Town of Ulster water service survey raises concerns

Daily Freeman-5 months before

The concerns were raised during a Town Board meeting Thursday, when resident Deborah Heste-Smith was among the people who questioned why the 220 customers in Whittier should return a survey asking if municipal officials should seek to have the state grant approval for town ownership rather than have the system taken over by a Canadian conglomerate.

“The problem I have with the survey is it’s very general,” she said. “We have no idea what we’re agreeing to. So that’s why I didn’t send it back and I’m sure a lot of people have the same (feeling that) you’re saying ...es or no to something you have no idea how it’s going to affect you.”

Residents in the survey are being asked if they would like the town to investigate taking over the Kingsvale system, which some customers incorrectly believed it meant a takeover would immediately be sought.

Supervisor James Quigley noted a decision on a takeover could not be made until officials were able to review enough water bills to determine whether it would be cost-effective for users. He noted that by Thursday there had only been 35 bills submitted, which was not enough to make definitive conclusions on how much of customers’ money was being used to make repairs of the Kingsvale system.

Quigley noted that the town currently operates seven water districts where information is available to the public and the issues are well-documented. However, Kingsvale operations are not only closely guarded by the company, but the basic information needed to determine a purchase price is not available.

“I don’t know how much water they sell,” he said. “I didn’t have any idea what rates they charge until people started returning the bills. So now I have the framework to start to develop the other side of a profit and loss statement. If I get more information I can develop a more accurate revenue estimate.”

Kingsvale’s parent company, New York American Water Company, is the subject of a $608 million purchase bid by Liberty Eastern, which has an ownership chain that extends to Liberty Utilities Canada as part of the Algonquin Power and Utilities Corporation.

“You have to realize that the acquisition by Liberty of American water assets include 125,000 customers, most of which are on Long Island,” Quigley said.

Town officials noted that information on the limited number of bills that have been submitted indicates that Whittier water users may need to brace for rate hikes whether Kingsvale or Liberty own the local system.

“There is a surcharge at the bottom of your bill every month,” he said. “It’s about 2 percent, it’s called a capital recovery fee. If you take that (amount) and multiple it times 12...and multiple it by 220 houses and ask yourself does that provide a return on an investment of $1 million that they just made in the new water tank and control room .. .and the answer is no. What that tells me is there’s about to be a request for a big rate increase to recover the cost of what they invested.”

Ulster town officials began asking Whittier residents for an opinion on breaking from Kingsvale after being approached by Long Island officials who objected to the Liberty proposal. They noted that the town can ask to be granted interest party status in the state Public Service Commission proceeding, which would allow the municipality to be granted some weight when submitting comments and provide a pathway to taking over the system if Kingsvale users support the idea.

Other municipal filings included attorneys for LI Clean Air Water and Soil, a not-for-profit group representing residents connected to New York American Water systems in Lynbrook, Merrick and Sea Cliff. Among their contentions is that the application by New York American Water has misleading information about costs.

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