Suffolk lawmakers OK release of $120M settlement tied to sewer overcharge case
Presiding Officer Kevin McCaffrey at his last meeting as a member Suffolk Legislature on Tuesday in Hauppauge. Credit: Michael A. Rupolo Sr.
The outgoing leader of the Suffolk County Legislature denounced the partial funding source of a $120 million settlement lawmakers approved Tuesday to resolve a decade-old lawsuit filed by ratepayers of the Southwest Sewer District.
The settlement agreement says the county will pay $4.36 million to more than 400 plaintiffs and $37.82 million in attorney fees. The total will be paid out of the Southwest Assessment Stabilization Reserve Fund known as Fund 405, according to the agreement.
Presiding Officer Kevin McCaffrey (R-Lindenhurst) argued the $42 million should not come out of Fund 405, which was at the center of the original lawsuit when the plaintiffs argued the county overcharged them to accumulate a surplus. When the legislature in August first authorized a settlement, McCaffrey said he believed Fund 405 would not be used for "anything other than what it was intended for," which is to subsidize the residents of the county’s largest sewer district.
"Here we are now and that’s been completely disregarded," he said.
Other lawmakers disagreed, saying it was financially prudent to use the reserve fund rather than bond. The legislature approved the resolution, 12-5, to appropriate the settlement funds and transfer $42.18 million from Fund 405.
The rest of the settlement — $77.8 million — will fund capital improvements in the sewer district over 10 years, according to the settlement.
Legis. Nick Caracappa (C-Selden) defended the settlement and said the money spent "is roughly equivalent to the cost we would incur to defend this case." He added it would be "fiscally irresponsible" to bond the settlement money.
Caracappa disputed McCaffrey’s claim that the settlement harms residents of the sewer district. "It is not true and it’s unfair to all of us," he said.
Fund 405 will have about $44 million left, according to the legislature's Budget Review Office. As part of the settlement, the fund will dissolve once the remaining money is spent.
Legis. Catherine Stark (R-Riverhead), who exits office at the end of the month, said it would be "ridiculous" to bond for the settlement rather than use "cash on hand."
Joe Werkmeister joined Newsday in 2022 and covers Suffolk County government and politics. He is a graduate of St. Bonaventure University and previously worked as the editor of two North Fork community newspapers.
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