O.C. Recovery Plan Outlook Gets Cloudier : Legislature: Two key county lawmakers say that a host of last-minute complications leave chance of passage just ‘50-50.’

With the clock ticking on the legislative year, two key players in the effort to push through a bankruptcy recovery plan for Orange County are giving the proposal only even odds of passing muster with state lawmakers.

Assembly Republican Leader Curt Pringle (R-Garden Grove) and state Sen. John R. Lewis (R-Orange) both said the recovery plan has only “a 50-50 chance” because of numerous political hurdles, turf fights and ongoing disputes in Orange County itself.

“I would say we’re at a crossroads right now; everything’s up in the air,” Lewis said. “There’s so many problems I don’t know if you should alphabetize them or categorize them.”

Among the last-minute obstacles is the strong likelihood that the fate of Orange County, which suffered $1.7 billion in investment losses and declared bankruptcy last year, will be shackled to legislative help for troubled Los Angeles County.

Earlier this summer, Gov. Pete Wilson vetoed a recovery bill that linked the two counties, and some lawmakers fear that the same thing could happen again.

Pringle said he would vote against any provisions of the Los Angeles County bailout package involving a tax increase, even if it meant derailing Orange County’s recovery efforts. Los Angeles County lawmakers have talked about a tobacco tax as one possible remedy for that county’s $1.2-billion funding shortfall.

“I will vote against a tobacco tax even if it means killing Orange County legislation,” Pringle declared. “And I’m sure the governor would kill anything that’s tied to a tobacco tax. It would just be a phony run by Los Angeles legislators.”

Meanwhile, Assembly Speaker Doris Allen has taken steps recently to play a leading role in the Orange County recovery effort, a move that has angered fellow Republicans and could deeply politicize the last-minute negotiations.

The Cypress Republican, who became the target of a GOP-led recall effort after she was elected in early June to the Assembly’s top post by a bloc of Democrats, has been only a bit player in the bankruptcy negotiations for most of the year.

On Tuesday, Allen made a pitch to Senate President Pro Tem Bill Lockyer (D-Hayward) to be the sole author of an Orange County recovery bill. Lockyer spurned that demand, and the two legislative leaders agreed instead to send bills authored by Allen, Sen. Lucy Killea (I-San Diego) and Sen. William Craven (R-Oceanside) to a conference committee later this week.

“It’s nothing more than a crass political stunt by Doris to come in at the last minute and take credit for everyone else’s work product,” Lewis groused.

Amid the tumult, Lewis and other state officials expressed dismay that Orange County officials, who billed the recovery package as a “consensus plan” when it was unveiled several weeks ago, have failed to come to final terms with participants in the bankrupt county investment pool.

“The governor told the parties to reach consensus, but they are continuing to war over essential terms of the agreement,” said Scott Johnson, chief counsel to Craven.

County bankruptcy attorney Bruce Bennett said a “term sheet” detailing the components of the plan was not ready as of early Tuesday morning. But the parties were working feverishly to hammer out an agreement, county officials said.

Because the law requires 24 hours’ notice of a board meeting, Board of Supervisors Vice Chairman Roger R. Stanton called a special meeting for 4:30 p.m. today to approve a term sheet, even though the details were still being debated. One county official called the meeting notice “a place holder” just in case all parties reach agreement.

Of late, pool participants--among them the county transportation agency, water districts, cities and schools--have expressed concern that their pay-back is linked only to revenue gleaned from legal efforts against the Wall Street brokers who advised former County Treasurer-Tax Collector Robert L. Citron, Johnson said.

The pool participants want assurances that any unexpected revenue the county might get in the future--be it the unanticipated approval of a new tax or a windfall from a county pension fund--goes first to pay off bankruptcy debts.

John Schotz, financial adviser to the pool participants, said the last-minute wrangling was not unusual, but had the potential to undermine the fragile agreement.

“Anything this complicated always takes time. It goes through periods of hitting the wall again and again,” Schotz said. “I don’t know that it’s doomed, but there are issues outstanding that need to be resolved. It’s going to be ugly, I think. People are going to go without sleep. There are going to be people with huge rings under their eyes. But I don’t think we have any choice.”

Among the other sticking points is language regarding a state-appointed county trustee, and how much power that person would have. As now drafted in legislation Craven plans to introduce, the trustee would have broad powers over the county’s operations, as well as the authority to step in and vote in place of pool participants on a bankruptcy settlement agreement between the various parties.

City officials, meanwhile, are worried about a county proposal for a state trustee that would have broad powers over the municipalities, including the ability to divert city tax revenue.

“That would be a deal-breaker,” said Janet Houston, executive director of the Orange County division of the League of California Cities. In addition, pool participants saddled with paying $18 million to cover the administrative costs of a county road maintenance program set to be transferred to the Orange County Transportation Authority want assurances they will recoup that money ahead of any proceeds the county would get from litigation.

Times correspondent Shelby Grad also contributed to this report.