Nassau County finished the 2020 fiscal year with more than $43 million in surplus funds as a result of two sources of aid, officials from the Nassau Interim Finance Authority said during a Thursday meeting.
“The county would have ended the year with a deficit of as large as 108.9 million if not for two extraordinary lifelines that had been passed through the county,” Evan Cohen, executive director of the authority, said at the organization’s directors meeting.
The two lifelines were Nassau’s receipt of a one-time federal grant of more than $102 million from the CARES Act, mostly used to cover salaries and fringe benefits, and $435 million in debt service savings for the fiscal 2020, 2021 and 2022 years, through the finance authority’s refinancing of $1.1 billion in county and finance authority debt.
The finance authority’s funding provided the county with net budget relief through a transaction that deferred $75 million in maturing debt, according to officials. The refinancing conducted by the authority helped the county save more than $50 million last year, according to officials.
A report from the finance authority projects Nassau’s deficits to be as large as $132.8 million in 2023 and $222.5 million in 2024.
Cohen also outlined some of the projections for the county from 2021-24. Cohen said the finance authority is projecting $153.5 million in sales tax revenue in 2021 and the county anticipates receiving $397.7 million in federal aid from the American Rescue Plan Act.
“We are recognizing the additional revenue, but we have also included in our projections an offsetting transfer of these revenues into the Special Revenue Fund,” Cohen said. “So in other words, we are treating the projected sales tax surplus and federal aid as budget neutral.”
The county’s Special Revenue Fund was established by the Legislature in December to monitor unbudgeted revenues the county receives. The fund will then allocate the unbudgeted revenues to the areas throughout the county where they can be of most immediate use. Cohen said the finance authority believes the Special Revenue Fund can be “a useful financial planning tool” for the county.
“It is imperative for a county to draft a plan that considers the use of the Special Revenue Fund in a way that helps stabilize its finances in the out years,” Cohen said.
Finance Authority Chairman Adam Barsky told Newsday that the county is in relatively good shape now, but ending the 2020 fiscal year with a $43.3 million surplus does not mean troubles may not lie ahead.
“In response to the unprecedented revenue loss caused by the pandemic, the county was able to get extraordinary help from NIFA to help them overcome those challenges,” Barsky told Newsday. “By no means does this mean they have achieved structural balance.”
“Nassau’s future will continue to brighten as we win over the pandemic while continuing to stabilize finances with fiscal discipline,” county spokesman Michael Fricchione said.