Fearing Foley Holdup, Suffolk Legislature Transfers $20M to Pension Fund

Suffolk County Legislators voted to transfer $20 million from the Taxpayer Stabilization Fund to the Pension Reserve Fund on Friday, a move the majority of legislators felt was necessary to assure the county would have enough cash to pay its February 2011 pensions.

The move passed by 11-6 margin, with one abstaining.

While County Executive Steve Levy's recommended 2011 budget contains enough money to cover the pensions, some of it relies on revenue-generating plans that haven't materialized yet. For example, the budget calls for the sale of John J. Foley Skilled Nursing Facility in Yaphank to a private operator for $36 million, which after paying off debts and replenishing the general fund would net the county a $19.7 million profit. That facility has already been on the market for two years. In addition, the $12 million sale of the proposed 95-acre industrial parcel of Legacy Village is also laid out in the 2011 budget.

Both controversial measures require supermajority approval by the legislature, requiring 12 votes in favor, after a series of public hearings and reports.

"Could we actually sell the property in 2011? Even if we decide to go this route, it might be unrealistic to assume $19.7 million in 2011," said Legis. Jay Schneiderman, I-Montauk.

Legis. Kate Browning, WF -Shirley,  said she questioned whether Levy's incorporation of these sales funds in the 2011 budget was legal under the Mary Hibbard Law, which lays out 17 procedural prerequisites that must followed before a facility such as Foley nursing home could be sold by the county. The recommended 2011 budget calls for beginning gradual closure of the facility in January 2011,  completed by April 2011.

"I think I need to point to two years ago when the county executive elected to go ahead and close Foley I asked council to opine about its legality. At that time, he pointed closure within budget was blatantly illegal, and the same set of facts still stand today," Legis. John Kennedy Jr. said, R-Nesconset.

Though the transfer of cash to the pension fund would make sure the money will be there in 2011, Presiding Officer William Lindsay, D-Holbrook, said the move could have a negative impact on Suffolk's bond rating by lowering it a step, increasing its interest rates. 

It's a sentiment echoed by Levy.

"This one-shot raid by the Democrats will have a horrendous impact on our bond rating and will do nothing to solve the structural imbalance that presently exists at the nursing home. If they drain our reserves, in 2012 we'll be right back at square one, continuing to lose $8 million a year at the nursing home, only with a lowered bond rating that will result in a million dollars a year in additional taxpayer funds wasted on higher interest penalties," Levy said in a press statement.

Levy pointed to a county advisor, who stated on the record that Moody's and Fitch had reviewed the 2011 recommended operation budget, as is, and upheld Suffolk's current bond rating.

Legis. Tom Muratore, R-Ronkonkoma, called to table the vote on the transfer until the legislature could hear from the comptroller and county treasurer. Minority Leader Daniel Losquadro, R-Shoreham, seconded, but could not receive the votes to delay action.