Q: How has the job of county treasurer changed during your 21-year career?
A: At the point in time I took this job over, it was described to me as a part-time job. Essentially, people who were in the position I am in now were known as conservators. In other words, they took in county money and then put the money in some safe place, such as a bank or a demand account. During my tenure, the job has clearly evolved into something much more than conservator. We are now money managers.
Q: You are also financial advisers, in the sense that you must determine when Nassau County may issue debt. What else does your office do?
A: This office performs many functions. One of our primary tasks is the collection of delinquent taxes. We receive upwards of $50 million to $60 million of delinquent taxes each year. Those taxes are my responsibility to collect. In addition to doing that, I oversee the investment of the county's investment portfolio. We have an average of $300 million invested on a daily basis.
Q: What do you invest in?
A: We are very conservative. We don't play the market. We generally invest in repurchase agreements, which is the purchase and resale of federal government securities, as well as certificates of deposits. On occasion, we buy Treasuries or Treasury bills.
During the days of high interest rates [in the early 1980s], we made as much as $70 million in investment income in a year. During the last few years, however, we have averaged about $35 million in a year in investment income.
Q: You also function as the county's expert on sale of tax-exempt securities...
A: That's the area that I devote a great deal of time to. In Nassau, because we have kept our infrastructure up, we are frequent issuers of tax-exempt securities. We also conduct cash-flow borrowings that are necessary because our revenues come in throughout the year.
We have increase our issuance of debt because of mandates from the state and federal government. For example, we will have to spend somewhere around $350 million to clean up ocean dumping due to a federal mandate. And in order to conform to that mandate, we have to build several plants: one to treat the wastewater, and two to convert the residue of the wastewater, called sludge, to something called pellets, which can be used as fertilizer. All this costs money.
Q: So you have to sell bonds?
A: That's right. We've already started on that program. As a matter of fact, part of the last two deals we completed with the state revolving fund was used to finance these mandated programs.
Q: How has the recent negative publicity about Nassau affected you ability to sell the county's bonds and notes?
A: You have to understand that there's often a difference between the political rhetoric tossed around by various people in the administration or county legislature, and the official numbers promulgated by this office.
I have to go by the official numbers, which are prepared by the county comptroller's office and the county budget office. Those are the numbers I use in our official statement. Often, these numbers are misinterpreted by the press, which in turn causes a perception that the numbers we used in the official statement are wrong.
Q: You have at times added inserts to explain changes in the country's official statement. Will that continue?
A: We did do it in an official statement a couple of weeks ago. It's occurring more these days, because of the troubled and volatile economic times we live in. I see it happening more and more to municipalities all over the country. In recent years, the press has also devoted more coverage to the sale of debt securities, which used to be a relatively quiet part of government.
Q: Why has this happened?
A: There's a perception in the community that everybody has to be concerned about money, even when it's in the ordinary course of a municipality's daily existence to borrow rather large sums of money. Just the sheer size of the borrowing makes any note sale newsworthy.
This atmosphere also makes the job of the finance official very difficult, particularly when you consider that in the grand scheme of things, these things are blown way out of proportion. What's really important, and what the rating agencies base their ratings on, are the fundamentals of any community.
Q: What are Nassau's fundamentals?
A: In the entire United States, for instance, Nassau County ranks eighth in per capita income. The studies with Nassau and Suffolk countries combined show an effective buying income that's one of the highest in the country. We are also ranked the highest in the country in terms of the percentage of households with income greater than $50,000.
Q: Do you have to keep reminding Wall Street of this after the publicity about the county's deficit and the county's request to issue $71 million in deficit bonds?
A: Yes, I do. I even have to remind the rating agencies, which in their reports cite these positive numbers all the time.
Q: Many people say you have a rather hard edge. When things get tough, as they have now, how do you deal with the situation?
A: Well, you always have to remember that you're working for the county, and you can't be influenced by any other aspect of this business, whether it's friendship, or someone who you respect in terms of their job. You just have to keep a very narrow perspective. And whatever you do, it has to be for the benefit of the county.
I'm probably going to get a little criticism or be called hard-nosed for something I recently did. We had a revenue anticipation note sale where we got a very good rate. When I sold these notes, I wrote in the official statement that the county would likely issue bond anticipation notes in July. But we got such a good rate on the Rans that I decided to move up the sale of the Bans to the next day in order to take advantage of this great market we currently have.
But there are those investors who said that the second bond sale may have has some impact on their ability to resell the original notes. I have to be a businessman, and I have to set the interest of the county foremost in my mind. I knew there was a tremendous market out there. I knew no one was going to get hurt. And this was an opportunity for the county to get the best possible deal it could without using a crystal ball to sell Bans next month.
Q: But does playing this kind of hardball ever hurt your reputation and the county's in the municipal bond market?
A: I don't think so. Because in the final analysis, people have to respect you for doing what is best for your municipality. That's your job. I am always fair and square with everyone. I think that is mainly my reputation.