ORANGE : Borrowers in County Pool Denied Backing

The Orange Unified School District has refused to give its moral backing to districts that lost borrowed money in the county bankruptcy, and rejected a resolution demanding a 100% return of principal for all pool participants.

“I do believe Orange Unified acted in a fiscally sound manner, but I do not believe all the districts have acted in a sound manner,” said Trustee Max Reissmueller during a school board meeting last week. “I don’t think it is right to restore (funds) to a district that has acted foolishly.”

A host of districts in the county have passed nearly identical resolutions drafted by the Good News Coalition, an advocacy group for schools. The statement advocates return of all school funds placed in the pool.

Noting that school districts were mandated by the state to put their funds in the county treasury, the resolution passed by these other districts says the districts for that reason “oppose any plan which does not provide full recovery of deposited funds for all public agency participants.”

Orange Unified had more than $19 million in the county fund. According to interim Assistant Supt. Harvey M. Grimshaw, the district stands to lose about $1.9 million under a proposed county plan to repay participants 77 cents on the dollar, with notes and IOUs for the balance.

However, some districts had borrowed substantial sums to invest in the county pool, and Reissmueller and other board members refused to support them.

Trustees Robert Viviano and Bill Lewis also wanted to add demands for the county to pay interest on funds that have been withheld and to pay the money within a stipulated period.

Supt. Robert L. French said he would need some time to craft the precise phrasing. He will bring the amended document back at another board meeting, he said.