Written by Matthew A. Piacentini Friday, 22 July 2011 00:00
Meeting July 14 at The Long Island Marriott Hotel and Conference Center in Uniondale, NIFA’s board of directors employed an impatient and chiding tone, delivering a clear message: Nassau County’s efforts to rectify what NIFA considers to be a financial disaster in the making are not good enough.
The board of directors rejected the county’s latest multi-year financial plan, called for better management of county contracts and the connected cash flow, insisted that the county use a NIFA-approved method of accounting and demanded a higher level of both transparency and fiscal realism from the administration of County Executive Edward P. Mangano.
NIFA Director Leonard D. Steinman summed it up: “We’ve all heard the county mouth the word ‘cooperation.’ If anybody hasn’t gotten the message today, that cooperation has not taken place.”
Ronald A. Stack, chairman and director, led the meeting, explaining that the county’s revised financial plan, particularly for 2011 and 2012, continues to include, in NIFA’s view, a deficit much larger than the 1 percent that triggered the control period. Therefore, NIFA “formally disapproved” the plan and ordered a new one in a “prescribed format.”
Stack indicated that he was extremely displeased with how Nassau’s administration has addressed the financial crisis it faces. He said that, at the county’s request, NIFA did delay the control period to give the county time to work on a budget this year, but ultimately, “we basically received nothing.” So, on Jan. 26, NIFA did impose the control period as required by statute, and ordered a new financial plan. “The county’s response? They sued,” he said, with “no budgetary improvements made” during the two months that the control period was then “tied up in court.” On March 24, Stack said, there was a revised plan, which NIFA rejected. “April came and went, May came and went… we were hoping they were doing something,” he continued. But, with the latest update delivered in June, “We basically found that nothing had been done.”
So, NIFA now insists on modifications to the multi-year financial plan. Stack said that $225 million must be removed, including $150 million for a project the county said would take 12-18 months and is in the 2012 budget. “It is July,” he said. “This has to come out.” As for red light camera revenue, “We’ve grown tired of this item,” Stack said. “Include it when it’s passed the state.” He also cited $23 million in union concessions that are unspecified. “Come back to us with a plan by July 28. We need a real plan now,” he concluded.
NIFA Director Thomas W. Stokes reiterated the dissatisfaction, calling for transparency and realistic cuts in spending: “It is time for a clear strategy… The blinders need to come off. Everything has to be on the table. The low hanging fruit is gone. Difficult, unpopular decisions will need to be made [to close the budget gaps].
Director Christopher P. Wright said that he could tell now from the multi-year plan that Nassau’s 2012 plan will be rife with problems, and that when Mangano delivers next year’s budget to NIFA this September, he will be facing the same issues that led to the control period this year.
“By telling you now,” said Wright, “we can hopefully avoid a situation in the fall where you have less options and less time to make changes.”
Wright accused that the 2012 budget included hundreds of millions of dollars in “transactions of dubious merit, dubious likelihood and dubious accounting.”
Almost making the others’ comments sound like compliments by comparison, Director George J. Marlin launched into a harsh rebuke of Nassau’s management, stating: “I am gravely disappointed by the county’s fiscal and managerial behavior.” He accused “delusions of fiscal balance” for 2011 and worse for 2012. “It is becoming apparent that the 2011 budget is a work of fiction,” he said. “The county has not been candid with taxpayers or NIFA. Contracts have been withheld. The county has not been candid about union negotiations.” He called the revised three-year plan “another example of unacceptable wishful thinking” and a “cruel hoax and insult to intelligence,” citing $150 million in revenue for sewer privatization that “the county has not even commenced.”
Marlin concluded: “The county must recognize that government entails more than finger-pointing, issuing rosy press releases and attending ribbon-cutting events and firework displays…” calling for “credible fiscal reforms to avoid the unparalleled disaster that looms over the county… ‘The dikes are crumbling and we are running out of fingers.’”
In line with the board’s complaints about transparency and realistic planning, concerns over the Nassau Coliseum “Hub” project arose. Chairman Stack said that NIFA was not yet going to judge the proposed $400 million in borrowing that will go before voters as a referendum on Aug. 1. If it passes, then NIFA will have final say on the project after an analysis.
However, Director Robert A. Wild urged the county to “be candid” with taxpayers, saying, “There is clearly a campaign to urge people to vote YES, but I haven’t seen where there is a clear presentation of the pros and cons.”
Wild calculated that the proposed $400 million debt will actually amount to $800 million with interest payments.
Steinman said that the approval of the referendum by Nassau residents will result in a property tax increase of 3.5 to 4 percent. “So, in essence,” he said, “this is a referendum on a property tax increase. We’ll be watching closely to see if [residents] have an appetite for tax increase.”
County Executive Mangano, who has been ordered to deliver a new financial plan by July 28, rejected both NIFA’s criticism of his budgeting and skepticism over the Coliseum plans. He said: “Once again NIFA’s radical views ignore the revenue (11.5 percent of gross revenue, ticket tax, hotel tax and sales tax) that will be generated as a result of the Hub plan. Last year NIFA said we would not have a surplus and in fact we ended with a $26 million surplus. We will continue to manage the county conservatively while creating jobs and opportunities for our residents.”