ORANGE COUNTY IN BANKRUPTCY : Crisis Leads Some Cities to Reconsider Fire Pact

The county’s financial crisis has some city officials taking a second look at plans to form a joint powers authority that would oversee the operations of the Orange County Fire Department.

Though it appears most of the 18 cities that contract with the county Fire Department will eventually approve the final JPA pact, officials this week expressed concern about how the county’s Dec. 6 bankruptcy declaration would affect their plans.

The Fire Department’s reserve fund of about $36 million is tied up in the county treasury, and city officials are warning the county against using the money to dig out of its financial hole. City officials fear such a move could weaken the Fire Department’s financial health, perhaps forcing municipalities to contribute more money for service.

“We contend that the county should not use this money to bail itself out. This is the Fire Department’s money and should not be touched,” said Irvine City Manager Paul O. Brady Jr.

The situation has prompted the Laguna Niguel City Council to delay a final vote on joining the Orange County Fire Authority until it receives more information about how the financial crisis will affect the plan.

“With the bankruptcy, it introduces many more problems in terms of the financial picture,” said Laguna Niguel City Councilman Thomas W. Wilson. “I think if these financial problems are cleared up, the (JPA) is still a viable idea.”

City and county officials have been planning the joint powers authority for several years as a way of giving cities served by the county Fire Department more voice in how the agency is governed. The department is now run by the Board of Supervisors and operated on a day-to-day basis by Fire Chief Larry J. Holms, who could not be reached for comment.

The proposal calls for the formation of a government body made up of city and county officials which would run the Fire Department and oversee its $80-million budget.

The county Fire Department serves most unincorporated communities as well as the cities of Irvine, Los Alamitos, Mission Viejo, San Clemente, Buena Park, La Palma, Placentia, Yorba Linda, Cypress, Dana Point, Laguna Hills, Laguna Niguel, Lake Forest, San Juan Capistrano, Seal Beach, Tustin, Villa Park and Stanton.

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The Board of Supervisors is expected to take a final vote on the proposal in February, and city officials hope the department’s $36-million reserve emerges from the bankruptcy intact.

“I think there is a feeling that if we don’t go ahead (with the JPA), that money in the reserve fund might fritter away at the discretion of the Board of Supervisors,” said Buena Park Mayor Don R. Griffin.

JPA backers are having meetings with county officials to discuss how the reserve fund would be transferred from the county to the joint powers authority if the plan is approved. The reserves are not part of the Fire Department’s daily operating budget but are used to pay outstanding debts and may fund a new headquarters.

Brady said Irvine would reconsider becoming part of the joint powers authority if the county significantly changes the funding arrangement in the plan.

“Our goal is to get the Fire Department out of the county and on its own so it isn’t entangled in the (bankruptcy) web,” added Elizabeth Dixon, an attorney for JPA backers.

Some city leaders said the bankruptcy reinforces the need for municipalities to take control of the Fire Department.

Times correspondents Bill Billiter and Bert Eljera contributed to this report.