As Nassau County and the MTA drag out their dispute over funding for Long Island Bus, a state court decided this week that the Long Island count must pay the MTA $20 million for a loan the county took out 15 years ago. Newsday has the details on this latest bit of financial chicanery:
Already struggling to meet its financial obligations to the MTA, Nassau County may have to pay the transit agency an additional $20 million following a state court’s decision in a lawsuit stemming from a financial deal made between the two sides 15 years ago.
According to the suit, the Metropolitan Transportation Authority lent “the cash-strapped county” $51 million in 1996 in a “2-for-1” agreement in which Nassau agreed to pay back twice that sum in funds for MTA capital projects in Nassau.
Nassau issued bonds to raise the full $102 million and made good on $89 million of the capital funding it had committed to the MTA. But, according to the suit, in 2001 the county filed a lawsuit looking to get out of the agreement, arguing that the MTA had overstepped its authority in making the deal.
The court is now requiring the county to fork over $13.6 million to cover the difference in payments as well as another $7.3 million in interest, legal fees and other capital improvements. County officials, of course, are none too pleased. “We are very disappointed in the ruling and have directed staff to file a notice of appeal,” Nassau County Attorney John Ciampoli said.
The MTA, meanwhile, with support from Newsday’s editorial staff, is starting to take an agressive approach toward Nassau County’s dismissive attitude toward its MTA funding obligations. “This ruling makes it clear that Nassau County’s obligations to the MTA are not optional and shouldn’t be treated that way,” agency spokesman Jeremy Soffin said. If only the authority would say the same to Albany.