Deadline Today for Legislature on Recovery Bill

SACRAMENTO — Taking the matter down to the wire, the state Legislature gets its last crack today at pushing through a recovery plan for bankrupt Orange County.

State lawmakers are expected to take up a package of three recovery bills that allow the county to tap into transit and other funds to yank itself out of bankruptcy.

Many of the problems that have dogged the legislation for weeks began to dissolve Thursday, among them a continuing struggle between the county’s legislative delegation and Speaker Doris Allen (R-Cypress), who resigned the post, over bragging rights to the recovery plan.

Other hurdles appeared to be teetering and could topple today as well.

County lawmakers have been concerned for weeks that a link between the county’s plan and a bailout package for fiscally strapped Los Angeles County could pose problems because of a long-threatened veto by Gov. Pete Wilson. But on Thursday evening, the governor and Los Angeles County lawmakers appeared to have settled their differences.

The Legislature is slated to conclude its legislative year at midnight tonight.

With that deadline looming, county officials pressed their case with state lawmakers. The county and other participants in the bankruptcy distributed a letter to all 120 members of the Legislature spelling out the tight time schedule they will be operating under to be able to pay back the $800 million in bonds that come due at the end of next June.

Holders of those notes, which were due last summer, accepted a one-year delay to give the county breathing room, but “it is highly unlikely that a further extension will be attainable,” the county letter said.

The letter also said that immediate passage of the recovery plan was needed to keep jittery municipal finance markets from going ballistic, potentially undermining the ability of cities and counties throughout the state to continue borrowing.

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Even as the county pushed, Allen and the delegation continued their tug of war Thursday over the legislation.

Allen has cast her lot with the trio of bills churned out by a two-house conference committee earlier this week. But the county delegation maintained that those bills have technical problems, and was attempting to produce another bill that combines most of the language from the conference committee bills, but without Allen as an author.

Insiders suggested that the delegation members, most of whom are supporting a recall attempt against Allen, were reluctant to give the besieged lawmaker anything to run on. Amid the ongoing assault from her GOP colleagues, Allen stepped down as Assembly Speaker on Thursday.

But late Thursday evening, state Sen. Lucy Killea (I-San Diego), one of the key participants in the push for bankruptcy recovery legislation, conferred with Assembly GOP Leader Curt Pringle (R-Garden Grove), who agreed to drop plans to introduce a competing bill.

One threat could remain for the three conference committee bills. The measures were supposed to be approved by midnight Tuesday under the rules of the Legislature for the end of session, but the committee didn’t conduct a vote until 12:30 a.m. Wednesday. Sen. Ross Johnson (R-Irvine) had planned to mount a challenge today in hopes of killing the conference committee bills, clearing the way for another recovery bill without Allen’s participation.

Insiders, however, suggested that the challenge might now be dropped.

Orange County declared bankruptcy late last year after discovering that its county-run investment pool had lost $1.7 billion. In the nine months since, the county has struggled to come up with a way to repay its bondholders and creditors and compensate the cities, schools and special districts for their investment pool losses.

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The centerpiece of its current recovery plan would shift $38 million in transit money to bankruptcy recovery. The legislation authorizes the county to give back $23 million in gas tax money to the transit agency to help ease its losses. Another $12 million a year would be tapped from the county’s flood control, park and redevelopment funds. The plan also would authorize appointment of a state trustee by the governor if the county doesn’t pull out of bankruptcy by May.

Wayne Wedin of the Orange County Business Council, who helped the county and the pool participants reach the agreement at the center of the bankruptcy recovery plan, said he is dismayed and frustrated by the situation in Sacramento.

* NO EASY ANSWERS

Committees of Correspondence members quiz O.C. chief executive. B4