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SundayJune 29, 2014

MANGANO REACHES DEALT H E L O N G I S L A N D N E W S P A P E R

COPYRIGHT 2014, NEWSDAY LLC, LONG ISLAND, VOL. 74, NO. 299

] Nassau promises $233M in savings] Still needs legislative, NIFA approvals

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Cedar Creek Water PollutionControl Plant in Wantagh.

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The Bay Park Sewage TreatmentPlant is one of the facilities that isto be managed by United Water.

Settling tanks at the Bay ParkSewage Treatment Plant. UnitedWater will get $57 million the firstyear to manage three plants.

Mangano promises $233M or more in savingsin deal to let NJ firm run Nassau system

BY PAUL LAROCCOAND ROBERT BRODSKYpaul.larocco@newsday.comrobert.brodsky@newsday.com

Nassau County ExecutiveEdward Mangano has reacheda deal for a private company tomanage the county’s massivesewer system, saying the planwill save at least $233 millionover 20 years and improve en-vironmental protection.

The contract between Man-gano and United Water ofHarrington Park, New Jersey,calls for Nassau to pay thefirm $57.4 million a year — ad-justed annually for inflation— to operate its three majorwastewater treatment plants,53 pumping stations and 3,000miles of sewers.

The deal needs approval bythe GOP-controlled countylegislature and the Nassau In-terim Finance Authority, astate monitoring board in con-trol of the county’s finances.

Most of the savings wouldcome from transferring countyworkers to United’s payroll.Workers that the firm can’t ab-sorb will be offered vacant po-sitions elsewhere in countygovernment, Mangano said.

A Wall Street financial con-sultant hired by Nassau to re-view the agreement said Unit-ed Water can save the county$233 million over 20 yearsthrough personnel reductionsalone.

Counting projected savingsdue to reduced county over-time, and other reduced ex-penditures, the agreementcould save a total of $379 mil-lion, the consultant said.

The county’s 2014 sewer dis-trict budget is $89.4 million.

“This allows us to tap intoindustry knowledge, be as-

sured that our managers arestaying on top of the learningcurve, [and] will implementtested efficiencies which cre-ate environmental benefitsand savings to all of our tax-payers,” said Mangano, whocompared the deal to thecounty’s privatization of itsNICE bus system in 2011.

Will run three plantsUnder the deal, United

Water will operate the BayPark Sewage Treatment Plantin East Rockaway, the CedarCreek Water Pollution Con-trol Plant in Wantagh, and theGlen Cove Water PollutionControl Plant, which serve atotal of 1.16 million residents.

The contract comes as thecounty is rebuilding Bay Park,which was flooded during su-perstorm Sandy in 2012 andknocked offline for 57 hours,

resulting in spills of untreatedand partially treated sewage.The Federal Emergency Man-agement Agency will pick up90 percent of the $830 millionin needed repairs at Bay Park,with the state and the countypicking the rest of the bill.

United Water, a subsidiaryof Paris-based Suez Environ-ment, is the nation’s second-largest private water systemsoperator. It manages about100 water or wastewater sys-tems nationwide, includingthose in Indianapolis andthroughout Bergen County,New Jersey.

Gary Albertson, United Wa-ter’s chief operating officerfor the Long Island team, saidthe company expects to hireat least half of the county’ssewer workforce of about 300people, who currently arepaid a total of $39.3 million.

All are members of the CivilService Employees Associa-tion, and Mangano said thosewho aren’t hired will take va-cant county spots.

Savings requiredUnited Water must provide

at least $10 million a year insavings to the county by takingon the salaries and benefits ofsewage treatment workers, ac-cording to the agreement.

CSEA president Jerry Laric-chiuta said he was “notthrilled” the county was priva-tizing operation of the plants.But he said the union agreedto the deal because Manganohad signed a no-layoff agree-ment.

“My main concern is mak-ing sure that my people stayemployed,” he said. “So, aslong as they follow the agree-ment, we will not fight this.”

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Settling tanks at the Bay ParkSewage Treatment Plant. UnitedWater will get $57 million the firstyear to manage three plants.

Presiding Officer NormaGonsalves (R-East Meadow)said legislative Republicans“will be supportive of anyagreement that has proper en-vironmental controls and is inthe taxpayers’ financial andeconomic best interests.”

Minority Leader KevanAbrahams (D-Freeport) saidhe favored the “concept” ofprivatizing the sewer systembut said Democrats wouldneed time to review the deal.

NIFA chairman Jon Kaimansaid last week the board willconduct a financial analysis ofthe contract to determine ifit’s “part of the solution orpart of the problem in thecounty’s financial picture.”

County officials first dis-

cussed the sewer privatizationearlier this year as one of thecost-saving methods Nassauwould use to pay for $130 mil-lion in wage hikes for countyemployees, Kaiman said. ButMangano said the sewer dealis not related to the labor con-tracts and is not needed to payfor wage hikes.

Rob Weltner, president ofOperation SPLASH, a Free-port-based environmentalgroup that works to improvelocal water quality, said he ini-tially opposed privatizationbut changed his mind aftertouring Bay Park and seeinghow it had “fallen into disre-pair.”

He said the plant needs a pri-vate operator with the experi-

ence, capital and technologycapable of turning it around.

“I am not blaming anyonebut I don’t believe the countyhas the capability” to managethe plant, Weltner said.

United Water said it canproduce cost savings withoutrate hikes. Mangano said Nas-sau will continue to setsewer rates and that the con-tract would not cause ratesto rise.

Skeptical of claimsBut Emily Wurth, director

of the water program at Foodand Water Watch, a Washing-ton, D.C., nonprofit that seeksto ensure food and water safe-ty, said sewer privatizationstypically result in rate increas-

es, service problems and work-force cuts.

She said private operatorscan lack the transparency andaccountability of govern-ments.

“The number one goal of aprivate company is to gener-ate money for their sharehold-ers,” Wurth said.

Michael Deane, executive di-rector of the National Associa-tion of Water Companies, aWashington, D.C., trade groupwith United Water as a mem-ber, said sewer privatizationsare commonplace.

Roughly 73 million Ameri-cans — or nearly a quarter ofthe population — are servedby private operators, he said.

“Private companies can pro-vide more cost efficiencies andbetter technology that can savein operating costs,” Deane said.

Mangano first attemptedto turn over management ofthe sewage system to UnitedWater in early 2012. That ef-fort stalled after NIFA reject-ed a $5 million contract withMorgan Stanley, the county’sfinancial adviser on the deal.

The earlier plan called for$750 million in financing bya private investor that wouldhave been used to pay downNassau’s long-term debt.

Critics at the time chargedthat the financing element con-stituted “backdoor borrow-ing.”

NASSAU SEWER PRIVATIZATION

My mainconcern is makingsure that mypeople stayemployed. So, aslong as they followthe agreement, wewill not fight this.”— CSEA president JerryLaricchiuta, who saidMangano had signed ano-layoff agreement

Nassau County has agreed to turn over management of itssewer system to a private New Jersey firm, United Water,under a 20-year contract:

] Annual payments to United Water: $57.4 million for thefirst year, plus $7.6 million in gas and diesel fuel costs. The$57.4 million figure will be adjusted annually for inflation.] County savings: United Water has pledged to reduce coun-ty staffing costs by a minimum of $10 million a year, includingsalaries and benefits. The company says it can operate thesystem with about half the employees Nassau is now using.Some county workers will be hired by the company, takingthem off Nassau’s payroll, while others will be reassigned toother county departments. There will be no layoffs, accordingto county officials.] Nassau will retain ownership of the system and remainsresponsible for funding capital improvements.] The agreement does not address sewer rates, but countyofficials say the cost savings will help prevent future increases.

Source: Nassau County executive

This allowsus to . . . createenvironmentalbenefits andsavings to allof our taxpayers.”— County ExecutiveEdward Mangano

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