The financial crisis on Wall Street has landed on Franklin Street with a $1 million thud.
The good news is that, even if the situation has further polarized the division between Democrats and Republicans in the House of Representatives, it seems to have helped bring the sometimes hostile factions of Erie County government and the state-appointed control board to work together for the common good.
County Comptroller Mark C. Poloncarz had to scramble to the bank the other day to swing a short-term loan of $75 million the county needs to continue its operations and meet its payroll.
Such bridge loans are common for government entities, where costs come every month but revenue comes in a few large bundles. But this time, with the normal sources of municipal capital ensnarled, the usual process was a dry hole.
That was bad for all government entities, but particularly unfortunate for the county and the control board, which were in the long-overdue process of making at least a temporary peace over which of them should borrow the money the county needs for expenses large and small.
The control board, with its superior bond rating and spotless record, can get a better deal on Wall Street than the county can. When, that is, anyone is getting a deal on Wall Street.
But, these days, Wall Street is no country for old ways. The control board had what looked like a good deal with bond underwriter Roosevelt & Cross to sell its short-term anticipation notes. The deal included a promise from the underwriter that it would buy any of the notes that didn't move on the open market.
But, when the open market closed up, Roosevelt & Cross couldn't follow through.
Luckily, Poloncarz had Plan B standing by. Partly because he had wanted to be the one to borrow the $75 million in the first place, the comptroller had already arranged with Bank of America to raise the money.
The rate he got, typical of such private placement deals, was higher than the control board had once had a right to expect from the open bond market. Thus the cost of the deal to county taxpayers will be about $1 million higher than had been expected.
That's a shame. Chalk that million up as the cost of county-control board bickering, which prevented this deal from getting done when the dealing was good. But also give Poloncarz credit, for keeping an option open.
Because of that, the deal was done. The county got its money. County employees will get paid and the county will continue to provide services for the taxpayers.
And, perhaps most important of all, control board officials complimented Poloncarz for his financial save.
A new day, when county officials and the control board work together for the benefit of the taxpayers instead of driving up everyone's costs by fighting and delaying important financial deals, won't exactly lead anyone to think that the Wall Street crisis was worth it.
But it would be a nice little benefit indeed.