Nasssau County Executive Mangano is proposing to sell or lease three of the County’s sewage treatment plants ("STP’s"), Cedar Creek, Bay Park and Glen Cove, to fill the county’s budget gap. A Request for Proposals ("RFP") was issued on February 16, 2010 seeking Public/Private Partnerships ("P3") to help fix the County’s fiscal woes. Morgan Stanley won that bid and was paid $24,750 (under $25,000 does not need NIFA approval) to help prepare Requests for Qualifications ("RFQ), to seek qualified bidders to purchase or lease our sewage treatment plants. Three viable entities were found:
1. Veolia (the company that runs our buses) - lobbied by former Senator Alfonse D'Amato;
2. American Water (the company that provides water to southwest Nassau County and is in the process of purchasing Aqua Water - the company that serves southeastern Nassau); and
3. Seven Trent (the company that manages the Glen Cove Plant).
In December, an agreement was approved by the Nassau County Legislature's Rules Committee to pay Morgan Stanley $100,000 per quarter to act as its financial advisor and conduct a strategic advisory review of the county's STPs to help them choose the investor that will purchase or lease our three STPs. Morgan Stanley will get 1% of the monetary transaction, but no less than $5 million if a deal is consummated. Morgan Stanley stands to make a great deal of money if it cuts a deal, even if it is a bad deal for Nassau County residents.
County Executive Mangano commented on the proposed sale of our STPs in a LI Press article, "In this case, we have the ability to protect the taxpayer, increase efficiencies and protect the environment."
Selling our plants may fill the county's budget gap, but our sewage tax will go up. According to a 2007 survey by the International City/County Management Association, 52% of governments that brought services back inhouse reported that the primary reason was insufficient cost savings. Private companies must be allowed to make a profit, whereas public systems cannot.
Aqua customers know firsthand that privatization costs more money. We are paying almost 3x more for our water than our neighbors who have public water. Aqua is a private company that is reaping record profits off our dollar. The average Aqua customer pays water bills of approximately $800 per year, while neighboring residents with public water pay an average of $320 per year.
A monopoly having control of our STPs will be no different than Aqua having a monopoly over our water. They both are necessities and we’ll have no choice, but to pay whatever they ask. Do we really want to have to worry about whether we can afford to flush our toilets?
Nassau County will lose its "ability to protect the taxpayer."
For years, Great Neck and Suffolk have been asking to send their sewage to our already overburdened south shore STPs. Now talk is underway about upstate New York sending its toxic wastewater from hydrofracking to our STPs for processing. The law protects private company’s ability to make a profit and if bringing in sewage from outside sources brings in more revenue, our courts will not prevent them from doing so. Nassau County will lose its "ability to protect the taxpayer."
The quality of service often declines when operated by a private system. Faith in the private sector to outperform government agencies is deeply ingrained in the American psyche. However, the facts disproving that belief are steadily mounting. Private companies naturally seek to maximize profits, which often means cutting corners to reduce costs. This can greatly impair service quality and maintenance. Over 60% of governments that brought functions back in-house reported this as their primary motivation
In 2010, Morgan Stanley, the very same company that we hired to find an investor to take over our systems, fostered a deal for the City of Indianapolis to take back its water and wastewater facilities. The City took back its systems from Veolia at a cost of $1.7 billion. The city had the second worst drinking water in the country. A grand jury investigated accusations by city and county officials that Veolia was skimping on staffing, water testing, maintenance and chemicals. Ironically, Veolia is one of the companies bidding for our STPs and is currently the company running our bus transportation. Do we really want a company with a long history of cutting corners and environmental violations running our sewage treatment plants?
Nassau County will lose its ability to protect our environment.
When private companies cut corners to increase profits, it can lead to shoddy work and deferred maintenance. Milwaukee's recent experience with sewage spills, again under Veolia, highlights this risk.
Private companies have privacy protection. They do not have to reveal their reports to the public and are not subject to Freedom of Information Requests. Again using Aqua Water as an example, we believe that our infrastructure is falling apart, yet we are unable to get maintenance and operation reports of even crisis situations such as water main breaks in the system. Once privately owned, how well will the County be able to monitor the STPs and protect our waterways from sewage leaks?
There are currently three critical research studies underway for the Western Bays. Two are through the Dept. of State and the South Shore Estuary Reserve Council in partnership with Stony Brook University, the U.S. Geological Survey, and the Dept. of Environmental Conservation. The third is a collaboration between NEIWPCC, Battelle, and Stony Brook University. Once completed, all three studies will be used to provide a holistic assessment of the health of our Western Bays and will be used to craft a science-based restoration plan.
The studies found high levels of ammonium (mainly from hair care products) and nitrogen (mainly from our sewage and water run-off) near Bay Park STP’s outflow pipe. Serious respiratory problems are being reported from Point Look Out residents. The County Health Department admits that it could be caused by the odor emanating from seaweed settling at its shores. Studies reveal that sewage leaks in our waterways may be the reason for the increase in seaweed growth. Tertiary treatment, which filters the nitrogen, and an ocean outflow pipe is being considered at Bay Park to remediate our waterways. Does anyone believe that a private company will invest in equipment to protect our waterways if it will not bring in more profit?
What about the future?
No company is going to pay approximately $1 billion to purchase our STPs if they do not expect to reap huge profits. To increase revenue, the new company will cut corners, bring in hydrofracking wastewater from upstate, sewage from Suffolk, pollute our waterways and increase our sewage tax.
We cannot foresee what the future of our sewage treatments plants will be. Twenty years ago, the problem of ridding ourselves of toxic wastewater from hydrofracking was not even conceived of. At least under public control, the people could elect representatives they trust to protect the health and safety of our families and our environment.
The Crest Law of the Iroquois Confederacy states: "In our every deliberation, we must consider the impact of our decisions on the seventh generation." It would be irresponsible for Nassasu County to look to fill the county's budget gap without considering what effect that decision will have on our children's children.