NIFA   Nassau County Interim Finance Authority

June 17, 2002

The Honorable George E. Pataki
Governor
State Capitol
Albany, NY 12224

Dear Governor Pataki

The Nassau County Interim Finance Authority ("NIFA") recently approved Nassau County's proposed Four Year Plan for the years 2002-2005. This Plan, submitted by Nassau County Executive Thomas Suozzi, contains initiatives on both the revenue and expenditure side that could assist the County in its efforts to restore fiscal health. NIFA is closely monitoring the County's efforts to assure that the administration follows through on the various initiatives and proposals and we are expecting a new Four Year Plan to be submitted to the Authority in September for the years 2003-2006.

A major component of the County's Four Year Plan is the enactment of State legislation in several areas. The County has asked NIFA to review these legislative initiatives and asked for our support. NIFA has reviewed a number of proposals submitted by the County to State Legislators and we have concluded that we can endorse them in their current form with certain changes that the County has accepted. These fundamental changes should not delay the Legislature from voting on each proposal prior to the end of the session later this month. NIFA encourages their passage.

NIFA is limiting its comments to four initiatives, which merit special attention and passage:

1. The creation of a County Sewer and Storm Water Authority;
2. Reform of the County's tax certiorari process;
3. Additional bonding authorization for NIFA in order to assist the County in restructuring its debt; and
4. Reform of the Traffic & Parking Violations Agency.

NIFA has reviewed these legislative proposals and encourages their passage.

The creation of a Sewer and Storm Water Authority will enable the County to obtain critical financing that will alleviate pressure on the county's general fund and allow for the centralization of County storm water and sewer operations. While NIFA recognizes the reluctance to create a new authority, the County has agreed to proper controls to limit potential abuses and create appropriate checks and balances to insure major savings. NIFA believes, and the County agrees, that these controls should include super-majority approval of the Authority's governing board for contracts over $50,000, borrowings, and new (non-civil service) hires. NIFA and the County also agree that the legislation should make explicit what is Understood: that Authority members receive no compensation; that the Authority will be a covered organization under the NIFA Act; that the Authority maintains itself as a publicly rated investment grade entity; and that the rents/lease payments charged by the County for the use of its property be limited to $5.7 million with an annual CPI increase.

NIFA's review indicates that reforming the tax certiorari process is central to the County's ability to reduce the annual debt burden that has been created by a broken down system of reviewing certiorari appeals. The County's legislation reforming this process will alleviate some of these problems and allow the County to reduce its annual debt service payments over time. The reforms contained in the package will also make the tax appeal process more equitable and reduce the possibility of political influence.

NIFA also supports the extension of NIFA bonding authority by an additional year and an increase in our ability to refund County debt in order to smooth out its debt service payments and creatively reduce the current burden on County taxpayers. However, if in the multi-year plan for 2004-2007, the County projects the need to finance property tax refunds in the FY 2005 through the issuance of NIFA indebtedness, then NIFA's oversight authority must be extended to December 2005. Notwithstanding the expanded authorization, we will continue to evaluate each proposed debt issue for its fiscal prudence and affordability.

Finally, NIFA supports putting the County's Traffic and Parking Violations Agency under the direct control of the County Executive as a way to clear up the significant backlog in traffic tickets and to centralize and improve management of an agency that has failed both taxpayers and motorists.

Nassau County's ability to improve operations depends to some extent on the States willingness to enact legislation that will enable Nassau County to help itself. These four legislative proposals are a significant step in the direction and we urge their passage in the current legislative session. Obviously, our positive views are dependent on final language.

The NIFA Board endorses this legislation and our staff is prepared to work with legislators and their staffs toward enactment. We welcome any comments that you might have and are prepared to discuss this with you at any point.