Officials Find Common Ground on Rescue Plans

Orange County supervisors don’t know it yet, but they have reached a delicate consensus on about $1 billion in financial rescue plans proposed by creditors and consultants, an informal survey conducted by The Times shows.

“Since we don’t communicate a lot, (that) is very interesting,” said Supervisor Jim Silva when told about the common ground he shares with his four colleagues.

Although united against tax increases, which many business leaders and creditors have urged them to consider, the supervisors seem to favor dramatic steps to ease the county’s financial pain. These include:

* Laying off more county workers.

* Selling county assets.

* Privatizing county services.

If supervisors approve just these measures, to which they say they are agreeable, they could net the county $930 million to $1.4 billion, according to a widely praised report presented this month by the Los Angeles-based Reason Foundation, a libertarian public policy think tank.

Critics of the report note that its numbers are broad estimates, and that it may be some years before the board is able to implement the report’s recommendations because of legislative and logistic obstacles.

However, such a mixture of savings and revenue would be close to the $1.69-billion loss posted by the county investment pool last year.

Since the county filed for bankruptcy protection Dec. 6, supervisors have struggled to avoid endorsing specific strategies, and none will predict which plans they might adopt.

Whether the strategies are offered by the Reason Foundation, interim Treasurer Thomas E. Daxon or the county’s creditors, the supervisors have said repeatedly in public meetings and private interviews that further study and deliberation must precede action.

“I think that it’s an insult to the political process for someone to jump to conclusions without full information,” Supervisor William G. Steiner said. “Obviously, I’ll come to my conclusions on these (strategies) over time and after it’s deliberated fully.”

“Everything should be on the table,” Supervisor Marian Bergeson said repeatedly, refusing to be specific when asked about the Reason Foundation proposals and other ideas floated.

But when the five supervisors were pressed by The Times to answer “yes” or “no” to each proposal on the table, a clearer picture of their common ground and differences emerges.

They like the idea of selling the county’s landfills.

They like the idea of selling John Wayne Airport and a portion of El Toro Marine Corps Air Station, as long as the price is right and the Department of Defense cooperates.

They especially like the idea of selling county-owned buildings and then leasing those buildings back.

They frown at the mention of more layoffs. But the Reason Foundation and others say the county should trim its work force by 10%, or 1,815 positions, and the supervisors agree.

“It’s going to happen,” Steiner said. “It’s reality, and the question is, ‘How many?’ ”

Besides laying off more county workers, many consultants have urged the supervisors to cut the pay of county workers by as much as 10%.

But supervisors say they probably won’t.

“I would at this time oppose that,” said Silva, echoing the view held by the board majority. “I think people working here at the county have obligations, and I think (a pay cut) would create problems.”

Steiner said: “If government is to operate more like a business, then we should have a more productive work force, which may be smaller. But those that remain ought to be well paid.”

The supervisors like the idea of letting private industry run the county’s animal shelters and service the county’s vehicles.

But when it comes to fire protection and emergency medical services, the supervisors are reluctant to relinquish control.

Firefighting, Steiner said, is “one of the few things the county does well.” And Vasquez questioned the legality of privatizing any emergency services.

Some observers of the county’s financial picture say it is wrong to put so much stock in the Reason Foundation numbers.

“The problem with your billion dollars (of Reason Foundation proposals) is that the billion dollars they’re saving isn’t the billion dollars we need to fill our hole,” said John Schotz of Saybrook Capital Corp., financial advisers for participants in the county investment pool, who want the county to enact tax increases to pay its debts.

As an example of what he believes are skewed Reason Foundation estimates, Schotz singled out the idea of asset sales, particularly landfills.

“(Reason Foundation researchers) assume the flow of trash in these (landfills) remains constant,” Schotz said. “And the problem is, I think everyone’s expecting . . . because of recycling, the amount of trash going into landfills is going to drop.”

Schotz also took issue with widely shared notions about John Wayne Airport’s potential value. The Reason Foundation says the airport, along with the airport portion of El Toro Marine Corps Air Station, is worth $250 million to $500 million. Daxon estimated the worth at $400 million in a recent report to the supervisors.

Schotz said such estimates are pie in the sky because they assume that many favorable circumstances will be true at the point of sale, such as the federal government donating El Toro to the county free and clear and assuming “liability for environmental cleanup,” according to the foundation’s report.

“I love good government,” Schotz said. “It’s the greatest thing in the world. The problem is, right now you’re looking for solutions to the general fund problem, and most of the stuff that’s in (the Reason report) didn’t address that.”

Reason Foundation President Robert Poole conceded that the numbers in his report are only estimates. But they are estimates based on close consultation with county officials, he said, along with years of consulting or studying other cities and national governments.

As for the speed with which Reason Foundation strategies could be enacted, Poole noted that raising taxes is not a quick solution either because any tax increase would require the approval of four supervisors and a special election.

Both Poole and Schotz warned that the supervisors had better form some consensus--on taxes, cuts or asset sales--and take some decisive steps.