TUSTIN : City Joins in Asking County for a Refund

The Tustin Unified School District has asked the county to return all of the $12.2 million it had invested in the county bond portfolio, as well as the interest the money has earned since Dec. 6 while frozen in the bankrupt county treasury.

Trustees unanimously passed the resolution last week. It is identical to the resolutions circulated among the 185 other school districts, municipalities and agencies that have invested in the county bond portfolio.

A plan proposed by the Orange County Business Council to return 77 cents on the dollar of all school district’s investments--and the rest in notes and claims--has been approved by the County Board of Supervisors, but district officials are wary of the plan.

“There’s no guarantee when we’re getting our money back,” board President Jane Bauer said. “Money loses value over time unless it’s earning interest.”

The only acceptable solution is full return of the district’s investment as quickly as possible, officials said.

Supt. David Andrews said the district has cut its budget in each of the past four years to accommodate revenue shortfall. Already this year, the school board has approved about $1 million in cuts to its current $50-million budget in response to the county bankruptcy, he said.

“We can not absorb more hits without significant effects to school programs,” Andrews said.