Nassau County Executive Ed Mangano said Wednesday he will sue to stop the Nassau County Interim Finace Authority’s decision to take over the county’s finances.
“We will take legal action to protect the taxpayers of Nassau County,” said Mangano at a press conference Tuesday after NIFA voted unanimously earlier in the day to immediately take the county’s financial reins declaring that county leadership, particularly Mangano’s, had not done a convincing job in redressing the county’s fiscal woes.
In a resolution signe NIFA chairperson Ronald Stack, the authority said Mangano’s proposed $61 million in labor concessions “rings hollow” in light of the publicly stated resistance of union leaders to granting any concessions this year.
“There is no discernible evidence that one dollar of savings will be achieved,” NIFA’s resolution stated.
Earlier in the week, Mangano had trumpeted an agreement with Civil Service Employees Association workers that he said would save the county up to $70 million over the life of the contract.
Mangano said he is concerned with NIFA’s motivation, which he said is possibly to get him to raise property taxes.
“There is absolutely no reason for their action today. They are premature at best,” said Mangano. “Every resident should be very, very concerned.”
Nassau County Legislature Presiding Officer Peter Schmitt said he was angry that NIFA did not issue a wriitten notice before making their decision. Schmitt said he is “delighted” that the county executive is issuing a lawsuit.
“It is clearly another agenda at play here,” said Schmitt. “They are an ethically challenged group, trust me.”
NIFA assigned a very low success probability that actions proposed by the couty to offset the deficit would work, including $15 million in departmental consolidation or elimination, $10 million in police overtime, $10 million from a hiring freeze and $9.6 million from eliminating the MTA subsidy.
NIFA said the county faced a deficit of $176 million – far in excess of the 1 percent limit – $27 million in 2011 – that automatically triggered NIFA’s implementation of statutory controls.
NIFA further criticized the county’s plan to eliminate its obligations resulting from tax appeals in 2011 by borrowing $100 million. NIFA also said that the county’s plan to sell its rights to Mitchell Field leases could bring in $30 million, but that $30 million could not be treated as operating revenues in the same calendar year in which the revenue is received.
On the issue of obligations resulting from tax appeals, NIFA said Mangano did not have the necessary support of the Democratic minority in the county Legislature, including Diane Yatauro, D-Glen Cove, the minority leader who had publicly stated during a Jan. 21 conference call with the NIFA chairman that no agreement between her party members and Mangano exists.
In a statement released after NIFA announced its takeover, Yatauro called the decision a “sad day” for the county.
“We are entering uncharted waters. NIFA control will alter how we conduct our business. It will affect the lives of our workforce and our residents,” Yatauro said. She urged the county administration and her legislative colleagues to assume “a cooperative, non-combative manner” to help the county regain sound financial footing.
E.J. McMahon, a senior fellow with the Manhattan Institute, a conservative think tank, said Mangano had misplayed his hand by seeking concessions from the unions while asserting that the county’s finances were in order. McMahon said the CSEA deal was the tipping point for NIFA.
“The CSEA deal made it inevitable because the deal fell well short of what the county needs to do,” McMahon said. “To give a two-year extension to an overly long contract in exchange for a very minor tweaking of step increments for new hires at a time when your supposedly not going to hire anyone is a definition of inadequate.”
NIFA said that finalizing a plan with the county could more than a month, with weeks or months needed after that to execute a plan. The county will need to prepare a revised financial plan as part of that process.
Schmitt said he will have more to say regarding NIFA’s motives at a press conference Thursday in Mineola.
Nassau County attorney John Ciampoli said he thought that NIFA’s decision was “predetermined” before it convened their public meeting on Wednesday,.
“It seemed to me that this was a process that the members of the board were hell bent on going through with,” Ciampoli said, “How can you abridge the elected government in Nassau County and abridge their right to govern? It’s quite amazing. It’s almost unfathomable.”
Ciampoli said the county will go to court “willy-nilly” over the NIFA decision. He said the county would review the NIFA resolution and wanted to examine information NIFA received from Skaaden Arps, Slate, Meagher & Flom LLP and Grant Thornton, a consultant for NIFA.
Mangano said the agreement comes at a time when concessions can only be achieved through voluntarily negotiations.
Just one day before the NIFA decision, Mangano announced Tuesday an agreement with Nassau’s largest union to save millions of dollars.
The agreement with CSEA achieves a minimum net savings of $70 million for taxpayers over the life of the contract while restructuring salary scales, and ensuring $60 million in savings before any increases in compensation as a result of this agreement, according to a statement issue by Mangano.
CSEA is the Nassau’s largest union, representing 5,600 full-time employees and close to 7,000 when including part-time and seasonal employees.
“Taking that demand seriously, CSEA and I worked tirelessly to achieve true savings and real reform,” said Mangano.
“The Nassau County Interim Finance Authority cannot achieve these long-term savings and can only freeze wages for 2011, which amount to $1.8 million for CSEA,” Mangano said in announcing
Mangano said he hoped the agreement would mitigate any risk associated with the balanced budget adopted by the Legislature, but that apparently was not the case.
The agreement includes $61 million in savings by restructuring salary scales. Mangano said the restructuring reduces the average compensation by 11.4 percent in the first seven years of employment.
“The men and women of CSEA have worked tirelessly for the benefit of Nassau County,” said CSEA President Jerry Laricchiuta. “We know the sacrifices families are making at home, and for that reason we will rise to the occasion once again by joining the county executive in achieving millions in labor savings over the next seven years.”
Reach reporter Rich Jacques by e-mail at email@example.com or by phone at 516.307.1045 x203