State panel poised to control Nassau finances

A state oversight board could take control of Nassau's finances Wednesday amid growing concerns that County Executive Edward Mangano has not proved that his $2.6 billion budget is balanced, several informed sources said.

After demanding Mangano provide by last Thursday detailed information about a total $424 million in union concessions, contingency cuts, additional revenue and surpluses, the Nassau Interim Finance Authority has called a 2 p.m. public meeting Wednesday to decide what to do next.

The six unpaid members of the NIFA board of directors weren't talking publicly Tuesday. But sources say that after reviewing reports from their accounting firm, Grant Thornton, there is a growing consensus that Mangano has not made his case.

If NIFA were to vote to impose a control period, sources say Mangano has the legal papers drawn up to challenge the move in court. Mangano contends his budget is balanced and sent a letter to NIFA Tuesday reaffirming his position.

Without saying what the board will do, one NIFA member said, "We are prepared to act tomorrow. We have all the information we need."

If the board determines that Mangano's budget has a 1 percent deficit, or if "there is a substantial likelihood and imminence" of such a deficit, state law says the board "shall" impose a control period.

There were divisions among board members in December over Mangano's budget, but the accountant's critical reports appears to have brought them together, sources said.

One member said a control period "is one of the strong possibilities." Another said Mangano had not provided "a strategy or a plan" for managing the budget risks.

"It's an important meeting," a member said. "We'll be discussing the next step in the process."

During a control period, NIFA could reject any new contracts and freeze salaries in union pacts.

On Tuesday, Mangano announced a new agreement with the Civil Service Employees Association that would save money by restructuring the pay schedules for new hires. It also would eliminate time off for donating blood, although members could still use time off already earned.

The new agreement would extend the current contract from the end of 2015 through 2017 and includes 3.25 percent salary raises for each of those two new contract years.

While sources said NIFA members were skeptical of the deal, Mangano said the new agreement will save $70 million through 2017, including $2 million this year. He contends that if NIFA froze the CSEA contract, it could save only $1.8 million this year. Taking a swipe at NIFA, the agreement states that the restructured pay schedule will become "null and void" if the county executive and county legislature do not "maintain sole control of the finances of Nassau County."

In his letter Tuesday to NIFA, Mangano reaffirmed the steps he has taken to balance this year's budget. He also noted that sales tax revenue for 2010 are coming in well over the budget and "bodes well" for this year.

"All of these aforementioned actions, when considered in total, result in a budget that is not only balanced but likely to lead to a surplus in 2011," Mangano said.

With Randi Marshall