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Hearings for Sewage Treatment Privatization Plan in Works

Nassau County Legis., Denise Ford, R-Long Beach, requests public sessions in legislature to answer questions about proposal to privatize three plants including Cedar Creek in Wantagh.

The  Nassau County Coalition of Civic Associations (NCCCA) has lobbied for hearings on a plan to privatize the county’s sewage treatment system and they may get their wish.

Nassau County Legis. Denise Ford, R-Long Beach, informed the NCCCA that she will request hearings on the privatization plan at legislature meetings this spring. Ford said Wednesday she submitted a request to hold hearings on Nassau County Executive Edward Mangano’s , which would involve selling or leasing the Cedar Creek Water Pollution Control Plant in Wantagh, Bay Park Sewage Treatment Plant in East Rockaway and Glen Cove Sewage Plant to a private company.

Ford, whose 4th legislative district covers the area serviced by the Bay Park plant, said she had concerns about Mangano’s plan, which is aimed at closing a more than $300 million budget deficit. She said the hearings would be aimed at addressing how privatization would impact the county’s three plants from a fiscal and environmental perspective and the impact workers at the facilities.

“I’m not totally sold on the idea,” Ford said. “I do have concerns and that is why I want to hold hearings.”

Ford could prove to be a swing vote on whether the privatization plan gets the go-ahead. The republicans control the legislature 10-9. 

The county has issued a March 31 deadline for its request-for- proposals process to help determine a potential private operator for the three plants. The three companies in the running include British sewage treatment system supplier Severn Trent PLC; Paris-based Veolia Environment SA, which has its American headquarters in Lombard, Ill.; and United Water, Inc. of Harrington Park, N.J. Wall Street giant Morgan Stanley was hired by the county as a consultant to oversee the RFP process.

NCCCA founder Claudia Borecky said Tuesday evening during a community meeting on the sewage privatization issue, hosted by Nassau County Legis. Dave Denenberg, D-Merrick, that she hopes the upcoming hearings will raise important issues about the potential plan before it comes to a vote. Borecky, who is also president of the North and Central Merrick Civic Association, pointed out during the meeting at  how research conducted by the NCCCA shows that sewage rates are currently about $185 per year, but if plants are privately operated they could be roughly that same amount on a monthly basis.

“It’s a back-door tax,” said Borecky of the privatization plan.

Nassau Chief Deputy County Executive Rob Walker emphasized Wednesday that Mangano will make sure that residents are kept up to the speed on the privatization proposal.

“County Executive Mangano will soon hold public informational sessions that will inform the public of the facts and solutions for a productive way to move forward,” Walker said.

An tUasal Airgead March 22, 2012 at 11:10 PM
Q. Do private utilities charge more for water and sewer service? A. Yes, compared to local governments, private utilities charge the typical household 33 percent more for water (see table 1) and 63 percent more for sewer service (see table 2). For several states, the difference is even starker. In Delaware, investor-owned utilities charge 75 percent more than municipalities do for water. In Texas, American Water charges two and a half times as much as the typical municipality for sewer service. Q. Are private water utilities more efficient than public utilities? A. No, private utilities are not more efficient than public utilities, according to a meta-analysis of econometric studies about privatization and costs in water distribution by professors from the University of Barcelona and Cornell University. Q. Does profit motive encourage private utilities to reduce costs? A. No, in fact, profit motive can drive up costs. Because of state price regulation, private water utilities tie higher earnings to increased costs. They earn a rate of return on investment, so that the more they spend on a system, the more they profit. http://documents.foodandwaterwatch.org/doc//A-Cost-Comparison-of-Public-and-Private-Water.pdf
An tUasal Airgead March 22, 2012 at 11:13 PM
Q. Does privatization reduce the cost of water and sewer projects? A. No, private management of water and sewer projects often increases costs. A professor of economics from Florida State University studied the construction of 35 wastewater treatment plants and concluded, “These figures suggest that choosing the privatization option is more costly than going with the traditional municipally owned and operated facility.” Q. Does privatization reduce financing costs? A. No, private financing generally is more expensive than public financing. For example, over the last decade, even the best-rated, or prime, corporate bonds were 26 percent more expensive than the typical municipal general obligation bond, and medium-grade corporate bonds were 47 percent more expensive than municipal bonds. http://documents.foodandwaterwatch.org/doc//A-Cost-Comparison-of-Public-and-Private-Water.pdf
An tUasal Airgead March 22, 2012 at 11:16 PM
A Comparison of Household Water Bills Before and After Privatization: The typical annual residential water and/or sewer bill in constant January 2011 dollars By 2011, after an average of 11 years of private control, water bills in these communities had nearly tripled on average. A typical household was paying an extra $434 a year (or $344 in constant January 2011 dollars) on average for water or sewer service. Under private ownership, water rates grew at an average of about three times the rate of inflation, averaging an increase of 18 percent every other year (see table). http://documents.foodandwaterwatch.org/doc//water_prices.pdf
SSteacher March 23, 2012 at 02:41 AM
Aqua v TOH water.........enough said
Phillip Franco March 28, 2012 at 02:04 AM
An tUasal Airgead - I like your style - I like your facts and the methodology.

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