FULLERTON : Council Not Willing to Forgive Pool Debt

Councilmen Peter Godfrey and Chris Norby tried this week to persuade their colleagues that the city should forgive 11% of the money Fullerton is owed from the failed Orange County investment pool.

Godfrey and Norby proposed adopting such a resolution at the suggestion of Assemblyman Curt Pringle (R-Garden Grove) and state Sen. John R. Lewis (R-Orange).

The two legislators, in a letter to cities that had money in the pool, suggested the debt forgiveness as an alternative to Measure R, the proposed half-cent sales tax increase.

“We call on you to forgive the county of the final 11% that they owe you,” they wrote.

“The county claims to need a total of $1.966 billion to meet all of its obligations. Counted in that is $407 million that they owe cities and districts in unsecured claims,” the letter continued. “If this $407 million were forgiven . . . the taxpayers of the county would be relieved from finding nearly half a billion dollars in revenue.”

But Councilwoman Jan M. Flory responded that she found the request “ill-advised and silly.”

Councilman Don Bankhead added: “This is distasteful to me. . . . I think it’s very unfortunate that we are even discussing forgiveness.”

The county’s financial crisis, he said, “was not done legally. If it had been done legally, then I for one would be willing to take my blows.”

Godfrey and Norby argued that forfeiting the cities’ money--about $2 million--would be a solution to the county’s fiscal problems.

But Mayor Julie Sa, Bankhead and Flory--a council majority--said they want the county to return all of the $22 million that Fullerton had in the investment pool when it collapsed in December.