Dennison building sale, lease-back approved

The H. Lee Dennison Building in Hauppauge. (Oct. The H. Lee Dennison Building in Hauppauge. (Oct. 8, 2013) Photo Credit: Ed Betz

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Suffolk lawmakers Tuesday night gave final approval to the county's unusual plan to sell, and then lease back, its H. Lee Dennison building in Hauppauge to net $70 million in onetime revenue to pay year-end bills.

The legislature, by a unanimous vote, authorized County Executive Steve Bellone to enter into the sale-leaseback contract with the county's Judicial Facilities Agency. The vote comes less than two weeks after Gov. Andrew M. Cuomo signed the bill providing needed state authorization for the arrangement.

The JFA will borrow $70 million next month to provide the cash for the sale -- which the fiscally strapped county will use to meet late-year expenses, including payroll. Suffolk will then make $4.8-million annual lease payments to the JFA over the next 20 years: a total of $96 million, or roughly equal to the cost of repaying the bonds.

Bellone had viewed the sale-leaseback idea as a "gimmick," but proposed it last fall in his 2013 budget after projections that the county would face a $300-million deficit during 2013 and 2014. Officials now estimate the shortfall to be $180 million heading into 2014.

State Comptroller Thomas DiNapoli recently listed Suffolk among a dozen municipalities across New York that are under "significant fiscal stress," based on year-end 2012 figures.

When proposing his 2014 budget last month, Bellone said the county will be less reliant on "one shot" revenue measures -- such as the sale-leaseback -- in the coming year than it was this year. His budget, however, asks the state to allow Suffolk to defer nearly $33 million in ballooning debt payments due next year.

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"I always said we'd have to use some one-shots to bridge us to a better economy," Bellone said late last month.

Still, municipal finance experts warn against relying on onetime borrowings to meet operating expenses.

"Those kinds of things, on their face, should make one worry," said Don Boyd, senior research fellow at the Rockefeller Institute of Government at the University of Albany.

In other action Tuesday, the county legislature:

Approved exempting the medical examiner and health commissioner positions from the 1996 law stating that no Suffolk employee can earn a higher salary than the county executive. The administration is searching for a new chief medical examiner, and said the market may require offering candidates $200,000 to $250,000 a year to lure better talent.

Yvonne Milewski, who recently left as medical examiner, was paid about $171,000 -- less than the $181,000 of her Nassau County counterpart. Bellone makes $187,000 a year, while Health Commissioner James Tomarken, who is still under contract, is paid $176,000.

Unanimously elected Legis. Wayne Horsley (D-Babylon) as presiding officer to fill the remaining term of William Lindsay (D-Holbrook), who died of cancer in September. Horsley, who had been deputy presiding officer since 2012, will hold the presiding officer post through the end of the year.

"This isn't my term as presiding officer," Horsley said after the vote. "This is Bill's."

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