Five years ago, Orange County officials stood outside the county's old courthouse and celebrated the emergence from bankruptcy. In an otherwise self-congratulatory moment, there came a whisper from a few wise heads: Wasn't the county simply deferring its inevitable pain?
Yes, it was. With little "let's-take-our-medicine" encouragement from elected officials, the county's voters rejected a sales tax measure that would have settled up more directly. Instead, the county crafted a plan that, while giving the appearance that the problem was over, would pay the piper through more indirect means over the long term.
Thirty years, to be exact. For that time, the county committed to repaying a gigantic bond offering to recover from its $1.64-billion investment losses. Millions in state revenue would be diverted from parks, flood control, redevelopment and transportation programs. Those in a less celebratory mood recognized that the recovery plan would affect the financial flexibility of the county for many years. Additionally, there was the human cost in county services. The county eliminated nearly 3,000 county jobs and fired about 580 workers.
Fast-forward to this summer of discontent in 2001, when concern about the quality of water from runoff, sewage discharges and development have moved to the front of the public's consciousness. Today the county and its municipalities are recognizing that substantial new investments in infrastructure will be needed to ease the strain on old systems. Huntington Beach is the latest to receive an invoice. Under a court order, the City Council has approved an annual fee of about $60 on residents and business owners for sewer repair. Laguna Beach last year raised its fees to repair an aging system.
The effects of sewage and runoff are also a regional problem. A $5.1-million Orange County Sanitation District study is looking at whether water pumped into the ocean is being drawn back in by a power plant's cooling system to pollute Huntington Beach's shoreline. Some early results don't seem conclusive, because the system wasn't running during the test.
The cost for the sanitation district could be high. Without an extension of its permit to discharge dirtier water than the Clean Water Act allows, sewage improvements could cost as much as $400 million.
County government has a role in this battle over clean water, and it is there that the cost of bankruptcy is now being felt directly. The county's Public Facilities and Resources Department, created after the bankruptcy to consolidate various public services including harbors, beaches and parks, currently diverts millions of dollars annually to bankruptcy debt payment. The result is that there is no money for capital improvements in an increasingly taxed system. The department has only enough revenue to cover current operations.
But faced now with mounting concern over water quality, the county has been looking at its harbors, beaches, parks and flood divisions to help pay for water quality improvement in the region. Something will have to give sooner or later. The numbers don't add up, and that means new sources of revenue to address water quality will have to be found.
Five years out of bankruptcy, the county is reckoning with the real cost of the big debt. The county borrowed heavily to settle. To pay today's tab, money is diverted from where it may not have seemed so damaging in the mid-1990s. That was before the stresses on local water from relentless growth and development were mounting up.
Today, the bill is coming due in tangible ways. This poses a special challenge to all concerned with water quality, when a desire for quick action comes up against the reality of the budget. At some point, the public is again likely to have to decide what it is willing to spend. As the man in the car repair ad always knew, you can pay him now or you can pay him later.