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L.I. American Water Seeks 19.5% Rate Hike

Village consortium formed to fight proposed increase.

Long Island American Water is seeking an overall rate increase of 19.5 percent from its customers, which include villages and residents in Malverne,  Lynbrook, and the Five Towns.

"I've got to continue to invest in infrastructure to meet water quality requirements, and in the most efficient and effective manner," said Bill Varley, president of Long Island American Water. "I'm fully cognizant of costs — no one likes a rate increase, but it's not sustainable [without one].

"The main driver of this is capital investment," he added.

Since Varley became president of the company in 2007, which is when the last rate hike went into effect, Long Island American Water has invested about $54 million in water infrastructure. These capital projects include 16 miles of water mains, new iron removal plants, and other construction to help improve water quality and stay compliant with regulations, Varley explained.

New York State Assemblymen Brian Curran and Ed Ra, who represent residents in Malverne and Lynbrook, have been working with village officials and LIAW ever since with the quality of their "brown" water.

During a held with locals at Malverne Village Hall in late May, Curran said that LIAW has committed to more than double the company’s investment in the infrastructure - from $382,000 in 2010 to over $743,000 for both of the next two consecutive years (baring any “unexpected economic pressure".)

This money will pay for 3,300 feet of new water lines to be laid in Malverne in 2011 and 2012. LIAW will also be installing an additional iron filtration plant in northern Lynbrook, which should improve the water quality in Malverne too.

“It’s an extremely positive step," Curran said. "“There are a host of things that Long Island American Water promised to do, but the only thing that will really, truly, drastically improve the quality of water here in Malverne is a change in infrastructure.”

Being one of the larger companies in Lynbrook, Long Island American Water pays a large sum to the Lynbrook School District. Varley explained that an anticipated increase in property taxes also contributes to the need for a rate increase, which may be spread over a three-year period. Without the school taxes — and also taking into an account a service charge that the water company already bills for — Varley said the real increase in the bill is closer to 13 percent.

So how would this affect Long Island American Water customers?

The Village of Lynbrook, for example, would pay about $64,000 more if the rate hike goes into effect, according to Village Administrator John Giordano. And $50,000 of that would be to cover the increase in rent for village fire hydrants.

"That's a big increase for us to be hit with," said Lynbrook Deputy Mayor Alan Beach. "It's ridiculous."

Beach said the village sent a letter to Valley Stream — also served by the water company — indicating that Lynbrook was prepared to fight the increase. The two villages are part of the Municipal Consortium in Support of Reasonable Water Rates, and are looking to get more support.

"We are looking into joining with other villages and other people [L.I. Water] is raising the increase on and fighting it together," Beach said.

Daniel Duthie, an attorney representing the villages in the consortium, said he encourages others to join the fight against the proposed rate hikes.

"We're also hoping that not only villages will join, but businesses as well," Duthie said. "That will send a message to the [Public Service Committee] that people are taking it seriously."

Residents can determine their potential bill by adding 19.5 percent to their existing water bill. An average residential customer that uses 72,000 gallons of water annually and is serviced with a 5/8-inch meter would pay an additional $72.04. A commercial customer that uses 200,000 gallons of water annually and is serviced with a one-inch meter would pay an additional $180.87.

The proposed rate increase was submitted to the state Public Service Commission, which must first authorize it. The process takes about 11 months, according to Varley, during which his company's books will be closely scrutinized to see if a rate increase is warranted. It is unlikely that a rate increase would be implemented this year.

"I'm obviously not happy about it, especially with everything that has been happening with Long Island American Water," Malverne Mayor Patricia Norris McDonald said.

While some Malverne residents have seen a noticeable improvement in the clarity of the water since, others like, Ozzie Huertas, say their water is still brown and are infuriated that they could have to pay more for it.

"My water was one step from mud last night.," Huertas wrote on the popular "I Love Malverne but hate the brown water (from LI Water)" Facebook group. " I had to let it run for a long time before it was light yellow."

Huertas said that he's even considered moving.

"We pay too much ( town and school taxes )... and now the water company wants to raise the water price.," he added. "Fix the problem and give us credit for all the months of living in this 'overly ironed water.'"

Tom Grech September 06, 2011 at 12:42 AM
So, LIAW when are the public hearings?

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