Orange County Recovery Options Upset Legislators

Saying the Legislature can pick and choose, the Board of Supervisors on Tuesday endorsed a bankruptcy-recovery proposal for Orange County with six different formulas.

But if the board’s action was intended to ease fear that the county is running out of time to get the legislative help it needs to resolve its bankruptcy before year’s end, it had the opposite effect.

The supervisors’ action was barely an hour old before members of the county’s legislative delegation rejected a key component of the plan.

And officials in Sacramento called an emergency session for next Tuesday of the Senate committee that has been investigating the Orange County bankruptcy and its potential statewide impact.

With only three weeks of the current legislative session remaining, Gov. Pete Wilson recently chastised county leaders for not preparing a comprehensive plan and told them that it was “imperative” that they have one ready when legislators return to work Aug. 21.

After Tuesday’s closed-door meeting with county officials who outlined the options, Assembly members Mickey Conroy (R-Orange) and Marilyn C. Brewer (R-Irvine) said they did not think that the county’s 31 cities should be forced to surrender between 1% and 4% of annual revenue for the next two decades to help county government recover from bankruptcy.

“I don’t think there is any interest in our [legislative] contingent, as far as I could detect, in a shift from the cities,” Conroy said, adding that the county should focus its efforts on targeting the Orange County Transportation Agency and various water and sanitation agencies that have the resources to help bail out the county.

Scott Johnson, chief counsel of the Senate Special Committee on Local Government Investments that plans an emergency session Tuesday, complained that “there doesn’t appear to be any consensus yet [on a comprehensive plan], and frankly we’re concerned about that.”

“There’s a three-week, drop-dead date to have a plan on the governor’s desk,” Johnson said. “If there’s no plan by the time we recess, it will simply be too late to help, and the county will just languish in bankruptcy.”

Supervisor Marian Bergeson raised such concern during the board hearing Tuesday morning, saying the Legislature does not want a laundry list of ideas.

“We’re going to have to defend and promote [a plan] . . . in all its gore and all its glory,” Bergeson said before the board resolution was put to a vote. “I think we need to be much more definitive in the action the board is going to take.”

But Board Chairman Gaddi H. Vasquez said later that the county is giving the Legislature viable outlines, recognizing that the county’s legislative delegation and others in Sacramento may find some parts of the proposal politically unpalatable and have their own, better ideas.

“We needed to come up with the parameters, and then we have to narrow the scope and refine it,” said Vasquez, who added that he believes the proposal fulfills a written promise that he and Bergeson made to have a plan in place this week.

“We’re confident we’ve achieved our goal of submitting a plan that is viable and going forward,” he said.

The half a dozen scenarios involve taking tax revenue from cities, special districts and the Orange County Transportation Authority in hopes of infusing the county’s treasury with $74 million to $160 million a year for 15 to 20 years to make up for the $1.7 billion the county lost on risky investments.

The county promises to continue seeking other alternatives, such as selling assets, privatizing services, downsizing government and cutting costs. The county’s suggestions also envision imposition of a state trustee with broad powers to implement a recovery plan if the county stumbles in its efforts.