LICAWS, Assemblywoman Call for New Study on American Water


Under the chants of “We want public water now”  co-directors Claudia Broecky and Dave Denenberg of Long Island Clean Air Water and Soil Ltd. of Merrick were joined by New York State Assemblywoman Christine Pellegrino of the 9th District in front of American Water headquarters in Merrick to propose a new feasibility study by the state comptroller’s office into the financial integrity of the Merrick, Lynbrook and Sea Cliff water districts overseen by NYAmerican Water after a state DPS report revealed that NYAW had known for years it had miscalculated its own property tax rates yet still increased water rates in May 2017 with the approval of the Public Service Commission.

IMG_1018Residents make their voices known and heard

The assemblywoman’s proposal follows an Article 78 lawsuit filed by LICAWS last September charging that the PSC did not have the residents’ interests in mind when it granted a 4% increase to NYAW just after a second Water Authority of South East Nassau County concluded in February 2017 that a public takeover of the water company would cost taxpayers more over a prolonged period of 30 years than without a takeover.

The assemblywoman, representing the Massapequa and Massapequa Park communities – part of NYAW’s Merrick water district –  told those gathered that she supported ongoing efforts to return water to a publicly run authority to ensure all Long Islanders can access and use safe, clean, and affordable water. “I call on my colleagues in the Assembly and Senate to stand up for our constituents on the south shore and across New York State,” she said.

She told Your NewsMag that state Senator Carl Marcellano had proposed legislation in the state Senate earlier to address issues Sea Cliff residents were having with American Water rates, but that her proposals would address the South Shore of Long Island as well.

IMG_1033Section 485-D of the state real estate property law with added amendment that could lower NYAW rates signficantly, by making the water corporation tax exempt

When asked where millions of dollars in new revenue streams for the Town of Hempstead and the local school districts might come from if NYAW were to go public, she explained that any tax increases applied to surrounding towns who pay for cheaper municipal water would be negligible, and the towns and districts would lose nothing. She added that better efficiencies in water delivery would be realized by residents and school districts by combining all water resources and infrastructure together.

Lenny Goldstein of Merrick said he couldn’t understand how the PSC granted a 4% increase to American Water when the state property tax cap is set at 2%. He said that hopefully a feasibility study could correct that miscalculation. Fire hydrants cost fire departments $700 a year to operate, he said, while fire departments in municipal water districts pay a fraction of that.

IMG_1022State Assemblywoman Christine Pellegrino announces proposals for new state feasibility study. Behind her are LICAWS co-directors Dave Denenberg and Claudia Borecky

For George Varghese of Merrick the solution is for a public water takeover. “Why should we be paying American Water’s property taxes,” he said, pointing to the new American Water headquarters building at 60 Brooklyn Avenue.

Neil Yeoman of Merrick, vice-president of the South Merrick Community Civic Association, said “there is nothing wrong with raising taxes fairly across the county” to pay for water. “We pay more than our fair share of taxes for the same water” they’re drinking, he continued.

When Edward Steinman of Bellmore complained to American Water, after his bill went from $18 to over $400, he said the water company sent “a novice” technician to measure the water at his home. Having managed properties in New York City for decades, Steinman said the technician didn’t even know how to calibrate measurements correctly.

Besides the new and more comprehensive study, Assemblywoman Pellegrino said she would approach the state Legislature to amend Section 485 D of the state’s real estate property law.  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.”

She showed a placard that exhibited the law, with the word “or county” placed after the phrase “in the city …”

Of the finished state DPS report that concluded NYAW planned to withhold information to residents after it had learned of its own rate miscalculations for years, Denenberg said  he knew they were hiding something. “Having pushed the Towns of Hempstead and Oyster Bay to reconstitute a water authority to conduct a feasibility study after the 2009 rate proceeding and having reviewed all the data that we had available to us, we knew that the numbers just didn’t add up.”

Attorney Theresa Walsh,  who filed the original Article 78 lawsuit on behalf of LICAWS against the PSC, filed a letter dated July 6 – after the DPS report was released – to the court asking once again the rate hike granted to American Water in May 2017 by PSC be vacated because the letter maintains, that according to the DPS report, “the process leading up to the order approving the rate hike was badly flawed.” The letter asks that the rate order be vacated.

The letter said that the DPS found that the grossly misreported inventory data and values were the result of NYAW’s incompetence, adding that when NYAW did discover its miscalculations, which resulted in “wildly incorrect tax assessments,” it covered up those miscalculations and did not report them to either the DPS or the PSC.

Withholding the information led to overcharging NYAW customers more than $2 million, according to the report.


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