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Health & Fitness

The Truth About Mangano's Plot to Privatize Our Sewage Treatment Plants

NIFA rejected Mangano's Plan to Privatize our Sewage Treatment Plants. The entire plan is based on the illusion of a sewer district deficit.

I applaud NIFA for having the courage and integrity to reject County Executive Mangano’s plan to mortgage our children’s future by privatizing our sewage treatment system. We the People Save Our Waters Coalition, which has been giving presentations throughout Nassau County, see this as a back-door tax hike and refinancing scheme to pay off low-interest municipal bonds by increasing our sewer taxes every year for the next 50 years. 

It is unconscionable that this privatization plan will pass the burden of paying a $750 million debt from the County to the already over-taxed taxpayer. 


NIFA rejected the $5 million contract with financial advisor Morgan Stanley and claims it will not approve the ultimate privatization deal with United Water and the yet unknown investor.

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George Marlin reiterated our contention that, “this would be like drawing down the credit line on one’s Visa card at 15 percent interest per year to pay down one’s home mortgage, which is a 4 percent annual interest rate.” 

Leonard Steinman declared, “The sewer deal is dead.” However, Mangano is still moving forward, claiming that “The County has a legal opinion that the transaction is not a borrowing.” So whether it is over is yet to be seen.

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This deal would cause our taxes to skyrocket! Mangano plans to cap our taxes at the rate of the consumer price index (CPI). In the sewage treatment industry, the CPI increases between 6.5-7.5% per year. By those calculations, our taxes would double in ten years. This will result in private monopolies making money on the backs of the taxpayers.


It’s like a refinancing plan. United Water is the chosen operator. However, the money comes from the second part of this deal - the investor. A $750 million lump sum is expected by a yet unknown investor to pay off $465 million sewer district debt and $285 million county-wide debt. Not one penny is going toward operating, maintaining or improving the plants. The investor will then use the sewer revenue to pay United Water to operate the plants. United Water would not be giving us one penny, as we would be paying them to operate the plants and implement improvements as needed. 

 
The county states that about $400 million will go toward improvements for the Cedar Creek and Bay Park plants. This $400 million is unused funds from the $700 million 5-year Capital Plan that was approved by the past administration. Suozzi spent about $160 million in 2008 and 2009. Mangano spent $70 million in 2010 and 2011. $35 million was just bonded, leaving approximately $430 million in unused funds. The county plans to take that $430 million and, through an investor, pay United Water to spread out those improvements over 10 years (instead of 5 years) and we will pay the investor for these improvements for the next 50 years through increased sewer rates. 


Up until recently, the County Sewer Authority operated with a $10 million annual surplus. So why is it now running at a deficit? Legislator Denenberg went through the financials and discovered the truth. It costs approximately $160 million annually to operate the plants.  It takes in $117 million from our sewer taxes – so the county claims that we are operating in a deficit. However, what Mangano intentionally fails to mention is that there is over $40 million coming into the sewer district from other sources. The sewer district has been, is now and will continue to operate in the black.  Even more disturbing is that Mangano withdrew approximately $37 million out of the profitable sewer district to presumably fill the County’s budget gap, creating the illusion of a deficit in the sewer district so that he could sell this privatization scheme to the people? Could it be that the sewer district is NOT going bankrupt? Could it be that the basis for Mangano’s threat to raise our sewer taxes by 22 percent is based on books that were fixed to create the illusion of a deficit? 


We believe there needs to be a forensic audit of the sewer district.  I am hopeful that this deal truly is dead.  Mangano says “Doing Nothing is Not an Option.”  We the People have a Blue Ribbon Plan to improve the plants. We need the county to act now toward improving the plants, instead of looking at them as the cash cow for the county’s fiscal woes.

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