HUNTINGTON BEACH : School Trustee Assails Investment Refund Plan

The board president of the high school district criticized a settlement plan offered to investors in the county investment pool, saying that it doesn’t go far enough in ensuring thatschools receive all their money back.

Michael S. Simons, president of the Huntington Beach Union High School District Board of Trustees, told his colleagues Tuesday night that the county’s proposal is unacceptable because it fails to guarantee 100% return of invested principal in the bankrupt county pool.

The district, which has high schools in Huntington Beach, Westminster and Fountain Valley, has about $19.8 million invested in the pool.

The proposed settlement for school districts in the pool would give them 90% of their principal in cash and notes and the remaining 10% in IOUs. Simons said the proposal gives no firm backing, or what he called “book value,” to the final 10% of school systems’ investment.

District Supt. David Hagen also criticized the proposed county settlement. Hagen said the proposal is vague about how and when a school system would get its final 10% of invested money. He said such vague assurances put the 10% of invested money “several layers below the level of a junk bond.”

Hagen said school districts must demand “some type of collateral on that 10% note.” The current proposal, he added, gives “no assurance we’ll receive that 10%.”