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'One Last Opportunity' for Nassau to Avoid Takeover

NIFA issues Jan. 20 deadline for detailed fiscal report on 2011 budget.

The  (NIFA) has granted Nassau and County Executive Ed Mangano, R-Bethpage, a stay of execution, a 21-day reprieve over the 2011 county budget to prove that the county's finances do not contain a 1 percent budget deficit.

Alarms have in the offices of the state fiscal watchdog so it was nothing new to the politicians and officials in the lower level conference room at the Long Island Marriott Hotel in Uniondale when the actual fire bell went off Thursday morning.

Before the klaxons started sounding, Mangano made a surprise appearance before the board shortly after 10 a.m.

"Two thousand ten was a difficult year but we made the tough managerial decisions to manage this county and we will end 2010 with a small surplus," Mangano said, reiterating that he has introduced a balanced budget for 2011 after . According to Nassau Comptroller George Maragos, the county was projected to end the year with a $5 million surplus.

NIFA may take over the county finances if Nassau runs a budget deficit of 1 percent or more. Using the county's current $2.6 billion budget, $75 million would total just under 3 percent.

The county is reportedly facing a $343 million deficit. Mangano had previously indicated that he would resist a takeover of the county, but has issued statements where he indicated he would be willing to work with the state watchdog on solutions.

If a control period were to be imposed, the county would be asked by NIFA to present a balanced budget "eliminating whatever items we believe are not realistic or not substantiated," Stack said. NIFA can also perform a wage freeze along with the declaration of a "fiscal emergency," a second step in the process of state oversight.

"This is not healthy for the county, it is not healthy for negotiations," Mangano said of the perception that a takeover by the NIFA board of county finances was imminent. "There may come a time when I ask for your help. That time is not now.

"We have taken under advisement from your prior reports, the real structural issues in Nassau County that have plagued it, we've offered a solution, the (county) legislature has supported that solution, and we are prepared to defend it and enact it," Mangano added, singling out the county's assessment system. "Those structural changes come from your own comments. It takes two years to fix because legislation enacted today affects the rolls two years from now."

Following a three-and-a-half hour wait, NIFA Chairman Ronald Stack and the other board members emerged from the adjacent conference room to announce because of "including various new contingencies," that NIFA would grant "in an abundance of caution, one final opportunity to present its support for the items that the county claims will conclude a balanced budget for 2011" and prevent a 1 percent deficit.

As a condition, Stack said that the county must be specific about contingencies for which "we do need further backup," and requests a "full description of these items" no later than Jan. 20.

NIFA will hold a meeting after this deadline "at which there will be a decision as to whether or not the county's final explanation of these items overcomes the strong sense of the NIFA directors that without more explanation, there exists a substantial likelihood and imminence of a 1 percent deficit," Stack said, adding that "NIFA is extremely concerned that the 2011 budget is not balanced."

Board member George Marlin described the situation as "a tale of two deficits," one "that the Mangano administration inherited," and one of "credibility," citing a proposed sales tax increase and $61 million in labor savings which have not materialized.

"We have no support that we can see, at least for new information. I personally find it disturbing that information comes at the very last minute," board member Robert Wild said, referring to Mangano's Dec. 28 letter.

The county executive had submitted a letter to the NIFA board Wednesday touching upon approximately $242 million in contingencies in the 2011 budget, including , labor savings and state requests, which include the expansion of the county's . The actions range from $1.2 million in savings up to $65 million in various contingencies.

"We want to see exactly what's behind - there are just numbers there," Stack said. "It says, this action, it has a number of $15 million. Well, we don't know how you get the $15 million out of that, why it shouldn't be $20 million, or five, or zero. We want to give the county a final chance to give us the backups so we can make our analysis."

In a statement issued after the ruling, Mangano said that he would "continue to cooperate with NIFA by providing them the information needed to verify the budget is balanced for next year."

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