Orange County Board Plans Audit to Help Revamp Government

The Orange County Board of Supervisors has launched a $450,000 outside audit aimed at overhauling county government and has appointed a committee to oversee it, but the plans are coming under attack from some critics as costly and stacked in favor of county insiders.

“We question putting out almost half a million dollars when the county is cutting back on front-line health and welfare services,” said Connie Haddad, president of the League of Women Voters of Orange County. “There’s no guarantee that it’s going to come up with any genuine change. Many of these types of audits just end up in somebody’s file cabinets.”

The criticism has been most pointed toward the committee’s chairman, former Orange County Supervisor Bruce Nestande. In a letter to fellow lawmakers last week, state Sen. Tom Hayden (D-Santa Monica) complained that Nestande had received $40,000 in contributions from bond and securities firms during his political tenure and asked that his role in Orange County’s recovery be scrutinized in that light.

Hayden is on the Senate committee that has held three public hearings dissecting the causes of Orange County’s bankruptcy crisis. In addition to heading the new audit committee, Nestande also works as a lobbyist for Orange County developer George Argyros, who sits on a private panel advising the Senate committee.

“I am not charging Mr. Nestande with improprieties,” Hayden wrote in the Feb. 16 letter. “However, the (Senate) committee or its staff should interview him on the issues of past and present campaign contributions, the impact of contributions on Orange County investment decisions, and his present role in relation to the Senate inquiry.”

Nestande was appointed to the 18-member audit oversight committee by Supervisor Marian Bergeson, who noted that he previously served on the California Transportation Commission and played a key role in overseeing a massive audit of Caltrans after its projects kept coming in late and over budget.

Nestande brushed aside Hayden’s criticisms, saying his campaign contributions during his time on the Board of Supervisors and his unsuccessful bid for secretary of state in 1986 are unrelated to the county audit.

“My point is, what’s the point?” said Nestande, who served as a county supervisor from 1981 to 1987. “We’re talking here about an audit. We’re trying to take a government and reduce it in size. How do you make it functional? That’s the issue. It has nothing to do with bondholders or whether I’ve been in government. I think we have a very balanced team.”

Supervisors approved the management audit--with a $450,000 cap on costs--Feb. 10. The audit is expected to delve into almost every area of county government, reviewing how contracts are bid, what county services could be contracted to private companies, how to avoid duplication in services and the relationship between top county staff members and the elected supervisors.

Bergeson and others who support the plan say a sweeping audit by outside eyes offers the best opportunity to rebuild a leaner county government in the wake of the bankruptcy filing.

“This would serve as the basis for any restructuring. You have to know where corrections can be made,” Bergeson said.

In approving the audit, the board named 16 people to the oversight committee, including Bergeson, Supervisor Roger R. Stanton; Westminster Mayor Charles Smith; Jan Mittermeier, manager of John Wayne Airport; county labor leader Bill Fogarty, and several business leaders.

Two more people--both local activists--were named to the committee after some residents complained that the panel was stacked with members too close to county government.

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“There’s a lot of foxes in the henhouse,” said Fogarty, of the Orange County Central Labor Council. He lobbied for his committee seat and said he feared that his opinions will be outweighed by the business members who could benefit from a slimmer county work force that relies more heavily on privatizing services.

Bruce Whitaker, a spokesman for the anti-tax group called the Committees of Correspondence, was appointed after he and others criticized supervisors for leaving out average taxpayers. And when Orange County Common Cause President William Mitchell wrote a newspaper opinion column last week criticizing Bergeson for “relying exclusively on the political in-crowd,” she asked him to serve on it as well.

Other committee members said they believe the audit will be impartial. Mary Ann Schulte, the owner of a Santa Ana engineering contracting firm that does business with the county, said she and other business people were sought for their management expertise, are volunteering their time and only hope to help reduce the costs of county government.

The audit plan arose after Supervisor Stanton announced intentions to launch a restructuring task force made up of a broad base of county residents. Stanton said he is concerned about the price tag of the audit but believes the two efforts can be complementary.

“This should not in any way obviate the need for a restructuring effort that brings into play community input,” he said.

Stanton said he plans to keep a close watch on audit expenses and wants “to see the expenses approved in stages. I don’t believe in signing blank checks.”

Stanton said the efforts of the restructuring task force would be different because the group would look at the way the county interacts with cities and other agencies. Bergeson, however, said the outside audit will cover the same ground.

In addition, the League of California Cities has just convened a “restructuring supercommittee” to examine relationships among cities, the county and special districts in an effort to achieve greater efficiency, said Janet Huston, executive director of the league’s Orange County chapter.

Mayors and city managers from across the county met for the first time Friday to discuss the league’s plan, and Huston said the officials raised concerns about duplication, but remain convinced that a range of voices must be heard. The league has invited two supervisors to join the group.

“They’re all pieces of the puzzle,” Huston said. “There isn’t any one group that has the entire answer.”

Nestande said the county audit committee will meet within the next 10 days to discuss how to get its effort under way.