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Is Nassau Exec Ed Mangano In Over His Head?

His Hand on the Helm
At a crowded conference room at the Marriott Long Island Hotel on Dec. 30, Mangano waved a copy of a letter he’d just sent the NIFA board the previous day updating the county’s financial situation for the current fiscal year and hoping “to dispel media speculation regarding the 2011 Adopted County Budget.” He hadn’t been invited to speak, and Newsday had reported that he wasn’t going to show up, but knowledgeable sources say that Mondello urged Mangano to get to the Marriot and “defend his county.”

In a deferential manner, he took the podium next to the seated panel and insisted that he had the county’s fiscal situation under control, as he’d explained in the letter. The board members listened intently.

In his letter, which the board had only received the night before the meeting, Mangano wrote: “Although I inherited a $133 million deficit from the 2010 County Budget, I managed to eliminate the Home Energy Tax and will end the year with a surplus due to my implementation of strong financial management practices.”


For added measure, he emphasized that on Dec. 16 he’d also “ordered $23 million” in further cuts to the 2011 budget, which included $15 million in savings from “implementing a non-essential employee hiring freeze, $5 million in savings from reducing government supplies and contractual expenses; $2 million in savings from departmental mergers that result in shared staff and fewer management positions; and $1 million in savings from the reduction of 5,000 non-utilized phone lines.”

Facing the board, he said, “There may come a time when I need to ask for your help, but that time is not now.”

Following Mangano’s presentation, the board met in executive session for almost three hours to “discuss certain legal matters,” its agenda said. On hand at the meeting was NIFA’s top legal advisor, Judith Kaye, New York State’s former chief judge. The statute creating the panel in 2000 had been supported by Mangano and Peter Schmitt (R-Massapequa), now the presiding officer of the county legislature, in a “home rule” request the body sent to Albany. The bipartisan legislation was sponsored by then-Assemb. Tom DiNapoli, a Great Neck Democrat (now the New York State comptroller), and state Sen. Dean Skelos, a Rockville Centre Republican (now the Senate majority leader). It was signed into law by Gov. George Pataki, a Republican.

The call for the watchdog authority had come after County Executive Tom Gulotta, a Republican, had led Nassau to the brink of a fiscal meltdown, with its bond status hovering above junk, and its deficit around $200 million. So, NIFA was born, and with it came a $100 million bailout from the state.

This time around nobody expects newly elected Gov. Andrew Cuomo, who faces a $10-billion budget gap of his own, to be able to come to Nassau’s rescue. In fact, some speculate that having NIFA take over the county is the last thing he wants right now, but it’s not his fiduciary responsibility anyway. It’s up to the board itself.

During the Suozzi years, which followed Gulotta’s tenure, the county seemed headed in the right direction until the economic collapse of 2008. Then deficits started running high again, and an increasing number of observers wondered why NIFA didn’t intercede, particularly when the county’s 2009 structural deficit— the gap between recurring income and expenditures—hit almost $170 million and its reserves, once $284 million, were being depleted.

But as NIFA Chairman Ronald Stack patiently explained to questioners on Dec. 30 following the executive session, every one of Suozzi’s budgets was balanced in the end. Some say, by hook or by crook, with risky borrowing, one-shot deals such as the sale of county land, and a 2.5 percent tax on home heating bills. Apparently what Suozzi did was enough to keep the bond-rating agencies happy until he was out of office.

On Nov. 4, 2010, Moody’s downgraded Nassau’s debt, referring to the county’s $158 million in risks, the first time in a decade that the county’s bond status had declined. The other two agencies, Fitch and Standard & Poor’s, kept the rating “stable,” but Moody’s action rattled the Mangano administration, which tried to play it down. For the record, Nassau County Comptroller George Maragos, a Republican also in his first year in office, pegged the at-risk total at $258 million in its review of the county’s budget last October. The comptroller’s office is expected to release its updated findings soon, and a spokesman says, it will claim “that the budget is balanced.”

After the executive session, NIFA board member Robert Wild referred to Mangano’s Dec. 28 letter. “I personally find it disturbing that the information comes at the very last minute,” he said, “when in fact this process has been ongoing for quite some time.” He said the board had expressed its concern about the county’s budget imbalance back in September.

NIFA board member George Marlin, a municipal banker and a prominent member of the Conservative Party (he chaired the Conservatives for Mangano campaign committee), was a bit more caustic in his public remarks immediately following the executive session. “A lack of candor has been coming from the county,” he said. “Promises have been made but not kept.”

Yatauro, the minority leader, was on hand to see Mangano make his unscheduled pitch to the NIFA board.

“It probably would have worked in February!” she tells the Press. “It didn’t feel comfortable for me to watch my county executive say, ‘Please, don’t take us over today!’”

Earlier this week, Schmitt threw down the gauntlet, telling Newsday that if NIFA decides to take over the county’s finances after the Jan. 20 deadline, “We will sue because if they take over, it will be an illegal move.” He’s made no bones that he finds the NIFA board “tainted” politically.

But a NIFA member who asked not to be identified tells the Press that the board “is quadra-partisan: we’ve got Democrat, Republican, Conservative and unaffiliated members. It’s fair to say that there isn’t a single NIFA board member who wants to impose controls. The statute says that we ‘shall’ take over if we conclude that a 1 percent deficit is imminent.”

“I think threats of a lawsuit against NIFA are foolish and irresponsible,” Marlin tells the Press.

Schmitt tells the Press that under the previous NIFA Chairman Frank Zarb, the county’s costly practice of borrowing to pay for over-assessed real estate property tax settlements was criticized, but tolerated.

“Under all of Suozzi’s term they allowed it,” Schmitt says. “Now they’re making noise they’re not going to allow it. Why? What’s different? NIFA always expressed concerns about risky revenues in the budget to which Suozzi answered them: ‘I will manage the problem’ and they let it go.”

Schmitt scoffed at the assertion often heard this fall that the new county executive would welcome a NIFA takeover because it would take the heat off him as the board forced him to make the tough calls.

“Not only would it be political suicide,” says Schmitt, “it would be lunacy.”

Clearly, when talking to Mangano, it’s obvious he doesn’t buy into that notion. He plans to see it through.

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