IRVINE : Unhappy Council Approves Bankruptcy Settlement Offer

The City Council grudgingly accepted Orange County’s bankruptcy settlement offer early Wednesday, but members said they are not optimistic about the prospects for recovering all of the city’s money.

The council unanimously voted for Option A, which would return to the city by June 5 about $177 million of the $208 million it had in the county’s failed investment pool.

“I feel like I’m getting screwed every which way by the County of Orange,” an exasperated Councilman Greg Smith said shortly before the 1:10 a.m. vote. Although Smith said his first reaction to the proposed settlement was in favor of a lawsuit, he joined other council members in unanimous support of Option A, which guarantees a cash payment but limits the right to sue.

City Manager Paul O. Brady Jr., who also serves as co-chairman of the pool participants committee, told council members the plan does not guarantee a full return. “I don’t think any of us can say with 100% certainty that we’re going to get that (last) 11% back,” he said.

Resident Gary Kingsbury, leader of a recall campaign against three council members, said that uncertainty over the recovery of city funds contradicts assurances made by the three recall targets.

“Your city manager, your investors are all saying, ‘This is a hope and a prayer right now,’ ” Kingsbury told council members. “For you to say that we’re going to get this money when everybody else is saying a hope and a prayer--I just want the public to know where we stand.”