Error In Sewer Fees Cost Nassau Residents Millions: Curran

Nassau County Executive Laura Curran announced today that her administration discovered an error by the Mangano administration that cost taxpayers in six villages millions of dollars in extra fees for sewers.

Curran said that her administration discovered an error in the sewer and storm water resources fund that dates back to 2016. The error resulted in residents of Freeport, Rockville Centre, Mineola, Garden City, Hempstead and Roslyn being overcharged for sewer disposal charges and county-wide collection and disposal taxpayers being undercharged for services. County wide storm water taxpayers were also overcharged.

“The sewer zone disparities were brought to my attention and I commend my team for their diligent work to develop a new methodology which will not only resolve the existing issues but also ensure that this problem cannot happen again,” Curran said. “I have had the responsibility of cleaning up one mess after another from the previous administration, I am dedicated to finding and correcting these mistakes and making sure our county is working efficiently and ethically moving forward.”

The discovery came after a village resident with properties in both the collection and disposal zone and the disposal-only zone questioned the apparent disparity in sewer tax rates. This prompted an internal investigation, Curran said. The breakdown was discovered in the financial model for calculating the sewer and storm water resources district tax levy.

Sewer and storm water taxes had been incorrectly calculated since 2016 under a faulty methodology developed by the Mangano administration, Curran said. The county found that sewer expenses had not been properly divided between the three sewer zones starting with the 2016 budget. It was also determined that some debt service amounts were not allocated correctly among all three zones either.

As a result of these errors, from the 2016 through 2019 levies, property owners in the sewer disposal-only zone of assessment were overtaxed by an estimated $13.9 million, while property owners in the storm water zone were overtaxed by an estimated $4.5 million. At the same time, property owners in the collection and disposal zone in the rest of the county were undertaxed by an estimated $18.4 million.

The county has created two new models to calculate expense, allocate to the appropriate zones and avoid inaccuracies going forward. Under new internal controls, each model must be used independently and results must be compared and approved before being used in the budget. The new protocol was followed for the proposed 2020 budget.

As a corrective action, Curran will include in her 2020 budget the Sewer and Storm Water Zone Rebalancing Program. Under the program, the misallocation will be corrected over a 5-year period in installments of 20% per year as a payment or discount on the sewer and storm water levy, depending if the zone was undercharged or overcharged. The rebalancing is incorporated in the allocation among the three accounts in the sewer and storm water resources fund. Homeowners will see the adjusted rate in their 2020 tax bill.

The taxes levied for each of these three zones will compensate homeowners who were over charged and collect additional funds from those undercharged. As an example, a home with an average market value of $589,000 in the disposal only zone including Freeport, Rockville Centre, Mineola, Garden City, Hempstead and Roslyn will receive an estimated $47 decrease while the collection and disposal zone will see an estimated $9 additional charge. County-wide the stormwater taxpayers will receive an estimated $1.86 credit.

“This is yet another gross misstep from the Mangano administration that I have inherited," Curran said. "I am committed to continuing to fix these broken systems and do what is right for the residents of Nassau County.”