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Nassau seeing lower-than-expected savings as union workers shun jobs with private sewer operator

Nassau County Executive Edward Mangano with Bertrand Camus,

Nassau County Executive Edward Mangano with Bertrand Camus, CEO of United Water, are shown in this 2014 file photo. Credit: Howard Schnapp

Six months after Nassau turned over management of its massive sewer system to a private operator, few public employees have agreed to work for the company, raising questions about whether the county will achieve savings significantly beyond what's minimally guaranteed in the contract.

New Jersey-based United Water began running the county's three major wastewater treatment plants, 53 pumping stations and 3,000 miles of sewers on Jan. 2. About 300 county workers were budgeted to staff the system in the year before the changeover, and according to the union that represents them, only four or five have taken jobs with United Water.

"Guys didn't want to lose their pensions," said Jerry Laricchiuta, president of the Civil Service Employee Association, Nassau's largest public union.

The reluctance of CSEA members -- protected against layoffs under the United Water deal -- to take private-sector jobs has left Nassau to rely, for almost all its projected savings, on the $10 million a year the company must reimburse it for salaries and benefits of county employees under the contract.

When the contract was approved last July, Nassau County Executive Edward Mangano's administration expressed the hope that about half the approximately 300 sewer workers would accept jobs with United Water. Administration officials said they expected the other half to move to other public works divisions, allowing a large cut to overtime costs.

Instead, 179 sewer employees remain on the county payroll, with United Water's annual payment covering the salaries and benefits of 121 of them. About 70 workers have moved to other county jobs, and about 50 have left county employment.

Public works spokeswoman Mary Studdert said the county's "expectations and expected efficiency improvements are spot-on and on-track." She said the county probably would save a total of $11 million this year -- the $10 million in reimbursements from United Water and another $1 million through efficiencies found by the company.

Under the 20-year contract, Nassau will pay United Water at least $57.4 million annually to manage and operate the sewage treatment system.

In a report last year, financial advisers hired by the administration to analyze the United Water contract said Nassau could save more than $8 million in 2015 through increased "synergy," including $7.3 million in decreased overtime if 123 sewer workers moved to other county public works jobs.

"That hasn't happened, and I'm concerned, because that obviously means that projected synergy savings are not being realized," said county Legis. Laura Curran (D-Baldwin).

Administration officials, however, say those savings will continue to increase as even more sewer employees move over.

Meanwhile, Mike Martino, a United Water spokesman who previously worked for the Mangano administration, said the company has improved management and worker training.

"United Water continues to implement new training and management strategies to ensure employees are provided with every tool they need to be successful and safe every day they come to work," he said.

Mangano has hired a consultant to research leasing the entire sewer system to a private investor. Such a deal could net the county up to $800 million in upfront cash in exchange for ceding system revenue over several decades to the investor.

The investor would also assume United Water's contract.

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