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NIFA Rejects County’s Mid-Year Plan, Warns About Next Year

Orders $225 million cut or fixed in 2012 budget

The Nassau County Interim Finance Authority (NIFA) has officially rejected Nassau County’s mid-year financial plan and ordered some specific actions for County Executive Edward P. Mangano as he prepares a multiyear plan that includes next year’s budget as well. The NIFA Board of Directors met on Friday, Sept. 2, at the Nassau County Bar Association in Mineola to vote on a resolution regarding the two financial plans, but had already made their wishes clear to the county on these issues.

Director Robert Wild was not in attendance. It was the first meeting for new Director Dermond Thomas, a Valley Stream lawyer who was recently recommended to fill the vacant seat on the board by House Speaker Sheldon Silver and appointed by Governor Andrew Cuomo, NIFA Chairman Ronald Stack said, as he presided over the meeting.

Stack spoke about the resolution that would disapprove the county’s mid-year financial plan and prescribe direction for the multiyear plan. First, regarding the mid-year plan submitted to NIFA in June, Stack said that the board had asked the county to remove certain “questionable revenues” from its budget, but that has not happened. Therefore, they voted to reject the plan.

The multiyear financial plan, due in a week, must have some specific items addressed, said Stack. NIFA wants “budgetary relief” for $225 million that the county will include in the 2012 part of that plan. The board finds items adding up to that dollar amount to be uncertain.

Stack specifically pointed out some items. First, he addressed $150 million in revenues that the county has in the budget coming from the privatization of its waste water system. Members of the board made it clear that they find this deal is rife with uncertainty. “We want it out, or if you leave it in, we want $150 million in contingencies in case that $150 million is not forthcoming,” Stack said.

Director George Marlin said of the sewer privatization that taxpayers should know it is “not a slam-dunk.” He said there is no guarantee that such a transaction will happen in 2012, pointing out several items that would have to occur to make it possible: the state would have to approve changes in a New York law that created the county’s sewer and stormwater authority; it would have to be determined if privatization would require approval from the New York Public Service Commission; it remains to be seen how much money will actually be made on any deal after the county pays off hundreds of million in debt related to the sewer system. He also said that the county legislature might not approve the deal because fees to residents and businesses could go up under a private operator and union workers could lose their jobs.

 Director Christopher Wright agreed, calling the deal “a transaction of dubious merit, dubious likelihood and dubious accounting treatment.” He said it would not be the means for the county to balance its 2012 or multiyear budget. That would require “difficult decisions,” some of which could have “painful outcomes,” he said.

Stack said, “the disturbing part of it is… even if it is achieved, it is a one-shot.” The chairman called the plan a “band-aid” that would not solve the structural problems of Nassau County’s budgets.

Beyond that item, the chairman said $23 million in revenues for 2012 coming from an expansion of the red light camera program should not be in the budget, having “been kicked around for a number of years now… we are not going to accept that as a revenue,” he said.

The cost of paying property tax refunds was then ordered to go up to $70 million rather than the $50 million currently in the budget for 2012, which Stack said “more realistically reflects the historical liability” of the county.

Regarding $33 million in labor savings that the county has in its financial plan, Stack said that they need specifics. “We do not want a line item in the budget saying ‘X million,’ we want to know how [savings] will be achieved.”

Nassau County Executive Edward P. Mangano stated, “NIFA’s resolution translates to deeper cuts and labor concessions. Government should brace for extraordinarily painful solutions in my 2012 no-property tax increase budget.”