Curry rules out own firm

Hoping to avoid any appearance of conflict, Newport Beach City Councilman Keith Curry has asked that the city not hire Public Financial Management ? Curry’s employer ? to invest money raised for capital projects.

The firm now handles $25 million in investments for Newport Beach, but Curry is not involved with that contract and no specific proposal was on the table to have the firm invest more funds.

Curry made the request not to use his firm at a Tuesday council meeting, immediately after pointing out that he will recuse himself from any council decisions on the city’s contract with Public Financial Management.

His comments were a response to criticisms from some residents that his firm could benefit from the city’s decision to use certificates of participation, a widely-used method of financing public projects that doesn’t require voter approval.

Certificates were suggested as a way to finance a new city hall, and a recent city initiative would have required a public vote before they could be used in certain cases, but the measure failed to qualify for the ballot.

Curry said Wednesday critics have suggested “somehow, somewhere, every time somebody buys a bond I make money, and that’s silly and ridiculous.”

The city has had a contract with Public Financial Management since 1992. It is one of five firms that handle the city’s investments.

Curry advises governments on financial planning. The investment management part of the business is separate, he said, though he does have a small financial interest in it.

“There’s never been any contact between him [Curry] and city staff over any financial matters,” City Manager Homer Bludau said.

He said he considers it a benefit to the council to have someone with Curry’s expertise. In the near term, the council will discuss how to plan for about $160 million in capital projects to be built over the next 20 years, and a report to the council Tuesday recommended using certificates of participation as a major component of the funding.

The move probably won’t satisfy all critics, however.

“I’m not satisfied at all,” said John Buttolph, who raised the issue of a conflict in a letter to the city attorney in April. He also spearheaded the initiative regarding city funding.

“He is an equity owner of a company that manages money for the city ? I’d be more satisfied if he said no, his company won’t manage the $26 million they currently manage.”

Although Curry asked that his firm not be used for that kind of investment advice, Bludau said nothing prevents the firm from asking to be considered if the city is seeking an investment manager.

It’s not unusual for residents to level accusations of bias at council members in Newport. Some have grumbled in the past that developers on the council were too pro-development.

“That happens to every politician in every community across the county, period,” said Councilman Tod Ridgeway, who develops shopping centers. He said in his many years on the council and planning commission he’s been the target of a few cheap shots, and that’s what happened to Curry.

“I think Keith handled it very well,” he said. “I don’t see a conflict of interest.”