During a press conference on Feb. 7, 2011, Nassau County Legislator Judy Jacobs (D-Woodbury) was joined by her legislative colleagues to demand that County Executive Mangano stop his taxpayer-dollar wasting lawsuit against the Nassau County Interim Finance Authority, NIFA. Mangano’s lawsuit challenges NIFA’s right to implement a financial control period over the County's finances.
Legislator Jacobs said, “’Constructive cooperation’" between the full legislative body, both Republicans and Democrats, the Administration and NIFA, is the only key to success all the way around and the only thing which will benefit the residents of this County now and in the future. It is not necessary, nor prudent, to impugn the integrity of unpaid professional accountants and auditors on the NIFA Board who, by the NIFA statute, morph into a control board if we have an unbalanced budget by 1% or more.” Jacobs further commented, “NO rocks should be thrown. NIFA is posed to declare a fiscal crisis. Constructive cooperation can offset that from happening. We owe it to the taxpayers to right this ship as quickly as possible by working together. The sooner we do this the decision making will be back in the hands of the elected officials. Let’s remember that NIFA is not involved out of anger, but out of legitimate concerns and by the very statute that they were formed under.”
Deputy Minority Leader Kevan Abrahams (D-Hempstead) added, "The experts in the financial market determined that Mangano’s lawsuit is an action that will worsen the County’s financial status. The entire Wall Street community is watching our county carefully. Prolonged litigation, which I believe will be unsuccessful, can only drive confidence in Nassau County to a new low."
On Jan.26, 2011, NIFA voted unanimously to implement a control period after their accountants analyzed the Mangano budget and his reply to NIFA’s request for additional financial data. NIFA determined Mangano’s 2011 budget had a deficit of more than one percent which, by State law, automatically triggered the control period.
"Our County is in the middle of an unprecedented economic crisis. I again urge the Mangano administration to work with, not against, NIFA and save our residents from a financial tsunami that will have devastating consequences on our taxpayers. The Mangano-Schmitt lawsuit is a waste of time and precious tax dollars. Mr. Mangano must cease this destructive litigation immediately," said Minority Leader Diane Yatauro (D-Glen Cove).
NIFA, created through state authorization in 2000 as a state oversight agency, has the right to impose a control period should the budget have or be about to have a deficit of one percent. NIFA accountants determined that the looming deficit of $176 million is closer to seven percent.
In a recent survey, an overwhelming majority of respondents urged the County Executive to work with NIFA.
Leading Long Island economic advisor Dr. Martin Cantor, CPA commented, “Nassau County is facing a fiscal abyss. Litigation challenging NIFA's authority is ill-advised and counter-productive not only because of the unnecessary legal fees; it will further jeopardize the county's standing on Wall Street. This would adversely impact the county's credit worthiness and increases the costs of any short-term borrowing required by the county. A county-led law suit against NIFA can only add to the problems of an embattled county."
Legislator Judi Bosworth (D-Great Neck) said “I am troubled by the County Executive’s decision to sue NIFA. It will be costly, lengthy and just embroil us in litigation for the foreseeable future. Although no one wanted NIFA to take control, we must use this as an opportunity to work together and put the County’s finances back on track. This is the time to build bridges, not burn them.”