According to a report issued on Monday, a study ordered by Gov. Andrew Cuomo and conducted by the state Department of Public Service found that the municipalization of New York American Water’s Long Island infrastructure is not only viable, but also in residents’ best interests.
“The study determined that such municipalization is both feasible and, under a variety of scenarios, in the public interest,” the DPS report reads, “even with an upfront investment of nearly $800 million for the purchase of NYAW’s assets (or a pro rata amount for parts of the system), ongoing and near-term infrastructure improvements, and transaction costs.”
The study was put in motion by Cuomo in early February, and gave the DPS until April 1 to declare its results. Rory Lancman, the department’s special counsel for ratepayer protection, oversaw the study.
The DPS recommended that the State Legislature act now to remove the “onerous property tax burden” on NYAW’s ratepayers, and to establish a new public authority, likely called the Nassau County Water Authority, with the power to purchase all or parts of NYAW’s assets in the county, or to obtain them through eminent domain proceedings. If the authority is established, it could choose to operate the infrastructure itself, contract operations to established public-water providers or merge all or parts of NYAW’s assets into existing water providers.
The report advised that time is of the essence in establishing a public water authority. The state Public Service Commission is still reviewing NYAW’s proposed sale of its Long Island infrastructure to Liberty Utilities for roughly $608 million. The report also noted that NYAW’s rates are scheduled to rise as much as 26 percent on May 1.
NYAW currently serves the Sea Cliff Water District, which includes Sea Cliff and Glen Head as well as parts of Glenwood Landing, Glen Cove, Old Brookville and Roslyn Harbor. It also serves select areas in the Town of Hempstead and Massapequa.
“This is a comprehensive report,” said NYAW President Lynda DiMenna. “As always, our number one priority is our customers, and we will be reviewing the details of the report to understand the impact on them. We are gratified to see that the governor’s press release and the report acknowledges what we have been saying for years: that the special franchise tax is overly burdensome for New York American Water customers, and tax reform is key to providing affordability for our customers.”
State Sen. Jim Gaughran, a Democrat from Northport whose district includes Sea Cliff Water District communities, has been a staunch advocate of public water since he took office in 2019. Last year he authored a bill to establish a public North Shore Water Authority, which was passed by the Senate but not by the Assembly by the end of the year, so it must be reintroduced this year. However, Gaughran said that the governor’s study offers another path to public water.
“I’m actually very supportive of it,” he said, “and I’m pushing for it to be adopted this week as part of our final budget vote.”
Cuomo has maintained that a public water authority should encompass all of Nassau County, Gaughran said, whereas the bill last year was created to serve the North Shore. A Nassau County Water Authority, he said, could work similarly to the Suffolk County Water Authority, which he chaired from 2010 until he was elected to the Senate in 2018, in that it might consolidate some of the county’s smaller water districts in the future. This could also be a crucial step toward a Long Island-wide water authority, Gaughran said, which could deal more effectively with water-quality issues, an aging infrastructure and the protection of underground aquifers.
Additionally, Gaughran said, a Nassau County Water Authority could provide the North Shore with a public entity to negotiate with the Jericho Water District. Joining Jericho has been one of the preferred methods of bringing public water to the Sea Cliff Water District for several years, but negotiations have been informal, because the Village of Sea Cliff does not have the authority to negotiate with entities outside the village.
Agatha Nadel, a director of the public water advocacy group North Shore Concerned Citizens, said she was shocked and elated to see the results of the study appear three days before its April 1 deadline.
“I just think that that’s a testament and a credit to the special counsel,” Nadel said. “It appears they really took everything into consideration. There’s so many pieces to this puzzle, and it’s rewarding because we know our voices were actually listened to and not just heard.”
Nadel characterized the news as “absolutely earth-shattering.” It covered every point the public had been pointing toward for years, she said, and she hoped there would be no roadblocks in the way of bringing public water to the North Shore.
“It appears that dreams really do come true,” Nadel said. “I just can’t think of another issue for this community that could be solved that could be so gratifying and rewarding.”