GOVERNMENT : Claremont Gets Some Money Back From Orange County Fund
Claremont received $1.7 million of its $5.4-million investment in the Orange County fund last week.
The money was given back to the city after a preliminary court order forced Orange County officials to release 30% of the investment pool funds to agencies that needed the cash, said Claremont City Atty. Wynne S. Furth. Claremont needed the money to meet obligations on $5 million in municipal bonds, Furth said. Orange County filed for bankruptcy Dec. 6.
The city issued the bonds, called TRANS (Tax Revenue Anticipation Notes), last summer and must make a payment in July. But because the city is required to set aside money throughout the year to repay the bonds, Claremont became eligible to withdraw some of its money from the Orange County fund, said Mayor Algird G. Leiga.
But it is uncertain whether the city will receive the full $5 million it owes to bond investors. Leiga said the city estimates that it will lose 22% of its investment, about$1.2 million. That would leave the city short by more than $800,000 of the amount it must pay bond investors in July.
At a Tuesday night council meeting, Leiga told city officials that State Street Bank in Boston, which issued the bond, might roll over payments for a year if the city does not get any more money from the fund. If Claremont receives most but not all of its money, the city will try to meet its bond obligations with its own funds, Leiga said.
Also Tuesday, the council named seven Claremont citizens to sit on a financial advisory committee, which will advise the council on its investment strategy, its use of TRANS bonds and other financial matters, Leiga said.