Both Sea Cliff Mayor Bruce Kennedy and Assemblyman Ed Ra, who represents areas of Glen Head, commented on the notification sent out earlier this month by NY American Water, the for-profit water company that serves the Sea Cliff Water District, informing customers that they would have to pay a $323.40 surcharge spread out in increments of $80.85 over their next four quarterly water bills. The surcharge was approved by the New York State Public Service Commission and, according to the company, is a result of a 40% spike in the company’s property tax bill.
Mayor Kennedy spoke to the issue at the November 14 Sea Cliff Village Board Meeting. He said that the assessment on the property on Reservoir Street, where the water tower is located, increased more than four-fold from 2013 to 2014 from $1.27 million to over $5.7 million, and that that could be one of the reasons for the spike. The company, he explained, did not initially challenge the reassessment, a decision which he said he had complained to the company and public officials about at the time as he had expected it to impact ratepayers. The Mayor continued that he believed a “legislative solution” at the state level was needed to address the issue. “What is happening here,” he said, “is completely unfair.”
A resident attending the meeting questioned whether the water company was financially benefiting from surcharge, as it was only for the purpose of covering its increase in taxes.
Another resident asked whether the water company property was in the utility class, to which the Mayor responded that for the purpose of village taxes it is not, since there are only two classes - commercial and residential,but that for the school district it would be a class 3 utility property. He continued that the decommissioning and demolition of the Glenwood Landing power and the resulting reduction in the assessment of that property could have caused more of the class 3 tax burden to fall on the water company.
While residential taxpayers are protected by a New York State law that limits a tax shift from one property class to another to one percent per year, that law would not protect other class 3 properties thereby potentially causing a significant spike in their tax bills when the assessed value of another property in that class is significantly reduced - in the case of the power plant property, by more than $10 million.
At the state level, Assemblymen Ra (R-19th A.D.) protested the surcharge in a letter to Brian Bruce, the President of New York American Water. Explaining that while he understood that “expenses incurred from rising property costs need to be met," he advised the water company executive that "it is also prudent to take on such expenses in the most cost-effective manner possible - particularly when the company intends to pass said costs along to its customers and already partakes in special revenue recovery mechanisms.”
He continued that he “remains vehemently opposed to this rate increase.”
“‘Recovering costs,’ through mechanisms that disingenuously and disproportionately punish working Long Islanders is not the way to do so,” he wrote.
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