City May Join New Investment Pool
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The city would become one of the founding members of a new investment pool for municipalities under a proposal to be heard by the City Council tonight.
Lake Forest would form a joint powers authority with West Hollywood that would be administered by MBIA, an Armonk, N.Y., company that insures government bonds.
Lake Forest had about $9.6 million in the Orange County investment pool when it collapsed in late 1994. The city has yet to recover about $1.85 million of its investment.
Dave Bass, city administrative services director, said the new pool would give Lake Forest more flexibility and security than is available with other investment groups.
Formerly known as Municipal Bonds Investment Assurance, MBIA would maintain a letter of credit drawn from a bank equal to whatever amount of funds are in the pool, Bass said.
The new pool also would allow participants to withdraw funds daily.
“It would be very liquid,” Bass said. “The guarantee of investment is a nice feature that isn’t offered by any other pool that I know of.”
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