City Urges County to Give Schools Settlement Funds

City officials are urging the Orange County Board of Supervisors to disburse to local school districts the $30-million settlement it negotiated with Merrill Lynch for the firm’s part in the bankruptcy.

Proposed by Councilman Mark Leyes, the City Council voted Monday night to urge the supervisors to follow an earlier agreement to give the first $50 million in bankruptcy-related income to local school districts.

Leyes, who said officials have considered putting the Merrill Lynch income in county coffers rather than giving it to the schools, said local districts are entitled to the money.

“Orange County schools should receive the first $50 million in proceeds. Only after that do they [other agencies] get in line and get a share of the rest,” Leyes said.

Garden Grove, which was one of only a handful of public agencies that did not invest in the doomed county bond fund, inherited a $1-million loss suffered by the Garden Grove Sanitary District’s investment in the pool when the city took over the agency earlier this year.

“The sooner the schools get their money, the sooner we can stand in line with our hands out,” Mayor Bruce Broadwater said in support of the position.