3 Top Tollway Executives Get Merit Bonuses

Members of Orange County’s toll road agencies rewarded three top executives Thursday with 5% salary bonuses for “outperforming expectations” despite the county’s deteriorating fiscal health and the agencies’ investment of about $325 million in the county’s now-collapsed portfolio.

Tollway Chief Executive William C. Woollett Jr., already one of the highest-paid public officials in Orange County at $141,248 a year, will get a one-time bonus of $7,062. Finance Director Wally Kreutzen and Head Engineer Greg Henk, who each make $127,415, are getting bonuses of $6,370 apiece.

“Giving someone like that a merit increase is a slap in the face of taxpayers,” said Bruce Whitaker, chief spokesman for the Committees of Correspondence, a local activist group. “The county and its branches, though they claim financial hardship, act like none exists.”

The move to pay salary bonuses was near unanimous after 10 members of the San Joaquin Hills toll road board and 11 members of the Foothill/Eastern board voted to approve the bonuses.

Irvine City Councilwoman Paula Werner cast the lone dissenting vote, arguing that although the trio had done a good job, “I can’t justify salary increases for such well-compensated individuals.”

Werner said it would send “the wrong message” to county residents, who are watching public services dwindle.

“When we’re cutting back on bus service and laying off county employees, this shows a real lack of sensitivity,” said Werner, who is the target of a recall drive in her city along with two other council members for approving a plan to borrow an additional $62 million last summer to place in the investment pool managed by former county Treasurer-Tax Collector Robert L. Citron.

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The one-time salary bonuses were a compromise. A compensation board subcommittee recommended 5% annual raises--2% for cost of living and 3% in merit pay--but some board members balked at the thought of making those increases permanent.

“I couldn’t justify that,” said County Supervisor Marian Bergeson, a member of both toll road agencies. “You’re building in benefits and that sort of thing.”

Bergeson said she was persuaded to approve the bonuses when subcommittee members provided documentation that showed significant cost savings associated with the toll roads under the guidance of the three men.

The subcommittee gave four reasons for recommending the bonuses:

* The recent successful financing of $1.5 billion in bonds for the Foothill/Eastern tollway.

* A segment of the Foothill/Eastern toll road opening two months ahead of schedule.

* Savings achieved through negotiating construction change orders.

* The staff’s “active participation to resolve county bankruptcy issues.”

Said Bergeson: “Wherever we can effect cost savings through superior management efforts, we should. You have to have an incentive.”

Although she conceded that approval of the bonuses might cause “a negative perception” on the public’s part, “we have to manage our projects effectively in a way that carries us beyond the bankruptcy.”

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Bergeson and other board members said they did not hold Woollett, Kreutzen or Henk responsible for their roles in keeping the toll road agencies’ funds in the investment pool, which lost $1.7 billion as interest rates soared and the county declared bankruptcy.

At the time of bankruptcy, the toll road agencies had about $325 million invested and has since recouped about 85% of that amount. The agencies have outstanding claims for the rest.

Many officials of the county, cities and special districts who elected to place millions in the fund contend that Citron deserves full blame for misleading investors. Citron has pleaded guilty to securities fraud, embezzlement and falsifying government documents. His top assistant, Matthew Raabe, faces the same charges. He has pleaded not guilty.

“I believe the financial officers throughout the county of Orange have practiced due diligence, and the facts are there to show that there were felonious activities in which they were mislead and fraudulent activities took place,” said Laguna Niguel City Councilwoman Patricia C. Bates, chairwoman of the San Joaquin Hills Transportation Corridor Agency.

As for the toll road executives, “they outperformed expectations,” Bates said. “The fact is that Wally and Greg and Bill have exceeded our goals and they should be rewarded. You’ve got to step up and say that these men deserve it.”

But Whitaker doesn’t buy it.

“We keep hearing about a financial emergency, but none seems to exist,” he said. “The county runs on autopilot, as if the bankruptcy never happened.”

The toll roads are being primarily financed through the sale of bonds, which are to be paid through the collection of tolls over the next several decades. State funds and assessment fees on new development near the toll roads are also being used to pay for right of way and construction.