claudia@licaws.org                                                                                  dave@licaws.org
516-972-6988                                                                                            516-330-9930
July 12, 2016

 
NYS Attorney General Eric Schneiderman
The State Capitol
Albany, NY  12224
 
            RE:      Constitutionality of a Private Water Company
 
Dear Mr. Schneiderman:
 
We are writing on behalf of residents of the Town of Hempstead's south shore communities that are being served by Long Island American Water pertaining to Article I,  ยง11 of the Bill of Rights of the NYS Constitution, which provides that "No person shall be denied the equal protection of the laws of this state or any subdivision thereof." 
 
In our south shore communities, some residents of the same town are provided a basic necessity, water, at an annual cost of $350 for the service and the use, while other residents of that same town are denied that necessity.  Instead, those residents are forced to purchase that necessity, water, from a private company at an annual cost of over $1,000. The residents who are forced to be customers of the private water company not only pay for the use and service, but for the private company's profits and for the taxes that private company pays to the county and the very town that denies the public necessity to some of its residents.
So, the people who don't get water from the town pay a private company three times as much to get water and some of that money goes back to the town to keep taxes down for everyone else.  That violates the equal protection clause of our federal and state constitutions.
The Town of Hempstead has a water district and within the town, there are many water districts that provide public water to residents at a nominal rate without profit or municipal and school taxes.  But over 20 % of residents of the Town of Hempstead are forced to get their water, a basic necessity, from a private company at excessive rates, which include increasing profits for its out-of-state shareholders and municipal taxes to the very Town that denies a basic necessity to these residents. For some residents to be forced to pay a tax on water that other residents do not have to pay, which tax benefits the residents who don't have to pay that tax is a denial of equal protection because residents of the same municipality should pay equally for equal services. While residents of water districts pay a nominal tax for service and supply to the water district (which private water customers must pay to the water company), they do not pay taxes to the county, town or schools for water district property.
The bottom line is that the Towns of Hempstead and Oyster Bay provide water to many of its residents at nominal rates, either through their own water district or a separate water district. The denial of the right to public water to over 20% of the residents is unconstitutional.  Of course, the supervisors would say they are not denying the water because they are receiving millions of dollars in tax revenue from the private water company; and the private water company passes its tax bills to its customers (the same residents who are denied public water) in their water bills.  And worse, the towns just said that giving over 20% of their residents the right to public water was too expensive. To whom?
Throughout Hempstead's and Oyster Bay's history, a public takeover of a private water company has ALWAYS - that is 100% of the time - saved residents within the district money.  The key to that savings is that a district does not pay county, town and school taxes, while the private water company does.  But that tax cost is passed to the customer, who is then paying more in taxes for less service that other residents being served by a water district.  And that violates equal protection.   
We are asking that our towns stop denying 20% of its residents' their constitutional rights and stop forcing these residents to pay, through private water rates, extra taxes to the town and county for a service they don't receive from the town or county.  Residents on public water pay a nominal water district tax, while those on private water pay the private companies' huge property tax bills for the town and county.  Instead, have a public takeover of the private monopolies and protect our water resources. Doesn't the constitution guarantee residents equal rights including equal services at equal costs.
And now LI American Water Corporation is looking to raise our rates by more than 8%.  Were it a public water district, it would not be able to exceed the 2% tax cap.

Therefore, CAWS requests that you investigate and determine that (i) the Towns' failure to provide pubic water to all of its residents and (ii) New York State's permitting private water companies to pass its liability for county, town and school taxes to its customers to be unconstitutional.

Very truly yours, 

Claudia Borecky, Donald Davidson and David Denenberg 
Co-Directors
LI Clean Air Water and Soil, Ltd.