DANA POINT : Investment Settlement OKd by City

The City Council has reluctantly approved a plan for distributing the money in the county’s collapsed investment pool that will return $11.98 million in cash to city coffers.

The county has promised to repay another $582,000 by June 5, but the city may have to wait years for the county to make good on IOUs for the remaining $3.75 million it had in the bankrupt county’s $5.7-billion investment pool, officials said.

In accepting Option A on Tuesday, council members gave up the right to file suit to recoup more money. Option B would have guaranteed the immediate return of less money, but preserved the city’s right to file a lawsuit.

The council leveled heavy criticism on the county for its handling of investment pool losses and the subsequent Dec. 6 bankruptcy declaration.

“The best option for Dana Point residents is not available tonight,” said Councilwoman Toni Gallagher. “The best option would be for the county to return 100% of our investment right now, not five to 10 years from now.”

Councilwoman Karen Lloreda said the “options before us continue to reflect (the county’s) efforts to cover their own needs. . . . I find it shameful.”

Earlier, financial consultants representing pool investors said a major victory in the settlement agreement was getting the county to legally acknowledge its debt.