IRVINE : City Manager Rejects Calls to Step Down

City Manager Paul O. Brady Jr. fought back Tuesday night against critics who have called for his resignation because of the city’s stake in the county investment pool.

“I will not be intimidated,” Brady said, reading from prepared remarks. “The city manager has no intention of stepping down, nor will I be made a scapegoat.”

Brady said no city investment polices have been violated. His comments followed a report by outside auditors who said investment losses can be covered without cuts in services paid for by the city’s $62-million budget.

Irvine could lose up to $42.3 million of $208 million invested in the county pool, according to Price Waterhouse accountant Glenn Hiraga. And if the county does not reimburse funds needed to pay $75 million in bond debts due in July, the city could face an additional $6 million in interest charges to refinance the debts.

But Hiraga said the city can dip into a $50-million Asset Management Plan account to cover potential long-term losses. The account was established to fund city rehabilitation projects. And debt refinancing costs could be paid with $2 million in budget surplus funds, $3 million in emergency reserves and $2.1 million expected from the sale of the old city hall building, according to Hiraga.

Frequent council critic Gary Kingsbury accused city officials of engaging in “happy talk” while glossing over the impact of potential financial losses. Kingsbury vowed to launch a recall drive against council members who voted to invest in the county pool, if City Manager Brady and Finance Director Jeff Niven are not fired within 30 days.

Council members Barry J. Hammond, Paula Werner and Mayor Michael Ward voted in July to borrow $62 million to make an extra investment in the county pool.

Council members Christina L. Shea and Greg Smith voted against the plan.

Ward said a Price Waterhouse internal investigation should be completed in about three weeks. “I will not be blackmailed into firing someone before I know that there is a reason to do so,” Ward said.