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WATER REPORT
FEBRUARY 25, 2016
 WATER AUTHORITY DISSOLVED
Without public notice or warning, the Water Authority of Southeast Nassau County ("WASENC") was dissolved at its February meeting.
The lengths that our representatives went to deceive the public is mindboggling. With all the mailings that we receive on a weekly basis, not once in six years did the Town of Hempstead even mention that WASENC existed; that it held meetings; that it conducted a feasibility study into the public acquisition of the private water company; that the study was complete; or that they intended to dissolve WASENC.
The Feasibility Study was made public in June of 2014 and WASENC did not hold a meeting about it until 1-1/2 years later on January 5, 2016. On January 26, 2016, the Town of Hempstead filled a vacancy on the WASENC board so that they would have a full board to approve its own demise a week later. On that same day, an email notification from WASENC Secretary Reinhardt to a small group of people was sent out about the February 2 meeting. There was no mention that they intended to pass a resolution to dissolve WASENC.
How to Kill a Water Authority
Because of the high cost of our water bills in comparison to our neighbors who have public water, we protested, rallied and got hundreds of signatures, demanding public water. For years, Legislator Denenberg had been asking the town for public water and Supervisor Murray on countless occasions, claimed that the town could do nothing about it. Then in 2009, when then Aqua Water wanted to raise our water rates by 21%, Legislator Denenberg investigated the issue and found that not only can the town do something, but discovered that the Water Authority of Southeast Nassau County was established in the 1990's and had never been dissolved. We worked together with other civics in the area, hundreds of concerned residents and our legislator in demanding that the Towns of Hempstead and Oyster Bay reconstitute WASENC.
On January 11, 2010, the day before a town board meeting in which about 200 people were planning to attend, Supervisors Murray and Venditto announced that they were reconstituting WASENC to study the feasibility of a public takeover of Aqua Water which is now Long Island American Water ("LIAW"). WASENC is comprised of five members, three appointed by the Town of Hempstead and two appointed by the Town of Oyster Bay.
Upon learning that Hempstead was interviewing civic leaders to appoint to the board, several residents from all over the district asked me to interview for the position. At that point, I had already done extensive investigation into this issue and had volumes of documentation from the Public Service Commission. I had discovered that Aqua was paying school taxes to 33 school districts even though it only served eight school districts. In fact, it paid five times more money to the East Meadow School District than it did to North Merrick - and East Meadow has public water. Aqua was passing 100% of its tax obligation onto us - the consumers. I had the ammunition to make public acquisition possible.
I interviewed with the Town of Hempstead, but suffice it to say, they did not appoint me because I didn't belong to their party. Instead, a civic leader from Massapequa was appointed to the board. I think it was obvious to most that it was just another patronage appointment.
But what we didn't realize then was that the Town never was going to allow a public takeover to happen. The Towns dragged their feet, taking nine months to make their appointments. We held their feet to the fire and in July 2012, WASENC hired George E. Sansoucy ("GES"), a New Hampshire company, to conduct a "preliminary" study to determine the value of New York Water's portion of LIAW. It found a value of $80 million, which we believe was grossly inflated since LIAW purchased Aqua Water for $71 million in 2012 and it included four systems throughout New York State, while we were only looking to acquire Nassau County's portion of the system. Allowing for $20 million in operating expenses, GES determined that if the Water Authority bonded for $100 million, it would cost the average resident $133 per year for 30 years to pay for the acquisition.
Since the Towns never intended to seriously look into a public takeover, WASENC never asked GES to look at a takeover by Hempstead, which studies and history has found to realize savings to residents from day one. Instead, GES was only asked to conduct an appraisal of LIAW and do an analysis of a takeover by WASENC, which was by far the most expensive scenario in that it assumed we would have to pay $8.8 million in taxes anyway. However, the study was comparing apples with oranges.
The problems lie in what the study omitted. The bottom line is that the Public Service Commission ("PSC") allows LIAW to get 7.85% on its investment. That profit amounts to about $73 per year out of our pockets. Hempstead does not pay school, town or county taxes. LIAW pays $8.8 million in property taxes, making up one-third of LIAW's expenses, which we pay through our water bills. What the report does not even look at is:
- North Merrick School District received $64,000 from LIAW in 2009. If we had public water, we would only pay $30 per year per household to fill the hole left from lost revenue from LIAW. However, we are already paying those taxes and more through our water bill, but we can't deduct them on our income tax.
- Hempstead only charges $75 to lease a fire hydrant to the fire departments and LIAW charges our fire departments $700 just to lease one hydrant. Savings to our fire departments would reflect savings on our fire district taxes, which was never examined.
- Hempstead doesn't pay sales tax.
- Hempstead doesn't pay corporate taxes.
We were blindsided by WASENC, which was formed to "investigate, analyze and evaluate various options for the distribution of water to the district" because it never intended to look into a viable option. Truth is that a public takeover by the Town of Hempstead was never studied by WASENC or GES. It was studied by former County Comptroller Howard Weitzman in 2007. That study found that if a water authority acquired New York Water and paid a PILOT (payment in lieu of taxes), not at first, but in years to come, residents would realize a savings. However, in that same report, it found that if the Town of Hempstead (and not WASENC) acquired New York Water, residents would realize huge savings from day one. Yet, that scenario has never been investigated by WASENC or GES, no matter how many requests we made for WASENC to do so.
I find it too much of a coincidence that GES came up with a value of $80 million with $20 million in operating expenses when that is the exact same amount that Secretary Reinhardt said that it would cost before GES was hired. Isn't it more likely that WASENC hired GES to fix the numbers to come up with a value of $100 million?
And then last night, we learned that if we had decided to take over LIAW within the first two years of LIAW's acquisition of Aqua Water, LIAW's closing costs would have been returned. Could that be why WASENC didn't make its feasibility study public until June 2014 - just over two years from when LIAW acquired Aqua?
Bottom line - What a Town of Hempstead Takeover would mean annually:
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Average water bill per household
Corporate taxes paid thru our water bill
Property taxes paid thru our water bill
No. of school taxes paid thru our water bill
Profit allowed by Public Service Comm
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American Water
$800
$1.2 million
$8.8 million
8 (was 33)
$73 per year per household
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Hempstead
$187
0
0
0
0
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It is apparent that we've been deceived for the past six years by the Towns of Hempstead and Oyster Bay. They spent $100,000 and waited out six years in a feeble attempt to disprove what every resident knows. A private corporation should not have a monopoly over a public necessity. Once you take profits out of the equation, of course, you're going to save money. And they've been either denying, hiding or ignoring the facts all along.
 GOVERNOR'S PLAN TO PROTECT OUR WATER
Pres. Claudia Borecky attended Governor Cuomo's press conference to announce the state's funding $300 million for its Environmental Protection Fund. Cuomo spoke of how we must learn the long-term effects of historic industrial pollution on Long Island. Our infrastructure is aging and falling apart. Cuomo is setting up a Statewide Water Quality Rapid Response Team to address water issues. The state is establishing the nation's leading clean drinking water program to address both regulated and unregulated contaminants in public and private drinking water systems.
With respect to the quality of Nassau County's drinking water, the Governor is ordering independent testing to fingerprint the manufacturers responsible for polluting our aquifers. This is of significant importance in testing contaminants in the Grumman Plume. He restated that he has given the order to allow the Massapequa Water District to test sites that are rapidly approaching its water district. The higher rate of certain cancers near the former Bethpage Grumman Plant needs to be studied as well. The study of the Grumman Plume starts today.
And lastly, Governor Cuomo committed $6 million for a comprehensive study of Long Island's aquifer to determine the full extent of its contaminants and saltwater intrusion in Nassau and Suffolk. The studies do not include wells in Brooklyn and Queens.
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