Shaky economy impacts ASD

The Ashland School District was feeling the effects of the financial turmoil on Wall Street Monday as officials explained the impact on the district's $46.8 million construction projects.

The district could lose up to $230,000 because of investments held in the Lehman Brothers through Oregon's local government investment pool, Business Manager Jill Turner told members of the Capital Projects Advisory Committee Monday night. About 1 percent of the district's $23 million invested with the pool was exposed to Lehman Brothers, whose declaration of bankruptcy on Monday was the largest in American history.

The district also holds about $9 million dollars in Fannie Mae and Freddie Mac bonds through Davidson Fixed Income Management. Those funds are now guaranteed by the federal government since the mortgage giants were bailed out last week, which kept the portfolio pretty stable, Turner said.

Even with the potential losses, the district will still exceed its interest earning projections for the construction projects, Turner said, but there will be less left over for extra projects.

"The good news is we still aren't going to have to cut back on our plans," she said. "The bad news is there isn't going to be a big pot at the end."

It was too early to tell just how much the district will be impacted, as much of the recent events were unprecedented. In her 30 years of experience, Turner said she had never seen a loss in a local investment pool, for example.

"I don't know where it will all end," she said. "Is there exposure? Yes. There's exposure in anything you do ... the pillow isn't a good place to put your money, but you kind of wonder when you have the economy we have today."

In addition to Lehman Brothers' announcement, the Dow Jones industrial average fell more than 500 points Monday, a 4 percent drop that was the steepest decline since the day the stock market reopened after the Sept. 11, 2001 attacks.

Committee members were still in shock about Monday's events when they attended the evening meeting.

"I don't think there's anything we could have or should have done differently," said Superintendent Juli Di Chiro.

"Except buy a crystal ball," added advisory committee member Rick Barth.

Staff writer Julie French can be reached at 482-3456 ext. 227 or

Share This Story