ORANGE : School District Has ‘Positive’ Fiscal Rating

Orange Unified School District officials last week presented trustees an interim financial report that shows the district has a “positive” rating of fiscal stability.

The report comes at a time when the county--which reports district ratings to the state--has been lowering all districts’ fiscal certifications to “qualified” because of the county bankruptcy, said Assistant Supt. Harvey Grimshaw.

In recent years, Orange Unified officials have been threatened by a “qualified” certification from the Orange County Department of Education because district coffers lacked the required reserve fund containing 3% of its annual budget. This year, the district has boosted its reserves to 5% of its $108-million budget.

“There remains a large question mark that hangs over this (latest) report in view of the status of the Orange County bankruptcy activities,” Grimshaw said. Even assuming the district loses 23% of the $19 million it had in the county investment fund at the time of bankruptcy, the district will still be solvent, he said.

The “qualified” certification from the county and state can translate to bad credit when the district goes on the market for Tax Revenue Anticipation Notes, Grimshaw said. The district borrows against the notes and counts on the money to pay its bills until property taxes are dispersed, Grimshaw said.

Trustees of the district said they would be willing to do what is necessary to fight any change in certification. But Wendy Margarita, director of business services at the county’s education department, said that a change in certification may not be necessary. If the county manages to settle with each school districts by April 15, the county will certify each district on its individual merits, she said.