How one Orange County community college district found $8M of its own money
Sep. 7—Rancho Santiago Community College District found itself this summer in a position almost too good to be true, after officials received
Two checks — one for
The collective
Advertisement The smaller check came from rebates, or dividends, accrued through
The rub ? Most
The ever- growing balance was never reported on the district 's budget, and a regular accounting was never provided to the
It wasn 't until a group of current and former employees, following up on the status of a
This is the story of how a public school district — one that had endured post- recession layoffs and salary freezes while banked dividends multiplied off the books — came to learn through numerous public records requests and collaboration with the Daily Pilot the details of a long and murky relationship with ASCIP that has been anything but transparent.
In short, it 's about how a district found
The great rebate debate For years, members of
Whenever collective premiums, paid into the pool by scores of
Under the program, districts can transfer dividends to their individual general funds, apply them to programs, equipment and training designed to minimize their risk of liability or use them to draw down the cost of future premiums. They can also cache them in a risk management deposit fund.
But
"This
Last fall, a rebate was proffered to
During an
"The question is, did we overcharge you ? Well, yeah, because if we undercharged you we 'd have to assess you in the middle of the year. So we always add a little bit of margin, just for safety, " he told trustees.
"But we do have a significant equity balance that we have built for just this purpose, " he continued, "so we can keep rates stable — that 's one of the advertised benefits of ASCIP — and so we can launch value adds that we believe will get a positive return on investment."
Board members in attendance at that meeting decided to stay in the pool with ASCIP for one more year and revisit the matter this year. They are scheduled to take a vote on the health insurance contract during their regular meeting Monday.
But something didn 't sit right with one union president, whose questions about a single rebate from a statewide insurance risk pool started a tidal wave of interest and inquiry that would lead to a public demand for the entirety of
The inscrutable risk management fund In May of this year, when the district 's
What had happened to those promised funds ?
As a member of the benefits committee, Barembaum had asked about the rebate in the months following Sanger 's declaration that it had been sent but was told twice it had not been received.
So, he emailed
Through a series of emails with Ingram and other district administrators that have been reviewed by the Pilot, Barembaum said he learned
As a lead negotiator for the faculty union, Barenbaum, a
Yet he had never heard about the risk management fund held by ASCIP.
"They didn 't give us the
Curious to learn whether other district stakeholders knew about it, Barembaum reached out to
Resnick, it turns out, was already looking into another insurance- related matter involving the district and its ASCIP rebates and had just seen mention of a "
Wanting to drill down to the truth, Resnick continued to send public records requests to the district and, on
"I was shocked. I didn 't believe it, " Resnick recalled of the discovery. "This rebate thing I had heard for a half a dozen years, and it never made any sense to me. Pretty much from the beginning of [the time our district began ] working with ASCIP, the rebates were mentioned and they were emphasized during the times we went out to bid. But Morrie was really the one to push them on where the rebates were."
The 'annual cry of poverty '
Learning of the existence of the
"There were years I sat at the table and listened to them tell us they had no money, " he recalled of annual contract bargaining sessions with then- Vice Chancellor of Human Resources
"It was the district 's annual cry of poverty : 'We don 't have any money, maybe we can give you an off salary schedule raise, maybe we 'll give a raise in the spring, but we don 't have any money for staff development.' And they had anywhere from
Resnick took the information he 'd learned to trustee Yarbrough — a 28- year veteran board member who owns two real estate investment and management companies and is a self- described budget wonk.
For all his tenure and credentials, the risk management fund held by ASCIP was as much of a mystery to him as it had been to Resnick and Barembaum.
So, during a
"There 's
"This just has to go back into where the taxpayer money is supposed to go, " he continued. "I just don 't think it should be held at an insurance company."
The day after the board meeting, seeking to learn how long the district 's risk management account had been accruing funds, Resnick sent out another records request, asking for all statements from ASCIP, from
By way of a
Nearly three weeks later, on
Some withdrawals included a note indicating the date the
But the board dockets associated with each referenced approval date, examined by the Pilot, either fail to list such expenses entirely or indicate the purchases as being paid out of Fund 11, the district 's unrestricted general fund.
Yarbrough maintains the board only approves purchase orders paid out of two general fund accounts and one for categorical one- time dollars earmarked for specific things.
"There 's no way the board would approve expenditures that came from a fund held outside the district or the treasurer 's office — no way in hell, " he said in a follow- up conversation Wednesday.
A request for an interview with ASCIP chief executive
"Media interviews [are ] not really a function which ASCIP is intended to serve or should undertake, generally or at the expense of time for its members, " Feldhake wrote in the email. "Interviews with print media are outside the purpose and function of ASCIP, the availability of staff, and not where priorities presently exist."
Ingram, the district 's Business Services vice chancellor, initially agreed to answer questions in a Zoom interview on Tuesday but canceled 90 minutes prior due to illness, according to an email from the district 's spokesman, and asked to reschedule for the following week, after publication of this story.
Searching for answers The questions about ASCIP — a joint powers authority that has handled much of
It 's been nearly a year since the decision was effectively tabled. And now the currently configured
"Had each of us not pulled a little thread in this tapestry, we wouldn 't know about any of this, " he said.
He sought a review of the risk management deposit fund under the board 's audit committee but was told by Martinez the panel only had purview over
"Someone is going to answer to me how this account was set up, how it was ever allowed to exist and where did the money go, " Yarbrough said. "I 'm going to get to the bottom of this, and I 'm not going to rest until I get my answers. And they 're going to want to give them to me because they have nothing to hide."
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