Bankruptcy Fails to Cloud La Palma’s Budget Picture : Finances: City manager expects money to be released from the investment pool to pay for park renovation.
City Manager Pamela Gibson says the county’s bankruptcy has had little effect on La Palma, despite the fact that the city has $5.5 million tied up in the frozen county investment pool.
In a report to the City Council Tuesday night, Gibson said that the city has suffered neither cash-flow problems nor changes in day-to-day operations.
“The only things I have to report are positive at this point,” Gibson said. “It appears the (bankruptcy) judge is being somewhat amenable to release up to 30% of each city’s or agency’s funds for emergency purposes.”
Gibson said La Palma has requested release of $290,000 from the fund to pay the final costs of renovating Central Park. She said all the signs indicate that the request will be granted.
“We so far have not heard it is being denied, and I think we would have heard by now,” she said.
The city manager said that a recent cash-flow analysis showed “the city appears to be pretty healthy.”
The good news, she added, includes continued fire protection from the Orange County Fire Department. Gibson said department authorities have said that “they will be able to continue without any reduction” in service.
Gibson said La Palma has pledged with other Orange County cities that invested in the pool to fight for a return of all funds, even though analysts have said the pool has lost more than 27% of the cities’ investment.
“The cities are taking the position that 100% will be returned,” Gibson said. “The cities are taking this very aggressive stance that we’ll get 100% back.”