Council to Review Investment Policy

To limit risk and tighten accountability in the aftermath of the county bankruptcy, the City Council today will review a new investment policy.

Irvine had $209 million in the county investment pool, which collapsed in late 1994.

The policy that led the city to borrow money to invest in the pool resulted in the removal of the city treasurer from office and in an unsuccessful attempt to recall three City Council members.

Councilwoman Christina L. Shea, who voted against the “borrow-and-bet scheme,” said she wants the new investment policy to restrict such arrangements.

“I just don’t think it’s a good policy to borrow money for investment,” Shea said.

Council members formed a Financial Investment Committee in the wake of the county bankruptcy to oversee investment strategy.

The new policy was crafted by the committee and approved by the city Finance Commission on Jan. 16.

In September, the city hired Ohio-based United American Capital Corp., a company headed by former state Treasurer Dennis Yacobozzi, to manage the city’s $325-million investment portfolio.

United American Capital officer and Oceanside resident Carole Gierhart now serves as city treasurer.

“We did not have the sophistication a city of our size needed,” Shea said.

“It was easier for our staff to invest most of the money in the county pool and allow somebody else to take care of it. This time, we must have more diversification.”