School districts, counties and cities across Florida are seekingt to raise cash after being denied access to their deposits in a $14 billion state-run investment fund.  The Jefferson County school district was forced to take out a short-term loan to cover the payroll for the 220 teachers and other employees in the system after $2.7 million it held in the pool was frozen yesterday. At least five other districts also obtained last-minute loans, said Wayne Blanton, executive director of the Florida School Boards Association.

Florida’s State Board of Administration, manager of the Local Government Investment Pool, halted withdrawals yesterday at an emergency meeting after $13 billion was pulled out this month from participants. Governments from Orange County, home of Disney World, to Pompano Beach asked for their money back following disclosures that the fund held $1.5 billion of downgraded and defaulted debt.

An advisory panel of school and local government officials with money in the frozen investment pool told the fund’s management late today, following a more than two-hour conference call, that they won’t accept a return of less than 100 percent of their investment.  The board said $1 billion was withdrawn from the pool just before the freeze, reducing the fund’s size to $14 billion, a 48 percent decline for the month. Yesterday, state officials said the pool held $15 billion.

By freezing the Florida fund, officials left governments without ready access to cash they are accustomed to drawing upon for routine expenditures. The pool was the largest of its kind in the U.S. at $27 billion before the unprecedented withdrawals.  Wilson at Jefferson County said he plans to withdraw the school district’s money from the pool as soon as he can, and won’t consider investing there again.