HomeMy WebLinkAbout21 O.C. BANKRUPTCY RES 02-06-95NO. 21
2-6-~9~5~
DATE:
FEBRUARY 6, 1995
Inter-Com
TO:
FROM:
SUBJECT:
WILLIAM A. HUSTON, CITY MANAGER
OFFICE OF THE CITY CLERK
RESOLUTIONS RELATED TO ORANGE COUNTY BANKRUPTCY
RECOMMENDATION:
Pleasure of the City Council.
BACKGROUND:
The City Council, at their meeting on January 16, 1995, requested
agendizing resolutions requesting the Orange County Board of
Supervisors return 100 percent of funds to all investment pool
depositOrs and requesting the Board of Supervisors rescind
arrangements with its public relations firm.
Valerie Crabill
Chief Deputy City Clerk
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RESOLUTION NO. 95-16
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN,
CALIFORNIA, DEMANDING THAT THE ORANGE COUNTY BOARD OF
SUPERVISORS ACCEPT RESPONSIBILITY FOR THE ORANGE COUNTY
INVESTMENT POOL BANKRUPTCY AND THAT IT RETURN 100 PERCENT
OF THE DEPOSITED FUNDS TO THE CITY OF TUSTIN AND ALL OTHER
POOL DEPOSITORS
WHEREAS, the County of Orange is authorized by Section
53684 of the California Government Code to serve as a trustee
for funds deposited by cities and other governmental agencies
in the Orange County Investment Pool (OCIP); and
WHEREAS, the Orange County Treasurer/Tax Collector
represented to the City that it adhered to all provisions of
State law regulating the activities of county treasurers as
well as the specific provisions of Orange County's own
investment policy; and
WHEREAS, the County continues to hold the City of
Tustin's accrued interest earned while City funds were
deposited in the OCIP, and
WHEREAS, the County continues to hold funds the City
deposited for the 800 mega hertz police communications system
and County matching funds for road construction projects, and
WHEREAS, the Orange County Treasurer/Tax Collector made
assurances to the City of Tustin concerning the safety and
liquidity of the City's deposits in the OCIP; and
WHEREAS, the Orange County Board of Supervisors is
required by law to exercise oversight of the activities of the
Orange County Treasurer/Tax Collector; and
WHEREAS, the OCIP has incurred significant losses to
participants' deposits due to the over-leveraging of the
portfolio and the use of high risk investment instruments; and
WHEREAS, on December 6, 1994, the County of Orange filed
for bankruptcy under Chapter 9 of the Federal Bankruptcy Code
on behalf of the County and the OCIP,
NOW, THEREFORE, BE IT RESOLVED, that the City of Tustin
City Council demands that the Orange County Board of
Supervisors accept its fiduciary responsibility to the
participants in the OCIP, and
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Resolution No. 95-16
Page two
BE IT FURTHER RESOLVED, that the City Council of the City
of Tustin totally rejects the "share the pain" theory being
promoted by the Orange County Board of Supervisors or any
attempt by the County to use a "cram down" approach in dealing
with creditors; and
BE IT FURTHER RESOLVED, that the City Council of the City
of Tustin demands that the Orange County Board of Supervisors
immediately return 100 percent of the funds the City of Tustin
had on deposit in the OCIP, and other City funds held in trust
by the County, and adopt a bankruptcy plan in which the Orange
County Board of Supervisors assumes the entire responsibility
for this crisis and which makes every victim of this crisis
whole.
PASSED AND ADOPTED, at a regular meeting of the City
Council for the City of Tustin on this day of
, 19~.
THOMAS R. SALTARELLI, Mayor
ATTEST:
MARY E. WYNN, City Clerk
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RESOLUTION NO. 95-17
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN,
CALIFORNIA, DEMANDING THAT THE ORANGE COUNTY BOARD OF
SUPERVISORS RESCIND ANY ARRANGEMENT WITH ITS
PUBLIC RELATIONS FIRM AND INSTEAD MEET ITS FINANCIAL
OBLIGATIONS TO THE ORANGE COUNTY INVESTMENT POOL PARTICIPANTS
WHEREAS, the County of Orange (County) filed bankruptcy
on December 6, 1994, as a result of the collapse of the
County-managed Orange County Investment Pool (OCIP); and
WHEREAS, the County has hired attorneys and consultants
to represent the County's interest in the bankruptcy
proceedings; and
WHEREAS, it should be expected that a reasonable amount
of funds will be expended by the County for expert legal and
financial advice; and
WHEREAS, the County has also retained a Beverly Hills
public relations firm to promote its image and to apparently
convince outside interests such as the financial markets that
the situation is under control; and
~ WHEREAS, the financial markets and bond rating firms are
fully capable of ascertaining the facts concerning the
County's financial status without the spin placed upon the
situation by a public relations firm; and
WHEREAS, the Orange County bankruptcy is a topic of
world-wide conversation and the media is more than capable of
reporting the facts without the assistance of a County-
financed public relations firm; and
WHEREAS, to date the County has incurred obligations of
nearly $300,000 to the public relations firm without a
contract; and
WHEREAS, the public relations firm is asking the County
for authority to expend an additional $300 000 for public
relations; and' '
WHEREAS, the current estimated financial loss caused by
the collapse of the OCIP is 1.7 billion dollars and the
County's share is estimated to be hundreds of millions of
dollars; and
WHEREAS, the County has stopped meeting its obligations
to pay its vendors and suppliers of services, many of whom are
small businesses;
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Resolution No. 95-17
Page two
NOW, THEREFORE, BE IT RESOLVED, that the City Council of
the City of Tustin urges the Orange County Board of
Supervisors to immediately rescind any arrangement with its
public relations firm and instead meet its financial
obligations to OCIP participants and others affected by the
bankruptcy.
PASSED AND ADOPTED, at a regular meeting of the City
Council for the City of Tustin on this day of
, 19~.
THOMAS R. SALTARELLI, Mayor
ATTEST:
MARY E. WYNN, City Clerk