The Nassau Interim Finance Authority on Thursday asked a State Supreme Court justice to dismiss a lawsuit by County Executive Edward Mangano that challenges the watchdog's authority to take over the county's finances.
In a 147-page response to Mangano's suit, lawyers for NIFA, an oversight agency created by the state in 2000, dismissed the county executive's legal claims as "baseless."
The NIFA board voted Jan. 26 to impose a control period on the county because of the likelihood of a $176-million budget deficit.
Mangano, who maintains his $2.6-billion budget is balanced, claims the move was unconstitutional, unwarranted and that NIFA's authority to take over the county's finances based on a projected deficit has expired.
But Jeremy Wise, NIFA's general counsel, along with the agency's outside attorneys - including the state's former top judge, Judith Kaye - rejected Mangano's arguments, noting that Nassau requested that NIFA be created a decade ago.
"A municipality can hardly claim that its domain has been invaded by legislation it asked the state to enact," they wrote.
In its court filing, NIFA noted that when Nassau sold millions of dollars of general obligation bonds and short-term notes in the past two years, its official statements told investors that NIFA has the power to take control of the county's finances.
"It is remarkable that the county - having sold tens of millions of dollars of debt based on representations of NIFA's continuing authority to impose controls - would now tell this Court the very opposite," NIFA wrote.
Mangano, a Republican, has criticized NIFA for not intervening when the administration of Democrat Thomas Suozzi had significant budget risks.
But NIFA said Thursday risks in the 2011 budget "dwarfed" those in past budgets. Risky elements in budgets from 2007 through 2010 amounted to about $60 million a year, compared with questionable elements in Mangano's 2011 budget totaling $234 million, NIFA said.
NIFA defended the competence and qualification of its six-member unpaid board, which Mangano has claimed is politically motivated.
"NIFA's answering papers expose their agenda to impose a new nonelected layer of government upon the residents of Nassau County that will never be held accountable to taxpayers," said Mangano spokesman Brian Nevin.
County Attorney John Ciampoli criticized NIFA for not allowing Mangano to consider bond proceeds as revenue, as Ciampoli contends it permitted Suozzi to do.
NIFA lawyers called it "nonsensical" to say the law allows borrowed money to be treated as revenue.