County Bankruptcy Prompts Advice, Encouragement, Recriminations

Regarding the Orange County bankruptcy: Why are we now trying to blame everyone in sight and get help from the state and federal governments? Contrary to our self-reliant, less-government, conservative image, we are whining like a bunch of spoiled children. Hindsight is always better. So we gambled and lost. And I stress “we.” Ultimately, we as citizens are partly responsible for this.

There was no investment oversight committee. We should have learned that lesson from the Newport-Mesa Unified School District when (an official) who had sole control of their finances embezzled $34 million a few years ago. I hope other cities and counties can learn from our misfortune.

We should impose a temporary tax, earmarked only for replacement of the lost money. Make sure the tax money is used only for that purpose and cannot be continued after the correct amount has been raised. There is no shame in making an error in judgment as we have. The shame is in whining for everyone else to fix it for us. To all who have been preaching “personal responsibility,” the time is now.

JODY PEDRI

Costa Mesa

* This is in regard to The Times’ articles on the Orange County bankruptcy. A copy of the 1992 auditor-controller’s report on Treasurer-Tax Collector (Robert L.) Citron’s office was sent to the Orange County district attorney’s office in 1993. Last week, Dist. Atty. (Michael R.) Capizzi stated, in effect, in a Times story that his office took no action because any violations that may have been committed by the treasurer’s office would be civil, not criminal, in nature.

The Dec. 13 Times states that the federal government is now investigating the possibility of mail or wire fraud as related to the Orange County investments. Didn’t Capizzi see the possibility of mail or wire fraud and the necessity of notifying the federal government?

NICK NOVICK

Irvine

* Being a student at Corona del Mar High School, I felt isolated from the effects of Orange County filing for bankruptcy because it never occurred to me that my education may be on the line. But as days progressed the situation became worse. The teachers and many social workers have not been guaranteed their paychecks after December. I then learned about San Jose High School, which declared bankruptcy a couple years ago. The school closed for a month and almost all of the teachers were furloughed and all the elective classes cut.

Here at Corona del Mar High we have an excellent journalism class, which I understand would be one the first things cut. My education is crucial to me and ultimately to the United States! I resent that my education should be taken away from me because somebody had a bad day on Wall Street!

JAMES STAUFFER

Corona del Mar

* I am writing to express my regret for the remarks I made regarding the Orange County supervisors and my statement that they should consider resigning because of the current fiscal crisis. During my two years on the Santa Ana City Council, I have worked hard to improve the lives of Santa Ana residents. I know that the Orange County Board of Supervisors is equally concerned about county residents, and believe that they have the best interest of these residents at heart. The supervisors have my support and confidence in their efforts to straighten out this situation.

TED MORENO

City Councilman

Santa Ana

* I believe that your coverage of the “Orange County problem” needs to be seen in a more historical context. Some of the “blame” that is being spread around needs to be shared by the citizens and taxpayers of this county and state which so joyously passed the famous Proposition 13 some years back. This “meat ax” approach to tax policy has come back to haunt us.

What has happened is that we tied the hands of our local officials to raise money to carry out our wishes. At the same time, we did not decrease our demands on those officials to deliver increased quantities and qualities of services.

The result has been a situation where an apparently public-spirited official has “gambled” with our inadequate tax dollars in an attempt to deliver the services that we the public have demanded but have been unwilling to pay for.

We are as guilty as he is in this situation.

BILL SHAWL

Irvine

* Our children came home from school with a note from their principal indicating that they would not be moving from their temporary location to their newly built school on Jan. 3, because of the Orange County financial disaster. The children of Foothill Ranch Elementary School, along with many enthusiastic parents and local businesses, have been planning opening day ceremonies for several months. The children have picked their school colors and mascot; the school stands beautiful and ready. Our children told us that their teachers’ eyes filled with tears while trying to explain why they wouldn’t be packing up the classrooms after all.

Saddleback School District is just one of many that is reeling from the current financial crisis. According to the note from school, the district does not have the funds available to pay the operating costs for the new school and the move is on hold indefinitely.

CAROL AND RON SCHERMAN

Foothill Ranch

* Advice to the higher-ups hunting for scapegoats in the bankruptcy debacle: Just blame it on the illegal (immigrants). A significant number of Orange County (residents) would buy that.

MONA DAVIS

Cypress

* I fail to understand why Robert Citron appears to be given the full blame for the poor investments and big losses of the county. According to reports, the Board of Supervisors approved each investment made by Mr. Citron. Admittedly, Mr. Citron is at fault for using poor judgment, but the board members were the ones who made the final decisions about each investment. Is it fair that Mr. Citron was pressured into retiring on his nice pension while the members of the Board of Supervisors continue to receive their $82,500 per year plus extra pay for meetings and lucrative car allowances?

I suggest that they start cutting county expenses by setting an example and giving themselves a pay cut of at least 65%. Maybe the citizens should do as the citizens in one California county did. They used the initiative process to set their county supervisors’ pay at $30,000 per year.

BOB DINSEN

Garden Grove

* In spite of the sad state of affairs in Orange County government, recriminations and finger-pointing will only exacerbate the immediate problem. Getting the county off the hook helps us all in the long run. What we need now is positive community action to solve the problem. Here is one way to help the county and ourselves at the same time:

Pay the second property tax installment now.

The county will receive a much needed infusion of cash, and individuals and corporations will profit through an extra tax deduction in 1994. Here’s how it works:

The second installment of property taxes is due Feb. 1, and delinquent April 10. By paying this installment now, you can profit through the income tax effect.

Assuming a minimum income tax rate of 20%, for each $1,000 of property tax paid in 1994, a direct savings of $200 in 1994 income tax can be achieved. (For higher tax brackets the savings will be even greater.)

Plus, waiting until 1995 to pay these taxes may carry substantial hidden costs for the average taxpayer. First, by waiting to pay the property tax in March, 1995, income tax benefits will not be received until 1996. Second, considering the fact that a federal tax cut is likely next year, the value of any property tax deduction will be lowered by the amount each tax bracket is lowered.

So, maybe paying property taxes isn’t so bad after all--providing the county uses the money wisely!

DONALD P. ANDERSON

San Juan Capistrano

* The League of United Latin American Citizens has been calling for a thorough overhaul of councils, boards, courts, law enforcement and bureaucracies for years. Few listened. Now we learn about disastrous decisions no one claims to have known or understood.

We see just how unresponsive to Orange County (residents) in all their diversity most elected and appointed officials are. Everyone is witness to a bankruptcy of leadership and responsibility. Only too ready to punish loyal rank-and-file public workers with wage freezes and layoffs, officials book a carnival of expensive consultants and lawyers to keep the punishment from reaching themselves.

We must take protective initiatives: an exhaustive federal investigation and oversight by state and federal authorities that can override mismanagement.

ART MONTEZ

State Director of Urban Affairs

League of United Latin American Citizens

* This is a time for us all to pull together instead of pulling apart. Buy locally, yes, but remember: We are not just residents of a single city--we also are residents of the larger community of Orange County--and it is the county that is in the greatest trouble. Maybe our slogan should be SOC--Shop Orange County!

CATHERINE C. CATE

Santa Ana

* Orange County’s pending bankruptcy has an ominous parallel to Orange County homeowner associations’ fiscal problems. The state Legislature has not only been busy during the past few years expanding the fiscal authority of counties, which has directly contributed to the bankruptcy, it has also been busy expanding authority of homeowner associations to spend money collected for reserves on non-repair capital improvement expenses--like attorney fees.

Like Orange County, an alarming number of homeowner associations are teetering on bankruptcy. Will the Legislature respond to the county crisis in the same way it responded to the homeowner associations’ fiscal crisis, that is, by requiring that monies be replenished within 12 months and then authorizing homeowner associations to pass unlimited special assessments on the homeowners? Since Marian Bergeson was a major player in passing the legislation affecting homeowner associations, it will be interesting to see if she advocates the same remedy for Orange County, and if (she) gets a taste of reality: Too much regulation is not good; not enough regulation can be devastating.

MARY T. LINDSEY

Santa Ana

* It is time for county, school district and city governments to do what private industry always must do during bankruptcy and insolvency proceedings: Redefine essential priorities and then lay off surplus employees under the new definition, and roll back wages, benefits and retirement plans of all remaining employees. Any senior staff employee who makes over $70,000 to $80,000 per year should have their wages above that amount reduced at three times the rate of the rank-and-file employees. Just as a company which is in bankruptcy reorganization cannot ask stockholders to fork over for management’s gross errors, neither should our local and county elected officials expect the taxpayers to cover for their collective gross incompetence.

WALLY ROBERTS

San Clemente

* As a longtime employee of the Garden Grove Unified School District and resident of Orange County, I have to say that I am furious and disgusted with the bureaucracy in which I live.

Garden Grove is probably one of the most fiscally conservative districts in the county if not the state. Yet, because of state law, their money is at the county office in the commingled pool. As the Orange County financial debacle continues to unfold, it is uncertain what the ramifications will be to my district as well as 26 others that merely followed the law. It would appear that districts like mine, whose only risk was to follow the law, will be punished. The same state Legislature that makes the laws seems to be turning its back on the 27 law-abiding school districts. These districts were not greedy investors looking for a quick win. They were merely doing what they were required to do. They should be helped, not punished.

ANN ADLER

Garden Grove