The article below originally appeared in the Foster City Patch and is being reprinted with permission.

The San Mateo County Community College District wants to diversify its portfolio rather than fully invest in the county pool fund.

At the Dec. 15 meeting, the Board of Trustees entertained alternative financial strategies to prevent fiascos like the the district’s $25 million loss due to the county fund’s investment in Lehman Brothers. The board, frustrated by budget pressures and uncertainties in state funding, discussed the district’s ability to invest independently.

“I feel like we’re putting our funds at undue risk by having 100 percent invested with the county,” said Board of Trustee Vice President-Clerk Dave Mandelkern.

The district decided to investigate the legal issues surrounding investment reallocation.

“County counsel has affirmed that, for the most part, the school districts have the right to invest surplus funds, and it is up to the board to decide what funds are surplus,” said Vice Chancellor Jim Keller of the findings.

Surplus funds are monies that are not required for immediate needs, such as operational costs, according to San Mateo County Counsel Michael Murphy.

Operational funds are required to be deposited in the county pool investment fund, but it remains uncertain as to which funds are judged operational versus surplus, according to county Assistant Treasurer Charles Tovstein.

Moreover, board members were unsatisfied with the county’s level of financial transparency with the college district.

Keller said that the district’s foundation investment manager, in contrast with the investments in the county fund, provides same-day notifications of transactions—but acknowledged that there is a very limited amount of activity in the foundation investments, typically only two to three transaction per quarter.

“We have received the highest rating from S&P that is available,” said Tovstein, who also said his office has quarterly reports and runs the portfolio daily—and wasn’t clear on questions the district trustees were posing regarding transparency.

Tovstein also said that the Investment Advisory Committee meets quarterly with representatives of all organizations invested in the pool, and that these meetings are open to the public.

While there are still disagreements regarding a number of other complaints, such as diversification of funds or checks on credit ratings of investments, Keller said he is continuing to investigate the district’s options.

“We’re going to be diligent in taking our time to be sure,” he said, estimating that his office would probably be getting answers after the first of the year and would be likely to present a packet to the board in January or February.