Nassau’s financial control board agreed Tuesday night to hire a consultant to help identify ways to cut county spending if county officials cannot close a projected $106 million shortfall by the end of the year.
The Nassau Interim Finance Authority, with four of its seven members present, voted unanimously to allow negotiation of contracts worth up to $500,000 with one or more of the consulting firms it recently interviewed.
The board consistently has warned county officials of its power to step in and make its own budget cuts, but has never done so.
“If certain things don’t go right, there may be the need for mid-year action to be taken,” said NIFA chairman Adam Barsky. “We want to be prepared.”
The consultant, who will be chosen from nine financial firms that responded to NIFA’s request for bids in January, will “review certain key aspects of the county’s budget and operations” and recommend cuts that could be made immediately, without impacting labor contracts or requiring a vote by the county legislature, NIFA officials said.
Last year, NIFA rejected the county’s $2.9 billion budget for 2017 after county legislators slashed a proposed traffic and parking ticket surcharge, eliminating $36 million in projected revenues. The board later gave its approval after Mangano and lawmakers proposed a new round of spending cuts and fee hikes to make up for the lost revenue.
NIFA has projected that the 2017 spending plan will have a $106 million deficit, based on generally accepted accounting principles that do not allow borrowing proceeds to be counted as revenue.
County Executive Edward Mangano’s administration responded to the consultant’s hiring by noting that in both 2015 and 2016, Nassau ended the year with surpluses of more than $50 million, counting borrowing proceeds.
“NIFA routinely predicts an operating deficit and the administration routinely returns a surplus,” Eric Naughton, Mangano’s finance deputy, said in a statement.
Mangano announced recently that he would use some of last year’s surplus to end borrowing to pay for property tax settlements a year earlier than expected.
Barsky, while crediting Mangano with ending tax-settlement borrowing, has noted that Nassau likely ended 2016 with an $80 million deficit, not counting borrowing proceeds.