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ORANGE COUNTY IN BANKRUPTCY : O.C. Rejects Bids, Rethinks Sale of EMA


SANTA ANA — County supervisors on Tuesday threw out bids to privatize the Environmental Management Agency and called for a 90-day review period before trying again to reorganize the agency.

Supervisors also approved proposals from a special committee to streamline county government in the wake of the bankruptcy and endorsed plans to postpone paying back nearly $800 million in debt.

Privatizing the EMA had been suggested by Supervisor Roger R. Stanton, who two months ago invited firms to submit bids outlining how they would operate the agency that's responsible for building and maintaining roads, reviewing development plans, managing flood-control channels and maintaining harbors, beaches and parks.

Five groups submitted bids, but after reviewing them an valuation team declined to endorse any, urging the board to instead more clearly define what work should be privatized.

Supervisors unanimously adopted that recommendation Tuesday, instructing EMA Director Michael M. Ruane to return with names of people to serve on a committee to continue the privatization.

"It appears that the unique combination of EMA functions may render the . . . privatization of this multifaceted agency unnecessarily unwieldy," Board Chairman Gaddi H. Vasquez said, quoting the evaluation team's report.

On another matter, with supervisors' approval, Orange County officials will ask a federal bankruptcy judge to extend repayment for one year of the $800 million in bonds and notes due this summer.

The county's bankruptcy attorney, Bruce Bennett, told supervisors they have just enough funds in the 1995-96 operating budget to pay back the millions it will cost in interest to delay the payment.

Supervisors also approved issuing $155 million in long-term bonds, marking another critical step in the county's efforts to pay nearly $1.7 billion to its creditors.

The county's unprecedented bankruptcy has sparked a variety of studies aimed at cutting costs and streamlining government.

Among the most dramatic measures endorsed by supervisors, the Integrated Waste Management Department and the Environment Management Agency will be merged and the Sheriff's Department will take over operations of Control One, which coordinates law enforcement communications and has long been the purview of the General Services Agency.

The proposals by the Restructuring Committee are expected to save millions of dollars, and eliminate scores of positions.

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