Countywide : County Advisor Contract for Hayes Considered

The Orange County Public Finance Advisory Committee held its inaugural meeting Thursday and discussed the appointment of former state Treasurer Thomas W. Hayes as co-financial advisor for the county.

Under a contract that the Board of Supervisors will consider in coming weeks, the county would pay Hayes’ brokerage firm, Metropolitan West Securities, $500,000 to work as financial advisor along with Salomon Bros. Inc. The contract would likely run through June 30, when the county is expected to emerge from bankruptcy.

Salomon Bros., now the county’s sole financial advisor, has agreed to reduce its compensation so the county will not incur any added expenses by using Hayes. The firm earns about $150,000 a month plus fees for its advisory services.

Hayes, 49, is a familiar face to the various bankruptcy players. At the request of Gov. Pete Wilson, Hayes helped restructure the county’s investment pool in the weeks following the Dec. 6, 1994 bankruptcy filing. The pool lost $1.6 billion of its value because of risky investment practices.

In September, Hayes was tapped to lead the county’s legal battles to recover the millions of dollars that the county and various local agencies lost in the bankruptcy. The county’s most significant lawsuit is against Merrill Lynch & Co., which sold most of the securities in the investment pool run by former county Treasurer-Tax Collector Robert L. Citron.

Officials said that Hayes will probably complete his work as financial advisor before taking on the job of “litigation czar.” Bob Thomas, interim assistant chief executive officer, said that representatives of the pool investors had no objections to Hayes handling both responsibilities.

The public finance committee is made up of county Chief Executive Officer Jan Mittermeier, Auditor-Controller Steve E. Lewis and Laurence M. Watson, interim county counsel. Two public members appointed by the Board of Supervisors will join the committee in the next few weeks.