Thorny County Issues Aired in Park Setting

Power suits gave way to colorful print shirts, and the setting resembled a rustic mountain cabin more than a boardroom as the Board of Supervisors and its staff held a retreat Saturday at Santiago Oaks Regional Park.

The issues on the agenda, however, were all too familiar: bankruptcy recovery, jail construction, welfare reform--and insufficient money to cover all of the county’s needs.

The purpose of the daylong retreat was to set priorities and begin developing a strategic plan for county government. Most supervisors agreed that the most pressing issue is improving the county’s financial health in the wake of the late 1994 bankruptcy.

“The long-term financial recovery has to be the No. 1 priority,” Supervisor Charles V. Smith said. “If we don’t have that, it’s impossible for us to provide all the other county services.”

The county emerged from bankruptcy last June by selling $800 million in bonds and using the proceeds to pay creditors. It must repay the bonds, plus interest, over the next 30 years.

Officials at Saturday’s retreat said that a fund set aside for early repayment of the debts could grow from $26 million to $50 million by the end of the fiscal year in June.

Chief Financial Officer Gary Burton said the extra money would come mostly from surplus funds in the current budget. The bond repayment fund could grow to $140 million over the next five years, he said.

Several supervisors expressed strong support for the idea, saying early bond repayment would save the county millions of dollars in interest. Supervisor Jim Silva urged his colleagues to remember the $800-million debt when constituents ask them to increase funding to other programs.

“Over the next weeks, people will come to our offices asking for [money] for this program or that project,” Silva said. “I hope this board will stay focused on the real world.”

Another high priority is improving the county’s image on Wall Street and boosting its bond rating. A higher rating would reduce the county’s cost to borrow the money needed to finance many stalled projects, such as new jails.

“There is a perception in the public that the bankruptcy is behind us,” Supervisor Todd Spitzer said, referring to a recent UC Irvine survey that found only 7% of the public considered the financial crisis a top concern.

“But this bankruptcy isn’t over,” he said. “We are still dealing with it.”

The county is not likely to earn an “A” bond rating for four years, and then only if officials can convince the financial community that Orange County’s fiscal house is in order.

Jan Mittermeier, the county’s chief executive officer, acknowledged that a skeptical public requires the same convincing.

“We need to rebuild trust, not just with the financial community but with the community in general,” she said.

Supervisors also discussed a wide range of other priorities, including building more courts and juvenile detention facilities, persuading cities to annex unincorporated communities, finding ways to privatize services and working to improve the business climate.

Board Chairman William G. Steiner suggested an increase in operating budgets for supervisors’ offices. That allocation was slashed 41% after the bankruptcy, forcing staffing cuts that make responding to public requests and inquiries more difficult, Steiner said.

“I’m not saying we return to the pre-bankruptcy days, but it’s something we have to come to grips with,” he said. “The pendulum has swung too far, and we can’t respond to our constituents.”

Steiner proposed the one-day retreat in January as a way for supervisors to discuss their goals and concerns informally. The meeting was moderated by a facilitator hired to keep the discussion focused and to keep track of key points made.

The informal setting did produce some candid moments.

At one point, for example, Steiner asked why so many county departments end the fiscal year with budget surpluses, suggesting that some managers are deliberately inflating their funding requests.

Mittermeier responded that some amount of inflation might occur, but that managers might provide more realistic budgets if they didn’t fear being “beat up” by the board for requesting emergency funding increases in the middle of the fiscal year.