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Long IslandColumnistsJoye Brown

Push to privatize Nassau sewers still alive

Civic leaders gathered outside the Nassau County Executive

Civic leaders gathered outside the Nassau County Executive Building to demand hearings on the county's efforts to privatize its sewage treatment plants. (Aug. 6, 2012) Credit: Newsday/Alejandra Villa

County Executive Edward Mangano wants a second chance to convince a state control board that there's merit to his plan to privatize management of Nassau's wastewater treatment system.

That's why he took the unusual step of soliciting potential investors -- 13 would go on to express interest -- for the deal.

"It was a test of the market to see who, if any, would be interested," Mangano said in an interview Monday. "We wanted to bolster our case to NIFA that this is worth a serious analysis."

Nassau Interim Finance Authority members shot down Mangano's plan -- which they said amounted to borrowing -- when they denied approval for a contract to hire the Morgan Stanley financial firm to advise Mangano on crafting the deal.

At the time, authority members predicted that their action had killed the plan, although Ronald Stack, the board's chairman, held open the possibility that Mangano could come back with another proposal.

But the plan is not dead. On the contrary, Mangano said, he's now working to try and convince NIFA that the contract for Morgan Stanley deserves approval. NIFA could not be reached for comment.

"I would like NIFA to take a very close look at the finances of this and comment on it in a thoughtful manner, and not dismiss it out of hand," Mangano said. "We are trying to provide them with a detailed analysis and it hasn't been easy without help."

Should Mangano succeed with NIFA, he said, he will use Morgan Stanley to produce a final version of his plan, taking into account criticisms he's received over the past several months.

His two-step proposal includes a private system operator, along with a financier who would give Nassau almost a billion dollars upfront. It would require approval by county lawmakers and NIFA.

In May, Mangano selected United Water to operate the system. Later, the county's Request for Information for potential financiers included the possibility of a fee, rather than the current assessment-based system and a surcharge for unexpected capital expenses.

Monday, both came under fire from a small group of demonstrators and Democratic lawmakers in Mineola who, for months, have been demanding legislative hearings.

A spokesman for Legis. Peter Schmitt (R-Massapequa), the body's presiding officer, said hearings would come only after Mangano submitted a plan.

"Right now, you have a concept," said Ed Ward. "At which time there's a formal proposal, a hearing will be held." Meanwhile, he said, "I think it is in the county executive's best interest to show people that delivery of services would remain the same."

All of which leaves county residents in a tangle:

Mangano said he has no plan to give lawmakers documents for analysis because he can't produce a formal document without help. And he can't hire help, he said, unless he can convince NIFA to approve Morgan Stanley's contract.

And what if the attempt doesn't work? Mangano -- while adamant that his proposal is the best one for Nassau's wastewater management system and its finances -- said he's never ruled out the possibility of having to go to some Plan B.

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