rates residents in municipal districts (Town of Hempstead, Town of Oyster Bay, Town of North Hempstead) pay, while up to 70% of those rates collected pay for NYAmerican Water’s property taxes.

With calls for “we want municipal water” sprinkled throughout the meeting, co-director Dave Denenberg said there was cause for hope rates could drop based on NYAmerican Water’s recent admission its rates has been miscalculated within the Sea Cliff water district, and was recalculating those rates. Privately owned NYAmerican Water provides water within its three districts of Lynbrook, Merrick and Sea Cliff.

With NYAmerican Water’s admission of rate miscalculations – which Denenberg said NYAW had known for years, CAWS has asked that the rate increases et last May be rescinded until PSC can recalculate rates, based upon more accurate NYAmerican Water calculations. However, PSC has asked for a stay of the rates until it can recalculate them.

“What if NYAmerican Water has miscalculated all of its rates?” Denenberg has asked.

Sea Cliff resident  Agatha Nadel, an advocate for municipal water,  told Your NewsMag she had already seen evidence of rate reductions, but added they were still too slight to make an impact.  In her talk to residents, she showed water bills for her home of $600 to $700 per quarter for service and taxes, noting that the taxes on the water service provided by the private company were higher than the water service itself.

In a letter to the state Public Service Commission from NYAmerican Water on January 29 regarding Case 17-W-0300, the company asked for petition to reconcile surcharges it had overcharged, or would charge, residents in the future, because of incorrectly assessed filings with the New York State Office of Real Property Tax Service regarding Sea Cliff properties.

The filing said “ … it was determined that a number of NYAW utility properties in its Sea Cliff District were over assessed due to errors in one of its asset inventory filings with the New York State Office of Real Property Tax Service (ORPTS). The over assessments led to certain NYAW property being taxed more than the property would have been had the ORPTS asset inventory not contained the errors.”

The letter added that it had recently reduced surcharges to residents of Sea Cliff because of the errors, confirming Nadel’s bills being slightly reduced.

Denenberg told the audience CAWS filed an Article 78 lawsuit against the New York State Public Service Commission in September after the PSC allowed NYAmerican Water to raise rates by at least 4% across its three water districts. He claimed the PSC was not adequately protecting the rights of residents against predatory practices of corporations – especially when water is a public necessity.

He explained that he and co-director Claudia Borecky have spent time before state administrative judges, attorneys for NYAmerican Water and PSC officials to ascertain how PSC calculated its new rates, and was overruled several times by judges when PSC officials objected to Denenberg’s pointed questions.

One critical question Denenberg wanted answered was how the PSC could raise rates higher than the current state cap of 2% and less on property taxes that has been in place for several years.


NYAmerican Water initially requested a much higher rate increase of 8% and more roughly a month after the Nassau County Water Authority of South East Nassau County concluded a study that did not recommend a municipal takeover of NYAmerican Water, the second such study to conclude so.

WASENC based the recommendation on a strong evaluation of the private company that would cost ratepayers higher monthly bills of $100 and more a month for up to 30 years to take over and then maintain NYAmerican Water infrastructure, which would include labor and structural costs.

WASENC concluded that residents were paying far less in increases under NYAmerican Water than they would under a takeover.

Denenberg objected to the study’s conclusions last March, saying WASENC, like the first WASENC study before it, was really about a lack of political will. He told Your NewsMag then that the first WASENC Study of the 1990s remarked in final comments that “ ‘…It was politically difficult to eliminate the taxes from the host municipality’s revenues,’ the first study concluded, adding that ‘the tax authorities that received these taxes [from NYWater] insisted that a municipal-owned system make Payment In Lieu of Taxes at levels similar to the taxes being paid by NYWater.’ ”

Denenberg has insisted that no revenues would be lost in a takeover when spreading the costs of revenue earned from the taxes among all communities within the county.  Rather, all county residents would pay fairly and equally for municipal water.


At the meeting, Merrick resident Margaret Valentino-Maher said it was imperative that ratepayers “go to their government” to request assistance in the fight to lower water rates. “We need more support from the local government levels to support those who elect them” into office. She said local town board meetings and legislative meetings were the ideal places to air out grassroots grievances to get assistance in amending state laws, such as Section 485-D.

North Bellmore resident Michelle Gagnon agreed, saying residents should put pressure on their local governments to assist them in lowering their rates.

Co-director Borecky thought it could be a substantive plan, especially with County Executive Laura Curran being from Baldwin – part of NYAmerican Water’s Merrick district, and several members of the Hempstead Town Board living in high-rate NYAmerican Water communities, such as the Lynbrook district.

Besides the Article 78 lawsuit, Denenberg suggested another avenue CAWS was taking to lower water rates was the little known real estate law known as Section 485-D. The law, officially known as New York State Real Estate Property Tax Law Section 485-D, asserts that water works corporations are exempt from property taxes:

“Real property situated in a city with a population of one million or more owned by a water-works corporation subject to the provisions of the public service law and used exclusively for the sale, furnishing and distribution of water for domestic, commercial and public purposes, shall be wholly or partially exempt from taxation provided that that local legislative body of such a city within such property is situated adopts a local law so providing.”

Denenberg maintains that if the law could be amended to add the words “or county” after the word city, the amended law would exempt NYAmerican Water from having to collect taxes from ratepayers on its properties within the water districts it serves. This would substantially reduce water rates to residents in the NYAmerican Water, he said.

In its January 29 letter to PSC, NYAmerican Water further commented that “NYAW is required to pay high property taxes … and these taxes are borne by customers as an expense component of the company’s rates for water service, making it challenging for the Company to provide customers with safe, reliable water service at fair and reasonable rates. “

Requests for comments to Hempstead Town Councilwoman Erin King Sweeney (4th CD) and to County Legislator Debbie Mule, (5th LD), who attended the meeting, were not answered by press time.

While the lawsuit continues, CAWS looks for donations to defer the continued cost of legal expenses. Residents can donate to either CAWS or the Law Offices of Teresa Butler, c/o LI Clean Air Water & Soil, P.O. Box 500, Merrick, New York 11566. Checks made out to CAWS are tax deductible.

                                                        DOUGLAS FINLAY       






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