When It Comes to Investment, County Schools Had No Choice

Orange County (Counsel) Terry Andrus is referenced in the Los Angeles Times as asserting that school districts may not have been required to keep their money in the Orange County treasury. His suggestion attempts to establish the basis for an opinion that public schools’ funds were not held in trust by the county and, therefore, schools would not have a legitimate claim for 100% return of deposited funds, including interest.

Mr. Andrus is dead wrong. The clarity of the Education Code speaks for itself.

“The governing board of every school district shall pay all moneys received or collected by it from any source, and all moneys apportioned to it from taxes levied and collected under the authority of city councils for school purposes, into the county treasury...”

In defending his assertion Mr. Andrus references another section of the Education Code that does permit school districts which just may happen to have “excess” funds in a “special reserve account” the ability to invest those funds in various kinds of moneymaking schemes.

Capistrano Unified School District had all of its operating funds on deposit and held in trust at the time Orange County declared bankruptcy. By state law our district was required to use the county treasury as our basic checking account. All of our funds were therefore frozen.

Capistrano Unified has no “surplus” or “excess” funds. All our money is needed for basic, day-to-day operations.

Mr. Andrus’ mistaken assertion that school districts did not have to keep their money in the Orange County treasury is specious, at best. It reflects an ignorance of public school finance.

Sorry, Terry Andrus. You are not going to be able to get Orange County off the hook on this one.

JAMES A. FLEMING

Superintendent, Capistrano Unified School District

* The Orange County bankruptcy has resulted in fingers pointing in all directions. I don’t know who is really at fault, but maybe it’s time to consider major changes in how we collect and distribute taxes to school districts.

School districts get a major portion of their funding as a result of property taxes. Since property taxes are paid in December and April, school districts are forced to borrow operational money to get them through to December and then borrow again to get them through April. Funds not needed immediately are directed by the Legislature to be placed into the county treasury. School districts have no choice in this matter. Brokerage firms and banks obviously make very good money on this arrangement.

Many taxpayers end up paying into a bank impound account on a monthly basis. The bank then pays our taxes in December and April. I would rather pay my property taxes on a monthly basis and cut out all of the middlemen. This would then allow the state or county to pay school districts on a monthly basis which would eliminate the need for much of the fancy borrowing and investing that currently goes on and has gotten us in Orange County into such a mess.

CAMERON M. McCUNE

Irvine

* There they go again! Orange County public school superintendents, led by Capistrano Supt. James Fleming, are calling for a sales tax increase to bail them out of the county’s financial fiasco so that they can keep their bloated salaries and perks all in the name of children. The superintendents argue that the schools should not have to share any of the pain. They “demand” that the schools receive 100% of their money at the expense of all other county and city services.

Apparently, Fleming and other superintendents just don’t care if public libraries close, or if badly needed road or flood control construction stops, or if senior citizens and others in need are denied medical emergency 911 service. These are just a few of the services that affect us all that would have to be cut to “save” the public schools. Is there no end? The public schools, which often produce poor results, are already guaranteed by state law the lion’s share of tax revenues; but it is never enough.

These public school bureaucrats apparently never took Economics 101. If they had, they could have learned that raising taxes will actually diminish revenues for government. Orange County’s current sales tax is among the highest in the state and the country. Raising our sales tax again would cost jobs and would ultimately result in less tax revenues for the county.

The sky is not falling as proclaimed by our Chicken Little superintendents. It is high time they bite the bullet and “manage” the public schools like any business facing a similar situation.

JOSEPH MORABITO

Mission Viejo

* Re: “County’s Schools Can’t Afford to ‘Take a Hit’ on Bankruptcy” by John Dean (Jan. 15):

Supt. Dean’s statement hit the nail directly on the head. “No plan to restore the county’s financial viability will be acceptable if it destroys the schools. Anything less than 100% return on our money, over the short or long range, is unacceptable.”

How would you like it if the government told you where to put your money? No choice, no oversight, no questions. Well, that is what the state of California told the schools in Orange County to do. We had no choice. Now our schools and our children are the innocent victims of this financial mess for which five supervisors and one treasurer will take no responsibility.

If one were looking for a silver lining to this cloud, maybe what we should be asking for from the state is to give local control back to the schools. If that were the case the schools would not be caught up in this financial crisis and our kids would not be the innocent victims.

SHERI A. SALADOW

Laguna Niguel