Bill to let NIFA borrow millions to help NUMC

Photo of the exterior of the Nassau University Photo of the exterior of the Nassau University Medical Center. (March 18, 2009) Photo Credit: Newsday/Thomas A. Ferrara

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ALBANY -- State lawmakers are rushing to sign off on a $300 million refinancing deal to help debt-ridden Nassau University Medical Center.

At the same time, a separate measure to allow Nassau County to bypass a financial control board to borrow millions of dollars to pay overdue tax refunds appears all but dead.

The issues are coming to a head as the State Legislature moves toward a June 21 adjournment and as lawmakers remain divided on lingering Nassau issues involving funds for youth programs, possibly complicating the last-minute negotiations.

The medical-center bill would authorize the Nassau Interim Finance Authority to guarantee bonds -- allowing NUMC to refinance while borrowing rates are low.

Assemb. Charles Lavine (D-Glen Cove), the primary sponsor, said NIFA backing would guarantee even lower rates, saving the medical center about $15 million in the long run.

The medical center, based in East Meadow, has been struggling with rising pension costs and lower Medicaid payments. It has laid off more than 300 employees in the last year and has begun talks with North Shore-Long Island Jewish Health System, a private entity based in Manhasset, about collaborating to lower administrative costs.

Lavine initially proposed allowing up to $450 million in borrowing as a ceiling, but said he would lower it to $300 million or less to match the medical center's debt. He said concerns that authorizing the higher figure would create a backdoor way for county government to borrow to cover its tax refund obligations were "absurd."

"One has absolutely nothing to do with the other," Lavine said. "We're simply trying to help one of our major hospitals to lessen its debt burden."

State Sen. Kemp Hannon (R-Garden City), who introduced the bill in the Senate late Tuesday, concurred. "None of those other things have come up," he said. "The whole focus of this bill is the viability of the medical center. . . . It would show the bond market we're serious about protecting the financial future of the medical center."

Assembly Deputy Speaker Earlene Hooper (D-Hempstead), dean of the Nassau Assembly Democrats, said she hasn't made a decision yet on the bill and was still trying to get more information from the medical center.

The medical center's debt has been a long-running issue. The county sold the medical center to a public-benefit corporation, Nassau Health Care Corp., for $82 millionĀ  in 1999 for a one-time cash infusion. The corporation, now known as NuHealth, then sold about $260 million in bonds to pay for the hospital and establish a capital fund.

"We are looking to NIFA to help us refinance our variable rate bonds at the lowest possible interest rates and to fix our bonds so as to eliminate any market or credit risk," Arthur A. Gianelli, president and chief executive of the NuHealth System, said in a statement.

Civil Service Employees Association president Jerry Laricchiuta said the union does not support the refinancing, but will not ask Albany lawmakers to oppose the bill on its behalf.

"We would like to be considered in this process," Laricchiuta said of the new legislation. "Will it help get stability with the labor force?"

Meanwhile, a bill that would allow Nassau County Executive Edward Mangano to bypass NIFA and the county legislature to borrow money to pay overdue tax refunds -- $41 million is due by the end of the month -- hasn't gained traction. The State Senate introduced the bill last week, but no one in the Assembly has taken it up.

Officials close to the discussions said they are concerned about giving the county the means to sidestep NIFA approval. They said it was unlikely the State Legislature would act on the bill.

With Robert Brodsky

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