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Torrance to Sell Bonds to Rebuild Liability Fund

The Torrance City Council on Tuesday approved the sale of more than $3 million in bonds in an effort to replenish the city’s liability fund, depleted by a series of expensive legal settlements.

The sale will give the city $3.52 million to add to the fund, which now stands at $10 million. Money from the fund has been used to finance several recent legal settlements, including the $6.5 million the city paid the family of Kelly Rastello, a San Pedro youth killed in a 1984 traffic collision with an off-duty police officer. Insurance covered only $3.5 million of the Rastello settlement.

“That took a lot of cash from us,” said Ken Flewellyn, the city’s assistant finance director. The bond sale allows Torrance to spread the cost of that and other settlements over a 10-year period, he said.

The bonds are being sold to the lowest bidder--Smith Barney, Harris Upham & Co. Inc. The firm offered the city an interest rate of 6.296%, the lowest rate offered by the six bidders.

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The bonds, formally known as certificates of participation, will be sold on the open market, Flewellyn said. The city will repay the bond-holders the principal and interest over 10 years.


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