Orange County Voices : COMMENTARY ON DEFEAT OF MEASURE R : It’s Time to Create a Regional Government for the 21st Century : The radical restructuring should recognize fiscal realities. The goal is an efficient, focused and entrepreneurial system.

Milton Friedman, noted economist, said: “Governments never learn. Only people learn.”

Friedman had it right. The people of Orange County today have the opportunity to take what they’ve learned over the past seven months to create a system of governance for the 21st Century. There is no doubt that revolutionary reform is necessary. Orange County’s bankruptcy only accelerated the demise of an outmoded, unfocused system for the creation and delivery of governmental services.

With the failure of Measure R, Orange County and the state are forced to assess the role of regional and subregional government in California and be on the “leading edge” of a government reform movement that will lead to a more efficient, focused and entrepreneurial system. The only factor standing in the path is the unwillingness of entrenched interests to recognize the need for change.

The fiscal and organizational problems facing the county are not unique. Rather, the problems are, or will be, faced by other counties in the state as the dynamic of shrinking revenue continues, failing to meet unfocused demands.

The fact is that two of California’s most populated counties, Orange and Los Angeles, as well as the state of California, are facing fiscal meltdown and the demise of services once taken for granted. Government at all levels has become bloated, redundant and irrelevant to the health and vitality of its economic bases.

Part of the problem lies in government’s unwillingness to accept new realities. A combination of changes brought about by Proposition 13 changed the fiscal realities of government in California. The voters were clear in their intent. Unfortunately, government didn’t seem to get the message and kept increasing spending while making up deficits from onetime sources. Well, those sources have all dried up and reality is an unworkable system.

Another reality is the change that is taking place in the global economy and the need to create a competitive environment to provide the types of jobs that can support the demand for services. What does that mean for government? It means a bureaucratic, heavy-handed government can’t hope to keep up. The economy of the future is being managed by yesterday’s government model. That is not only a waste of increasingly scarce resources, it creates barriers to future growth and prosperity. A government built on old notions of regulation and control cannot hope to survive, much less succeed in an environment of ever-expanding individual freedom and entrepreneurism.

OK, so what’s next for Orange County?

We need to get the bankruptcy out of the way and move forward.

First, take a hard line on repayments to government agencies other than the schools; share the burden of loss with those that shared in the excess profits over all those years!

Second, collapse and combine the county’s redundant special districts (water, sanitation, etc.) and use their excess reserves to make up the current fiscal shortfall and repayments to the investment pool participants. Create a countywide authority to administer privatization contracts for the management and operation of the collapsed districts. The authority will act as contract administrator and the bonding entity to provide water and sanitation services in the county.

Third, move immediately to restructure the county government to an urban model. A charter needs to be written that eliminates the “ward” mentality at the Board of Supervisors level and individual fiefdoms at the city and special district levels. Orange County has never responded well to a strong central government. Hence, the model used to write the charter should reflect those services that are essential to the county and cities. We need to examine carefully (and possibly abandon) those services that are more anchored in historical “ways of doing things.”

Look for “best practices” in other regions of the United States and apply them in Orange County. Nassau County in New York State and Indianapolis provide two examples Orange County might look to in developing its charter.

For the longer term, we should focus on the fundamental definition and role of government in the 21st Century and the most effective ways it can deliver its services. Is it intelligent to have 31 individual cities in Orange County? Do we really need or want the multitude of special districts and regulatory agencies?

We should be looking at “disinventing” much of government and reinventing the remainder to be responsive to the strategic needs of the people and businesses that can and will contribute to growth of the quality of life and standard of living in Orange County. We have allowed ourselves to become dependent on government as it encroached into areas which in the past, and more appropriately, were assumed by the private sector. It will be difficult initially, but over time the revised role of government will strengthen the private sector allowing it to create and maintain more benevolent social services.

Without a healthy and vibrant economic base, government and the social programs it provides will experience an accelerating decline into an unworkable state. Government’s role should be to maintain and increase the quality of life and asset values of its citizens by the least intrusive manner possible.

But government is us--and it takes leadership. A political will must be articulated from not only the elected and professional government sector, but forcibly by the business and education sectors as well. Leadership abhors a vacuum. If we don’t elect leaders with vision and ability, leaders who are up to the job, then the void will be filled by mediocrity, something we can ill afford.

I recommend that a blue-ribbon commission, coordinated with Los Angeles County (they are going through similar evaluations and our economic and social structures are strategically entwined), be formed to develop a framework for the role of regional-subregional government going into the 21st Century.

Arco President and CEO Mike Bowlin and John Bryson, chairman and CEO of Southern California Edison, are working to create an organization of the top CEOs in the region, the CEO Business Leadership Group, to address just this type of issue. Partnership 2010 will work with that group to pull this type of commission together and get a straw-man plan on the table of a government model for the future.

No overall plan for radical restructuring can be put on the table by government acting alone. It will be suspect and discounted to the point of losing public support. Any plan has to be developed by a blue-ribbon coalition of top business, academic and elected government leaders--exactly the coalition of leadership that Partnership 2010 represents.

One question I have: If Partnership 2010 could coordinate the design of an initiative that would give government in Orange County three years to restructure itself or face mandated restructuring by an entirely revamped elected body, would the voters approve it?

Finally, if it is so overwhelmingly important to the electorate to have a grab-bag of duplicative government entities in the name of “local control,” then let’s be sure that we know their true costs. Partnership 2010’s Project GEAR (Government Efficiency and Restructuring) has commissioned a study with the highly respected Rose Institute of State and Local Government at Claremont McKenna College to analyze and compare costs of operations at the county, city and special district levels of Orange County. Despite the uproar it caused from entrenched governmental interests, the analysis represents the first time that relative cost comparisons have been assembled for Orange County government. The county supports more than a $10-billion-a-year total government operation. It’s time we managed it efficiently and in line with strategic goals and objectives.

In late 1993 Joel Garreau, author of “Edge Cities” and an expert on urban economic development, said in an address to the Urban Land Institute: “Not many regions have the very real opportunity to ‘reinvent’ themselves in the way Orange County does over the following years. More than any other area, Orange County, if it can dream big, can establish itself as one of the most attractive and vibrant centers of the 21st Century in the United States and in the world.”

It’s time to make it happen.