COUNTYWIDE : Fuller Checks Urged on OCTA Vendors

Orange County’s top transportation official recommended Tuesday that his staff use independent information sources such as Dunn & Bradstreet to check the finances of companies doing business with the Orange County Transportation Authority.

Stanley Oftelie, OCTA’s chief executive officer, released a memo partly critical of his staff’s failure to fully document the financial health and history of SuperBus Inc. before granting it a non-competitive, $4-million contract for 10 buses.

A Times Orange County Edition investigation found that SuperBus was sued for an alleged failure to pay rent on its offices, and that some of its officers faced fraud charges in lawsuits unrelated to SuperBus.

SuperBus Chief Executive James F. Elder has staunchly defended his firm’s ability to deliver the buses on time and within budget and has denied the accusations in the lawsuits.

The company’s innovative vehicles, popular with drivers and passengers, carry more people than a standard bus and resemble a low-slung horse trailer pulled by a big-rig truck cab.

“Sole-source justification for contracts above a certain dollar threshold should be more detailed and should not grow out of ongoing relationships with vendors or consultants,” Oftelie wrote.

Oftelie said that OCTA Internal Auditor Bob Duffy is developing a “list of recommendations designed to strengthen internal controls involving future sole-source procurement.”

The list, Oftelie said, will be given to the OCTA board on Feb. 24.

Meanwhile, Oftelie said negotiations to conclude the deal with SuperBus will continue.

Still at issue, Oftelie said, is a $760,000 letter of credit from SuperBus that was originally drawn on a Mexican bank. OCTA is insisting that the letter of credit be drawn on a U.S. bank with branches in California.

The Times has reported that Elder has been running the company out of his home in Saratoga, and that the firm intends to build the buses at a new plant in Baja California, Mexico.

Former Orange County Supervisor Ralph B. Clark’s role in the contract has also stirred questions. Clark has acknowledged receiving SuperBus stock in lieu of salary as a paid adviser to SuperBus after he left county government in 1986.

Clark introduced Elder to Board of Supervisors Chairman Roger R. Stanton at a lunch in August, two months before the bus purchase was approved by the OCTA board, which Stanton also chairs. Stanton abstained, citing unresolved questions about the non-competitive aspects of the deal and the need for the vehicles.

Clark and Elder also met with Jim Kenan, OCTA’s chief financial officer, to complain that the transit agency staff was too slow in bringing the deal to completion.

The contract was developed by the Orange County Transit District staff before it became part of OCTA in June.

Oftelie revealed Tuesday that Elder has given him the names of the company’s stockholders, but he refused to give The Times a copy despite a request filed by the newspaper under the California Public Records Act. Oftelie said the names were obtained under a promise of confidentiality. He said no current or former OCTA or OCTD officials are listed except Clark.

Two SuperBus prototypes have been used successfully by OCTD for three years.