Slamming Nassau County Executive Edward Mangano for “one shot” tactics, the director of the Nassau County Interim Finance Authority said last Thursday he would vote against a 2013 county budget that included plans to privatize the county sewer system.
“I will not vote to approve a 2013 budget or a fiscal plan that includes any ‘one shot’ proceeds from mortgaging the sewer system to the tune of $750 million,” Marlin in a statement preceding a NIFA meeting on Friday where two other NIFA directors reportedly took the same position as Marlin.
“‘One shots’ do not solve structural operating deficits,” Marlin said. “It merely kicks the can down Mineola Boulevard, and sticks the bill to the children and grandchildren of today’s taxpayers. In the case of a sewer deal, every citizen who flushes the toilet would be paying back for the next 50 years that $750 million with an annual interest rate of 10 percent to 15 percent.”
In May, NIFA members rejected a $5 million contract for Morgan Stanley to find an investor who would pay the county $750 million to finance the sewer transaction.
Mangano spokesman Brian Nevin responded to NIFA citicism last week, saying, “The administration is not commenting on the budget until its release. If NIFA members have any constructive comments, we request they forward them to County Executive Mangano for consideration before September 15th.”
Nassau’s multi-year spending plan, updated in June, includes $50 million in revenues next year from turning over its sewer system to a private operator. Nassau County Comptroller George Maragos projects Nassau will end this year with a $45 million deficit.
Marlin also blasted the county for another “one shot” tactic, cancelling $19 million in capital projects to relieve debts.
“If the County is going to deceive NIFA and treat capital dollars as operating dollars,” Marlin said, “I will have to seriously consider withholding my support for the funding of new capital projects presented to this board.”
In December, NIFA approved the Veolia bus deal to maintain operation of the public transit, despite receiving the contracts at what Marlin called “the last minute.” Marlin said in Thursday’s release that the county’s estimate that it would cost $106 million for a private company to operate public bus transportation was “too rosy a picture of the contract merits and that it would prove to be a disaster for taxpayers and bus riders.”
Marlin said the estimate was $14 million short. To relieve the debt, bus routes and services were trimmed to $7 million. A “one shot” of federal and state aid paid off the rest of the debt.
Marlin also said the budget approved by the county Legislature requires the county to cut $150 million in recurring labor costs, but the county has not yet reached this number.
On July 13, Maragos released its Unaudited 2011 Year-End Financial Summary, detailing the county’s $50.4 million cash deficit and $173.4 million GAAP deficit. In the report, Maragos sadi that the deficit stemmed from the failures of the or NIFA, and legislative minority to approve $43.1 million in bonding.