Mangano Vows To Forge Ahead With Nassau Sewer Privatization



It should be no surprise by now to anyone in Nassau that the county’s sewage treatment plants are currently hell on Earth.


An ongoing Press expose has revealed, among many other devastating and potentially life-threatening aspects of the Cedar Creek and Bay Park facilities: inoperative methane gas valves that hadn’t been serviced in years, despite the closest two buildings being elementary schools; a complete lack of preventive maintenance; unreported chemical and wastewater spills devoid of warnings to the public, including fishermen and swimmers; gross neglect and complete and utter mismanagement, either by ignorance or design.

Workers who refused to go along with the misdeeds were retaliated against. Bay Park, it was revealed, had been exceeding the legal discharges of its state permit, in violation of EPA and state Department of Environmental Conservation regulations, for years, without so much as a slap on the wrist for any plant management, such as former Nassau Superintendent of Sewage Plants Richard Cotugno or any of his staff or county officials. [Cotugno still collects roughly $130,000 per year, compliments of Nassau taxpayers.] The current power failure at Bay Park is estimated to cost county taxpayers several hundred thousands dollars.

Longtime sewage workers and internal records reviewed by the Press say the plant’s systemic dismantling took decades—beginning under former Republican County Executive Tom Gulotta’s administration and exacerbating under former County Executive Tom Suozzi, a Democrat. Mangano inherited it, immediately “triaging” the situation, spending tens of millions, he says, on improvements since taking office, and promising to hire new employees to staff the plants to adequate levels.

Yet he, too, has fallen short, say current and former plant workers, along with longtime watchdogs such as Phil Franco, co-chair of the Cedar Creek Oversight Committee and a district leader of the Nassau County Coalition of Civic Associations.

The plants are still understaffed, they claim. New hires were brought on more for who they know than what they know. Preventive maintenance—the equivalent of changing the oil of one’s vehicle so the entire engine doesn’t have to be replaced—is still not getting done. County expenses on outside contractors have ballooned to historically high levels—more than $22 million, according to recent county projections; some are heavy campaign donors.

Perhaps most backwards, say critics, is that many of the most knowledgeable employees—and the ones who care the most about trying to turn the plant around—have been sent “out to pasture,” relieved from their old posts and conveniently and comfortably silenced. Franco, who’s calling for a federal and state audit and investigation into the plants, questions whether it’s all been done by design, to help further the drive to privatize.

“They actually threw the money at it,” he says of Mangano. “But I think one of the reasons they were doing that was to throw everything into deficit. So if we overspent so much in these last few years, then that could be used as the projections for the future.”

Regardless of sanctioned destruction or not, the sheer devastation of the plants have many scratching their heads as to why anyone would want to take them over—and how anyone could possibly turn a profit doing so.

The answer, says Gary Albertson, United Water’s vice president of business development, who along with Fewell and several other company officials visited the Press offices recently to explain their role as Nassau’s pick for plant operator, is through efficiencies.

“We can do it better, for less money than the county’s doing it,” he says.

United Water has serviced New York for nearly 120 years and currently provides water and wastewater services to more than 600,000 people throughout the state. The company’s responsibility would not only be operating, but maintaining the facilities and overseeing the expenditure of the $300 million to $400 million the county envisions from a private financier, and would make the plants more efficient—through staffing assessments, restructuring, prioritization, automation, better management, better training, more accountability—explains Albertson.

Those changes, he says, could make the plants as much as 30 to 40 percent more efficient than they are today. Since the second part of the equation, the private financier, hasn’t been selected and thus no contract drawn up yet, it’s too early to estimate how much that could mean in dollars. A banker from Morgan Stanley tells the Press the private financier would benefit from United Water’s efficiencies, along with future development projects utilizing the system.

And despite NIFA’s rejection of the Morgan Stanley contract, says former Nassau County legislator and failed U.S. Senatorial candidate Bruce Blakeman, who’s been hired by former Republican Assemblyman-turned lobbyist Tom Alfano to use his Nassau ties to help seal the deal for United Water, the company isn’t giving up.

“United Water is going to continue on working with the county on putting forward the project as outlined by the county executive,” says Blakeman. “We’re continuing to move forward.

“From a financial viewpoint, this is an absolute no-brainer,” he continues. “It will be fiscal malpractice not to do this deal… You’re talking about the county relieving themselves of some $450 million in debt; that is huge!”

It’s that retirement of debt that Nassau Legis. Dave Denenberg (D-Merrick), perhaps Mangano’s most outspoken critic, says is the real key to understanding exactly why any private company would be interested in the sewer deal. Since Mangano has said the operator pockets the sewer district’s $117 million-plus annual revenue stream, he explains, once the $750 million retires its $465 million in debt, the millions spent on servicing that debt sweetens the pot.

“So it’s really $140 million worth of revenue that they’re going to get,” says Denenberg. “We’re talking about giving away for a budget one-shot Nassau County’s most expensive and important environmental infrastructure!”

Denenberg says the deal is not merely wishful thinking for Team Mangano—rather that the administration is banking on its passage, since it’s already budgeted in the county’s multi-year financial plans.

Elliott Sclar, economist and professor of urban planning and director of the Center for Sustainable Urban Development at Columbia University’s Earth Institute, also questions the logic of Mangano’s deal. Sclar is a nationally recognized expert on privatization and author of You Don’t Always Get What You Pay For: The Economics of Privatization. He “very much doubt[s]” United Water’s claim of 30- to 40-percent efficiencies and questions the purported benefits of keeping sewer rates stable with CPI, which fluctuates and can increase, while most families’ paychecks haven’t.

“You’re talking about a county where most of the people who live there, they haven’t gotten raises that have kept up with inflation,” he explains. “Their real income has been falling. You’ve got all of these blue-collar working-class people who live in Nassau County and they’re getting killed right now. Essentially, the real cost is going to go up for them.”

“What I don’t understand is why Mangano is doing this, playing this particular game, rather than attempting to do some real reform,” he adds. “It all looks like smoke and mirrors to say he never raised taxes while he was there.”

Phineas Baxandall, an economist at the U.S. Public Interest Research Group and a former academic who works on infrastructure issues, shares the interpretation.

“Local governments are broke, and it’s often kind of a budget gimmick that allows them to keep their no-tax pledge and appear to be doing something innovative when in fact they’re just borrowing from the residents in the future by promising higher rates,” he says.

“The devil’s in the details,” warns Donald Cohen, chairman of Washington, D.C.-based nonprofit In The Public Interest. “Is there anything in that deal that would not allow us to make good public policy decisions that are good for the environment?”

If Mangano does move ahead with the deal and successfully finds a private investor willing to be a part of such a plan, NIFA members assure that they’ll have final say over the inevitable contract.

For now, Marlin stresses what he says is the nonsensical math of the scheme, explaining that the whole thing not only stinks, but also has a long way to go before it could ever become reality.

“I believe that NIFA sent a very strong message that our entire board is not thrilled with this particular deal,” he says. “Anyone who says that this is a ‘done deal’ is delusional.”

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