We Want Public Water NOW!

The Water Authority of Southeastern Nassau County (WASENC) is holding a meeting tonight at 7 p.m. at the Merrick Park Golf Course Clubhouse, 2550 A Clubhouse Road, Merrick.

The North and Central Merrick Civic Association (NCMCA) has been asking for this meeting since January of this year. WASENC, 2-1/2 years after being reconstituted by the Towns of Hempstead and Oyster Bay, is finally hiring a firm to conduct a feasibility study of a public takeover of the portion of American Water that was formerly served by Aqua Water’s Long Island operations (Aqua). After writing letters, signing petitions, rallying and protesting at Town Hall, Hempstead and Oyster Bay agreed to fund the study in January of this year.

This meeting is crucially important because it may be the last chance the public will have to voice its concerns about the cost of private water. WASENC has made statements that it expects  the study will find it to be unfeasible because of the money that the school districts will lose, if it were to become public. It worries me that WASENC, whose job it is to undertake a feasibility study, has doomed it to fail.  I am greatly concerned that the firm will do an honest study as it is being paid by an Authority that expects to show it unfeasible to acquire Aqua.

With American Water just recently purchasing Aqua, it will try to stop a public acquisition in any way it can. It hopes we just go away. It will most likely need to be acquired by eminent domain.

School Taxes

Aqua paid taxes to 33 school districts. Twenty-seven of those school districts are not served by Aqua. For example, Aqua paid $64,446 in 2010 to North Merrick School District, which residents are served by Aqua. However, Aqua paid $304,061 to East Meadow School District, which has public water. A North Merrick resident pays about $150 in a summer month. An East Meadow resident pays about $15 for the same water usage. It is important to note that as of January 2010, Aqua is allowed to pass 100 percent of its tax bills onto its customers. So, not only are we paying our own school district taxes through our non-deductible water bill, but we are also paying for children to go to school in districts where they are provided with public water. 

Aqua Water’s predecessor – New York Water – did not pay taxes to school districts it did not serve. Further, there are approximately 6,000 homes in North Merrick. If we have public water, that will mean that each of us may have to pay $10 more a year to make up the loss in school taxes from Aqua.  The savings that we will realize by taking profits out of the equation will certainly be more than $10 per year.

In researching financial records, I compared the cost of operating a Town of Hempstead Water District of approximately the same population and approximately the same amount of wells. Hempstead is operating public water for about $16 million per year. Aqua is operating private water for about $14 million per year. However, Aqua is charging us $43 million per year. Yes, some of that goes toward taxes, but most of it is providing record profits to its stockholders.

It is our belief, that it is unconstitutional for the Town of Hempstead to provide one unincorporated hamlet (East Meadow) with public water, while forcing its neighboring unincorporated hamlet (North Merrick) to pay exorbitant prices for private water.

WASENC will claim that a study was done over 20 years ago and a public takeover was found too costly. The disparity in the cost of public water versus private water was not that great back then. Moreover, public water districts that took over the private companies 20 years ago are now reaping enormous savings.

The former Nassau County Comptroller Howard Weitzman conducted a feasibility study in 2007 of a public takeover of what was then New York Water (now Aqua/American). The study researched  a variety of  scenarios to discover whether savings would be realized if the public acquired New York Water. The study included full payments in lieu of taxes (PILOT) in perpetuity; pilots decreasing at a steady rate until it is eliminated; and no pilots at all.

The study found that takeovers with full pilots realized savings after a few years;  takeovers with pilots decreasing at a steady rate found small savings from the start with growing savings over the years; and takeovers with no pilots reaped immediate savings. And at the time of this study, Aqua did not pass 100 percent of its tax bill onto the consumer and it didn’t pay school taxes to school districts that it didn’t serve.

MOST IMPORTANTLY, the study must include the feasibility of the territory formerly served by Aqua being acquired as Towns of Hempstead and Oyster Bay water districts. If WASENC, as a water authority, takes control of the water system, we will receive a separate bill and it MAY be required to pay school taxes. However, if the Towns takeover Aqua’s water system, it will be operated the same as our neighboring communities who have public water and it will NOT be required to pay school taxes.

The NCMCA sent a letter dated April 21, 2012 requesting that the feasibility study include all of the above-mentioned scenarios.  Anything less would not be an honest and transparent exploration of a public acquisition of the territory formerly served by Aqua Water.

Please come to the meeting and voice your concerns. This may be our last chance.