O.C. Gets ‘Strong Signal’ of Support for Recovery : Legislation: Wilson signs five measures designed to help the county regain its financial footing. He vetoes one calling for a state trustee.

Gov. Pete Wilson has signed a slate of bills to help Orange County pull out of bankruptcy, but vetoed a controversial measure that would have given the state unprecedented authority over the county’s fiscal affairs, the governor’s office announced Monday.

Wilson said the five bills he signed “send a strong signal” that state and local politicians can cooperate to help Orange County pull out of the worst municipal bankruptcy in U.S. history.

The bills were approved as urgency measures by the Legislature last week and became law with the governor’s signature Friday night. Wilson’s press office did not announce the signings until Monday.

Authored by Sen. John R. Lewis (R-Orange) and Sen. William A. Craven (R-Oceanside), the legislation is designed to help the county speed the sale of assets, make it easier to resume selling bonds on Wall Street, borrow against delinquent property taxes and reap additional revenue by importing trash from other counties.

Orange County officials were delighted by the governor’s actions, saying the bills will form the bedrock on which the county can build a solid recovery after suffering $1.7 billion in investment losses and declaring bankruptcy last year.

“I think today culminates a great deal of work by a lot of people,” Board of Supervisors Chairman Gaddi H. Vasquez said. “This package is an important part of our financial recovery plan.”

“We have the tools, now we have to start using them,” County Chief Executive Officer William J. Popejoy said.

Supervisor William G. Steiner said he was glad the political fighting between Democrats and Republicans in Sacramento eventually gave way to the realization that Orange County’s legislative package had to be passed.

“It’s encouraging in a democracy that rhetoric can evolve into good public policy,” Steiner said.

Paul Nussbaum, Popejoy’s top adviser, said the governor’s action was not only good news for the county but also for the entire state.

“We’re obviously very pleased that we have reached this milestone,” he said. “It’s a key component of our financial recovery plan. It’s additionally pleasing that this was a bipartisan effort, where the leadership rose above politics to address a very serious problem confronting Orange County and the State of California.”

The three bills carried by Lewis allow the county to borrow $60 million to be repaid over 20 years using interest and penalties collected on delinquent property taxes; set aside vehicle license fees to help secure $660 million in loans, and speed the sale of county property and other assets.

Craven’s two bills include another measure designed to intercept vehicle license fees--a tactic intended to assuage the concerns of Wall Street bond houses--and legislation allowing the county to avoid environmental reviews before accepting trash from outside.

Along with an increase in trash fees, the importation scheme is expected to produce more than $50 million in annual revenue.

Meanwhile, the Assembly on Monday approved and sent to Wilson an Orange County recovery bill that would allow county schools to use loans secured by campus property for operating expenses.

The measure, proposed by Assemblywoman Doris Allen (R-Cypress), should be particularly helpful for the five school districts that borrowed money to invest last year and suffered heavy losses when the county pool collapsed.

Wilson vetoed a bill by Sen. Lucy Killea (I-San Diego) that would have allowed a state trustee to run Orange County’s financial affairs. The proposal drew sharp attacks from the Board of Supervisors and the county’s legislative delegation in Sacramento.

But the governor warned county officials in a prepared veto statement that if the Board of Supervisors “fails to show the necessary leadership” as it struggles to rebuild county finances, “this issue may need to be revisited.”

Steiner and other county officials took his words to heart.

“I think it’s consistent with the governor’s hope that Orange County control its destiny,” Steiner said of the veto. “By the same token, I’m under no illusions that he would step in with a trustee if we were to default.”

Killea, meanwhile, expressed disappointment over the governor’s quick decision. The senator, who was a San Diego City Council colleague of Wilson, had hoped to meet with him and lobby for her bill.

Killea suggested Wilson was trying to “keep a low profile” on the bankruptcy as he gears up to run for President.

“I’m so surprised,” Killea said. “If anything, this would have been a very presidential thing for him to do.”

Supervisor Marian Bergeson said she appreciated Wilson’s acceptance of the supervisors’ argument that Killea’s bill was not needed.

Bergeson said it is now up to the voters of Orange County to pass Measure R, a half-cent sales tax increase that is the subject of a June 27 special election. The legislation will be of little help, she said, unless the tax is approved to support the rest of the bankruptcy recovery effort.

Other lawmakers, however, suggested there are alternatives if voters don’t approve Measure R.

Lewis, who opposes the sales tax hike, continued to stress that officials should explore ways to divert funds from a transportation sales tax approved by county voters in 1990, and use county property to pay off cities that invested in the collapsed investment pool.

Assemblyman Curt Pringle (R-Garden Grove), another Measure R opponent, said the county should be allowed to to privatize more services and avoid costly state mandates.

* COUNTY’S OFFER: Moorlach outlines plans to draw investors back to pool. A18

* FEEDING FRENZY: Portfolio managers make pitch for a slice of released funds. B1