Archive for October 11, 2013

NIFA Statement – October 3, 2013 – By George J. Marlin

October 11, 2013

Statement by

George J. Marlin

Director

Nassau Interim Finance Authority

Wednesday, October 9, 2013

on

“The Proposed Multi-Year Financial Plan”

2014-2017

Nassau County’s proposed multi-year financial plan for fiscal 2014-2017, in my professional judgment, is seriously flawed.

In 2011 after NIFA declared a Control Period—upheld by the Courts after the County sued, and instituted a wage freeze, notably requested by the County—Nassau County prepared its 2012-2015 Financial Plan. That Plan, approved by NIFA (which I reluctantly supported) was to be a transitional plan—and included as the report notes on page 12, certain conditions including $150 million in labor saving that would recur and a GAAP balanced budget in 2015. In exchange for these two conditions, NIFA agreed to approve borrowings for Certs and judgments and settlements at an agreed upon level.

The County has failed both conditions. Blatantly and without remorse or explanation.

The County projects in their multi-year fiscal plan, on a non-GAAP basis, deficits of $32 million in FY 2015; $48 million in FY 2016; and $51.3 million in FY 2017.

The NIFA staff analysis projects deficits of $157 million in FY 2015, $190 million in 2016 and $255 million in 2017.

Labor has given no concessions. Any labor savings were imposed by the County not given by labor. And here we are in the fall of 2013 and the County’s financial plan as our staff outlines is not anywhere near GAAP balance in 2015. Yet it plans to borrow and expects NIFA to approve this borrowing for operating expenses.

Why? The County simply does not care. A control period and a wage freeze are draconian measures that a locality should wish to avoid and if it occurs to climb out of as quickly as possible. What duly elected official wants a non-elected State board to control? Sensible governments would do anything to get out of controls.

But not Nassau. So what if contracts and borrowings have to be approved. So what if wages remain frozen.

As long as the County does not have to make the tough decisions. As long as the County can blithely go along la dee da, tomorrow is another day.

The leadership of the County was elected to lead and to govern and not to absolve itself of responsibility by blaming NIFA whose controls it brought down on itself and whose controls the County now finds as the easy way to go.

When can NIFA lift controls? Never unless the County wants controls to be lifted and stops borrowing for operating expenses, makes the hard decisions and produces a GAAP balanced budget.

NIFA Statement – October 9, 2013 – The Nassau Events Center – By George J. Marlin

October 11, 2013

Statement by

George J. Marlin

Director

Nassau Interim Finance Authority

Wednesday, October 9, 2013

on

The Nassau Events Center

I am skeptical of a deal of this proportion when:

• The Party to the agreement is a shell corporation with no assets;

• The agreement is subject to financing that the shell corporation does not possess;

• The agreement is subject to numerous other conditions.

(Frankly, I doubt the conditions of the agreement will ever be met and I expect that in a year to eighteen months the shell corporation will try to renegotiate.)

Nevertheless, I would like to note that although we have decided that the particular structure of the coliseum redevelopment documents does not require our contract approval, we reserve our right to examine and consider any other contracts related or ancillary to the coliseum. We are not giving a blank check. And the decision that the current documents do not need our approval should in no way be construed or expanded to imply that we will hesitate to interject whenever we believe a commitment by the County constitutes a contract requiring our review under our statute which gives broad power to oversee contracts impacting the County’s finances.