N.Y.’s Suffolk Co. Had Accidental Default on Clerical MissMichelle Kaske
New York’s Suffolk County, home of the Hamptons beach towns, was short $722.65 on April 15 on an interest payment for its municipal bonds because of a clerical mistake rectified one day later.
Manufacturers & Traders Trust Co., escrow agent for the county, accidentally neglected to make the full payment. It completed the entire $1.15 million payment on April 16, according to a securities filing.
Suffolk delivered the money on time, yet the trustee missed the payment, said Richard Tortora, president of Capital Markets Advisors LLC, which works with the county on its finances. The company has offices in Great Neck, New York.
“M&T had the money when they needed it,” Tortora said in an interview. “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.”
The county’s median household income from 2007 through 2011 was $87,187, compared with the U.S. median of $52,762, according to U.S. Census data.
“We have contacted the comptroller’s office to apologize for our error, we have taken immediate steps to determine its cause and we will ensure that it never happens again,” Michael Zabel, spokesman for Buffalo, New York-based M&T, said via e-mail.
Fitch Ratings last month cut the county’s $1.4 billion of general-obligation bonds one level to A, sixth-highest, because of budget deficits and concern about the county’s ability to attain stable financial operations, Karen Wagner, a Fitch analyst, wrote in a March 25 report. The outlook is negative.
The Long Island county is among municipalities in the region still rebounding from Hurricane Sandy, which hit the Northeast on Oct. 29, with winds and driving flood waters that killed 125 people in 10 states.