More Bad News for Planning Agency

A court decision Friday could spell more bad news for Orange County’s beleaguered Planning Department.

Superior Court Judge C. Robert Jameson ruled that the county must follow federal guidelines on the type of expenses that can be paid with user fees. A lawsuit claims that the Planning Department spent revenue collected from building permits on overhead and administration instead of costs associated with the permitting process.

The suit, filed by a national homebuilder, says the county violated federal guidelines.

A special master selected by the judge to examine Orange County’s planning finances has said in court papers that the Planning Department may have misspent as much as $10 million.

The master, Robert P. Mosier, said the county may have to place that amount into a reserve fund until a ruling is made on whether the money was spent properly.

Jeffrey V. Dunne, a private attorney representing the county, said the county has complied with the federal and state guidelines.

In August, the Board of Supervisors approved an $8-million emergency loan to the department. Planning officials hoped to persuade supervisors to raise permit fees as a way of repaying that loan and replenishing their reserves. Supervisors had the issue before them twice this month, only to have it postponed. Supervisors are again scheduled to discuss it Jan. 14.

On Friday, Chief Executive Officer Michael Schumacher said Auditor-Controller David Sundstrom is reviewing the “reasonableness” of the fee increase and will meet with a consultant about establishing new proposed fees.

Supervisor-elect Chris Norby, who will replace outgoing board Chairwoman Cynthia P. Coad on Jan. 6, said the fee issue and the finances of the planning department are a priority.

“We need to look at this thing from the bottom up,” he said.