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ORANGE COUNTY PERSPECTIVE

Keep the County's CEO Model

The CEO model works for industry, and, with the right person sitting in the CEO's third-floor office, there's no reason it shouldn't work for county government.

January 12, 2003

The head of Orange County's troubled planning department abruptly retired in December. The county Board of Supervisors has met behind closed doors with the executive officer who was on duty when the financial meltdown occurred.

But those developments have shed little light on why the planning department is bleeding red ink and cutting staff. The department already has burned through an $8-million emergency loan, and a plan to increase fees faces stiff legal opposition -- so taxpayers don't yet know how much it will cost to bail out the troubled department.

On the strength of its title, the planning department is the last place that should be caught unaware by an economic slowdown. The department -- which uses inspection and permit fees to fund its activities -- is supposed to have its finger on the pulse of development. But instead of hedging his bets, department chief Tom Mathews seems to have stuck with a Las Vegas-style hunch and kept staffing and spending geared to a development upturn that didn't materialize.

County Executive Officer Michael Schumacher either failed to catch the department's problems or wrongly figured Mathews could pull things together. Taxpayers aren't sure, because the Board of Supervisors, which in August approved the emergency allocation, has yet to publicly discuss the department's situation.

To some people, the situation is eerily similar to the county's 1994 bankruptcy -- a troubled department, an undiagnosed financial problem and a lack of oversight by administrators and supervisors. This is exactly the kind of mess supervisors hoped to avoid in 1995 when they turned much of the business of running the county over to a chief executive officer.

Where were the safeguards and tripwires that should have tipped Schumacher and the board to the potential for problems? Didn't the sight of all those zeros set alarm bells ringing when supervisors cut the emergency allocation check Aug. 20? Why was Schumacher's plan for dealing with the crisis dated Dec. 16 -- a full four months after the loan was made?

The county's audit team could have been too tightly focused on the treasurer's office after the 1994 bankruptcy. County Treasurer John M.W. Moorlach might be right in his observation that "when you have the majority of your police force focusing on one house, the burglars are going to go elsewhere."

Supervisors have a legal obligation to audit the books and operations of county departments. Supervisors also must ensure that acting department head Larry Leaman, the former head of county social services, has the support needed to protect residents' interests as the county tries to right the troubled department.

It's likely that the strong CEO model adopted after the county bankruptcy will come under attack as supervisors comb through the planning department wreckage. But supervisors should not try to grab back powers transferred to the CEO in the mid-1990s.

Supervisors were in the driver's seat during the years leading up to the county's 1994 bankruptcy, so this isn't the time to seek shelter -- or try to score political capital -- by running back to a system that clearly has its own set of problems. The CEO model works for industry, and, with the right person sitting in the CEO's third-floor office, there's no reason it shouldn't work for county government.

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