FURIOUS AND FRUSTRATED OVER WATER MONOPOLY’S REPEATED RATE INCREASES, RESIDENTS FUME AT PUBLIC FORUM
August 11, 2017 -- Hundreds of residents of the Sea Cliff Water District, many frustrated, furious, and fuming over water bill charges significantly higher than what those in neighboring municipal water districts pay, flooded the steamy North Shore Middle School cafetorium this past Wednesday evening to demand accountability from New York American Water, the for-profit corporation that has a monopoly over water service in the area, and action from government officials to reverse the rate increases.
The forum, hosted and organized by George Pombar, the president of a collection of neighborhood Civic Associations in Glen Head and Glenwood Landing, featured a panel of village, town, county and state government officials, as well as the President of American Water, Carmen Tierno. The lively, but for the most part orderly, two hour discussion was at times interrupted by angry shouts and jeers, most often in response to comments made by Mr. Tierno, but also occasionally to others at the dais, as well as by applause and cheers - in particular for fiery statements made by community members.
While organized in reaction to the latest round of water company rate increases that were approved this past June by the New York State Public Service Commission (PSC) that have raised water bills for customers by 60%, complaints about the company that assumed control over the water district that serves Sea Cliff, Glen Head, Glenwood Landing, and Old Brookville in 2011, go back several years.
Prior to June 2017 the average customer in the Sea Cliff District using 8,000 gallons of water per month, paid about $814 per year for water service. Since approval of the rate increase this past June, that customer can now expect to pay about $1,316. This recent increase follows a $325 annual surcharge on customers that was approved by the PSC back in the fall of 2016.
Some, however, who spoke Wednesday night have paid much higher. One Glen Head resident said that his first monthly bill after the most recent rate increase was over $900, although ultimately, he explained the company came to the conclusion that his meter was broken. Another, a 90 year-old resident, said that her most recent bill was $750 and still another said that she had paid over $800 in a single month.
“No private corporate monopoly should be controlling a basic human right - it is only beholden to its shareholders,” asserted resident Agatha Nadal who said that her neighbors in the Jericho municipal water district have far lower bills as do the 90% of Long Islanders who live in municipal water districts. "This is a violation of our constitutional rights."
“This is a moral issue,” said another resident
“This is thievery at the highest,” said still another resident who received a $429 bill for a house he said has been unoccupied.
Mr. Tierno explained early in the meeting that the dramatic increase in charges for all customers within the water district was a result of a fourfold increase in property taxes the company has had to pay since assuming ownership of the district in 2011. 70% of a resident’s water bill, he said, goes to paying those taxes.
But more than a few of the public officials who spoke were skeptical of those claims.
County Legislator Delia Deriggi-Whitton (D-Glen Cove) said that the county had not seen actual documentation that the monopoly was paying what it said it was and that the company was not being transparent with its finances. “Will you agree to a public audit?” she asked Mr. Tierno later on.
He replied that PSC examines the company’s financial records very thoroughly.
“Show us the tax bills,” said Assemblyman Michael Montesano (R-Glen Head).
Sea Cliff Village Administrator Bruce Kennedy, holding up a line graph, said that while the Company was greatly overassessed on its properties in 2014, their assessment has declined significantly since then.
Taxes that American water pays in Sea Cliff, he explained, have gone down significantly since 2014, while residents taxes have gone up and their stock price has gone up.”
“How can that be?” he asked showing other line graphs to make his point.
Mr. Kennedy speculated that the over-assessment by the New York State Office of Real Property Tax Services (ORPTS) on the utility’s property, played to the long term financial advantage of the company while hurting customers.
County Legislator Don MacKenzie described the decision of the PSC, which bore much of the criticism throughout the evening, to allow the company to push their tax burden onto customers as “taxation without representation.”
During the public comment period, resident Larry Ruisi said that he believed it was very unfair that the company was able claim the property taxes as deductions when it came to paying federal taxes, while it was the customers who were actually paying the taxes.
“They are profiting from high taxes and then grieving them,” he continued, saying that when the company wins tax challenges only 80% is returned to ratepayers with 20% going to the monopoly.
Mr. Tierno said that if taxes went down customers would get a credit, to which the audience responded with skeptical jeers.
Perhaps illustrating more concretely the difference between what residents in a municipal water district pay versus what those in the Sea Cliff Water District are charged by a for-profit monopoly was Wednesday night’s discussion over fire hydrant fees.
NY American Water charges customers collectively $770 per hydrant whereas customers in a municipal district like Glen Cove pay $80 per hydrant.
Asked why that was the case, Mr. Tierno reiterated his point that 70% of that cost is taxes that the company pays on the hydrants which in turn is passed onto customers. Glen Head resident Michelle Hagen pointed out that without the taxes, that would be $240 per hydrant, still triple of what it is in Glen Cove.
While Mr. Tierno bore the brunt of the audience’s ire he did not have a monopoly in that area with elected officials also taking some heat - in particular state representatives.
“Can we get the names of those elected officials who were invited to attend but did not show up,” asked Ms. Hagen. “The community has a right to know.”
An aide who was sent on behalf of Senator Carl Marcellino was pressed on why the Senator was not in attendance. It was his wedding anniversary was the response.
When Assemblyman Charles Lavine said that he had drafted and sent a letter regarding the issue in late July to the PSC, he was pressed as to why he did not act sooner, since this has been an ongoing problem. He replied that the letter was a result of calls his office had received from community members after the commission’s most recent decision this past June.
“We need our local, county and state politicians to step up to the plate and rectify this situation," said Ms. Nadal, pushing for public takeover of the ditrict. "There's been enough pussyfooting; we need something done - we need a short-term solution and a long-term solution.”
As for solutions, Mr. Pombar opened the meeting reiterating two proposals he had made at a public meeting this past May.
The first would be for the community to take over the water district through eminent domain and financing the purchase of the infrastructure through bonding.
The second would be state legislation granting the utility tax exempt status.
As for the first approach, Assemblyman Lavine said that he would provide assistance to whatever approach the community pursued, but that he had been involved in eminent domain cases and that it would be a long, difficult, and costly process, that would require bonding to finance the purchase of the infrastructure.
He suggested that a committee or commission be created to research the issue and develop a long term alternative solution.
Mr. Pombar responded that the community needed immediate relief.
As for the second proposal, while not dismissing the approach, Assemblyman Montesano warned that if the utility was not paying the taxes they would likely be shifted to others.
“If their taxes went down, money has to be made up somewhere,” he explained. “You have to be careful - watch what you wish for.”
As for other actions, Sea Cliff Mayor Ed Lieberman said that the Sea Cliff Village Board would be pursuing litigation against the water company and the PSC.
As the meeting neared its end, Assemblyman Lavine said that he and his colleagues would work on a legislative solution to address the issue before the next session begins in January.
Mr. Pombar, like many of the residens who spoke, said that both short-term relief and a long term solution were needed.
"We are are going to be joining hands with the Village of Sea Cliff and the Merrick District," he said. We can’t wait that long - we can’t have bills this large. If this continues we will revolt - we will not pay our bills.”
“I’m not encouraging that now, but at some point it is something we may have to do," he said.
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