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Editorial: Nassau sewer plan needs scrutiny

Digestor tanks at Nassau County's Bay Park Sewage

Digestor tanks at Nassau County's Bay Park Sewage Treatment Plant in East Rockaway Credit: Kevin P Coughlin (2011)

Is Nassau County doing such a poor job running its sewers that a better outfit could take over, and in the next half-century generate a profit, throw off $750 million in cash to the broke county, and reinvest hundreds of millions in the system? And do all this without raising sewer charges beyond the rate of inflation?

That's what County Executive Edward Mangano claims will happen under his plan for the Bay Park and Cedar Creek treatment plants, 53 pumping stations and 3,000 miles of sewer pipes. It's also an admission that the county is an inept manager and that he refuses to raise rates to prevent the system from going broke.

The idea, from adviser Morgan Stanley, is for Nassau to turn over the sewers to United Water, a private operator, and find a financing partner to give Nassau as much as $750 million. That money would pay off the $465-million sewer system debt, with the rest going to retire other county debt. Nassau owes $3 billion total.

Repaying the $750-million investment plus interest and funding operations and upgrades would all be done by United Water, using only the money currently paid in sewer fees, plus increases limited to inflation. The plan is in its very early stages, with Mangano planning three public comment sessions. No financing has been found, and the $750 million in revenue is theoretical.

So at this point, no one can say the deal is impossible -- because there really isn't a deal. Answers to the critical questions are usually found carved in rock-solid contracts, but there are no contracts. Mangano and the water company must explain how they would vastly improve the current, slipshod system, and how the county can hold the company to high service standards. And how can ratepayers hold the company to high standards, when voters can't replace it?

Sooner rather than later, Mangano must nail down terms defining when rates can escalate. And after he does all that, he must explain how getting $750 million in exchange for 50 years of payments isn't just plain old borrowing -- that Nassau isn't just selling a county asset in a desperate one-shot maneuver.

Privatization of government services is the trend and perhaps Mangano can convince us that this is a good deal. If not, it's a plan that's ought to be flushed.


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