Agencies Discuss Use of Heiress’ Largess : Gifts: The proposed donation of at least $1 million by Joan Irvine Smith to establish a water institute has officials brainstorming.

For the first time since multimillionaire Joan Irvine Smith offered to help pay for local water projects, officials from four public water agencies met Monday night to discuss possible uses of her largess.

The discussion was held less than a month after Smith asked the water districts to draft “wish lists” of projects that would increase Orange County’s water independence by using previously unusable water.

Smith said Monday that she would give “at least” $1 million to start a joint water institute. Other money would be drawn from federal and private grants from agencies interested in the water institute’s research, Smith said.

Monday night, officials from the Orange County Water District and Irvine Ranch Water District discussed ideas and how the institute would function.

“I think it was very productive,” Smith said after the meeting. Although each agency had its own concept of how the water institute should work, the meeting was a good first step, she said.

The other agencies participating in this proposed water institute are the Orange County Sanitation District and the Municipal Water District of Orange County.

Two weeks ago Smith announced her intention to fund water projects that would make Orange County a leader in reclaiming water that contains too much salt, organic particles or toxic chemicals to drink.

Smith said the money for to water research would be part of about $30 million she planned to donate to various organizations in the county. That would happen, she said, after she receives proceeds from her settlement with the Irvine Co. for her former 11% share of the company.

But first, she said, she needs to get the settlement check. The ruling by a court referee awarding Smith $252.6 million for her stock still requires certification by Michigan Circuit Court Judge David F. Breck. After that, both sides have 45 days to appeal.

Irvine Co. spokesman Larry Thomas said: “We generally think it is fine and nice that she would make a commitment to share with the community, and the fact that the success of the Irvine Co. over the years would be behind that is fine also and the source of some pride. But there is a legal procedure we are going through. The question was never whether she would be paid but when.”

Robert Holtzman, a member of the legal team representing Smith, said attorneys for both sides are negotiating to shortcut the legal procedures.

“If we can reach an accommodation promptly, essentially the case would be deemed settled” and Smith would get her check, he said.

Otherwise, he said, the resolution of the case could be delayed for months, if not years, with objections and appeals.

So far, Smith informally has pledged millions of dollars to UC Irvine to help found a law school, establish a water-reclamation department within the School of Engineering, create clinical research facilities at the medical school and assist in research to help stop the Earth’s ozone layer from being eroded by man-made chemicals.

Smith also said she will give $60,000 to help clean up polluted ground water in the San Juan Basin, which underlies San Juan Capistrano, where she lives and maintains a horse ranch.

Other proposed Smith contributions include $1 million to the House Ear Institute in Los Angeles to help set up an ear research center at UCI, and $100,000 each to 10 environmental and historical causes. Smith said she will establish a foundation to distribute the remainder of the money.