ORANGE COUNTY IN BANKRUPTCY : O.C. Delegation to Draft Own Recovery Plan : Politics: State legislators criticize county supervisors’ laggardly pace in coming up with an alternative to the failed Measure R half-cent sales tax increase.

Saying the Orange County Board of Supervisors isn’t working fast enough, the county’s legislative delegation announced Monday it will draft its own alternative bankruptcy recovery plan.

State lawmakers from Orange County plan to meet Wednesday in the Capitol to hash out details of a plan they contend is needed immediately so they can begin pushing legislation to make it work.

In setting up the special meeting, the delegation is brushing aside a request from Orange County supervisors, who asked that state lawmakers wait until mid-August for the county to craft a new recovery plan to replace its original version.

The board’s original plan is in shambles after voter rejection June 27 of Measure R, a proposed half-cent sales tax hike that was the plan’s linchpin. Orange County bought some time Friday by getting holders of more than $800 million in bonds that come due this summer to roll over the debt for a year.

But members of Orange County’s delegation contend the supervisors’ mid-August schedule for a new recovery plan doesn’t give them enough time, particularly because the state lawmakers hope to put a new measure on the November ballot asking voters to support shifting half of the Measure M transportation tax to bankruptcy recovery.

The Legislature is scheduled to begin its one-month summer recess Friday if a budget is approved, and would return in mid-August for a final month of session.

“From talking to the supervisors, it doesn’t seem like they’re doing much,” said state Sen. Rob Hurtt (R-Garden Grove). “We don’t have much legislative time left. When we come back, we better be ready to pass some measures if that’s what it’s going to take.”

“We don’t believe we can leave the possible solutions to the county’s problems hanging like that for an additional month,” added state Sen. John R. Lewis (R-Orange). “We ultimately have to work together with the supervisors. And we will. It’s just that we can’t afford a month of inactivity.”

“There seems to be a lack of urgency,” said Scott Johnson, chief counsel to Sen. William A. Craven (R-Oceanside), whose district includes parts of South County. “The delegation is politely declining to wait any longer.”

Some county officials, however, expressed concern that the state delegation might be attempting to hurry an effort that should be handled with careful deliberation and shaped with feedback from the various factions that battled over Measure R.

“We need them to give credit for what we’re trying to do and work with us instead of against us,” Supervisor Marian Bergeson said. “We need a well-choreographed plan. I hope when we have our proposal ready on Aug. 14 they’ll give us the assistance we need.”

Bergeson said, for instance, that there remain numerous questions about the legality of shifting money from Measure M to the bankruptcy recovery that need to be resolved before the board can endorse a final plan.

Board Chairman Gaddi H. Vasquez said County Chief Executive Officer William J. Popejoy will be in Sacramento to discuss the situation. Vasquez said he believes the delegation’s plans are a sign that Sacramento is willing to help.

“I think there is a mutual desire to begin the development of a response plan as quickly as possible,” he said. “We can get past that hurdle faster if we’re all sort of working together.”

The board and the delegation share many of the same notions on how to now dig out of the huge financial hole the county plunged into last year after suffering $1.7 billion in investment losses. Among them is tapping accounts now held by the county and various special districts that handle water and flood control.

“I don’t think anything that comes out will be particularly original,” said Johnson, Craven’s counsel. “We’ve got a lot of ideas out there. It’s just a matter of knitting together a solution.”

State lawmakers are also worried in part about giving the Orange County Transportation Authority time to work out a deal to trade Measure M money for rights to develop an airport at the El Toro Marine Corps Air Station, which is scheduled to be closed. They would prefer instead to see OCTA, which has insisted that Measure M cannot be tapped for the bankruptcy, help put the issue on the ballot for county voters to decide.

Officials at the agency continue to insist that tampering with Measure M funds could cause OCTA to default on an estimated $700 million in bonds sold against anticipated tax proceeds. OCTA is barred from spending the tax proceeds on anything other than transportation.

As a result, OCTA is cautious but not unwilling to assist the county as it advances its own transportation interests, said Dave Elbaum, director of planning and development at OCTA.

“I don’t think the issue is whether OCTA is going to hide the money or lock it up or do anything to keep it away” from the county, Elbaum said. “If we are able to consummate some kind of a deal, I don’t know why there would be a distinction with how the money got [into the general fund]. Under any way, the Board of Supervisors would have a say in it all.”

Many county lawmakers in Sacramento also worry that Democrats in the Legislature continue to embrace a plan championed by state Sen. Lucy Killea (I-San Diego) that would allow a state takeover of the county and divert property taxes from cities and special districts to finance a county bailout.

A spokesman for Killea said that the trustee plan, which has already been vetoed by Gov. Pete Wilson, could prove inevitable if problems from the bankruptcy continue to seep into other parts of the state.

“We’re not really waiting in any expectation that a realistic solution would emerge from Orange County or its legislative delegation,” said Craig Reynolds, Killea’s spokesman.

Meanwhile, the county delegation’s staff was scheduled to meet today with various bondholders to tap their perspectives on possible solutions.

“They’ll share the thoughts they have, not the least of which is the urgency they feel,” Johnson said. “They also haven’t felt a party to negotiations so far. Clearly they are part of any solution.”