ORANGE COUNTY IN BANKRUPTCY : Consultant Urges Sale of Assets, Including Airport
To make up for the losses of its investment fund, Orange County could earn between $1 billion and $1.25 billion through the sale or privatization of assets, a consultant to a Republican group told a panel Friday.
Perhaps half of that could be raised by the sale of El Toro Marine Corps Air Station and John Wayne Airport, said Robert W. Poole Jr., president of the Reason Foundation.
The foundation, a nonprofit Los Angeles libertarian organization, recently was hired by the Lincoln Club, an conservative Orange County group, to study options for recovering from bankruptcy to present to county government.
Friday’s discussion of those options at the Garden Grove Community Center was sponsored by state Assemblyman Curt Pringle (R-Garden Grove).
Poole said El Toro and John Wayne airports would have to be sold together to attract a significant price from a buyer, because John Wayne’s high debt and inability to handle more traffic would limit its value if sold alone.
But if the county packaged the operation of John Wayne with the right to establish civilian air service at El Toro, it could raise the price to between $250 million and more than $500 million, he said.
The county also could make about $500 million by selling its landfills, Poole said.
Privatization and the possible sale of county assets and services were the common theme of the session, which attracted about 200 people. Pringle began by arguing that tax increases should not be used to fund the county’s recovery.
Some speakers were less enthusiastic about some of the suggestions for privatization. Dolores Otting, owner of a Newport Beach-based trash collection business with contracts with four Orange County cities, said the county should be skeptical of selling its profit-making enterprises and losing control of their management.
“If a private company does buy the airport and then they want to start flying over Newport Beach, there’s not much you can do about it,” she said.
Congressman Jay Kim (R-Diamond Bar) also cautioned against relying too heavily on airport sales, since some federal laws and existing federal agreements might have to be changed to permit the sale.
Among the other proposals were suggestions to streamline county purchasing procedures and privatize some or all of the functions of the county’s public defenders.
Elizabeth Hill, a legislative analyst for the state’s Joint Legislative Budget Committee, said officials also should look at ways to allow private firms to take over specific functions rather than entire agencies.