There are still quite a few obstacles for Orange County to negotiate before finding its way back to a sound fiscal base, with a secure future.
That was the primary message delivered by OC Supervisor John Moorlach, at his “State of the County” Address on Thursday, Feb. 9. at Old Ranch Country Club, Seal Beach.
With an audience of about 100 businesses and city officials in attendance, Moorlach painted a rather bleak current picture of the state of Orange County and in the state and nation in general. He warned of increasing risk of falling into bigger traps if actions are not taken.
But he also said that there has been progress and that despite the economic troubles in recent years, Orange County and the many of the cities represented in his Second District, have been able to reduce costs while sales tax revenues have slowly begun to creep back up. “The last five years have been an incredible ride for us in public office,” Moorlach said.
Moorlach said that in facing the many challenges, Orange County has risen to the challenge.
He said pension reform was a major component in meeting the budget crises. He also said that anticipating the extended real estate market slump and being proactive has helped lessen the impact.
The reduced staff has led Orange County to have one of the lowest government employees to per capita residents (1,000) in the state. At just over 5.5 employees per captita, Orange County is lower that counties such as Riverside, Sacramento, San Bernardino and Los Angeles, all of which are around eight or higher.
But more challenges lie ahead, Moorlach said.
Much of that will come as the real estate market makes it’s slow recovery.
Moorlach posed the question, how do we manage a county so dependent on real estate taxes when the real estate economy has flattened out?
Add to that, the fact that as a county, we are already deep in debt. Taking into account, the pension costs, which are not required in municipal accounting, but are in for-profit accounting standards, Moorlach noted that Orange County would be more than $1,400 per capita, in debt. That would rank the county 27th among OC cities, if it were an individual city.
On the positive for local cities, most were well above that among other county cities. La Palma was fifth, with a net surplus of $731 per capita and Cypress was sixth with a surplus of $639 per capita. Stanton was No. 9 and Seal Beach No. 10, both with numbers in the black. Los Alamitos was 21st with a negative of $594 per capita.
And as the state continues its financial woes, it likely could continue to put more pressure on local cities. Under performing investments have also hurt the bottom line. The state’s confiscation of vehicle license fees and the potential moving of state prisoners to county jails could also put more stress on local counties, Moorlach said.
“This is reality and this is what we are all working with,” Moorlach said.
Some of the solutions that have stemmed the tide have included an increase in sales tax revenue and some reforming of pension plans. Moorlach also noted the drop in the county’s unemployment rate, making OC better off that the country overall.