Friday, 20 January 2012 00:00
(Editor’s note: This letter is in response to “Denenberg Asks AG to Investigate Privatization of Sewage Plants,” that appears in this edition of the Farmingdale Observer. This is one of two letters from Claudia Borecky. Her letter next week will address how she thinks privatizing will affect the efficiency of the sewage treatment plants and the affect on the environment.)
County Executive Mangano is proposing to sell or lease three of the County’s sewage treatment plants (STP), Cedar Creek, Bay Park and Glen Cove, to fill the county’s budget gap. A Request for Proposals (RFP) was issued on Feb. 16, 2010 seeking Public/Private Partnerships (P3) to help fix the County’s fiscal woes. Morgan Stanley won that bid and was paid $24,750 (a bid under $25,000 does not require NIFA approval) to help prepare Requests for Qualifications (RFQ), to seek qualified bidders to purchase or lease our STPs. Three viable entities were found:
1. Veolia (the company running our buses) – lobbied by former Senator Alfonse D’Amato;
2. American Water (the company providing water to southwest Nassau County and is purchasing Aqua Water—currently serving southeastern Nassau); and
3. Severn Trent (currently manages the Glen Cove Plant).
In December, a contract was granted by the Nassau County Legislature’s Rules
Committee to pay Morgan Stanley $100,000 per quarter to act as its financial advisor and conduct a strategic advisory review of the county’s STPs and help choose an investor that will purchase or lease our three STPs. Morgan Stanley will get one percent of the monetary transaction, but no less than $5 million if a deal is consummated. Morgan Stanley stands to make a great deal of money if it cuts a deal, even if it is a bad deal for Nassau County residents.
County Executive Mangano commented on the proposed sale of our STPs in a LI Press article, “In this case, we have the ability to protect the taxpayer, increase efficiencies and protect the environment.”
Selling our plants may fill the county’s budget gap, but our sewage tax will go up. According to a 2007 survey by the International City/County Management Association, 52 percent of governments that brought services back in-house reported that the primary reason was insufficient cost savings. Private companies must be allowed to make a profit, whereas public systems cannot.
Aqua customers know firsthand that privatization costs more money. We are paying almost three times more for our water than our neighbors who have public water. Aqua is reaping record profits off our dollar. The average Aqua customer pays water bills of approximately $800 per year, while neighboring residents with public water pay an average of $320 per year.
A monopoly having control of our STPs will be no different than Aqua having a monopoly over our water. They both are necessities and we’ll have no choice, but to pay whatever they ask.
Do we really want to have to worry about whether we can afford to flush our toilets?
In the past, municipalities asked to send their sewage to our already overburdened south shore STPs. Now talk is underway about upstate New York sending its toxic wastewater from hydrofracking to our STPs for processing. The law protects private company’s ability to make a profit and if bringing in sewage from outside sources brings in more revenue, our courts will not prevent them from doing so.
No company is going to pay approximately $1 billion to purchase our STPs if they do not expect to reap huge profits. To increase revenue, the new company will cut corners, may bring in toxic hydrofracking wastewater from upstate New York, sewage from Suffolk, pollute our waterways and increase our sewage tax.
One thing is certain. Nassau County will “lose its ability to protect the taxpayer.” Another backdoor tax increase without government accountability and transparency is something that Nassau County residents cannot afford.