The state oversight board in control of Nassau’s finances gave the county 30 days on Thursday night to develop a plan to shave $23 million from its operating budget to close a projected $103 million deficit.
The county needed only 17 hours to respond, telling the Nassau Interim Finance Authority Friday the savings would be achieved, in part, by cutting spending on utilities and trimming the snow removal budget.
“The county’s historical proactive fiscal management should provide confidence that we will address NIFA’s $23 million concern,” wrote Eric Naughton, deputy county executive for finance, in a letter to NIFA chairman Adam Barsky.
Nassau reached a deal with NIFA last year to limit its 2016 deficit to $80 million using Generally Accepted Accounting Principles, which prohibit using borrowed or surplus funds to pay operating costs.
The board said that midway through 2016, the GAAP deficit has ballooned to $103 million, including $60 million in borrowing to pay property tax refunds; $40 million in excess bond premiums for debt service and court settlements and $3 million from the county reserves for NICE Bus services.
County Executive Edward Mangano said Nassau added $40 million to its reserves fund last year, negating the $3 million it used to restore bus routes.
Nassau’s deficit reduction plan consists of saving $8.5 million by cutting spending on utilities, gas and snow removal; $7 million on Police Department retirements; $5 million in reduced costs for preschool and early-intervention services; $1.5 million through declining Social Services program spending and $1 million in added red light camera revenue.
Nassau previously told NIFA it would use the police retirement and early-intervention savings to close potential holes in the county’s operating budget. Naughton said the county is running a “balanced budget” in 2016 and will not need to tap those funds.
NIFA member Chris Wright criticized the county for “double-counting its savings” and said the administration still doesn’t “get it . . . Their refusal to acknowledge the existence of a massive deficit which requires a financial control board continues to hinder their ability to balance the budget.”
NIFA last year projected the county would have an $80 million budget deficit. But Mangano said the county ended 2015 with a $53 million surplus that it used to boost its reserve fund from $120 million to $160 million.
But critics said the surplus only was achieved after $150 million in NIFA-approved borrowing.
Mangano said Nassau “has the track record” to manage the board’s concerns. “NIFA’s job is to conservatively point out risks, as they pointed out $80 million in risks in 2015, and our job is to make sure those risks don’t become reality,” he said.