First, don't be mistaken - you already have a level 2 special care nursery, NOT a level 1 newborn nursery. Typically, a level 1 does not take infants <36 weeks, or infants that require O2 or IV. I certainly hope your hospital is billing for these level 2 infants.
Second, I would look to the AWHONN staffing guidelines for guidance as to what is appropriate nurse staffing ratios for these special care infants. I would also look at the book Guidelines for Perinatal Care, which hopefully your manager has a copy of.
You're right, that this is a HUGE practice change that can't just happen without serious planning and forethought, and additional training and staffing. At the last facility I managed, we were a small community hospital but had a level 2 SCN, and nurses who were "NICU competent" had to go through a lot of training, as well as a couple weeks of shadowing/precepting/training at our sister facility where we transferred our sick infants to. Then they worked alongside an already trained and competent NICU nurse at our facility for several weeks/months before they were deemed competent to take care of these special care infants.
I think I would start by setting up a meeting with your manager and your pediatric chief with data on what the national standards are for safe staffing for these NICU infants, and propose that they come up with a comprehensive training/orientation program to get these nurses competent, BEFORE they start admitting these special care infants to your facility.
Are you union? If so, utilize them. You and your colleagues should be filing an ADO EVERY SINGLE TIME you are given an assignment for which you are not adequately trained or competent, or that exceeds safe staffing of these high acuity patients.