Court: Nassau must pay $20 million to MTA

Already struggling to meet its financial obligations to the MTA, Nassau County may have to pay the transit agency an additional $20 million following a state court's decision in a lawsuit stemming from a financial deal made between the two sides 15 years ago.

According to the suit, the Metropolitan Transportation Authority lent "the cash-strapped county" $51 million in 1996 in a "2-for-1" agreement in which Nassau agreed to pay back twice that sum in funds for MTA capital projects in Nassau.

Nassau issued bonds to raise the full $102 million and made good on $89 million of the capital funding it had committed to the MTA. But, according to the suit, in 2001 the county filed a lawsuit looking to get out of the agreement, arguing that the MTA had overstepped its authority in making the deal.

The MTA in April filed a counterclaim arguing that Nassau illegally reneged on its agreement.

State Supreme Court Justice Barbara Kapnick, in a Dec. 22 decision, granted the MTA's legal claim "in its entirety" - ordering Nassau to pay the $13.6 million it owes the MTA from the original deal, up to $7.3 million in further capital funding, interest on the debt and attorneys' fees.

Kapnick also dismissed Nassau's claims in the suit.

"We are very disappointed in the ruling and have directed staff to file a notice of appeal," Nassau County Attorney John Ciampoli said Friday.

MTA sources said in April that the counterclaim was an indication of an "aggressive" new approach it intended to take with Nassau, which it says has failed for years to meet its obligation to subsidize Long Island Bus.

The bus agency is operated by the MTA, but owned by Nassau, which contributes $9.1 million to its $133-million budget. The MTA last month voted to no longer make up for Nassau's funding shortfalls.

Friday, MTA spokesman Jeremy Soffin drew a parallel between Nassau's failure to make good on its 1996 deal and its failure to fund LI Bus.

"This ruling makes it clear that Nassau County's obligations to the MTA are not optional and shouldn't be treated that way," Soffin said.

Nassau County Executive Edward Mangano has said the county cannot afford to pay the additional $26 million each year that the MTA says is necessary to keep buses running.

The county has sought bids from private vendors to take over the operation of LI Bus, and has indicated that it may not even kick in the $9.1 million it had been paying the MTA.

"Although we remain hopeful that negotiations with the MTA will result in the continuation of LI Bus service, County Executive Mangano has explored privatization which may include operation without government subsidy," Mangano spokesman Brian Nevin said.