Nassau: NIFA's basis for control flawed

With a crucial court hearing looming, Nassau County has submitted another batch of legal papers arguing that the Nassau Interim Finance Authority should be blocked from exercising control over the county's budget.

The county said its 2011 budget of $2.6 billion is balanced and that NIFA, in voting last month to impose a control period, was making "a predictive judgment" just 26 days into the fiscal year.

"NIFA does not have the authority to trigger a control period based upon its perception that the county's budget is not balanced," the county said in legal papers.

The fiscal watchdog had said in papers filed last week that the risks in the current budget "dwarfed" those in past spending. NIFA pegged the 2011 deficit at $176 million - nearly seven times the $26 million deficit that by law would trigger a NIFA takeover.

Oral arguments between attorneys for the county and NIFA are scheduled for Friday before Justice Arthur Diamond in State Supreme Court in Mineola on the county's request for a preliminary injunction blocking NIFA from exercising its powers under the control period. The judge has indicated he would rule quickly, perhaps as early as Friday.

The latest papers were a reply to a legal filing by NIFA last week that in turn was a response to the county's original lawsuit on Jan. 31.

As part of the court record, the county submitted proposed guidelines it would follow in asking NIFA to approve spending on county contracts if the county loses its court challenge.

Contracts for more than $250,000 would be submitted for NIFA approval, the county said, although it listed several exceptions: contracts arising out of "emergency situations" that affect public health or safety; many federal- and state-funded social service contracts where the county's share fell below $250,000; and contracts with towns, villages or other "municipalities" within Nassau.

Mangano aide Brian Nevin said officials developed the $250,000 threshold after researching the experience of Buffalo when it was under a control board. Nassau officials are using the per capita cost of contracts in Buffalo. Nassau then multiplied that per capita cost by Nassau's population.

The county-backed Nassau Health Care Corp., which runs Nassau University Medical Center and other health facilities, will ask to be exempt from contract review, as will Nassau Community College, the court papers said.

NIFA has given no indication of what contracts or spending it wanted to review. Calls to NIFA Wednesday were referred to its chairman Ronald Stack, who did not return calls.

With Celeste Hadrick