Governor to Sign Recovery Bills Monday : Bankruptcy: Wilson is scheduled for a ceremony in Santa Ana to approve legislation allowing the county access to transit revenue and other funds to pay for debts and services.


Capping a nearly yearlong battle to give Orange County the tools to recover from bankruptcy, Gov. Pete Wilson is scheduled to visit the county Monday to sign a package of bills designed to let local officials tap $810 million in transit revenue and other funds.

The 3 p.m. signing ceremony at the Plaza of the Flags at the Civic Center in Santa Ana will include local and state officials who worked to push through the legislation.

Supervisor William G. Steiner, who will be in San Antonio attending a transportation conference when the governor is in Orange County, said he believes Wilson "is very pleased that the county is handling the recovery locally."

Although many county observers have said that Wilson tried to distance himself from the bankruptcy crisis during his bid for the presidency, Steiner said the governor "has been very involved behind the scenes. His coming to Orange County completes the effort."

"I think it shows his commitment to Orange County," added Supervisor Marian Bergeson. "He's been extremely helpful throughout this situation."

While the legislative package should give Orange County the ability to emerge from the worst municipal bankruptcy in U.S. history, it includes a provision for a state takeover next year if local officials stumble. Wilson would be able to appoint a trustee to assume command of Orange County, which declared bankruptcy in December after suffering $1.7 billion in losses on high-risk investments.

County officials say they expect to submit a final plan for pulling out of bankruptcy to a federal judge in December and emerge from bankruptcy by the middle of next year.

While the Legislature had been grappling for months with just what to do about the bankruptcy, the solution didn't win approval until the final hours on the last day of session for the year.

In a series of mostly lopsided votes Sept. 15, the Senate and Assembly approved a trio of bills that had been cobbled together earlier in the week by a special two-house conference committee. A fourth bill designed to clean up technical glitches in the first three bills also won approval.

A variety of problems, most of them political, cropped up in the last weeks, among them a push by Assemblywoman Doris Allen (R-Cypress) to inject herself as a player in the recovery plan.

Allen, who faces a Nov. 28 recall election boosted by GOP colleagues angered after a bloc of Democrats elected her to the Assembly speakership in June, grabbed a piece of the action during the conference committee. Orange County lawmakers, who are pushing the recall, balked for a time, but ultimately relented, in part because Allen stepped down from the Assembly's top post during the final week.

The high jinks have continued. Some of Allen's opponents suggested Friday that Wilson--who has been at odds with the former Speaker for months--would abstain from signing the bill she carried. But a spokesman for the governor said the plan was to sign all of the bills.

Orange County's recovery legislation, which with Wilson's signature would become law Jan. 1, are a combination of carrot and stick.

They give the county the power to siphon $38 million annually in sales tax money that goes to transit and use it for bankruptcy recovery. In exchange, the legislation lets the county shift to the transit agency $23 million a year in gas tax money now used for road construction. Another $12 million each year is grabbed from restricted funds that normally would go to the county's redevelopment agency, harbors, beaches, parks and flood-control district.

Over the next two decades, that revenue would help defray the immediate costs of paying off creditors and the more than $700 million in outstanding debt coming due next summer.

The stick is a measure carried by state Sen. Lucy Killea (I-San Diego) that requires the governor to appoint a trustee to oversee fiscal affairs if the county doesn't have a final solution filed in Bankruptcy Court by May. Aside from tackling all the duties normally reserved for the Board of Supervisors, the trustee would be able to step in to finalize the particulars of the bankruptcy plan that must be submitted to a federal judge.

Times staff writer Matt Lait contributed to this story.

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