A state oversight board that controls Nassau County finances voted Tuesday to refinance $118 million in long-term debt in a move officials said will save the county $9.7 million in lower interest payments on debt service costs.

At a meeting in Uniondale, the Nassau Interim Finance Authority, which issues bonds backed by county sales tax revenue, unanimously approved a plan to refinance its tax-exempt, fixed-rate debt. NIFA cited low interest rates that may rise in the near future.

The board expects to generate $5.2 million in savings on refinanced bonds that can be redeemed within 90 days and another $4.5 million on bonds that cannot be called until 2019.

NIFA general counsel Jeremy Wise said the debt service savings will be spread over the life of the refinanced 10-year bonds. "We are taking a very conservative approach to how we are doing the savings," Wise said.

Nassau County Executive Edward Mangano said "refinancing saves the county money by reducing interest costs, which is good news for taxpayers."

NIFA also plans to tap its $13.8 million liquidity reserve, used by the board to make debt service payments in case revenue declines unexpectedly. The reserve funds will be used help pay down the refinanced 10-year bonds, officials said.

advertisement | advertise on newsday

NIFA chairman Jon Kaiman also wrote to Mangano on Monday, raising concerns about the county's 2016 budget proposal. Kaiman said the board would not approve $32.8 million in proposed borrowing for police termination costs because the county "failed to find the dollars to pay for this expenditure."

In a letter Tuesday, Mangano identified nine "contingency" revenue sources to offset borrowing, including fewer seasonal employees, reduced overtime at the Nassau Correctional Center and higher fees at the Department of Public Works.