Another episode in NUMC's continuing struggle
The East Meadow hospital, pummeled by reduced Medicaid reimbursements and rapidly growing pension costs, wants state approval to have the Nassau Interim Finance Authority refinance $300 million in hospital debt.
The idea is to use NIFA to allow the hospital to move debt from a relatively high-risk portfolio to one that is more stable and has lower risk.
The measure, if passed, would more directly link the fortunes of NUMC to those of the state control board overseeing Nassau County's finances.
Should the proposed measure in Albany trigger more aggressive oversight? That determination, down the line, would rest with NIFA's board and NUMC's needs.
NIFA by law already has authority to more aggressively oversee hospital finances. But NIFA's scrutiny has been almost cursory because the county has required more attention than the hospital Nassau sold to a public benefit corporation more than a decade ago. The hospital has run a deficit for all but two years of that period.
NIFA could help the hospital control some costs by extending the wage freeze that currently applies to county workers.
The proposal pending in the State Assembly to allow NIFA to borrow for NUMC includes language almost identical to that which created NIFA in the first place.
More than a decade ago, NIFA used its pristine bond rating to borrow, refinance and restructure a significant portion of Nassau's massive debt. The county, which was diving toward an almost noninvestment grade rating, saved money through lower rates.
In return for the one-time-only restructuring and other aid, however, Nassau had to accept NIFA oversight.
The hospital contends there's a difference between what happened then and the terms of legislation pending now. NUMC officials contend they only are seeking authorization to have NIFA borrow, not direct state aid or a restructuring.
After former County Executive Thomas Gulotta and county lawmakers approved NUMC's sale in 1999, the corporation sold millions of dollars in bonds to pull in enough revenue to begin operations.
Part of those proceeds -- $82 million in one shot -- went to Nassau so that Gulotta, desperate for revenue in a fiscal crunch, could help fill a yawning budget hole.
Would the current proposal accomplish the same thing for County Executive Edward Mangano, who is in the midst of his own budget crisis? As of Wednesday, the proposal included a request to have NIFA borrow $450 million in borrowing, $150 million more than NUMC needs.
The bills' sponsors in the Assembly and Senate said Wednesday, however, that the measure would be amended to authorize no more than the $300 million NUMC says it needs.
What NUMC views as an opportunity for refinancing has become tied up in the continuing tug of war between Mangano and Democrats.
Mangano is cutting funding to youth and other social service agencies next month, because Democrats won't let him borrow $41 million to pay tax settlements. Assemb. Earlene Hooper (D-Hempstead), the deputy speaker, indicated Wednesday that she would like to use the NUMC measure to guarantee funding for youth programs.
County officials weren't commenting Wednesday.
Whatever happens, there's not much time. The State Legislature is scheduled to go home a week from Thursday.