This memorandum from Comptroller Weitzman was distributed to New York State Legislators in Albany on May 6, 2003

To: NYS Legislative Leaders
From: Howard S. Weitzman, Nassau County Comptroller
Date: May 6, 2003

I am writing to ask your support for the proposed legislation that would establish a Sewer & Storm Water Authority in Nassau County.

Counties throughout New York State are facing increasing financial distress. In 2002, Nassau County found itself in a particularly poor financial position. In the last fifteen months, the new county administration has made great strides towards improving Nassau's financial situation, largely without eliminating essential personnel, services, or benefits to its residents, but much remains to be done before Nassau County budgets can be structurally balanced.

Any proposal to create a new public authority must be closely scrutinized. I believe that the plan for the creation of the proposed Nassau Sewer & Storm Water Authority is financially sound. It will help further Nassau's fiscal recovery and lessen potential additional burdens on its taxpayers.

Among the financial, operational and public policy advantages:

• Nassau will realize a net present value savings of $25.7 million by restructuring the County's debt through the Authority's access to the Environmental Facilities Corporation's low-cost acquisition financing. This bill is particularly significant now, while interest rates remain at extreme lows. If Nassau refinances promptly, the county could save an additional $5 million a year in interest.
  
• Nassau will gain a $25 million annual benefit to its general fund, helping to further stabilize its financial health at a critical time in the County's effort to retain local control of its finances.
  
• Consolidation and integration of the existing sewer districts with the County's existing functions will allow for cost and operational efficiencies and reduce duplicative work and overhead.

Some have objected to the establishment of the proposed Sewer and Storm Water Authority, citing concerns about possible effects on ratepayers or the creation of "a new bureaucracy." I'd like to address those concerns here:

• Will costs to Nassau County ratepayers increase?
  Nassau's many sewer districts find themselves at different stages of their respective bond issues and the current rate structures will be preserved for 3 years. At the end of the first 3 years, the districts' rate structures will be blended into a new rate structure that will remain in effect for at least the next 10 years. While it is true that communities across the country have been faced with rising sewer rates, this is primarily because those systems are found in younger communities with expanding needs. Nassau County should be able to hold its costs down because it is a mature county whose growth rate has slowed, and routine maintenance remains relatively inexpensive.
  
• Will this be, in effect, a new bureaucracy?
  The Board of the Authority will not be paid. The approximately 136 employees needed to run the Authority's day-to-day tasks will be current county civil service employees shifted to the Authority, but who will retain their civil service protection.

To increase oversight of the Authority, we suggest that the proposed legislation be amended to grant the County Comptroller, an independently elected fiscal watchdog, a place on the Authority's Board, as follows (our changes are shown in italics):

"It shall consist of five members, who, until appointed and confirmed as hereinafter set forth, shall initially consist of the county executive, one appointee of the county executive, the county comptroller, the presiding officer of the county legislature and the minority leader of the legislature, each serving ex officio, including in each case, any designee thereof. The initial members shall be replaced by four members who shall be residents of the county, and be appointed by the county executive and confirmed by the county legislature; one upon recommendation of the presiding officer of the county legislature and one upon recommendation of the minority leader. The fifth member shall be the county comptroller or his designee. No more than three members shall be members of the same political party."

In summary, I urge your consideration and speedy approval of the new Sewer and Storm Water Authority in order to provide an annual savings to the County of more than $25 million, take advantage of available federal subsidies, and do so at no cost to the County's ratepayers.