Officials seek takeover of water systems
The proposed $608 million purchase of New York American Water Company’s holdings has given the town a chance to take over the systems owned by Kingsvale in the Whittier and Deer Run subdivisions.
Town Board members agreed to negotiate for the local systems during a video conference meeting Thursday, with Supervisor James Quigley saying he was informed of the opportunity by officials seeking a similar take over for Long Island communities.
“I was notified by an engineer ... who was dealing with New York American Water’s utility assets on Long Island on behalf of several of the municipalities down there who are seeking to acquire those assets and turn them into a municipalrun utility,” he said.
“The town of Ulster has an opportunity, which I was unaware of, to enter into negotiations to acquire (Whittier and Deer Run systems),” Quigley said. “Tonight is the first step in a long journey in this process to complete this transaction if at the end of the day residents ... indicate to us this is an action they wish the Town Board to take.”
Quigley noted that the town’s opportunity to take over the Kingsvale system is the result of municipalities on Long Island filing their own paperwork for public ownership of the local systems.
The proposed takeover of New York American Water Company was confirmed by the company last year by did not move forward until state filings in February by Liberty Eastern, which has an ownership chain that makes it a subsidiary of Liberty Utilities, which is owned by Liberty Utilities Canada as part of the Algonquin Power and Utilities Corporation.
“Liberty Eastern... currently owns and operates, through its subsidiaries such as Liberty Eastern. 25 regulated utilities in the United States,” the company wrote in filing documents.
Concern over the Kingsvale system in Ulster has been raised by residents for years, and in 2017 about 30 customers attended a Town Board to complain about water quality problems that caused discolored clothing, a white residue when water dries, blackened water filters, and an apparent sulfur smell. Several people voiced concern over health problems that they attribute to use of the water and were upset that they have paid to replace equipment they contend has been damaged.
Quigley in December noted that Kingsvale was behind in making about $500,000 in improvements that were to have included new lines and booster pumps. He did not provide an update on that work during the meeting.
Filings with concern over the proposed sale have 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 contentions earlier this year was that the application has misleading information about costs.
“In the (application) it is proposed... to freeze rates for the first two years,” attorneys wrote. “However, it fails to clarify that on April 1, 2020, rates (were scheduled to) increase by as much as 20.3 percent with other scheduled rates to follow and these high rates and other surcharges may be imposed with no opportunity to comment.”
The filing added that New York American Water did not notify ratepayers that NYAW increased charges to fire districts for maintaining a fire hydrant to as much as $1,064.56 per hydrant per year; identify surcharges for capital expenditures that will be charged separately and in addition to the increased water rates; inform ratepayers of Liberty Utilities shareholders’ high return on capital improvements that are paid by ratepayers; or inform ratepayers about the revenue Liberty Utilities shareholders will receive from the refunds of property taxes paid in whole by the ratepayers.
New York American Water also operates the Lucas Estates system in Rochester.