Nassau County Executive Edward Mangano has 60 days to amend his four-year budget plan to show how he will pay for at least $130 million in wage hikes for county employees -- or the Nassau Interim Finance Authority says it will impose budget cuts itself.
The budget-balancing mandate was part of a deal reached early Saturday morning to lift a three-year wage freeze that the state control board had imposed on county employees.
Nassau's plan to cover the cost is expected to include the privatization of the county's sewer system, according NIFA chairman Jon Kaiman. Mangano spokesman Brian Nevin called it a contingency.
A private operator, United Water of Hackensack, N.J., would manage and maintain Nassau's three major wastewater treatment plants, 53 sewage pumping stations and roughly 3,000 miles of sewers. Nassau would pay the firm an annual fee, but Nevin declined to say how much that would be.
The firm would hire an undetermined number of Nassau's 300 sewer system employees. The rest of the workers would be offered other vacant jobs with the county.
Nevin said the proposal "would save millions" annually while allowing the county to continue to set sewage rates.
But, he acknowledged the savings would depend on how many employees leave the county payroll and other operational efficiencies -- minus what the county must pay United Water.
Kaiman agreed the privatization could save millions in payroll costs, but added "we are not putting all of our eggs in one basket." He cited additional revenue from speed cameras and mortgage recording fees and higher projected revenue from sales taxes.
NIFA voted 6-1 in favor of the labor contracts shortly before 2 a.m. after board members met for eight hours behind closed doors with Mangano and union officials.
Chris Wright, the lone NIFA member to vote against the labor contracts, said he has "virtually no confidence" in the county's ability to pay for the deals, which he projects will cost nearly $300 million.
The contracts would provide members of the Civil Service Employees Association, Police Benevolent Association, Detectives Association and Superior Officers Association their first pay increase in three years. A deal with the correction officers union is still pending.
The salary increases, which are retroactive to April 1, would appear in paychecks in four to six weeks and would be followed by a series of pay hikes totaling more than 13 percent by the end of 2017.
"This brings closure for our members going forward," said PBA president James Carver.
"It's been a long process and I am happy for our members that it's finally resolved."The county will hire 162 new cops under the terms of the new labor deal tomorrow. The recruits will undergo six months of training, Nevin said.
Under the agreements, employees would give up annual pay raises that had been due in 2013 and were lost under the wage freeze. The unions, which are still challenging the legality of the freeze, are also giving up any step increases due in 2011 as well as their 2012 salary increase unless a court rules the freeze was illegal. The unions are appealing a State Supreme Court decision that found the freeze legal.
Mangano said the agreement "saves taxpayers hundreds of millions over present contract costs" because of concessions that require new employees to pay a percentage of their health insurance premium and pension costs. But, NIFA said the county must still show it can pay the full cost of the deals.
The board passed a resolution requiring Mangano to modify his 2014-2017 multiyear budget plan to account for a minimum of $130 million in new labor costs. Independent county budget experts estimate the deals could cost between $120 million and $292 million.
NIFA issued a similar directive to the county in January to revise its multi-year plan but the county ignored the request.
The modified budget plan must also include a combined $30 million in further annual funding reductions for county departments -- a contingency to be triggered if other savings and revenue forecasts do not materialize.
If NIFA is not satisfied with Mangano's changes, the resolution provides the board with the authority to modify the budget on its own and impose cuts on county departments.
Legis. Kevan Abrahams, the legislature's Democratic minority leader, said, "We're glad NIFA is making the county go back to the drawing board on the budget to prove it can afford lifting the wage freeze."
The sewer privatization is a key component of the plan. CSEA president Jerry Laricchiuta, whose members include sewage district employees, said his deal with Mangano "guarantees his members a public job with the county" if they are not hired by United Water.
"My members will be protected," Laricchiuta said. "My main focus was their job security."
The plan is different from Mangano's past plan to sell the sewers to a private operator for an upfront payment, Kaiman said. NIFA rejected that proposal as a form of borrowing.
Wright, who opposed the earlier sewer proposal, said he could not judge the soundness of the new plan because he has received virtually no information about it.
"Thus far," Wright said, "this has been a relatively fact-free exercise with the county."
With Joye Brown
and Celeste Hadrick