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Original post made
on Jan 6, 2011
I understand that the districts lost $$ when Lehman failed but did anyone anticipate that? Wasn't it a big surprise within the investment community? Did the school districts pay to hire financial advisors or did they try to save money by leaving investment decisions to non-professionals?
I don't have a dog in this fight, but suing SMC for negligence or "fail[ing] to diversify" looks pretty lame. Why not take responsibility for the decisions to participate in the fund pool? Didn't school boards & Sup't have to approve this? Are they getting sued too?
Unfortunately this is typical behavior in a society which has devolved into finding others to blame for our own poor decisions & expecting reimbursement through court action. Time for tort reform, too. Some law firm is looking for a fat paycheck here. Oops, maybe this is pro bono!
The superb Financial Manager at the Fire Board saw the Lehman collapse coming and took the Fire District's funds out of this County managed fund. The Fire District didn't lose a penny.
I have been told that school district are required by law to keep their funds in this County managed account but I do not know if that is a fact. AT least the school districts should have gone on record with the County on this issue before the Lehman collapse if they were concerned about the Lehman investments - did they?
All of the public school districts in San Mateo, including SMCCCD are REQUIRED by law to deposit their funds in the county investment pool that is managed by the County Treasurer's office. This, ironically, is to protect those public funds from mismanagement at the school district level.
So, "Downtowner", you are completely incorrect. The school boards and superintendents had not authority over how the funds were invested. And most school boards and superintendents are in the business of managing public education systems, not in evaluating investments. That's the job of the County Treasurer's office.
Responsibility - AT least the school districts should have gone on record with the County on this issue BEFORE the Lehman collapse if they were concerned about the Lehman investments - did they?
It wasn't only that the investment was made in Lehman with OUR tax dollars and OUR bond money, it's that the amount invested was MORE than the county was supposed to have invested in any one place. Keeping money with the county is just supposed to be that. They don't have to MAKE money on the money. Careless and stupid. It's OUR money that WE want back. Don't make this an issue of "the schools" Some of the money that was lost was just being held by the county for a payroll. It was not supposed to be used by the county to make money!
The answer to your question is Yes, they did.
That's funny, losers sue when they make a bet and loose. Take responsibility, what are you teaching your kiddos in school????
Sue, you miss a critical point: The school districts are REQUIRED to turn their money over to the county. The county invests it. The schools have no choice in the matter, from entrusting it to the county or what to invest it in. But when they see that the money was invested recklessly (and/or stupidly), and lose millions as a result, is it any wonder they try to hold the county accountable and recoup the money?
I think all the taxpayers in the County should sue the County for losing money in the San Mateo County Employee Retirement fund which the taxpayers will have to support.
We should sue CalPERS for the same reason. both funds dropped by a third.
Then we should sue somebody (maybe the mortgage banks) for allowing the no-downpayment-mortgages which set the failures off. And then we should sue the US government agencies Fanny Mae and Freddy Mac for condoning the practice. Then we should sue......
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