The Nassau County, N.Y., Interim Finance Authority on Tuesday called a special meeting for Wednesday afternoon amid speculation that the control board will take over Nassau County’s finances.
The meeting has no stated agenda and authority chairman Ronald Stack declined to comment.
At a Dec. 30 meeting, NIFA asked the county to provide additional budget information by Jan. 20. The agency asked for additional information from Nassau on its labor contracts, budget cuts, contingency plans, and fund balances so that they may be reviewed by NIFA’s financial adviser, Grant Thornton LLP.
County Executive Ed Mangano has maintained that Nassau’s budget is balanced, though it relies on union concessions that are still being negotiated. Newsday reported Monday night that a deal had been reached with one union, the Civil Service Employees Association. The county executive has been seeking legislative authority to reopen union contracts to reduce labor costs. Mangano’s office did not immediately return a call seeking comment.
County Comptroller George Maragos earlier this month projected that Nassau would end calendar 2010 with a surplus of more than $65 million and that the $2.59 billion 2011 budget was balanced, though it contained risks, including $61.3 million of union concessions that have been under negotiation.
By statute, NIFA can take over the county’s finances under certain conditions. Some of those include defaulting on debt-service payments, incurring a 1% operating deficit, and violating the statute that created the control board in a way that would impair the marketability of the county’s bonds or notes.
The authority said in a September report that Mangano’s $2.6 billion 2011 budget wasn’t balanced. It identified $234.4 million of risks in the proposed spending plan that was adopted by the county Legislature with some modifications.
In November, Nassau received its first downgrade in a decade when Moody’s Investors Service lowered the suburban Long Island county’s GO debt to A1 from Aa3. Moody’s retained a negative outlook on the credit, citing weak liquidity and increased dependence on non-recurring revenue.
The mid-year repeal of a home-heating energy tax last year cost Nassau $19.8 million. Moody’s cited the repeal as one factor in the county’s strained finances when its revised its outlook on the credit to negative from stable in June.
New York State created NIFA in 2000 to issue bonds and oversee county finances at a time of fiscal crisis. It has never implemented a control period and no longer has the authority to issue new-money bonds.
