Are water customers getting soaked?

State lawmakers propose legislation


After hearing the concerns of Glen Head and Sea Cliff residents about water rates at a public meeting last month, State Sen. Carl Marcellino and Assemblymen Michael Montesano and Edward Ra teamed up to propose two bills on Sept. 9 to help affected New York American Water customers.

“This really came together from the information that we elicited from that meeting,” Montesano said. “The big concern was that people are paying taxes for this utility bill, and they’re looking for some redress.”

The first bill would allow residents served by a private water utility to take a credit against their state tax bill equal to the amount of their annual water bill.

With monthly water bills ranging from $500 to $1,000, area residents urged elected leaders to enact a law that would stop private water companies from paying property taxes. Montesano explained that this couldn’t be done, because every utility pays those taxes. He said that the proposed legislation was the best alternative.

The second bill would require the state comptroller to conduct audits of private water companies before and after rate changes were approved by the Public Service Commission.

“It seems the public’s perception, and quite frankly ours, is that the Public Service Commission doesn’t really do a full audit of the utilities,” Montesano said. “We figure now that the better person to have involved is the state comptroller. He’s better equipped, [and] he has more skilled personnel and equipment to do these type of forensic type audits that really need to be done.”

NYAW pays roughly $4.2 million in property taxes. It serves 4,500 houses in the Glen Head/Sea Cliff area, so that equates to roughly $933 per household per year.

That, however, “isn’t how they’re imposing the tax,” Montesano said. “They’ve elected to attribute a percentage of the tax based on the usage. It’s hard for us to follow that, so we don’t know if they’ve been collecting extra money at this point.”

“Since they’re a private entity, the only real oversight comes from the Public Service Commission,” Ra added. “If this was a public entity, there would be some authority of an elected official, like the comptroller, to do an audit, so that’s what we’re trying to accomplish.”

Ra also said that private entities like NYAW must be more accountable to the customers they serve. Having worked on this issue since 2013, Ra said that he understands how these concerns have evolved over the years.

“We worked a lot during that initial period with individual customers on their bills to clear up whatever issues they had,” he said. “Obviously, in the last couple of years, the issue has shifted more dramatically to the overall rate increase. We’re looking at a wide variety of steps to take to try to work on this issue.”

“The public outcry has been loud and justified,” Marcellino said. “Yet American Water is unwilling to take any steps to reduce this burden on its consumers. Residents have no choice in their water provider, and deserve to receive the same benefits that customers of municipally owned water districts enjoy.”

Marcellino added that between the rate increase and the lack of accountability by private entities, ratepayers are left feeling betrayed and helpless. He said he hopes legislation will provide some financial relief.

Montesano said that while this is just the beginning, he and his fellow legislators think this is a necessary step forward to help residents. “We’re hopeful that if Governor Cuomo is satisfied with our proposal, he’ll sign the bill,” he said. “We’re hoping that he realizes the seriousness of this issue.”

“There needs to be some short-term steps, and there needs to be some long-term steps,” Ra said. “This is just a part of that process.”

Both bills are currently pending review in the State Assembly and Senate.