Approximately $25 million of the district’s money has been lost due to the recent bankruptcy of a prominent financial-services firm.

After Lehman Brothers Holdings Inc. filed for bankruptcy in September, the San Mateo County Community College District [SMCCCD] took one of the largest financial hits in its history. The impact that this will have on each college (Skyline, Canada, CSM) will be significant.

“The district has a $750 million construction plan,” said Jim Keller, Executive Vice Chancellor for the district. “If [the district] should lose $25 million, those projects at the end will most likely lose out.”

According to Keller, many plans will be put on the back burner, at least until the district can recoup its losses.

“One of the last things that will occur at each college is the improvement to its roads and parking lots, as well as the improvements of buildings,” Keller said.

However, the district is not alone in its losses. According to Barbara Christensen, the district’s director of community and government relations, $155 million in local government funds that were invested have also been lost due to the Lehman bankruptcy.

By law, the district is required to deposit any revenue from bond sales and other cash assets in the County Investment Pool. The pool, which is managed by the County Treasurer, “acts much like a bank [in that it] holds your money,” according to Keller.

“When the fund pool loses money, the depositors share the loss as well as any gains,” Keller said. “[Because] Lehman went bankrupt, all debt instruments with them are now in jeopardy.”

The district is scrambling to minimize the impact that the loss will have on each college. According to Christensen, “this is a matter of serious concern for students, employees, and the community.”

“Legal and investment professionals are currently reviewing the Community College District’s options to determine how best to protect our investments, minimize our losses, and prevent a recurrence,” Christensen said in an e-mail addressed to all district employees.

According to Keller, although the $25 million loss is likely to occur, it is not written in stone. “We will have to wait and see what the values are.”

However, the district is taking immediate action to prevent any further loss.

“We have notified the County Treasurer and the County Counsel that the [district] will act as we deem it appropriate to protect our interests, in consultation with our legal and financial advisors,” Christensen said. “We have also asked that we be kept informed of further developments in this matter and that we be consulted regarding the steps being taken to mitigate this loss.”

Some Skyline College students, like Rosa Rico, think that the loss is inexcusable and are upset over how it affects students.

“We [Skyline] were planning to do new things, but now we can’t,” Rico said. “It’s unfair to me, and it’s unfair to all students. It isn’t [Lehman’s] fault. The district should have had a backup plan.”