Water District Breaks Ice on Investment Pool

A small Villa Park water district said Tuesday it will become the first government agency to voluntarily place money in Orange County’s once-notorious investment pool since the county went bankrupt nearly five years ago.

The Serrano Water District’s investment is expected to be modest, but county officials hailed it as a symbolic boost and another sign of the county’s reemergence from the 1994 financial collapse.

Before the bankruptcy, hundreds of cities and special districts placed millions of dollars into the county pool, trusting the county treasurer to make sound investments. But when the pool collapsed because of risky investments, those agencies lost money. Most have vowed never to trust the county to manage their money again.

County Treasurer John M.W. Moorlach, who took office after the bankruptcy, has been talking to several government agencies about investing in the pool for about a year. But Serrano was the first to step forward. The county now has very conservative investment practices and earns yields slightly higher than several well-known money market funds, officials said.

The district probably will invest a fraction of its portfolio into the pool. It had not invested in the county pool before the bankruptcy because it deemed the returns “too good to be true,” said water district president C.L. Pharris.