Is Nassau County on the brink of fiscal disaster? Citizens for a Better Nassau County contends in a white paper that if changes aren’t made, problems are imminent.
The paper was presented during a Tuesday evening meeting of the group, in which Shanea Jones, the director of the Office of Management & Budget and assistant county manager of Nassau County, discussed the county’s financial state, problems related to underinvestment in depreciating assets, and the depletion of the capital reserve accounts, and Brian Martin, a vice president of Robert Charles Lesser & Co., discussed the fiscal sustainability of Nassau County.
The paper notes that “recently a highly respected financial consulting firm, Burton & Associates, presented the findings of a comprehensive audit of the county’s finances to the county commission. The audit painted an undeniable picture of a looming fiscal crisis that could lead to the insolvency of the county, downgrades of the county’s bond rating and the inability of the county to meet its financial obligations.”
The problem is, says the group, severe. If unaddressed, “this crisis will impact every county resident and property owner and will inhibit the county’s ability to pursue economic development opportunities that are vital to restoring the economic sustainability of our community. County services will be severely restricted, our ability to adequately fund our A-rated schools will be challenged and our governing decisions could ultimately be dictated by the state.”
The Great Recession, says the paper, hampered Nassau, which relies heavily on residential ad valorem taxes: “County real estate values declined from roughly $8 billion to $6 billion, which resulted in an annual decrease in ad valorem tax receipts of approximately $13 million.”
The county has made aggressive plays to attract non-residential capital investment, cutting jobs in county employ, and also making “severe” cuts in reserves.
Indeed, capital reserves have dwindled. In FY 15-16, there “was a shortfall of approximately $8 million, as more cash was expended than revenue coming in. To compensate for the shortfall, the county used approximately 70 percent of the one cent sales tax fund, which is supposed to go toward road and infrastructure projects and… some of the undesignated reserves [was used] to compensate for the shortfall, leaving a near-zero balance.”
Capital improvements have been delayed also, leaving an infrastructure crisis that the county is ill-equipped to handle. As mentioned Tuesday, as of FY 13-14, Nassau County has 42 percent of all assets depreciated, a roughly 50 percent uptick from FY 06-07.
Especially hard hit: machinery and equipment, 75 percent depleted; and roads and bridges, at 47 percent depleted.
For Nassau County to reverse course, Citizens for a Better Nassau County asserts that diversification of the tax base and getting more businesses are essential.
And the presentations Tuesday night detailed that time is of the essence.