Sunday, June 5, 2011
San Mateo County still feeling pinch from Lehman Brothers collapse
In retrospect, losing $155 million of public funds in a single day was like a bad hit to the immune system. Alone, it wasn’t enough to kill the patient, but it sure didn’t help when the patient caught a bad flu right afterward.
Nearly three years after San Mateo County took the biggest hit from the collapse of Lehman Brothers of any municipality in the nation, financial leaders on the Peninsula say the loss is still being felt, especially in the county’s school districts.
Such is the legacy of the San Mateo County Investment Pool’s massive loss in the Lehman Brothers bankruptcy. The failure of the massive financial services firm in September 2008 wiped away 7 percent of the pool’s fund overnight — money that school districts, public transit agencies and county departments had placed in the care of the county treasurer.
Some of the lost money had been targeted toward specific programs or building projects, but much of it was simply reserve money set aside for a rainy day — which unfortunately went missing just at the start of a long, long downpour.