Process Fun of the Week: Clerical blooper sees Suffolk County default on debt
Suffolk County may be one of the most affluent areas of New York's Long Island, but an accidental default on interest payments highlighted the precarious state of its coffers.
Regulatory filings on April 16 revealed that Manufacturers & Traders Trust Co., escrow agent for the county, was short $722.65 for a $1.15 million interest payment on $76.1 million of public improvement bonds. The deadline was April 15.
Richard Tortora, president of the Capital Markets Advisors LLC firm that deals with the region's finances, insisted that Suffolk had delivered the money on time: "M&T had the money when they needed it. They had the schedule, but through some kind of administrative glitch on their part, M&T missed it, which is shocking. But it happened, unfortunately."
Tortora went on to lament the hassle of regulatory filing with the Municipal Securities Rulemaking Board. Meanwhile M&T spokesman Michael Zabel said on email: "We have contacted the comptroller’s office to apologise for our error, we have taken immediate steps to determine its cause and we will ensure that it never happens again."
The incident has thrust Suffolk County's finances into the spotlight. Also home of the Hamptons, the Long Island region is known in popular culture as the lavish setting of The Great Gatsby. Despite having an income per capita well above the national average, Suffolk County has struggled in the aftermath of Hurricane Sandy, and is expected to post a budget deficit of $250 million at the end of the year.