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Statement

By

George J. Marlin

Director

Nassau Interim Finance Authority

Thursday, July 14, 2011

Throughout the oversight period that began January 26, 2011, Ihave been gravely disappointed by the Countys fiscal and managerial

behavior. The County has exhibited delusions of fiscal balance. The County continues to refuse to come to grips with the fact that

their 2011 budget is woefully out of balance and 2012 threatens to

be even worse. With overly optimistic revenue projections andcost savings not materializing, it is becoming apparent that the2011 budget is a work of fiction. This conduct concerns not only

bondholders. The real parties in interest are County families,small business owners, recipients of vital services, the Countyswork force and future generations who will pay for Countyexcesses. Not-for-profit contracts that were approved

by the County months ago have been languishing in desk draws.By refusing to dispense federal and state grants to non-profitsfor whatever cynical reasonsthe poor, the sick and the elderlyhave needlessly suffered. Non-profits that do important workmay go out of business. The County has not been candid withtaxpayers or with NIFA. Contracts have not been promptlyforwarded to NIFA and have been intentionally withheld. Thatsnot acceptable.

Many of the Countys assumptions have been for naught: sales

tax increases sought by the County; red light camera authorizationfrom the state Legislature; labor concessions; and collection ofFIT payments have all failed to materialize. The County has not

been candid with taxpayers or with NIFA as to the status of

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negotiations with public employee unions over the last year.Thats not acceptable.

The revised three-year plan is another example of unacceptablewishful thinking. For instance, to assume revenues in 2012 of

$150 million (a number revised upward by $25 million) from theprivatization of the sewer systems, which the County has not evencommenced despite having it in its financial plan, is a cruel hoaxand an insult to the intelligence of Nassau taxpayers. The Countyis duty bound to provide bondholders and NIFA complete andaccurate information.

Today there is a crisis of confidence in the Countys fiscalmanagement. If corrective actions are not pursued now to cure the

Countys fiscal ailments, Nassau will be plunged into fiscal chaos.The time has come for the County:

To stop illusory budgeting practices; To stop juggling money to keep on the budgetary lid.

The time has come for the County:

To actually govern; To manage fiscal realities;

The County owes taxpayers two things: First, candor. Second, a

plan to make up the missing revenues or missing cost reductions. Thosehave both been in short supply.The County must also recognize that governing entails more than

finger-pointing, issuing rosy press releases, attending ribbon-cuttingevents and fireworks displays. Governing means making difficult andsometimes unpopular executive decisions. It means implementingcredible fiscal and management reforms in order to avoid theunparalleled disaster that looms over the County.

In 1975 Felix Rohatyn said this about New York Citys fiscalcrisis: The dykes are crumbling and were running out of fingers.That metaphor applies to Nassaus present crisis.

It is my sincere hope the County abandons delusions of fiscalbalance, drops its amateur political public relations campaign and finallyagrees to wage a genuine reform campaign to prevent fiscal catastropheand restore taxpayer confidence.

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