The San Diego County Board of Supervisors...

The San Diego County Board of Supervisors officially acknowledged Tuesday that the county will lose about $1.8 million when it clears from its books a debt originally created for the purpose of buying a countywide telecommunications system. The effort was abandoned in 1983 amid allegations of fraud and kickbacks involving the system’s provider, Telink Inc.; two county officials, and others. The county had intended to purchase the system by borrowing $34 million in the form of certificates of participation, which required the county to meet certain deadlines toward the purchase and installation of the system. When plans to buy the system were scrapped, the county could no longer meet those deadlines and was forced to convert the proceeds from the bonds into U.S. Treasury notes. That process, called “defeasance,” is expected to cost the county $1.8 million, because the Treasury notes the county must buy to secure its debt will cost more than the amount the county originally borrowed.