NORTH COUNTY : College District Seeks New Recovery Plan

Administrators at the cash-strapped North Orange County Community College District are re-evaluating recovery strategies after a proposal to borrow up to $20 million and sell surplus land narrowly failed to win support by the Board of Trustees.

Board action on a recovery plan may come as soon as Tuesday.

District officials are scrambling to cope with a projected $10.6-million general-fund loss resulting from the collapse of the county investment pool. The projection assumes that the district will be reimbursed for 90% of its investment.

The district had nearly $86 million in the pool, including more than $50 million that was borrowed strictly for investment.

Trustees met in special session this week to consider issuing up to $14 million in tax-revenue anticipation notes. They also considered obtaining a short-term $6-million loan from the Bank of America, and selling 44 acres of district land in Yorba Linda. The plan was intended to help meet payroll and other cash-flow needs through the end of the 1995-96 fiscal year.

It needed four votes for passage, but fell one short when trustee Chris Loumakis refused to support additional borrowing. Board members Nilane A. Lee, Leonard L. Lahtinen and Barry J. Wishart all favored the plan. Three trustees were absent.

Loumakis, who opposed borrowing last year to invest in the ill-fated county pool, said that incurring additional debt is “the same mistake with a different face on it.”

A wiser approach, Loumakis argued, would be to tap district reserves and make budget cuts. This would result in a “few lean years,” he said, but would avoid spending money on interest that could have gone for educational programs and employee salaries.