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An Opinion: Selling Off the County’s Sewage Treatment Plants

(Editor’s Note: Although in Great Neck, our sewage is treated locally by Belgrave and the two plants on East Shore Road that will be combined once the new, upgraded treatment plant is completed, we have learned from experience that decisions made by Nassau County elsewhere can have a profound impact on all county residents. We need to become more familiar with the issues our neighbors on the South Shore are dealing with in their efforts to keep the bays and beaches protected from contamination. It is in that spirit that we are publishing the following opinion piece. - CF)

Merrick Civic Association and founding member of Sludge Stoppers

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 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 1 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.

Research has also shown that the quality of service often declines when operated by a private system. Although faith in the private sector to out-perform government agencies is ingrained in the American psyche, facts disproving that belief are steadily mounting. Private companies seek to maximize profits, often by cutting corners to reduce costs. This can greatly impair service quality and maintenance. Over 60 percent of governments that brought functions back in-house reported this as their primary motivation.

In 2010, Morgan Stanley, the very same company that the County just hired, fostered a deal for the City of Indianapolis to take back its water and wastewater facilities from Veolia at a cost of $1.7 billion. The city had the second worst drinking water in the country. A grand jury investigated accusations that Veolia was skimping on staffing, water testing, maintenance and chemicals. Ironically, Veolia is one of the companies bidding for our STPs and is currently running our bus transportation. Do we really want a company with a long history of cutting corners and environmental violations running our sewage treatment plants?

Nassau County will lose its ability to protect our environment.

When private companies cut corners to increase profits, it can lead to shoddy work and deferred maintenance. Milwaukee’s recent experience with sewage spills, again under Veolia, highlights this risk.

Private companies have privacy protection. They are not required to reveal their reports to the public and are not subject to Freedom of Information Requests. Again using Aqua Water as an example, we believe that our infrastructure is falling apart, yet we are unable to get maintenance and operation reports of even crisis situations such as water main breaks in the system. Once privately owned, how well will the county be able to monitor the STPs and protect our waterways from sewage leaks?

There are currently three critical research studies under way for the Western Bays. Once completed, all three studies will be used to assess the health of our Western Bays and will be used to craft a restoration plan.

The studies found high levels of ammonium (mainly from hair care products) and nitrogen (mainly from our sewage and water run-off) near Bay Park STP’s outflow pipe. Serious respiratory problems are being reported from Point Lookout residents. The Nassau County Health Department admits that it could be caused by hydrogen sulfide gas emanating from seaweed decomposing at its shores. Sewage leaks in our waterways may be the reason for the increase in seaweed growth. Tertiary treatment that filters out nitrogen and an ocean outflow pipe are being considered at Bay Park to remediate our waterways. Does anyone believe that a private company will invest in such improvements if they will not bring in more profit?

The Future

The county expects to receive approximately $1 billion for the sale of our STPs. To be profitable, the new company is likely to cut corners, take in toxic hydrofracking wastewater from upstate, sewage from Suffolk, pollute our waterways and increase our sewage tax.

We cannot foresee what problems we’ll face in the future. Twenty years ago, hydrofracking was not even conceived of. But at least under public control, the people could elect representatives they trust to protect the health and safety of our families and our environment.

The Crest Law of the Iroquois Confederacy states, “In our every deliberation, we must consider the impact of our decisions on the seventh generation.” It would be irresponsible for Mangano to look to fill the county’s budget gap without considering what effect that decision will have on our children’s children.