Nassau County is moving ahead with its plan to allow homeowners to sell as much as $21 million in property tax refunds to private investors or accept a seven-year payment plan from the county. They also can continue to wait for Nassau to pay their overdue refunds directly.
Nassau County Attorney John Ciampoli said Wednesday that implementation of the new plan, first proposed in September, had been delayed because of superstorm Sandy.
But Ciampoli said Nassau continues to work out details to allow a State Supreme Court justice to order the payout plan chosen by each of 18,000 homeowners awarded refunds in small claims court last year.
"This is the best vehicle we can find to get our taxpayers their money and get it to them now," Ciampoli said at a public meeting in Mineola, flanked by a team of county attorneys.
Ciampoli devised the debt-sale idea after Nassau Democratic legislators repeatedly turned down County Executive Edward Mangano's request to borrow to pay tax refunds.
They refused again last week to provide the 10-member Republican majority with the three additional votes needed to borrow. Mangano had requested $165 million in borrowing, primarily for commercial refunds. While the county says it has stemmed the growth in refunds from erroneous residential property assessments, the county comptroller estimates the commercial backlog could reach $380 million by the end of next year.
Ciampoli originally proposed that homeowners could sell refunds to a private investment firm in Uniondale. The firm, RPTF, would pay taxpayers the full amount due with interest while the county would repay RPTF over seven years at 5.95 percent interest. Nassau would pay only interest the first year.
To satisfy County Comptroller George Maragos, Ciampoli later modified the plan to allow homeowners to sell their refund to any private investor willing to accept the same repayment terms, or to allow them to get a similar seven-year deal with the county. They also could sell their settlements to private investors. Ciampoli said RPTF is still the only firm that expressed interest.
He called the public meeting after the county's control board, the Nassau Interim Finance Authority, ordered him to provide details of the plan, which some NIFA members considered a form of borrowing. Ciampoli opened the meeting to the public, saying it "is a matter of great public concern."
"This doesn't need NIFA approval," he said. "It's not a borrowing. It's not a contract." He added that any NIFA interference would be a "conflict of the branches of government" because the program would be court-ordered.
NIFA staff attended the meeting but declined to comment afterward.
Democrats continued to object. "Nothing of substance has changed. It's still an unlawful borrowing under the local finance law and subject to legislative and NIFA approval," said Democratic counsel Peter Clines, who attended the meeting.