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.
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.