NYAW deal involves $1M for Sea Cliff district

No decision from village to accept the deal


As part of a complex deal now pending approval in State Supreme Court, New York American Water is offering to sell the Village of Sea Cliff its pumping station, at 325 Prospect Ave., with the sale proceeds to be passed along to NYAW’s North Shore ratepayers.

According to an Aug. 28 letter to the court detailing the settlement agreement, NYAW would contribute $1 million in shareholders’ funds to the village to offset the cost of the proposed purchase. At press time, it was unclear what the property’s value was or what condition it was in.

Village Administrator Bruce Kennedy said the deal essentially offers Sea Cliff the property at a discounted rate. “If the village were interested in acquiring the property, it would take $1 million off the appraised value of the property,” he said. “And if the property appraisal came in at a reasonable number, it would make perfect sense for the village to acquire it.”

The company has also promised an additional $1 million refund to the 4,500 customers in the Sea Cliff district, which accounts for approximately $222 per household.

An emailed statement from the company read, “The inclusion of the $1 million . . . is above and beyond the credits due to customers from their overpayment of taxes.”

An April report from the state Public Service Commission found that NYAW’s “erroneous tax calculations have caused an overpayment of $2.3 million over the past four years.” Sea Cliff ratepayers were overcharged by $282,000, or $65.50 per customer, according to the report.

The PSC filed a legal action against the private utility on Aug. 18 to ensure that customers would receive financial restitution amid allegations that they were unfairly overcharged. The deal would also provide the company’s 120,000 Long Island ratepayers more than $11 million in bill reductions, and an independent monitor would be appointed to review NYAW’s controls and processes (see box). Gov. Andrew Cuomo helped broker the agreement.

Sea Cliff Mayor Edward Lieberman called the proposal “an initial step in the governor recognizing the very crucial and critical issue here,” adding that the village board is reviewing all aspects of the litigation.

The pumping station, comprising two buildings, sits on two acres. The building closest to Prospect Avenue houses an office that is still in use, and the other is a pump house at the center of the property, which once included a pump and a well. Kennedy said that facility has been out of commission for the last “30 to 50 years” and is now being used for storage.

“The village has expressed interest in acquiring that property many times,” Kennedy said, noting that the land could be repurposed for public use. If Sea Cliff were to acquire the property, he said, it could offer “tremendous value” to residents.

“The old pumping station has a stage built into it, so you can convert it into a playhouse or a yoga studio,” he said. “You could hold concerts overlooking the waterfront on the great lawn.”

If the village were to acquire the property, Kennedy added, it could prevent it from becoming subject to overdevelopment. “The last thing someone would want to see is a McMansion at the property,” he said.

Even if the village were to say no to the $1 million, NYAW has promised to credit that amount to ratepayers in the Sea Cliff district as compensation for the company’s shortcomings, but Glen Head resident Steve Warshaw said, “It’s not enough.”

“While we appreciate and thank the governor for working this out, we’re not done yet,” said Warshaw, who is a member of North Shore Concerned Citizens, a local group with a mission to remove NYAW as the community’s water provider.

“Would [the money] be enough to cover the miscalculations, or the bad customer service, or my black water filters, or the overcharges on our rates?” Warshaw said. “It’s a step in the right direction, but it’s not enough. We want public water now.”