Hempstead Water District Threat

[Chris_Wendt]

townofhempstead.org/content/home/news/h20auth.html

In 1997 we were instruemtal in shutting down the Town's attempted takevover of what was then NY Water Service.
Why did we shut this down? Having a Water Authority/Water Commission take over the private water company would have cost the Wantagh School District more than $400,000 per year in lost property tax revenue at that time.

Now, the Town has re-instated the Water Authority and appointed a new Water Commission charged with taking over what is now Aqua, YOUR water company.

The School Business Office needs to immediately assess the potential loss of 100% of Aqua's current and future school tax revenue to the District, and the Board of Education must carefully weigh such an impending loss of funding against upcoming and future budget requirements, but especially the impact of such a prospective loss of revenue on the ongoing teacher contract negotiations.

If necessary, the school district should be prepared to testify before this Water Commission as it deliberates on its acquisition to acquire the Aqua Water Company.

Alarmed,

Chris Wendt

[bradnanita]

Quoting Claudia Borecky, president of the North Merrick Civic Association: "Aqua paid $131,816 in school taxes to the Wantagh School District in 2009-2010 (nowhere near $400,000). There are 11,164 households in Wantagh. That would mean an average increase of $10 per year per household to make up the lost revenue. Aqua passes 100% of its school tax bill onto its customers so we are paying our school tax bill in our water bill. We did not pay 100% of the school taxes in our water bill in 1997.

We are also paying school taxes to 26 out of 33 school districts that don't even have Aqua Water. That's right, 26 out of the 33 school districts that we are paying school taxes to, have public water. And the discrepancy between public and private water wasn't that great in 1997. Right now we are paying $200 water bills for private water in comparison to $40 for public water.

The new water authority is doing a feasibility study to see if we would realize a savings with a public takeover. If it is found that it is not feasible, I will be the first the say that we shouldn't do it. However, things have drastically changed in the past 20 years and the cost of private water has gone up at a much higher rate than public water. All studies indicate that we will realize a savings so I'm optimistic that the feasibility study will show similar findings."

[Chris_Wendt]

bradnanita quoted Claudia Borecky of North Merrick as stating:
"There are 11,164 households in Wantagh."

As much as I dislike being argumentative, I must point-out a significant statistical error in your post.

As of the census of 2000, there were 18,971 people, 6,179 households, and 5,215 families residing in the CDP....There were 6,250 housing units at an average density of 1,626.3/sq mi (628.4/km²).

I know the census number to be rather accurate, and the Wantagh School District can validate that.

Regardless, the Water Authority will do what they will about this. The Wantagh School District, not the North Merrick Civic Association, should determine the projected property tax shortfall resulting from a takeover of Aqua. The Wantagh school board should testify about that before the authority. Then, the board needs to include that loss of revenue in their financial planning to determine what has to be cut from the school budget, either to get the budget passed, or, to keep the tax increase beneath the upcoming promised tax cap.

Tax revenue or the loss thereof from the water company does not happen in vacuum. This is part of a much more serious overall financial situation facing the Wantagh Board of Education and us taxpayers.

Sincerely,

Chris Wendt

[bradnanita]

We only passed on what we received from Ms. Borecky, but even if the number of households is only about half of what we quoted Ms. Borecky as stating the conclusion is still the same. An increase in $20 in property tax to achieve a $160 reduction in water costs seems like a good deal, and part of that $20 comes back as a reduction in income taxes.

A&B

[Chris_Wendt]

Dec 11, 2010 14:48:47 GMT -5 bradnanita said:

An increase in $20 in property tax to achieve a $160 reduction in water costs seems like a good deal, and part of that $20 comes back as a reduction in income taxes.

A&B

I understand you were not the source of the information you were quoting, so please do not personalize my response.

The data provided by your source was off significantly (100%), and you should avoid making an assumption that the rest of her data was any more accurate and then use her bad data to interpolate a new result.

For the sake of discussion let's say that the revenue reduction would "only" be $131,816. You cannot presume that revenue loss can simply be translated into a $20 tax increase to conveniently put the matter to bed. If the school budget did not pass, or, if the State imposes a tax cap, then that $131,816 revenue loss would have to be translated into spending cuts from the school budget.

So, instead of a $131,816 tax levy increase raising everyone's taxes by just a little old $20 bill, the Board of Education would have to cut $131,816 out of programs, for instance, by laying off staff & increasing class size, or by not purchasing Smart Boards, or by canceling some Varsity Teams or eliminating 7th Grade Sports, in order to comply with the law.

If ten or twenty dollars is all we had to worry about, Wantagh could change its name to Fat City.

Finally, and this goes to the original case against first attempted takeover of NY Water Service, the predecessor of Aqua, neither you nor anyone else should embrace as factual some half-baked conclusion that a Water Authority Takeover would achieve a $120 reduction in water costs, or that any savings resulting from the initial takeover would continue.

We just received our water bill yesterday and it was $29 for two months. There is no way the Water Authority will be able to save me $120 unless they will give away water.

So, you should not be so free to bandy about someone else's comparison of $120 "savings" with a theoretical $10 tax hike, or was it a $20 tax hike, and then cheer the prospect of this being a good deal, or any deal at all.

Recognize this Water Authority for what it is...a political operation designed to create political patronage jobs to replace Aqua water company private sector jobs. As long as the politicians behind this masquerade get those patronage jobs under their thumbs, then they will be quite willing to allow the chips to fall where they may as far as actual water rates and the school budget are concerned.

Feel free to quote me on this, with attribution to...

Yours truly,

Chris Wendt

[neilyeoman]

I do not understand why the $130,000 would not be made up by a tax increase that averaged about $20 per household. Who would object if that reduced water costs by five or ten times as much? My October - November water bill was about $140 and my 2010 total about $730. People in other parts of LI are horrified by how much my neighbors and I pay for water. The ratepayers pay all of Aqua's school taxes and a major fraction of that money goes to school districts that do not use Aqua water. We are paying for districts not our own and we cannot even take it as an income tax deduction. There is something fundamentally wrong with that. Having worked all my life in private industry I well understand how in some situations, specifically competitive situations, the private sector does a better job, but there is no competition here and nobody is more rapacious than a private company with a monopoly on an essential service. With a water district there will at least be some accountability to the public, something we do not now have.

[Chris_Wendt]

NeilYoeman posited:
"I do not understand why the $130,000 would not be made up by a tax increase that averaged about $20 per household. "

The reason is because revenue items all get lumped together on the revenue side of the school budget. The district. by law, must keep its expenditures completely balanced with the revenue to the penny. There is no such thing as a $20 tax increase for this or that individual item (revenue or expense), but rather the sum of all expenditures minus the sum of all other revenue yields the tax levy, a multimillion dollar total tax to be raised on the basis of individual assessments.

However, if the school spending budget is defeated (for example if the majority of voters felt the resulting tax increase was too high) then the school district would be required to reduce spending, also by state law. Also, the newly elected Albany regime has promised to enact a tax cap which would require school spending to be cut, rather than raising taxes even $20, to whatever extent revenue is reduced.

I already said my peace about what a political charade I think this Water Authority takeover really is. But the Water Authority will do as they see fit.

The point and purpose of my starting this thread was to raise awareness in the Wantagh School District Community that the pending takeover of Aqua represents a loss of revenue to the school district and the potential to cause spending cuts, meaning anything from staff reductions to student program cuts. That threat is potentially worth significantly more than $20.

I hope that I have satisfactorily addressed your understanding of the tax implications.

Chris Wendt