In January of 2009, I sat before my colleagues on the Orange County Board of Supervisors, County staff and members of the public to offer a State of the County address that not only outlined how the County was doing but also laid out my priorities for the direction of the Board during my year as Chair.
Above all, my greatest concern was stabilizing the budget.
This included the short-term goal of reining in expenditures to appropriate levels in order to deal with the difficult financial climate and the long-term goal of reducing the County’s unfunded pension liability so as not to pass on debt to our future generations.
Additionally, in keeping the campaign promises made during my initial run for Supervisor, I vowed to work toward making our County government more transparent and accountable to the taxpayers.
Looking back over the year, I’m pleased to say we accomplished much in all of these areas.
As we entered 2009, the economy had already signaled an impending downturn unlike anything experienced in recent memory. We were projecting dramatic declines in expected sales tax and property tax revenues, which the County is clearly dependant on.
Those factors were coupled with a state budget crisis that left the Legislature resorting to raiding our property tax funding even further and deferring reimbursement payments for many state-mandated services the County provides. It appeared to be the perfect storm.
As the new Chair, I was determined to uphold the Board’s commitment to responsible budgeting and ensuring the fiscal soundness of our County.
To that end, over the past year, the Board steered the County through one of the most concentrated efforts to scale back expenditures in our history; and it was no easy endeavor.
In June of 2009, the Board of Supervisors approved a $5.5 billion dollar budget for Fiscal Year 2009-10, representing an 18% decrease compared to the previous year’s budget.
The $1.2 billion in cuts were associated with program reductions, fewer employees, cutbacks in internal service and supply expenses, restructuring of financial programs, and reductions in capital projects and information technology projects.
In all, 271 County employees were laid off and an additional 5,705 were affected by furloughs and pay reductions.
Our department heads and executive management team are to be highly commended for taking direction from the Board and working collaboratively on a budget plan that was able to reduce spending by first targeting administrative costs.
In doing so, we were able to minimize direct impacts to residents of
The Board recognized this budget would be a work in progress as we continue to monitor the State budget and the economy.
Throughout the year, we worked closely with each of our County agencies, especially our public safety departments, to ensure our shared goal of balancing needed reductions while maintaining adequate levels of service and public protection.
The approach the County took in reaching a balanced budget is a remarkable achievement.
The bureaucracy was challenged to reject its tendency toward growth and find meaningful ways to effectively reduce itself with limited impacts.
Earlier in the year, an Orange County Register editorial commended the Board of Supervisors for passing a budget that is fiscally sound and serves as “a statewide model for responsible budgeting in the midst of a tough recession.”
The Board extends that compliment to every County employee, as we all helped in contributing toward the solution. No one was unaffected, including the members of the Board, who all took a voluntary pay reduction.
In terms of our goal of attaining long-term fiscal security, the County took great strides in the area of pension reform.
On the heels of our huge success with Measure J, in which over 75% of Orange County voters voted in favor of requiring all future pension increases be put to the ballot, the Board achieved two additional milestones in 2009.
In August, the Board stood united in its decision to appeal the lawsuit challenging the constitutionality of the retroactive portion of a pension increase awarded to Sheriff’s deputies by a previous Board. We agreed to see the case through because of the potential cost savings to the County.
A successful outcome at the appellate level, which we’re confident will be achieved, would set a precedent that could result in substantial cost-savings for governments throughout the state.
Additionally, in July, after months of serious negotiation, the Board approved an agreement with the Orange County Employees Association (OCEA), the County’s largest bargaining unit, to reduce pension costs for both the County and employees.
The agreement contains provisions allowing the County to implement a lower pension formula, 1.62% at 65, combined with a Defined Contribution Plan. New employees will be given the option of selecting the current 2.7% at 55 retirement formula or the new, lower formula; and current employees will be provided a one-time opportunity to select the lower formula.
The agreement also changes how overtime is paid for employees, which could achieve up to a 30 percent reduction in overtime costs for the County.
The new pension formula, particularly the portion allowing employees to opt between the two formulas, required legislative approval in order for the County to move forward with implementation. In September, SB 752, authored by Senator Lou Correa, passed unanimously in both the Senate and the Assembly.
The bill was so popular that many local governments throughout the state are now looking to our approach as a model in dealing with similar pension issues. There has even been conversation within the Governor’s office that he may attempt to implement a similar approach statewide.
Step by step,
Another goal during my year as Chair was to continue to advance the Board’s pledge to identify ways to make County government more accountable to our residents. I believe we have shown our resolve in carrying through on this pledge.
Aiding us in this ongoing effort has been the work of our Performance Audit Director. The Board established this office last year and it has already proved its worth, as demonstrated with such successes as the Audit of the Sheriff’s Department’s use of overtime.
The Performance Audit Director was also instrumental in identifying cost-savings associated with using Correctional Officers in our jails, as opposed to sworn deputies, a recommendation we were able to implement this year and that is expected to save the County millions of dollars annually.
Additionally, the Board of Supervisors unanimously supported my request to initiate an audit of the Planning Department. This request stemmed directly from complaints my office received from constituents regarding the lack of customer service demonstrated by County employees.
When the Performance Audit Director presented their final report to the Board, it unfortunately confirmed many of my concerns about the Department.
However, recommendations identified in the audit have served as a blueprint for moving the Department forward. Supervisor Campbell and I have taken a hands-on approach in this effort by heading a subcommittee to ensure the recommendations are implemented in a timely manner.
Another Performance Audit directed at my request, which is currently underway, is a review of the County’s Information Technology (IT) Department. Anticipated costs for the new IT Systems and their ongoing maintenance and upgrades call for multi-million dollar investments of taxpayer money.
The Performance Auditor has been tasked with reviewing these Capital projects to ensure they are necessary to implement in terms of adhering to regulatory requirements and being able to maintain adequate service delivery.
When this report is completed, I expect it will help the Board identify a number of areas within our IT Department that could be managed more efficiently in order to realize significant cost-savings.
As one can see, reducing government spending has been a priority for the Board, but we’ve also done much to reduce costs for residents and businesses doing business with the County, which has been especially important, as we’re all feeling the affects of the national recession.
To that end, we have been proactive in requesting reviews of fees we charge businesses. Earlier in the year, the Board voted to defer fees for developers.
The Board also eliminated scheduled fee increases, such as restaurant inspection fees and boat slip fees in our harbors.
Additionally, when the Board was asked to change its restaurant inspection notification system to an ABC grading system, there was great concern expressed by local restaurants of potential cost impacts to their businesses.
The Board reviewed several proposals and voted to proceed with an easily identifiable County seal program that indicates whether or not the facility passed inspection. This new notification system went into effect October 1, 2009.
These are but a few examples of how the County is doing its part in reducing the financial burden on our businesses and residents.
At the local level, we’ve also taken steps to bolster the local economy and respond to the national call for economic stimulus, which translates to creating and maintaining jobs.
We’ve managed to accomplish this by helping retain private sector jobs and contracting out services wherever possible.
We’ve also accelerated a number of capital projects funded through enterprise funds, which do not come from the County’s General Fund. The largest of these projects is the massive $543 million undertaking at
In the Fifth District of Orange County, which I represent, the estimated $140 million Dana Point Harbor Revitalization Project is also underway.
I would be remiss if I did not mention a milestone achieved on this project when the California Coastal Commission voted to approve the Local Coastal Program Amendment in September, enabling the project to continue moving forward.
The Board has also been very active with regards to encouraging transparency. When the Sheriff brought forward a new Concealed Carry Weapon (CCW) policy, we advocated diligently for a clear and fair process to be applied for any revocations.
As Chair, I also encouraged the Board to respond when the County was under public criticism for our practice of rehiring retirees as “extra-help” employees.
I called for a full report by our CEO to examine this practice so the Board could move forward in establishing a policy that ensures fairness in our hiring practices and avoiding potential indiscretions regarding the use of our retirees.
Through direct budget reductions and our efforts to reduce costs in a proactive way, the Board of Supervisors has worked diligently this year to make County government more cost effective and accountable to the people.
We certainly accomplished a lot in 2009, but much more remains to be done; and I’m confident our newly elected Chair will be successful in moving the Board and County forward in 2010.
With the actions initiated by the Board of Supervisors in 2009 during my tenure as Chair, I believe when the recession finally ends, the County will be poised to recover quickly and be much more efficient in serving the people of our great county.
As always, my door is open and I look forward to continuing to serve as your Fifth District Supervisor. Please don’t hesitate to contact my office if I may ever be of assistance.