Schools Respond in $20 Million Suit Against County

The by several local school districts claiming the county “failed in multiple respects” to manage school money reached a new phase this week.

The plaintiffs – who include the – responded to a by saying Brenda Carlson, San Mateo County’s chief deputy counsel, caused their tardiness in filing the suit.

According to attorney Farley Neuman, who represents the schools, Carlson repeatedly told him that filing the suit would “destroy the county’s lobbying efforts” to recover $155 million of county money lost when Lehman Brothers collapsed in September 2008. As a result, he says, the schools delayed in filing their claim against the county.

Twelve San Mateo County school districts and the county Office of Education charge that the county and its former treasurer, Lee Buffington, were negligent in keeping so much money invested in Lehman Brothers. The districts taking the biggest hits include Sequoia Union High School District, which lost nearly $6.6 million, and San Mateo Union High School District, which lost more than $5.7 million.

“The money lost by the county treasurer included funds for instruction and operations, taxpayer-approved bonds, and other funds critical to educating San Mateo County's children. The county treasurer charged the districts substantial fees to manage their money, for which the county treasurer was required to provide competent, professional investment services,” county schools Superintendent Anne Campbell said in January when the original suit was filed.

In response, the county’s attorney, Stuart Gasner, called the suit “Monday morning quarterbacking.”

“The Lehman Brothers bankruptcy was one of the most unexpected, catastrophic events in the history of American finance,” he told Patch, and “took the entire world by surprise” — not just Lee Buffington, who retired at the end of 2010.

On June 16, San Francisco Superior Court Judge Richard Kramer ruled that the districts cannot sue the county due to limitations in state law allowing such suits. The plaintiffs were given a month to respond to the judge’s ruling. The amended version of the lawsuit was filed this week.

The 12 county school districts that elected to join the suit – by a majority vote of their respective school boards – are:

• San Mateo Union High School District
• (Half Moon Bay)
• Jefferson Elementary School District
• Las Lomitas Elementary School District (Menlo Park-Atherton)
• Menlo Park City Elementary School District
• Portola Valley Elementary School District
• Ravenswood City Elementary School District (East Menlo Park)
• Woodside Elementary School District