NIFA members warn Mangano about new budget
Three members of Nassau's financial control board are warning publicly that they will not accept a 2013 county budget that includes revenues from a proposed sewer privatization deal.
The ultimatum from members of the Nassau Interim Finance Authority may make it difficult for Nassau County Executive Edward Mangano to balance his proposed budget, which is due to be submitted to the county legislature Sept. 15. The county comptroller projects Nassau will end this year with a $45 million deficit.
Nassau's multi-year spending plan, updated in June, includes $50 million in revenues next year from turning over its sewer system to a private operator.
In May, NIFA members rejected a $5 million contract for Morgan Stanley to put together the deal that envisions an investor paying the county $750 million upfront to finance the sewer transaction. They said the one-time payment would be the same as borrowing $750 million because the investor would demand to be paid back with interest over the next 50 years.
At NIFA public meeting on Thursday, chairman Ronald Stack and NIFA members George Marlin and Chris Wright were even stronger in denoucing the plan.
"No matter how the county describes this potential securitization deal, it is still borrowing," Marlin said. "The next two generations of Nassau residents would be paying ever increasing toilet-flushing taxes so the county could receive 'one-shot' dollars to plug the deficit hole in current operating budgets."
Marlin added: "Let me make my position clear. I will not vote to approve a 2013 budget or a fiscal plan that includes any 'one shot' proceeds from mortgaging the sewer sytem to the tune of $750 million."
Wright warned, "Don't bring a budget to this board if it includes financial resources from that deal."
Stack said because Sept. 15 falls on a weekend, Mangano will likely submit his budget on the 17th. "That budget should not be balanced on money related to that sewer deal," he said. "The board will not accept it. Make sure the budget is balanced without any of that sewer money."
The two other NIFA members present, Dermond Thomas and Leonard Steinman, did not comment.
In response, Mangano spokesman Brian Nevin said, "The administration is not commenting on the budget until its release. If NIFA members have any constructive comments, we request they forward them to County Executive Mangano for consideration before September 15th."
Mike Florio, a spokesman for Nassau's Democratic legislators, said, "We hope that Mr. Mangano heeds NIFA's stern warning and presents a realistic 2013 budget that does not rely on massive borrowing or the ill-advised sewer deal."
Press aides to Presiding Officer Peter Schmitt (R-Massapequa) could not be reached for comment Friday.