Court upholds Nassau's $26-million MTA debt

An appeals court has upheld a ruling ordering Nassau County to pay the MTA more than $26 million for reneging on a loan 16 years ago.

The State Supreme Court, Appellate Division, First Department ruled in favor of the Metropolitan Transportation Authority in a lawsuit filed by the county looking to get out of a deal it struck with the transit agency in 1996.

According to the suit, the Metropolitan Transportation Authority lent "the cash-strapped county" $51 million 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.

In January 2011, a State Supreme Court ruled in favor of the MTA in a counterclaim and ordered Nassau to pay the authority $26 million.

In its decision Thursday, the appellate court dismissed various legal claims by Nassau that it should not have to pay back any money because of procedural errors.

"We're gratified that the First Department has affirmed the lower court's decision in favor of the MTA," authority spokesman Aaron Donovan said.

SEE PHOTOSLIRR trains and commuters through the years

Nassau County Attorney John Ciampoli said the County had not yet reviewed the decision.