HomeMy WebLinkAbout1995-05-25 - Resolution No. 95-051
RESOLUTION NO. 95-05
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE YORBA LINDA WATER DISTRICT
OPPOSING A PROPOSAL FOR NON-SCHOOL
PARTICIPANTS IN THE ORANGE COUNTY INVESTMENT
POOL TO FORGIVE A $407 MILLION DEBT
OWED BY THE COUNTY OF ORANGE
WHEREAS, the County of Orange was entrusted with the responsibility of
managing funds deposited by nearly 200 public agencies in the Orange
County Investment Pool; and,
WHEREAS, the County of Orange did not fulfill their obligation to properly manage
and protect the deposits made by special district, cities and school
districts; and
WHEREAS, on December 6, 1994, the County of Orange declared bankruptcy as a
result of a $1.7 billion loss of funds in the Orange County Investment
Pool; and,
WHEREAS, the Orange County Investment Pool Settlement Agreement calls for the
eventual repayment to all agencies, other than schools, in the manner
of 1) cash reimbursement and recovery notes in the amount of 80%, 2)
a 9% return from the proceeds of lawsuits pending against Merrill
Lynch and others, and 3) the final 11% reimbursement, representing
$407 million, in the form of an unsecured note issued by Orange
County at an unspecified later date; and,
WHEREAS, Assemblyman Curt Pringle and Senator John Lewis have submitted a
proposal for non-school participants to forgive the final I I%, or $407
million debt, owed by the County; and,
WHEREAS, the non-school participating agencies entered in the Settlement
Agreement in good faith and expectation of receiving 100% of their
deposit back in accordance with the terms of the Settlement Agreement;
and,
WHEREAS, if the County of Orange fails to repay the $407 million debt it
demonstrates a lack of good faith and lack of responsibility to abide by
the terms and conditions of the Settlement Agreement; and,
WHEREAS, the proposal to forgive the $407 million debt may constitute an
unconstitutional gift of public funds; and,
WHEREAS, furthermore, the proposal will not save taxpayers money but instead
will create an indirect tax which shifts the financial burden from the
County, who created the problem, to local special districts and cities.
• i
NOW THEREFORE BE IT RESOLVED by the Board of Directors of the Yorba
Linda Water District that the Yorba Linda Water District opposes the proposal submitted
by Assemblyman Curt Pringle and Senator John Lewis for non-school participants in
the Orange County Investment Pool to forgive a $407 million debt owed by the County
of Orange.
PASSED AND ADOPTED this 25th day of May, 1995, by the following called vote:
NOES: o-
ABSENT. 1- Sterling Fox
ABSTAIN: 0-
AYES: 4- Arthur C. Korn, Michael Beverage, Paul Armstrong & Carl Scanlin
President, Arthur C. orn
Yorba Linda Wate istrict
1
Sec> etary, William J. Robertson
Yorba Linda Water District