State board clears way for Nassau to borrow to buy cars for police, sheriff's departments

The state board that controls Nassau's finances has allowed the county to borrow $9.8 million for public safety vehicles, including cars for police and sheriff's deputies, relaxing a prior policy.

But the board last week drew the line at letting county officials borrow for other types of passenger cars. Nassau must use operating funds to pay for those vehicles, officials from the Nassau Interim Finance Authority said.

NIFA in December limited county borrowing for capital projects with a “period of probable usefulness” of at least five years, with one exception: public safety vehicles. 

That's allowed the county to borrow $9.8 million for public safety vehicles, including new fleets for the police and sheriff's departments, budget documents show. 

County officials had lobbied for further exceptions. But on Tuesday, NIFA denied the county's request to borrow about $820,000 for other types of passenger cars.

Nassau has the cash to pay for them, Evan Cohen, NIFA's executive director, said at the meeting. “We see no compelling reason for the board to deviate further from its position to have these restrictions in place.”

NIFA in the past has discouraged Nassau from borrowing for short-lived or one-shot expenses, including legal judgments, termination pay, and tax certiorari settlements.

“The board has tried for some time to move the county away from issuing debt with short-term maturities, an expense which should be built into the operating budget and multiyear financial plan,” Cohen said at the meeting.

A county spokesman did not respond to a request for comment.

At last week's meeting, Nassau finance director Andrew Persich pushed for borrowing authority. 

“Even though the useful life [of the cars] is less than five years, our vehicles last a lot longer than that,” he said at the meeting.

In a letter to NIFA officials, Persich argued: “The county has historically borrowed for vehicles and maintained and used such vehicles for more than five years. As such, we are requesting that NIFA remove this restriction and once again allow the county to borrow for such vehicles.”

Under state finance law, the county's passenger vehicles generally have a “period of probable usefulness” of three years, below the five-year threshold NIFA uses to approve borrowing requests.

“Clearly that's short,” Cohen said. He added that “how long the county keeps its vehicles in its fleet … is not so relevant to the decision of whether to allow the bonding.”

Shannon McCue, a senior director for Fitch Ratings, which rates Nassau's credit, said generally speaking: “You don't want to use long-term debt to finance something you'd use in the short term.”

McCue added: “You don't want to be paying for something that no longer has value after the fact.”