Non-Investor City Wants Its Funds Too

As mayor of Garden Grove, I would like to clarify the city’s position with regard to the Orange County bankruptcy, and why Garden Grove has decided not to support the compromise solution being put forward by the Orange County Division of the League of California Cities.

The league of cities compromise would repay all investors 100% of the principal, over time. Unlike most cities in the county, Garden Grove made a reasoned, conscious decision not to invest in the county investment pool. The city reviewed the investment strategy used for the pool and determined that it was too risky and that it did not meet the guidelines of the city’s investment policy. We believe that those cities who chose not to invest should be treated differently than the investors. Before any compromise solution is adopted to give investors (who voluntarily accepted the risk) 100% of their investments back, the cities and other agencies that did not invest should be made whole.

The county is currently holding over $1.5 million from Garden Grove to help pay for a countywide 800 MHz radio system, over $1 million in Drug Asset Forfeiture funds and over $500,000 in a court deposit for an eminent domain case. There has been no indication yet by the county as to when, or if, these funds will be released. It is the city of Garden Grove’s position that any compromise to help the county resolve its bankruptcy must address these and similar funds being held by the county just as seriously as, and prior to, the investment principal funds addressed by the league of cities proposal.

While the city of Garden Grove, as much as any other city, would like to see the County bankruptcy issue resolved as quickly and painlessly as possible, we will not participate in a process that does not recognize that non-investor cities are being hurt financially, and have an equal, if not superior, claim to their money, which is being held by the county.

The taxpayers of the city of Garden Grove were protected by their elected officials from involvement with the county investment pool, and they should not have to suffer through a loss of funds that rightfully belong to them.

BRUCE A. BROADWATER

Mayor, Garden Grove