The Nassau County Interim Finance Authority Thursday hired accounting firm Grant Thornton LLP to review the Long Island, N.Y., county’s troubled finances.
Managing partner Marti Kopacz, who co-founded the restructuring practice at Grant Thornton, will coordinate the effort. She said her group will conduct field work over the summer and expects to conclude its study in early September, in time for the county to implement its suggestions in its budget deliberations for the fiscal year 2012.
“It is about fiscal sustainability,” Kopacz said in a telephone interview.
The state-imposed authority chose Grant Thornton from among eight firms that sought the mandate. A NIFA subcommittee scored the firms on fees, staff quality, experience, proposed turnaround, and presentation.
Grant Thornton’s fee is still unknown, as the firm and the authority are still working out contract details. NIFA is scheduled to approve the contract at one of its meetings.
“One of the criticisms we’ve received from the county is that we’re not doing things positive enough. Now we’ll be giving them expertise from a highly ranked firm,” one NIFA official said, requesting anonymity.
Kopacz said Grant Thornton will employ three people, herself included, on its preliminary work and add personnel as needed.
“We’re waiting to see the level of support from the county,” she said. “A couple of people have told us, in essence, that they might be willing to loan us some staff, and we’re looking into that.”
“NIFA looks forward to working collaboratively with the county on this project and will continue to pursue all other avenues that would help the county live within its means,” board chairman Ronald Stack said in a statement.
The authority in January announced a control period after determining that Nassau’s fiscal 2011 budget had a deficit of more than 1% of its $2.6 billion spending plan. Nassau then sued, challenging NIFA’s supervision, but ended the litigation in April, three weeks after a judge denied Nassau’s request for a temporary injunction.
Compared with other distressed communities such as Vallejo, Calif., Central Falls, R.I., and Harrisburg, Pa., “the sheer size” of Nassau County poses a unique challenge, Kopacz said. “When you think of a $2.6 billion budget, if it were a state, there would be 10 states smaller,” she said.
“Nassau has a high tax rate and high expectations,” she said. “There is a lot of goodness to Nassau — good people and good things. But deficits in the hundreds of millions are not sustainable.”
Kopacz previously executed an out-of-court restructuring of the Legal Aid Society, crafted a reorganization plan for student-loan guarantor Educational Resources Institute Inc., and worked with the financially strapped Archdiocese of Boston. Before joining Grant Thornton, she was a managing director with Alvarez & Marsal and a principal with PricewaterhouseCoopers LLP.
Nassau County has also scheduled an Aug. 1 referendum seeking taxpayer approval for $400 million of borrowing to fund a replacement for Nassau Veterans Memorial Coliseum and build an adjacent minor league ballpark.
Moody’s Investors Service last month assigned an A1 rating to Nassau County’s $82 million of Series 2011A general obligation bonds. The outlook is negative.