Nassau County has expressed strong opposition to a proposed state initiative that seeks to shift control of the Nassau University Medical Center (NUMC) Board of Directors from the county to the state. This objection was formally addressed in a letter sent to New York State Governor Kathy Hochul, Senate Majority Leader Andrea Stewart-Cousins, and Assembly Speaker Carl Heastie. The county argues that such a move would breach its governance rights and existing contractual obligations linked to bonds valued over $300 million.
“The hostile takeover would not only violate existing legal agreements but also undermine NUMC’s operational stability and financial integrity,” county officials argued, asserting that legal action could ensue if the legislation moves forward. They noted that the county holds considerable governance rights under New York Public Authorities Law § 3402, including appointing a majority of the NUMC board members in conjunction with other state officials. Specifically, the legislation might interfere with the county’s authority to appoint board members and designate the chairperson.
The county’s letter emphasized that the control over NUMC was part of contractual agreements necessary for their guarantee of bonds issued by the Nassau Health Care Corporation (NHCC), NUMC’s parent. The text clarified that, under current arrangements, Nassau County has been able to influence and ensure proper management of the hospital due to its significant governance rights.
Citing precedent, the letter mentions that “Valid contracts are property, whether the obligor be a private individual, a municipality, a state, or the United States.” Furthermore, under Section 3412 of the Public Authorities Law, the state had committed not to alter the rights of NHCC to operate the hospital. Any switch from county to state control could violate that commitment, they suggested.
The county also suggested that the timing of the proposed legislation is notable, as it closely follows a $1 billion Medicaid claim filed against the state by NHCC. This claim alleges that the state has unlawfully withheld Medicaid funds, and the county appears to interpret the legislative move as retribution for the Medicaid claim. County representatives indicated that any takeover by the state could lead to court action to preserve its rights. Moreover, if the state assumes control, they would need to take over the bond guarantees held by the county and return the land on which the hospital sits.
Nassau County’s counsel, Matthew A. Schwartz of Sullivan & Cromwell LLP, signed the letter, reinforcing the county’s firm stance against the proposed state actions. Additionally, wider contracts with NUMC related to different county operations were mentioned, highlighting the depth of the county’s involvement and reliance on current governance structures.
