Statement By George J.

Marlin Director Nassau Interim Finance Authority Thursday, July 14, 2011

Throughout the oversight period that began January 26, 2011, I have 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 and cost savings not materializing, it is becoming apparent that the 2011 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 Countys work force and future generations who will pay for County excesses. 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-profits for whatever cynical reasonsthe poor, the sick and the elderly have needlessly suffered. Non-profits that do important work may go out of business. The County has not been candid with taxpayers or with NIFA. Contracts have not been promptly forwarded to NIFA and have been intentionally withheld. Thats not acceptable. Many of the Countys assumptions have been for naught: sales tax increases sought by the County; red light camera authorization from the state Legislature; labor concessions; and collection of FIT payments have all failed to materialize. The County has not been candid with taxpayers or with NIFA as to the status of

negotiations with public employee unions over the last year. Thats not acceptable. The revised three-year plan is another example of unacceptable wishful thinking. For instance, to assume revenues in 2012 of $150 million (a number revised upward by $25 million) from the privatization of the sewer systems, which the County has not even commenced despite having it in its financial plan, is a cruel hoax and an insult to the intelligence of Nassau taxpayers. The County is duty bound to provide bondholders and NIFA complete and accurate information. Today there is a crisis of confidence in the Countys fiscal management. 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. Those have both been in short supply. The County must also recognize that governing entails more than finger-pointing, issuing rosy press releases, attending ribbon-cutting events and fireworks displays. Governing means making difficult and sometimes unpopular executive decisions. It means implementing credible fiscal and management reforms in order to avoid the unparalleled disaster that looms over the County. In 1975 Felix Rohatyn said this about New York Citys fiscal crisis: 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 fiscal balance, drops its amateur political public relations campaign and finally agrees to wage a genuine reform campaign to prevent fiscal catastrophe and restore taxpayer confidence.
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