Nassau County's financial control board voted Thursday to freeze workers' wages for a second consecutive year, declaring a continuing fiscal crisis and issuing estimates showing that the county could face a $100 million deficit by year's end.
Members also expressed skepticism about a plan by County Executive Edward Mangano to bring in a private operator to run the county sewage treatment system, in a nearly $1 billion deal that could represent the largest financial transaction in the county's history.
George Marlin, a board member of the Nassau Interim Finance Authority, said the sewer deal appeared to be the largest one-time shot of revenue in county history. But one-shots "will not fix the county's structural operating deficit," Marlin said. "Whether it's good public policy does not appear to be part of the equation."
NIFA chairman Ronald Stack said, "We would be extremely skeptical of such a transaction."
Board members said at a meeting in Uniondale that they would not continue to approve county borrowing if Nassau did not achieve the $150 million in recurring labor savings promised in this year's budget.
Stack said it would be "generous" to say the county so far has achieved about $90 million in recurring savings. He noted that while Nassau projects a $69.3 million cash deficit this year if additional savings are not found, NIFA staff predicts the gap will reach $100 million for 2012.
Stack noted that Nassau also expects to borrow $170 million to pay severance costs, legal judgments and tax refunds this year.
"In short, the county's fiscal crisis continues," Stack said.
In response, Mangano said in a statement that, "The administration and NIFA set forth a multiyear plan that holds the line on property taxes while stabilizing county finances by cutting waste and reining in labor costs." He noted that a police retirement incentive "approved by NIFA does just that as it eliminates 100 pay checks from the shoulders of taxpayers."
NIFA, which took control of Nassau's finances last year, declared Thursday that another yearlong wage freeze, projected to save $35 million, is "essential to setting the county on a path to fiscal balance as required by law." The freeze, imposed a year ago, expires Friday.
"The fiscal predicament of the County today is even more challenging than one year ago," NIFA said.
Mangano agreed to cut $150 million in recurring labor costs by Feb. 1 in return for NIFA consent to borrowing up to $450 million for severance, court judgments and property tax refunds -- in addition to borrowing for construction projects and to cover short-term cash flow.
NIFA said the county has taken steps to slash its operating costs by reducing employee head count through retirements and layoffs to 7,644 as of Jan. 31, compared with 8,410 positions included in the 2011 budget; replacing Long Island Bus with private contractor Veolia; privatizing inmate medical care at the county jail; ending a guarantee to pay property tax refunds for the county's school districts and towns; and reducing the number of police precincts from eight to four.
Thursday, the seven-member board approved a key element of Mangano's precinct realignment plan -- $26.5 million in retirement incentives intended to encourage highly paid veteran officers to retire. Mangano has projected that trimming 100 officers from the force could save up to $20 million annually.