BOND TICKER : ORANGE COUNTY IN BANKRUPTCY : Human Relations Panel Braces for Budget Cuts

Members of the Orange County Human Relations Commission are bracing for another round of budget cuts that they fear will limit their ability to help foster racial understanding and harmony.

Under a proposal by the county administrative office, the commission’s budget would be slashed from $113,000 this year to $66,000 in fiscal year 1995-96, according to commission members.

The cutbacks, which will be discussed today and Wednesday at special hearings by the Board of Supervisors, would provide the commission with funding for just one employee: the executive director. A few years ago, county funded a staff of five.

“We are literally hanging by the skin of our teeth,” commission member Becky Esparza said. “The sad part is that with the bankruptcy, there will be a greater need in the community for the (commission). But now we are understaffed.”

The commission was created 24 years ago to help eliminate prejudice, intolerance and discrimination in the county. The commission compiles hate crime statistics, sponsors a variety of community programs and works with schools and police departments to promote racial understanding.

Commission members hope that private donations can help offset some of the expected budget cuts. This year, private contributions paid the salaries of two commission staffers.

Tinkering for Emergency Fund?

The key question of who owns funds trapped in Orange County’s ill-fated bond pool evidently will surface during a March 31 hearing in U.S. Bankruptcy Court unless county creditors and investors settle disagreements over an emergency fund that cash-strapped cities, school systems and special districts are using to pay their bills.

Creditors, investors and Orange County earlier agreed to make $1 billion of pool funds available to investors facing financial emergencies. But the fund is drying up and attorneys for bond pool investors want to increase the fund limit to $1.25 billion, as well as the amount that individual cash-strapped investors can withdraw.

Creditors, however, are balking at the plan to increase the emergency fund, said Patrick C. Shea, an attorney who represents the investors’ committee.

“We’re at what appears to be an end of the willingness of the (county, creditors and investors) to negotiate interim (help) for these investors,” Shea said. “The creditors are, if you will, taking a possessory interest in those funds.”

Investors have argued forcefully since the county plunged the pool into bankruptcy on Dec. 6 that they deserve to be repaid 100 cents on the dollar for funds invested in the pool.

The fund disagreement is important because, during the next month, several investors will face severe financial shortfalls. “This (blockage) requires everyone in the next week to get very serious about making the (bond pool) plan work,” Shea said.

“If the (creditors) come to their senses and make added accommodations for the continued hardships of investors, that’s great,” Shea said. “If not, we’ll be in court at the end of the month to ask the court for it’s read on what the law says in respect to whose funds these are.”

Complied by Shelby Grad, with Greg Johnson.