Borecky: Merrick Residents Shafted by Aqua Water

Sometimes you look at the fight against Aqua Water and just throw up your hands and say: "What's the use in fighting?  There's nothing you can do."  Our neighbors in East Meadow are paying  $17 and we're paying $160 for the same amount of water usage.

We ask how can the Town of Hempstead offer some of its residents municipal water, while others are forced to pay a corporate monopoly more than three times the amount of money for the same water? It would appear to be unconstitutional to offer one person public water and not another.  No matter how you look at it, it's simply unfair. 

Thanks to a public outcry from the Merrick community, the Public Service Commission in Albany called me to suggest a location to hold a hearing.  I thought the Merrick Library would be big enough.  I never expected so many people to show up in the middle of a summer afternoon.  The library had to turn people away.  Aqua customers are upset and rightly so. We want a water district, too.

But how do you start a water district? This led to more questions and no one seemed to have the answer.  

And then, as if in answer to our prayers, at Legislator Dave Denenberg's (D- Merrick) community meeting in North Bellmore last Thursday night, Denenberg declared, "We already have a water authority."  Apparently, on Jan. 1, 1991, the Water Authority of Southeastern Nassau County District was created to "investigate, analyze and evaluate various options for the distribution of water to the district."  It has the authority to purchase, operate and create and/or retain a water district to service customers that are currently being served by New York Water ("Aqua").  It is governed by a board of directors consisting of five members, three appointed by the Town of Hempstead and two appointed by the Town of Oyster Bay.  These directors do not receive compensation.

Denenberg said that he has not seen any evidence that this authority has been dissolved.  In other words, we have a water authority already in place so now all we have to do is ask the towns of Hempstead and Oyster Bay to re-establish the water authority, appoint new directors and begin the investigation into the feasibility of either purchasing or otherwise taking over Aqua by eminent domain.

So, the foundation for an authority exists.  All we need to do now is convince to towns to re-establish it. 

A study was done by Nassau County Comptroller's office as recent as July of 2007.  A representative from the Comptroller's office discussed the results of the feasibility study of acquiring New York Water Service ("NYWS") a public water district.  Because NYWS, purchased in 2007 by Aqua Water of New York ("Aqua"), is a private company, it pays property taxes, the majority of which goes to Long Island school districts.  The Comptroller's study examined three different scenarios for acquiring NYWS:

• The new water authority would pay a payment in lieu of taxes ("PILOT") to the school districts in perpetuity to make up for the school's lost revenue;
• The new water authority would pay a PILOT that decreases at a steady rate until it is eliminated at the end of 20 years;  
• The new water authority would not pay a PILOT.

In the first scenario, since the new authority stabilizes rates and increases charges more slowly than a private utility, the advantages becomes more magnified as the years continue.  In the second scenario, the gradual elimination of the PILOT allows the new authority to stabilize rates very effectively and customers will see savings.  In the third scenario, rates dramatically go down immediately. 

But Aqua currently passes on 85 percent of its property taxes to its ratepayers.  In Aqua's 2010 proposal, it requests passing on 100 percent to its ratepayers.  In other words, we are paying the taxes to the school districts in our water bill anyway. 

What is even more outrageous is the fact that we, as Aqua customers, are currently paying 85 percent of these taxes to 25 Long Island school districts that Aqua does not even provide water.  As mentioned above, Merokeans pay $160 while East Meadow residents pay $18 for using the same amount of water.  Well, did you know that Aqua pays $304,061 to the East Meadow District and only $233,407 to Merrick and $64,446 to North Merrick?  And yet, its administration building and water tower is in Merrick.  If we had to pay a PILOT to North Merrick, how much difference could that possibly make in our tax bill?  It would be negligible.

This year, Aqua is paying $1,077,496 to eight school districts in which it provides water.  However, what is shocking is that it pays another $1,769,162 to 25 school districts that it doesn't serve  or even own property in.  The Public Service Commission questioned this and as I understand it, Aqua now believes it has been wrongly categorized by the tax assessment office and is taking the matter to court.

How can Aqua increase our rates based on its high property taxes if it is found that Aqua does not owe taxes to these outside school districts?  I wrote to the Public Service Commission, asking that they reject the request for a rate increase until the matter is settled.

Further, in studying a public acquisition of Aqua, I would imagine that a public water authority would find that it should not pay a PILOT to school districts that it doesn't serve.

Now is the time to act.  First, we must re-establish the board of directors of the Water Authority of Southeastern Nassau County District. Denenberg is providing us with the tools we need to accomplish this.  He is circulating a petition to the towns of Hempstead and Oyster Bay calling for them to appoint a new board.  

I believe that with enough public outcry, the towns will re-establish the water authority and we may have our own water district before you know it.  Then, we can worry about consolidating all the water districts into one authority – but that will be another mountain to climb.