Towns fund water company takeover study

The towns of Hempstead and Oyster Bay have committed $75,000 to the Water Authority of Southeastern Nassau County to help pay for a feasibility study weighing the costs and benefits of the authority taking over Aqua New York Inc.

Water authority chairman Richard T. Ronan said at Wednesday night's meeting that Hempstead Town will give $50,000 to the Water Authority and Oyster Bay will provide $25,000. More than 50 people at the meeting in Merrick applauded in response to the possibility of buying Aqua, which serves parts of Hempstead and Oyster Bay towns.

"We are very pleased that now we can put out a request for proposal for engineers to review a possible takeover," said Ronan, adding it could take the company that would be chosen three to six months to conduct its evaluation.

The money is in addition to $10,000 from Hempstead and $5,000 from Oyster Bay granted to the Water Authority in late 2010 to help begin preliminary studies.

"Working together, Hempstead and Oyster Bay towns are dedicated to Aqua Water customers and their quest for cost-effective drinking water," Oyster Bay Supervisor John Venditto said in a statement.

In January 2010, the two towns reconstituted the long-dormant water authority -- formed in 1991 in response to a similar situation -- to study a takeover of Aqua's operations in both towns. The Water Authority looked at the feasibility of a public takeover in 1997, but the board ultimately voted against it.

"When the studies are completed, we will know whether a public takeover is cost-effective for residents served by Aqua," Hempstead Town Supervisor Kate Murray said in a statement.

American Water Works Co. of Voorhees, N.J., is seeking approval from the state to buy Aqua for $71 million.

"We are still moving ahead with the evaluation of a public takeover regardless of who owns it," said John L. Reinhardt, secretary for the authority, who also is the commissioner of Hempstead Town's Department of Water. He said the authority has the power to take over Aqua's current service area.

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 people are coming out again, again and again because they want something done," said Nassau Legis. David Denenberg (D-Merrick), who favors a public takeover. His district includes the portions of Aqua's service area.

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