County Reallocates Bankruptcy Funds

As part of an unusual spending spree, the Board of Supervisors on Thursday agreed to move $31 million into an escrow account earmarked to pay off three years’ worth of bond debt from post-bankruptcy borrowing. The supervisors also set aside an additional $15 million in a trust fund for future bond repayment.

In addition, the board agreed to pay off a $3.6-million computer lease, set aside $52.4 million over 10 years for corrective maintenance on the county’s aging buildings and equipment, spend $3.3 million for job development and training programs and spend $2.4 million through 2002 to promote new jobs and tourism through the Orange County Business Council and the Orange County/Anaheim Visitors and Convention Bureau.

Along with plans to build a courthouse in South County and expand the jail in Orange, the spending spree for a county not two years out of bankruptcy came courtesy of a $103-million fund set aside in 1995 from bankruptcy bond proceeds. Recognizing that nervous financial markets wouldn’t accept short-term borrowing by the county so soon, the fund was intended to be used for short-term cash-flow needs.

But the county recovered from bankruptcy quicker than it expected and Chief Financial Officer Gary Burton said the county could take the $103 million and earmark it for other uses during the next 10 years.