A New York State fiscal control board rejected a bonding request from cash-strapped Nassau County to partially fund a $46 million judgment owed to two men exonerated from a 1980s murder conviction of a 16-year old girl, saying other settlements should have a higher priority.

The Nassau Interim Finance Authority denied the county’s bid to borrow $23 million for covering half of the monies it must pay Dennis Halstead and John Restivo, who served 18 years in prison for the 1984 rape and killing of Theresa Fusco before DNA evidence exonerated them. NIFA Chairman Adam Barsky said after Wednesday’s 6-1 vote against the borrowing proposal that the county already paid for the full judgment out of its 2018 operating budget. Addressing an estimated $360 million of past tax challenge settlements is a more pressing priority, he said.

John Restivo, pictured, and Dennis Halstead won a judgment against Nassau County, N.Y. for their wrongful murder convictions.
John Restivo, pictured, and Dennis Halstead won a judgment against Nassau County, N.Y. for their wrongful murder convictions. Centurion

“The majority of the Board was not convinced that there was need for the borrowing,” Barsky said in a statement. “Should the Administration seek to address the larger issue of the County’s assessment debt, NIFA remains willing to consider their proposal.”

NIFA was formed in 2000 and has controlled Nassau County finances since early 2011.

Spokesman Michael Martino said the county expects to have a $9.2 million surplus at the end of the 2018 fiscal year and disagreed with NIFA’s conclusion that there are $81 million in budget risks. He stressed that county finances can’t turn the corner until a “mountain of past cert debt” is tackled.

"Every report generated by NIFA since inception names tax cert debt the biggest challenge facing Nassau’s fiscal health," said Martino in a statement.

New Nassau County Executive Laura Curran submitted a revised budget in March after NIFA rejected a $2.99 billion fiscal plan last December because of uncertain revenue assumptions. The suburban county adjacent to New York City finished the 2017 fiscal year with strained finances including a negative $68.8 million rainy day fund and $122 million deficit, according to a comprehensive annual report released last month.

Nassau’s general obligation debt is rated A2 by Moody’s Investors Service and A-plus by S&P Global Ratings with both having stable outlooks. It is the sixth-most-populous county in New York with an estimated 1.3 million people.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.