ORANGE COUNTY IN BANKRUPTCY : Irvine’s Brady Fighting for Pool Investors, and for His Job : Profile: He’s a leader of creditors committee, but critics note that he backed the fund that backfired.
City Manager Paul O. Brady Jr., is learning that there are things in life he just can’t control.
Such as time. Brady can’t find enough of it as he zips through each business day, running this city and serving as one of the top officials in a group representing the cities, schools and special districts that may have lost hundreds of millions of dollars in the collapse of Orange County’s investment pool.
Personal life? Eating? Forget it, says Brady, who has stepped up to the plate as a leader of the county’s investment pool creditors committee just as he did in his earlier professional baseball days with the Pittsburgh Pirates organization.
“I have lost weight. There has been no personal life for me and for my family in the last two months since this all started,” Brady said. “With 15-, 16-hour days . . . you just get wrapped up on the inside with this.”
Friends and associates say the pace has taken a toll.
“I’ve never seen him (look) so bad,” said Sally Anne Sheridan, former Irvine mayor, who attended a holiday dinner with Brady that was interrupted three times because he had to answer his beeper. “He looked like he was working all night. We were worried about him.”
It is Brady’s position as current president of the Orange County City Managers Assn. that led to a seat on the creditors committee, a selection made by U.S. Bankruptcy Trustee Marcy J.K. Tiffany. In all, 187 investors--the county, cities, schools and special districts--have lost $1.69 billion in the collapse of the pool.
Brady has emerged as a forceful voice for cities with money in the pool and a strong critic of the county.
Known as a get-it-done, straight-shooter type, Brady is uncomfortable in the limelight. But his decisions and role in plotting the financial strategy that led to Irvine investing $209 million in the county pool--including $62 million in borrowed funds--have put the 53-year-old administrator’s future in jeopardy.
Angry residents who have formed the Coalition for Public Responsibility are expected to meet tonight in Irvine to discuss seeking Brady’s ouster and recalling the City Council.
“Our concern is that the same people that led us into this problem are going to be the same group that solves the problem for us,” said coalition member and Irvine resident Gary Kingsbury. “I don’t have any trust in this group.
“If a business suffered such heavy losses, you would see the top guy and several top officials go,” he added. “The county got rid of (demoted County Administrative Officer Ernie) Schneider. Brady has to go.”
It won’t be easy toppling the popular executive, who has been with the city in various management positions since it incorporated in 1972. So far, most council members said they still trust Brady’s judgment.
“He’s highly professional and is responsive to the residents and the council,” said Councilwoman Paula Werner, who added it is too early to decide which city officials are to blame for the crisis.
The City Council has commissioned an investigation by the Price Waterhouse accounting firm and city legal counsel to examine the city’s investment practices and assess the actions of top city officials.
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“This is an outside and impartial review,” Werner said. “I think this will help us come to grips with how this happened.”
Werner and others said they will closely review the Price Waterhouse report and consider residents’ views before making any final judgments on the roles of Brady and others in the crisis.
“The next two or three weeks are going to be critical in terms of getting information,” she said. “We need to listen to the community.”
Brady said he’s not letting criticism from residents sidetrack him.
“I’m a street fighter,” Brady said. “I don’t run away from anything, especially if I truly believe in what I’m doing. I have no intention of walking away from my service and responsibilities here. If the City Council doesn’t like what I’m doing, they have a right to seek and ask for my termination.”
Intensely athletic, Brady was once a first baseman for the Pittsburgh Pirates AA farm club. He is a former competitive body builder who was once a sheriff’s deputy in Santa Barbara County.
Kingsbury and other coalition organizers said they have been contacted by more than 250 residents. They were moved to act by what Kingsbury described as the “City Council’s silence” immediately after investment losses came to light, and Brady’s subsequent insistence that city service levels “will not be reduced.”
“The schools back in December acknowledged there was a problem, acknowledged there was a mistake and how they needed to think about alternatives,” Kingsbury said. “On the city side, it’s like there isn’t any problem and how we’re going to get 100% back from the county. It’s all happy talk.”
Brady responded that “it’s easy for political opportunists to make statements. At the appropriate time, I’m going to be able to respond to those critics. We haven’t had the time or opportunity to respond.”
Despite $78.6 million in principal and interest payments due by July 27, Brady remains confident that the city’s financial obligations will be met. More than $80 million in city investments are secure outside the county pool, Brady said.
Frustration levels increased, however, when coalition organizers began digging into tapes of City Council meetings and found bold comments on the so-called safety of the investment pool by city Finance Director Jeff Nevin.
Questioned in 1993 about the unusually high interest rates the pool was earning, an indication of high risk, Nevin said: “The Orange County investment pool offers no principal risk.” He added that it would take “a major, international war” to threaten the county pool.
Brady said the county investment pool was a good deal at the time for a city with a tradition of fiscal conservatism.
“Nothing has changed with our image as far as being fiscally conservative,” Brady said in an interview Thursday. “There was an opportunity presented to us and the city of Anaheim and school districts to get into the revenue enhancement programs. The interest earnings were going to be higher and they were going to help offset development costs in the city for parks and streets.”
The city earned about $2.2 million in 1993-94, Brady said. For fiscal 1994-95, it would have reaped $300,000 to $1.1 million in interest if the pool had not collapsed.
Some residents, including former Irvine Mayor Larry Agran, believe that Irvine ultimately could lose about $55 million in the fund.
“Not true,” Brady said. “There is no loss yet. People are speculating. We still have every desire to bust our butts to get 100% of our money back on this.”
According to Brady, Nevin and an assistant city manager recommended in 1993 that the city join the county investment fund. Brady said he approved the recommendation, which was endorsed by a council-appointed finance commission and approved by the council itself.
These days, Brady shuttles between meetings on city business and serves as a spokesman for cities with money in the fund.
“I feel he’s done a good job in a very difficult situation,” said Costa Mesa City Manager Allan L. Roeder, who has known Brady for more than a decade. “Even with 31 cities, you have 31 different opinions. So it’s difficult for one individual to fairly represent the opinions of all participants.”
Roeder credits Brady with advising cities to approach the crisis as a unified front instead of seeking their own remedies.
Brady has also emerged as a leading proponent of a radical restructuring of county government. He believes cities can provide some services, such as planning and public works, more efficiently than the county. He and other city managers are already working on a plan for cities now served by the Orange County Fire Department to manage the agency.
As Brady’s responsibilities multiply, Irvine Councilwoman Christina L. Shea said he needs to continue to focus on the taxpayers who pay his salary.
“He’s in a very sensitive position,” Shea said. “But he needs to represent the views and interest of the city.”
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Profile: Paul O. Brady Jr.
Position: Irvine city manager
Age: 53
Education: Bachelor’s degree in recreation administration, Cal State Los Angeles; graduate studies in public administration at Cal State Los Angeles, Cal State Long Beach and USC
Sidetrack: Played minor league baseball in the Pittsburgh Pirates organization
Professional experience: Variety of public administration positions beginning in Monterey Park in 1956; has worked for city of Irvine since May, 1972. Served 12 1/2 years as assistant city manager.
Salary: $136,000 per year
Home: Irvine
Family: Married, six children
Hobbies: Weight training, golf
Attitude: “I’m a street fighter. I don’t run away from anything, especially if I truly believe in what I’m doing. I have no intention of walking away from my service and responsibilities here.”
Source: Paul O. Brady Jr.
