IRVINE : Tape of Council Votes on Investments Played

About 50 people gathered at a Common Cause meeting Wednesday night to watch videotape excerpts of meetings in which City Council members voted to borrow money to invest in the troubled county investment pool.

The tape was compiled by former city budget analyst Stephen C. Smith, who unsuccessfully tried to have the tape played Tuesday night at the city’s first public forum devoted exclusively to the county financial crisis.

The city has conducted weekly meetings since the county’s Dec. 6 bankruptcy filing to offer time for public comment.

But Smith and others affiliated with the newly formed Coalition for Public Responsibility say the public debate over the council’s actions is incomplete without a viewing of the 26-minute videotape.

Smith says the tape reveals the council’s “overreliance” on city staff.

During the meetings of April and July, 1994, Councilman Greg Smith, no relation to Stephen C. Smith, repeatedly questioned the safety of the county investment pool.

“What guarantees do we have from the county that they would be able to repay us our principal in full a year from now if we were to go ahead with this deal?” Greg Smith asked city Finance Director Jeff Niven during an April, 1994, council meeting.

“There are no guarantees in really any financial market,” Niven answered, explaining that he believed the investment pool was safe because it had earned top rankings from Moody’s and Standard & Poor’s investment rating services.

“The county has never had a paper loss or a loss on any investment. The rating agencies’ highest rating is virtually our guarantee that the county will protect our principal,” Niven said.

In April, Smith was the only council member voting against the plan.

In July, Councilwoman Christina L. Shea joined Smith in voting against the proposal.