County Must Stick to Recovery Plan

* The uncertainty in Orange County’s economic future is the most damaging effect of history’s largest municipal bankruptcy. Businesses can’t hire employees or build new facilities when they can’t predict the economic climate. They need to know that the county has a road map to recovery.

Now we have one. The Orange County Taxpayers Assn. (OCTax) supports the consensus recovery plan. As OCTax recommended, the plan repays vendors and bondholders first, schools second. Last to be paid are the cities and special districts; repayment to them will depend on proceeds of the county’s lawsuit against Merrill Lynch and other investment firms.

There is an elegant justice in subordinating the cities’ and special districts’ claims to all other claims. If the lawsuit recovers less than 100%, cities and special districts will suffer in proportion to their investments of taxpayers’ money in the Orange County investment pool. Those prudent cities and special districts that invested least will suffer least.

In addition, special districts will contribute cash to the recovery effort--something OCTax suggested after Measure R failed. The Orange County Transportation Authority, the Flood Control District, Harbors Beaches and Parks, the Redevelopment Agency, and other Orange County investment pool participants will provide over $50 million per year for a number of years. Sales of county assets would provide another $20 million.

While OCTax supports the consensus recovery plan, we don’t view it as a road map to “business as usual.” Much still should be done. Here are other recommendations made by OCTax before and after the defeat of Measure R:

* Examine the budgets of Orange County’s 100 or more special districts

* Issue a request for proposals to sell the county’s landfills

* Vigorously pursue statewide tax equity

* Continue to downsize county government

* Facilitate privatization by making Orange County a charter county

* Review wages and benefits paid by the county, cities and special districts.

REED L. ROYALTY

Executive vice president

Orange County Taxpayers Assn.

San Juan Capistrano