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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 Lynbrook, the Five Towns, and Malverne.

"I've got to continue to invest in infrastructure to meet water quality requirements, and in the most efficient and effective manner," said William 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 new water mains, new iron removal plants, and other construction to help improve water quality and stay compliant with regulations, Varley explained.

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."

The now spends about $75,600 a year for water for fire hydrants, according to Mayor Andrew Parise. With the proposed 19.5 percent hike, Cedarhurst would have to pay about $14,500 more just for fire hydrants.

“I think it’s horrible,” Parise said. “The rates are much higher than they were. We have to do a study about it.”

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.

Frank June 10, 2011 at 06:55 PM
Everybody, start drilling wells! One shallow for watering lawns and gardens; the other deep into the Magothy Aquifer for potable use. If Gandhi, through peaceful non-cooperation, was able to bring the British Textile industry to its knees with the advocacy of homespun cloth on simple spinning wheels....a couple of hundred water wells should stop the water tax!

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