Town asked to consider public takeover

Elected officials, civic leaders and residents are asking the Town of Hempstead to fund a feasibility study to look into a public takeover of Aqua New York Inc. before it is bought by American Water Works Co.

At yesterday's town board meeting, Legis. David Denenberg (D-Merrick) asked the board to fund a study on the financial costs and benefits of a takeover, to be conducted by the Water Authority of Southeastern Nassau County. He and others claimed a public takeover would mean long-term savings for customers of Aqua, a private water company based in Merrick and serving parts of Hempstead and Oyster Bay towns.

"We must make this change to public water before residents are asked to endure even higher rates," said Denenberg, adding that county funds could not legally be used to pay for the study.

American Water announced in July it is seeking approval from the state Public Service Commission to buy Aqua.

"We are continuing with the acquisition process," Lendel Jones, a spokeswoman for American Water's Long Island division, said in response to the call for a public takeover of Aqua. "The final say is going to be up to the Public Service Commission."

Recently, American Water also requested approval from the commission for a 20 percent rate increase. The potential hike would affect Aqua customers if the purchase is approved, said North Merrick Community Association president Claudia Borecky, a candidate for the town's Fifth Councilmatic District.

"The town provides some of its residents with public water at affordable rates, while others have to pay exorbitant prices to a private company that brags record profits from our dollar," said Borecky, adding the town provides water to 80 percent of its residents. "We cannot afford to pay these rates."

In January 2010, the towns of Hempstead and Oyster Bay reconstituted the long-dormant authority -- formed in 1991 to respond to a similar situation -- to study a takeover of Aqua's operations in both towns. The authority is funded with $10,000 from Hempstead and $5,000 from Oyster Bay. But the authority has been unable to obtain grants to fully fund the study, Borecky said.

Town officials argued a public takeover would result in the loss of property taxes paid by Aqua, which school districts would have to recoup through increased taxes. They also accused Denenberg and Borecky of "political pandering" since both are political candidates.

The authority "never gave us a request, but if they make a request, we certainly will consider it," Hempstead Town Supervisor Kate Murray said at the meeting.

"The ultimate decision is up to the board members of the Water Authority of Southeastern Nassau County as they have been designated to determine the feasibility of a potential public takeover," Aqua New York president Matthew Snyder said in a statement.