School upgrade: Will the funds be there for it?

RANCHO SANTA FE — On Oct. 20, the school board held a special meeting with San Diego County Treasurer-Tax Collector Dan McAllister, Chief Deputy Treasurer Lisa Marie Harris and Investment Officer Mark Van Den Herik, to discuss the investment policy for funds from Propositions K and E.
“We are here because we sold bonds to fund the new school, but (financial) markets have us concerned,” Superintendent Lindy Delaney said. “It’s a question of safety. Should we continue to invest as we have? Is our money safe? Can we get it when we need it?”
“We worked hard to get here,” School board member Ty Miller agreed. “We wanted interest on this money. We wanted it to gain. What is the risk for the constituents we represent?”
School board members became concerned recently because the renovation of the new school is about to move forward, thanks to the bonds raised by Propositions K and E. With the decision to lease/leaseback as a delivery method for the school, funds will soon need to be withdrawn on a regular basis.
“There is a district up north that went to draw down and the money wasn’t there,” Delaney said. The school board wanted to investigate the possibility of something similar happening in Rancho Santa Fe, especially given the volatility of the financial markets during the past month.
“First of all, your money is safe,” McAllister said. “The majority (75 percent) of the funds are AAA rated. We manage assets for many schools and our goal is not to lose money. We meet on a weekly basis to reassess investments and have migrated to higher credit quality.”
School board members, however, wanted assurances that in this volatile market, funds for the new school would be there. “We know what our budget is,” board member Carlie Headapohl said. “We can’t afford to lose any money. We want the preservation of the principle.”
School board President Richard Burdge asked the treasurer about notes that are not AAA rated and whether that money is available for draw down in light of events of the past few weeks.
McAllister and his associates assured the board that they have options: they can continue to do as they have in the past, or they can work on new strategies.
“We have strategy meetings weekly with advisors,” Harris said. “We’re very proactive. We want to do well, too. Your concerns are our concerns.” The bottom line for the board was an assurance that the money would be available when it comes time to draw down. “I can write you a check tomorrow,” McAllister said.
After much debate, the board felt it wasn’t in its best interest to micro-manage the funds, but rather to leave it to the experts. However, it was agreed to have more meetings with the treasury team to assure lines of communication are open and to keep an eye on all investments, especially during these uncertain economic times.
“These are unprecedented times,” Miller said. “I feel more comfortable going forward now, knowing we (the board) took steps to safeguard our funds.”

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