Malverne to Pay Tax Refund to LI American Water

The village of Malverne will have to pay Long Island American Water a tax refund of $722,612, but this figure is far less than the amount the utility had been asking for.

After conducting a three-and-a-half year confidential negotiation and spending roughly $77K to contest a tax certiorari claim filed by LIAW, Malverne was able to successfully reduce the $1.3 million tax refund the utility requested by nearly half, and protect its assessment going forward.

Looking to lower its taxes, LIAW began contesting tax assessments in 1999 with Malverne, 11 other villages, the Town of Hempstead and Nassau County, village officials explained.

"We didn't come to terms in the beginning," Deputy Mayor Joseph Hennessy stated during Wednesday night's village board meeting.

He explained that the tax certiorari claim LIAW filed with the village called for a refund of $1.3 million for excess taxes paid from 2000 to 2010, as well as a 75 percent reduction in the utility's assessed value.

After the village agressively contested the claim, LIAW agreed to a settlement, which was signed by a Nassau County Supreme Court Judge earlier this week. The settlement reduces the refund the village is required to pay out to $722,612. This includes the current 2012-2013 tax year.

As for LIAW's assessed value, Hennessy said, "In the end, we finally came to an agreement that their assessment was going to $110,000 from $219,000."

Malverne hired expert consultants to conduct a detailed appraisal of existing buildings, below-ground infrastructure and improvements that supported the assessment of $110,000, which was $50,000 higher than what LIAW had originally claimed, according to village officials.

"We were very fortunate to get the deal we got," Mayor Patricia Norris McDonald said.

However, Hennessy pointed out that the settlement will cause village taxes to automatically increase next fiscal year. 

Long Island American Water President William Varley told Newsday Thursday that he could not comment on the case because it was still pending but did say, "The bulk of the money usually goes back to the ratepayers."

Because of confidentiality issues, village officials also explained that they could not publicly speak about the tax certiorari negotations until a settlement had been brokered.

"It wasn't that we were hiding anything," Mayor McDonald assured residents.

McDonald also said that the village continues to work with LIAW to address residents' concerns regarding the quality and clarity of the water the utility provides. The board will be meeting with LIAW's management again on Feb. 19. 

McDonald, Hennessy and Trustee Michael Bailey also testified before the Pubic Service Commission regarding the issues with LIAW.

The mayor urged residents who do have issues with their water to make sure they provide that feedback to LIAW, the Public Service Commission and Village Hall by making phone calls. There is also a form enclosed in customers' water bills that residents should fill out and submit to express their problems with the tap water.

In a statement released to Patch, McDonald said:

"The village board will continue to use all legal means to represent the rights of Malverne residents to have clean, healthy water while minimizing the cost to taxpayers."

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