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NIFA postpones approval of Nassau County budget as GOP balks at debt refinancing

NIFA chairman Adam Barsky, center, during a meeting

NIFA chairman Adam Barsky, center, during a meeting Tuesday, Oct. 15, 2019, at the Long Island Marriott in Uniondale. Credit: Newsday/Steve Pfost

The Nassau Interim Finance Authority has postponed approval of Nassau County Executive Laura Curran's 2021 budget as Republican lawmakers oppose a key element of the plan: NIFA's refinancing of nearly $500 million in county debt.

Curran's $3.3 billion budget proposal asks NIFA, a state control board that oversees county finances, to refinance $473 million in debt over 15 years. Curran says the refinancing is necessary because of massive revenue losses during the coronavirus pandemic.

NIFA board members met Tuesday night, but did take action on Curran's budget.

If NIFA agrees to refinance the county debt, as well as debt the control board has incurred on Nassau's behalf, the county would save a total $435 million in debt service in 2020, 2021 and 2022.

Republican lawmakers want the county to refinance its own debt, without NIFA's involvement. Republican legislators have expressed concern that a refinancing could extend the life of NIFA, established in 2000, while burdening taxpayers with debt payments for several more decades.

The Nassau Legislature, where the GOP has an 11-8 majority, must approve a "declaration of need" to ask NIFA to restructure county debt. NIFA does not need the county's approval to restructure its own debt.

NIFA Chairman Adam Barsky said Tuesday the declaration was essential to a balanced 2021 budget.

"The county is negotiating with the legislature on the budget, and with respect to the declaration of need, in order to do the restructuring of the county bonds with NIFA, the leaders continue to meet and negotiate it," Barsky said in an interview.

"That’s what’s going on; we’ve kind of made it clear we would need to see that in order to approve a budget," Barsky said.

Republicans had proposed major amendments to Curran's budget, including higher projected sales tax revenues. Curran vetoed the changes and Democratic lawmakers helped uphold her veto.

"We laid out a different path, and I think there is a profound disagreement about how to go about doing this," Presiding Officer Richard Nicolello (R-New Hyde Park) said. "They should consider the path we've laid out."

Nicolello said he agrees the county needs to restructure debt, but doesn't want to involve NIFA.

"The problem I see is their plans for restructuring and the amounts, and other actions they're taken is simply loading up the costs on this county [for] a couple of years."

While the proposed refinancing "generates cash for the county immediately, in 2021, it's going to look like she's [Curran] flush with cash. But the real costs and structural problems are still sitting out there."

Republicans "don't think we have to borrow that much," Nicolello said. "We simply think they're borrowing way too much money. It's like a homeowner who has to repair his house and make changes to his home, which is going to cost $100,000 and goes out and borrows $300,000 so they can have extra cash on hand. I think it's a bad way to proceed."

Curran spokesman Mike Fricchione said in a statement: "The County Executive proposed a fiscally disciplined budget that prioritizes funding for first responders and essential employees, who continue to save lives and protect public health during this unprecedented pandemic. The next step to ensure fiscal stability, while maintaining public health and safety, is for the legislature to approve a declaration of need, which will help Nassau through the next wave of the pandemic."

The declaration of need has passed legislative committees but needs approval by the full county legislature.

Also Tuesday, NIFA board members approved a 5-year, $56 million contract between NuHealth, the public benefit corporation that runs Nassau University Medical Center, and Allscripts Healthcare LLC. The company provides NUMC with licenses for the medical record system. Barsky said the contract needed to be approved or risk being "disruptive to hospital operations." But "otherwise, [the board] would not have entertained this contract given the way it was handled."

He did not elaborate. Board members approved the vote after leaving a nearly 4-hour executive session.

Earlier Tuesday, Barsky said he had concerns about approving the contract given the precarious nature of NUMC's finances. Alvarez & Marsal, a company NIFA hired to review hospital operations, is finalizing recommendations for the hospital's future.

"The hospital may look very different a few years down the road and require different services than they are currently contracting for," Barsky said Tuesday morning.

Nassau County backs $173 million in hospital debt.

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