LOS ALAMITOS : City Manager to Give Update on Pool Funds

City Manager Robert C. Dunek today will update City Council members about the city’s $2.2-million investment in the bankrupt county treasury and the efforts being made to recover the money.

Dunek said the bankruptcy has so far not affected the city’s daily operations, but the 1995-96 budget and critical projects such as street and park improvements could be harmed.

Also, about $70,000 of the city’s property taxes collected before the Dec. 6 county bankruptcy filing remain frozen, he said.

But, he said, the judge handling the bankruptcy is expected to agree at a Friday hearing to release property taxes the county has held back. County officials also had promised to release the money, he said.

In his report, Dunek will outline the bankruptcy process, the key players involved in resolving the financial crisis, and the efforts of depositors to recover their full investments.

The recent announcement by Thomas W. Hayes, the former state treasurer who is helping restructure the county fund, that the investment pool lost $1.69 billion, instead of the original estimate of $2.2 billion, increases the city’s chances to recover most of its money, Dunek said.

Exactly how much the city would recover will be determined by a plan still being developed that calls for the return of the investors’ money from the pool, he said.

The final phase of the process, Dunek said, involves the $2-billion lawsuit the county has filed against bond broker Merrill Lynch in an effort to recover the losses the investment fund suffered.