L&M Publications
Merrick Life • Bellmore Life • Freeport-Baldwin Leader • Wantagh-Seaford Citizen

County Legislator David Denenberg (second fron left) discussed sewage plant privatization plans with, from left, John Weber of Surfriders, Long Beach City Councilman Michael Fagen, Cedar Creek Oversight Committee member Ralph Spagnolo, North and Central Merrick Civic Association President Claudia Borecky and Scott Bochner.

Nassau County Legislator David Denenberg (LD 19) is calling on state Attorney General Eric Schneiderman to investigate the legality of privatizing the county’s sewage treatment plants as well as its contract with Morgan Stanley.
   
The firm was awarded a contract to evaluate and formulate a request for proposal (RFP) for the privatization, through sale or lease, of Nassau County’s sewage treatment infrastructure and assets. The county has three sewage treatment plants including the Cedar Creek Water Pollution Control Plant in Seaford, the Bay Park water treatment facility in East Rockaway and the Glen Cove treatment plant.
   
Legislator Denenberg made this announcement at a press conference at the Cedar Creek Park on Thursday, December 15. A formal letter calling for an investigation was sent to state Attorney General Eric Schneiderman and New York State Comptroller Thomas DiNapoli on Wednesday, December 14.
   
“The Republican majority just ratified an inside contract with Morgan Stanley which was entered into clandestinely 18 months ago,” said Mr. Denenberg in a press release. “Under the contract we are spending $500,000 of taxpayer money to figure out how to sell sewage treatment plants that were built with federal and state funds. How can we ever sell public assets built with public money?”
   
But the county has defended its position in its mutli-year plan, pointing to other “U.S. governments that have successfully pursued similar P3 transactions.”
   
Furthermore, the memorandum regarding the contract with Morgan Stanley from Timothy P Sullivan, deputy county executive of finance,  stated “it is anticipated that this transaction will generate net revenue of approximately $400 million for the  county and aid in bridging the gap to achieving long-term recurring budgetary balance. Additionally, this transaction will retire approximately $465 million of debt.”
   
But last week a rating service, Fitch, downgraded the county’s bond rating, citing among other things the sale of the sewage treatment assets for one-shot revenue being used to balance the budget.
   
Mr. Denenberg, in his letter, wrote that the proposed privatization “is a classic one shot budget gimmick that will result in higher sewage charges to taxpayers and less public oversight of this vital county function and environmental issue.”
   
Mr. Denenberg is also requesting that the investigation look at the Morgan Stanley contract with the county and  “whether state municipal laws and/or regulations with respect to proper bidding processes and proper contracting processes were violated.”
   
The contract was first brought to the Legislature for a Rules Committee review and vote on December 5, although Morgan Stanley had been retained in the spring of 2010 for $24,500.
   
This newspaper previously reported that  Morgan Stanley will receive $100,000 for its contact with the county per quarter for 2012 as well as another $100,000  for the last quarter of 2011.
   
The contract never went before the entire Legislature. It was put through as a rules-only contract. Personal service contracts, such as this one, do not have to be approved by the entire Legislature. Additionally, prior to the December 5 vote, Morgan Stanley had been hired for $24,500, a sum that does not need full legislative approval.
   
“The Republicans, including Dennis Dunne and Peter Schmitt, voted for the contract,” Mr. Denenberg told this paper in an earlier interview. “It couldn’t have passed without Dennis’ vote.”
   
But Legislator Dennis Dunne (LD-15) said “misinformation is being given out. This vote was for the Morgan Stanley contract only to explore our options, not for privatization. I did what everyone should do. I did my due diligence for a study that might help us find a way to remove some of the tax burden to the people of Nassau County.”
   
“This will be an above-board process. I told Tim Sullivan there must be public hearings so that there is a record, so that everything is transparent. But it may never happen and if it does, I will listen to what the people want. If they want me to vote no, I’ll vote no.”

By Laura Schofer

Laura Schofer, staff writer for L&M Publications, has been recognized with several awards for many of her feature pieces published in Bellmore and Merrick Life, The Citizen and The Leader.