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New York American Water sues Nassau over tax assessment

Residents questioned New York American Water about their

Residents questioned New York American Water about their high water bills at a civic association meeting in Glen Head in August 2017. Credit: Howard Schnapp

New York American Water, the private water company whose soaring rates in Sea Cliff have led to ratepayer outrage, on Friday hit Nassau County and others with a lawsuit on behalf of customers “forced to pay excessive rates due to illegal property taxes.”

Also named in the suit filed in state Supreme Court were Nassau’s Department of Assessment, the Nassau Legislature, the Town of Oyster Bay and its tax assessor, and the North Shore Central School District.

The suit was first filed with the Nassau County clerk’s office on Jan. 31 but was formally served on the parties Friday, according to correspondence and court documents.

The lawsuit takes issue with property taxes levied on the water company, with a focus on the demolished Glenwood Landing power plant. Specifically, the suit charges, Nassau County “failed to account for the significant valuation decrease” of the Glenwood property in calculating taxes for the water company and other utilities beginning in 2014. LIPA’s tax payments on the property fell from about $23 million to about $16 million that year.

The problem was compounded when school tax bills were issued that “included the illegal and erroneous” tax formulas, the suit says. The water company said it first paid the taxes in November 2014 “under protest, under a mistake of fact and under duress.”

Mike Martino, a spokesman for County Executive Laura Curran, said, “We’re not going to comment on litigation.” Calls to the North Shore Central School District and Oyster Bay Town weren’t returned Friday evening.

The water company, in a statement, said, “We are taking this action on behalf of our North Shore customers, as the property tax burden borne by these customers remains significant.”

It noted that “even after revising the company’s property tax assessments, property tax expenses still represent more than 50 percent of customer water charges in this operating area,” a figure considerably higher than “any other area we serve.”

New York American, based in Merrick, is a subsidiary of American Water, the nation’s largest investor-owned water and wastewater services company. New York American provides water services to about 122,500 customers in Nassau County.

The suit seeks a judgment declaring that tax adjustments, rates and other calculations beginning in 2014-15 were “illegal, inequitable, invalid, unconstitutional, null and void,” and to prevent Nassau from relying on the calculations for future taxes. It also seeks refunds of “all excessive taxes” resulting from the “excessive and erroneous” calculations.

The company in its statement said it “looks forward to continuing a dialogue with Nassau County to resolve this inaccurate classification on behalf of our customers so that additional property tax relief can be provided to them.”

With Chau Lam

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