Financing O.C.’s Future
In bygone days, when members of the Orange County Board of Supervisors had programs they wanted but could not finance, they turned to the county treasurer-tax collector, Robert L. Citron.
Citron had a knack for finding the money. As the late Supervisor Thomas F. Riley once said, “I don’t know how the hell he does it, but he makes us look good.” But in 1994, the financial roulette wheel operated by Citron stopped on the wrong number, and Orange County filed the biggest municipal bankruptcy in U.S. history.
One of the silver linings from that black period emerged this month in the form of the county’s strategic financial plan. Amazingly, the county never before had a detailed five-year financial blueprint. Incredibly, it apparently is the only county in California to have one now.
The county’s chief executive officer, Jan Mittermeier, and her assistant, Chief Financial Officer Gary C. Burton, deserve credit for producing the document. They said the reason it had not been done before was the difficulty in assembling the data and figuring out what it means.
County government department heads helped with the facts and figures. Chapman University’s noted economists James Doti and Esmael Adibi supplied the economic models and forecasts needed to bring meaning to the numbers. Now it will be up to the supervisors to use the document and not file and forget it.
The financial plan says the county’s revenue is unlikely to rise as much as inflation, even if inflation stays relatively tame. Proposition 13 limited property taxes, which along with motor vehicle license fees make up more than two-thirds of the revenue for the county’s general fund, the pot of money over which the supervisors have discretion.
But there are ways to be financially prudent. Monitoring expenses, holding contractors to budgets and paying overtime if it’s cheaper than hiring new workers all improve the balance sheet.
The Orange County supervisors juggle priorities each year at budget time and update their plans throughout the year. The strategic financial plan spells out in stark terms what can be done and what is too expensive.
For instance, the need for a new, bigger courthouse in South County has been pressing for years. The county’s financial document tells the supervisors that if they build a new courthouse, it will cost about $10 million a year to operate.
That would leave enough money for county plans to retain businesses and promote economic development. Funds also would be available to do maintenance on county properties that has been deferred since the bankruptcy and to comply with the federally mandated Americans with Disabilities Act.
But it would not leave enough money for such important projects as expanding the Orangewood home for neglected and abused children; paying off some debt incurred to get out of bankruptcy; adapting the county’s computers so they do not go haywire in the year 2000; and relocating the county animal shelter.
The difficulty the supervisors will have choosing between competing projects was evident two weeks ago. They decided to make funding for a new South County courthouse the county’s top priority. But they also want a design for a second phase of expansion of the Theo Lacy Branch Jail in Orange. Mittermeier told the supervisors that the cost would be $60 million more than the county has.
The strategic financial plan will not work miracles; it cannot produce money. But it will be a valuable tool if it helps the supervisors steer clear of mistakes such as building a facility but not having money to run it, as happened with a Los Angeles County jail.
It also will be a reminder that supervisors cannot look to a county treasurer or other economic wizard to pull financial rabbits out of a hat. Living within the county’s means will not be easy, but the bankruptcy demonstrated there is no alternative.
