The Suffolk County Water Authority has the Riverhead Water District in its crosshairs.

The Water Authority is currently trying to block the Riverhead Water District’s extension into the Enterprise Park at Calverton and will object to all future Riverhead Water District extension applications, according to the authority’s outgoing CEO Steve Jones.

“The Water Authority feels it’s time to draw a line in the sand,” Jones said in an interview Wednesday. “It is the manifest destiny of the Suffolk County Water Authority to be the purveyor of drinking water to all of Suffolk County. That  is a statutory mandate,” Jones said.

And that means taking over all other water supply systems in the county — including the Riverhead Water District, Jones said.

By law, the entire county is the Water Authority’s service territory, Jones said. So from now on, the SCWA will attempt to block all extension applications made by Riverhead, including the one to supply the Calverton Enterprise Park, he said.

Riverhead is actually already operating the water system that serves the EPCAL site. It took over the operation of two existing wells and pumps at EPCAL when it took title to the former Grumman property from the U.S. Navy in 1998, according to Riverhead Water District superintendent Gary Pendzick.  It subsequently improved the distribution system at EPCAL, adding two new wells, pumps and mains to serve the site, he said. The Riverhead Community Development Agency even got a grant to fund the improvements.

“We put an extension application in back then. They [DEC] raised some questions and it’s never been finalized,” said Dennis Kelleher, an engineer with H2M Group, longtime consulting engineers to the Riverhead Water District. “Then DEC came back and said they wanted the water district to look at including the entire [EPCAL] property, and we had to revise the application . That went in about a year ago,” Kelleher said.

Enter the Suffolk County Water Authority.

In an eight-page letter sent to the DEC in Oct. 2009 and resubmitted late last month during the official public comment period on water district’s extension application, SCWA general counsel Timothy Hopkins opposed Riverhead’s application, lambasting the town for expanding its district into SCWA’s service territory without a permit, and trying to extend its district boundaries even though it lacks pumping capacity to serve its existing customers. The district has a pumping capacity deficit in excess of 7 million gallons per day right now, the lawyer argued. With the Calverton extension factored in, the deficit would increase to nearly 9.5 million gallons per day.

“The RWD would have to install seven new 1,000-gallons-per-minute wells to address this deficiency,” Hopkins wrote. “Nowhere in the RWD engineering report is there a discussion about the location, financing timetable or legal requirements for the installation of seven new 1,000 GPM wells in the RWD.”

Riverhead has experienced supply problems in recent years that have reached a crisis point because the town failed to implement any of the improvements recommended in its 2006 master plan for the water district, according to Town Supervisor Sean Walter. “In January, Riverhead Water District could only supply 94 percent of its peak demand,” he said. Upgrades and new well sites currently under construction or entering final planning stages will increase the water district’s capacity to 116 percent of its current peak demand, the supervisor said. In assessing the water district’s ability to serve the Calverton water district extension, it’s unfair to operate under the assumption that the entire site will be developed at once, because that’s a false assumption, he said.

“This is a hostile takeover attempt by the Suffolk County Water Authority,” Walter said. He said he’s prepared to do battle to keep the local water district under local control. “The town needs to control its own destiny,” he said.

But Suffolk County Water Authority officials believe there’s more to the town’s desire to hang onto its water district. It’s about the money generated by the district, which the town has been using to supplement its general fund, Jones said. Riverhead each year transfers hundreds of thousands of dollars from the Water District to the town’s general fund, according to the SCWA letter. The supervisor acknowledged this ongoing practice.

Jones said water district’s “surplus” cash comes from “key money” the district charges new customers — fees which, if they don’t specifically relate to the infrastructure improvements for that customer, are not allowed by law, Jones charged. SCWA’s counsel made the same argument in his opposition papers on the Calverton Extension.

“New York courts have held that the charging of key money for financing capital improvements within a water district is illegal and unconstitutional,” Hopkins, the SCWA general counsel wrote in his Oct. 7, 2009 letter to the DEC. The district cannot charge new customers key money unless it can demonstrate that they will be “primarily or proportionately benefitted by the expansion,” Hopkins argued. “The key money fees for the Riverhead EPCAL site would be millions and millions of dollars,” he wrote.

Suffolk County Water Authority does not generally charge “key money,” Jones said, except in special circumstances.

“Riverhead has just been taking the money and hasn’t done improvements in something like six years,” Jones said.

Walter said he made upgrading the water district’s facilities a top priority of his administration upon taking office in January. Improvements are now well underway, he said. The Water Authority is a “bloated patronage agency” that charges inflated rates to its customers, Walter said. “Even with the $7 million in upgrades, Riverhead’s rates are still 40 percent less that the Water Authority’s rates,” Walter said.

Jones disputes that calculation. “You have to take into account the customer’s property taxes paid to the Riverhead Water District. The SCWA doesn’t get property taxes. When you add the charges buried in the special district property taxes,” Jones said, “the typical customer in Riverhead is paying about $380 a year. Ours pays $320 a year.”

Jones said the Water Authority’s $12 million offer to buy the Riverhead Water District, made to the town in 2008, which the Town Board quickly rejected, is still on the table. But Riverhead’s refusal to negotiate a sale won’t stop the Water Authority’s effort to serve customers within Riverhead Town, Jones said.

The Water Authority is prohibited by law from condemning a municipal system, Walter said. But that won’t necessarily stop the agency from drilling supply wells in the town and offering water to Riverhead residents who live outside the boundaries of the Riverhead Water District. But Walter believes the Riverhead municipal district can serve its community better than the county’s public authority and vowed not to give up on that mission without a fight.

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