County’s Business Comes Under Scrutiny

County supervisors on Tuesday raised questions about lax oversight of county business during a series of debates heavily tinged with acrimony over the controversial El Toro airport plan.

Led by Supervisor Todd Spitzer, board members questioned a $271,000 contract for an El Toro public-relations campaign, an audit on the company overseeing use of the closed base and an agreement for redistributing $7.5 million received from lawsuit settlements that followed the county’s 1994 bankruptcy.

While the items were separate, they were linked by a single concern: exercising the board’s responsibility for financial oversight.

The series of debates began with discussion of a county staff request for $271,000 for Burston Marsteller to conduct a public-education campaign on El Toro through June. The contract requires the firm to submit monthly progress reports before it can be paid.

But Spitzer questioned that provision, pointing out that an identical requirement for monthly progress reports had been waived by a staff manager on an earlier $9-million contract with another company planning the county’s two-airport system. How can supervisors trust what they are signing, Spitzer asked, when contracts can be changed without board knowledge or approval?

He suggested that county airport planners have become so worried about having their actions questioned by airport opponents--of whom he is one--that they have directed consultants “not to produce a paper trail.”

Challenged by Supervisor Jim Silva to provide an example, Spitzer said, “I just did.”

Board members later voted 3 to 2 to approve the public-relations contract, with fellow airport opponent Supervisor Tom Wilson joining Spitzer in dissent.

Spitzer had better luck later in the meeting with an item involving the disbursement of proceeds from bankruptcy litigation. Supervisors voted 4 to 1, with Silva dissenting, to require county attorneys to get approval first from the bankruptcy judge.

The original disbursement had been approved by bankruptcy Judge John Ryan. But county staffers discovered a mistake: about $7.5 million should have gone to special districts, called community facilities districts, instead of the county general fund. County attorneys agreed to change the disbursement, but didn’t plan to bring it back to the judge.

Spitzer, a former county prosecutor, said that step was necessary. Last week, supervisors also questioned why several changes to a court agreement involving John Wayne Airport hadn’t been brought back to a federal judge for approval. County airport staff will update supervisors on that issue at the Jan. 11 board meeting.

On the final item raised Tuesday, Spitzer praised Wilson for asking months ago for an audit of the operations of Cabaco, the consultant hired to manage community services at the former Marine base. Cabaco is in charge of the golf course, the officer’s club, a recreational-vehicle storage lot and horse stables.

Though declaring its operations adequate, an internal audit discovered that Cabaco had no written policies or procedures for handling cash, or for the termination of employees. “In addition, we found the review of deposit documentation inconsistent and not documented, and not all revenues were adequately controlled at the point of sale,” the audit concluded.

“If [Wilson] hadn’t asked for the audit, we wouldn’t have known about this,” Spitzer said.

The oversight theme continued when Treasurer John M.W. Moorlach presented the annual report of the Treasurer’s Oversight Committee, including the county’s policy for how public funds can be invested.

Spitzer asked oversight committee chairman Robert Fauteux what parts of the report could be changed without board approval.

Nothing, Fauteux said. “The buck stops with you.”

“So unlike the other documents,” Spitzer said, “I can rely on this one.”