The Menlo Park City School District expects a "significant" loss in its funds that are deposited in the San Mateo County treasury due to the bankruptcy of Lehman Brothers, the investment bank, district Superintendent Ken Ranella said in a statement Monday.
The exact amount, however, has not been determined yet.
County Treasurer Lee Buffington is estimating a total loss of $150 million from the county's $2.7 billion pool as a result of the bankruptcy of Lehman Brothers, Mr. Ranella said. Securities issued by Lehman Brothers represented about 6 percent of the county pool, he said.
The Menlo Park district had about $70 million in the pool, about 2.6 percent of the total, Mr. Ranella said in a written statement.
If the district takes 2.6 percent of the $150 million loss, that would amount to $3.9 million.
"It has been proposed that at the conclusion of the quarter, each pool member's loss will be calculated based on the average daily balance of all members of the pool," Mr. Ranella said.
Although district holdings during the last eight quarters amounted to about 1.5 percent of the pool, that percentage rose substantially this quarter as funds from a bond sale in June were deposited in the county treasury in July, Mr. Ranella said.
All public schools are required to invest "all their working funds" in the county treasury, he said.
Mr. Ranella noted that five days prior to the bankruptcy, the district notified a member of the county treasurer's oversight committee expressing concerns about the concentration of county investments.
"The Board of Education and I are highly focused on this issue," Mr. Ranella said. "Although the Lehman Brothers crisis is beyond our control, we hope to be able to influence the distribution of the loss with the County to limit our impact. Additionally, we will do what we can to ensure that the financial bailout under consideration in Washington, D.C., includes provisions to assist impacted local municipalities, counties and school districts."