Aqua New York tax payments questioned

The Water Authority of Southeastern Nassau County wants to know why Aqua New York Inc., which serves part of Hempstead and Oyster Bay towns, pays taxes to 23 school districts outside of its coverage area.

Officials for the public water authority have been investigating the tax payments, which ratepayers fund, as part of their effort toward possibly taking over Aqua, a private water company based in Merrick. The company also pays taxes to seven school districts within its service area and three districts partially within its territory, officials said at an authority meeting Tuesday night.

"We are trying to find out why that is happening," said authority secretary John Reinhardt, who also is the Hempstead Town water commissioner.

Aqua president Matthew Snyder said the company pays a total of about $3 million in taxes to 33 school districts. The company's tax payment has remained consistent, but its distribution by Nassau County changed a few years ago, Snyder said.

"It used to be that we paid for taxes in just our service area, but Nassau County changed that about four or five years ago," Snyder said, adding the company usually challenges the amount of taxes paid and how they are distributed. "Why the county changed the assessments, I don't know."

Nassau County officials said Wednesday that they are looking into the allocation of Aqua's taxes to school districts.

Water authority members said they still need money to fund a study of the costs and benefits of taking over Aqua. At the same time, American Water Works Co. of Voorhees, N.J., is seeking approval from the New York State Public Service Commission to buy Aqua for $71 million.

"We have to see if a public takeover makes economic sense," water authority board chairman Richard Ronan said.

Supporters of a public takeover said it could mean long-term savings for Aqua customers. But authority members argued a takeover would result in the loss of property taxes paid by Aqua, which school districts would have to recoup through increased taxes.

The authority would need a $100 million bond for 30 years to buy Aqua for $71 million and $20 million to fund capital improvement projects for five years, Ronan said. Ratepayers in the service area would vote on a public takeover.