Capistrano Unified School District trustees want the state to ensure that the district gets a 100% cash return of the funds it had in the county's failed investment pool.
Under a county proposal, school districts would receive 90% back in cash and secured notes but the remaining 10% in county-issued IOUs. Capistrano trustees passed a resolution Monday asking the state to swap cash for the IOUs for all county school districts.
"We think it is proper," Supt. James A. Fleming said. "This is simply putting (state officials) on notice."
Also, for the first time in the school district's history, Capistrano trustees on Monday downgraded to "qualified" an interim financial report to the state. The change from a "positive" rating means that school districts officials are unsure whether they can pay district bills through the end of the fiscal year, June 30. The annual budget is $136 million.
"It is really a terrible thing for all of us," said Carleen Wing Chandler, assistant superintendent of business and fiscal services.
Chandler told trustees that the downgraded rating would not subject the district to state penalties but put it on a "watch list."
The district had $74 million in the county investment pool when it collapsed. Under a current proposal to iron out the bankruptcy, district officials are figuring they will immediately lose $7.4 million, which is money they say is needed to operate without major cuts.
For weeks, school leaders here have said that the state should assume some financial responsibility in the county's investment debacle because state law required that the schools deposit their money with the county treasurer, who managed the massive pool.
Trustee Crystal Kochendorfer said Monday that the district's students should not suffer because of a county blunder. Kochendorfer said the district had already made $10 million in cuts over the past four years because the state had not provided any cost-of-living increases.