Nassau County last week opted to drop its lawsuit against the Nassau County Interim Financing Authority to end a control period that NIFA implemented in late January.

A judge on March 14 denied Nassau’s request for a temporary injunction to stop NIFA’s supervision. Since then, the authority has approved a wage freeze to help the Long Island county save $10.5 million in payroll expenses this year.

“The County Executive Edward Mangano and I have had conversations with NIFA chairman Ronald Stack which we hope portend a productive and mutually cooperative effort on behalf of Nassau County,” county attorney John Ciampoli said in a statement.

Mangano’s fiscal 2011 budget includes spending cuts and layoffs to help close a $176 million deficit. Stack last week said that many of the proposals to balance the budget have yet to be implemented and require local and state approval.

NIFA in late January announced a control period once it determined that Nassau’s fiscal 2011 budget had a deficit that is more than 1% of the $2.6 billion spending plan. The county contested the control period a few days later.

Moody’s Investors Service in February placed Nassau’s $1.4 billion of outstanding general obligation and GO-backed debt on negative review due to the legal challenge. It rates the credit A1.

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