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From Governing’s
Grading the Counties introductionFebruary 2002 issue
THE GOVERNMENT PERFORMANCE PROJECT
Report Card:
Actually, even the bankruptcy was largely misconstrued. It was the result not of a totally diseased financial structure but of one particularly hideous error: The county’s treasurer had lost $1.7 billion of taxpayers’ money through investments not dissimilar from the kind made by high rollers in a casino. High rollers sometimes win. The treasurer lost big. As Gary Burton, the county’s chief financial officer, puts it, the problem was “a complete lack of oversight and a board that was happy (at first) with the revenues that were being generated.”
Not one of those board members is still in office, however, and the silver lining to this problem has been what Burton describes as “a dedication and a discipline that everyone, including the board of supervisors, applies to financial decisions now.” The county’s current investment policies may be the most open and accessible in the country, with elaborate standards of review. The investments themselves are as conservative as the most traditionally minded financial officer in America could want. Some think they are too conservative.
But the side-benefits of bankruptcy have extended beyond investments and finance. In an effort to determine priorities and spot future problems ahead of time, Orange County has developed one of the better strategic planning processes around. It requires a detailed business plan from all departments that it funds, and the board of supervisors follows the plans diligently. The county also has made significant investments in its technology, successfully outsourcing some functions, while establishing a data warehouse to provide easily accessible information to its managers.
Other aspects of government were in good shape before the bankruptcy, and are in good shape now. In the late 1980s and early ’90s, Orange County put a significant effort into making sure that its roads were well maintained, a practice that allowed it to get through the more difficult years without disaster. The same pavement-management system has been in place since 1983, and it works. “The county has been very proactive in road systems,” says one official. “If you spend a dollar now, you’re going to save five dollars in just a few years.”
Positives: After reforms that followed bankruptcy, county’s investment status is “squeaky clean,” highly visible, continually reviewed and very conservative; policy of booking revenues also conservative; one-time revenues spent only on one-time projects; careful quarterly tracking of expenditures; sufficient cash reserves, although no formal rainy day fund; good multi-year strategic financial plan.
Negatives: $1 billion in debt remains from bankruptcy; decentralized contracting and purchasing deprive county of central oversight; departments required to do cumbersome formal bidding for purchases over $10,000.
Positives: Long-term attention to road maintenance, dating back to late 1980s, leaves infrastructure in excellent shape; condition assessments of roads done regularly; restructuring to single project-manager system should make road building and maintenance more accountable; preventive maintenance plan for facilities being implemented.
Negatives: Multiple funding streams stand in way of entity-wide capital plan, although departments create their own; no centralized tracking of facilities projects; funding of facilities maintenance a challenge, although county now trying to catch up.
Positives: Merit system more flexible than many in California; market-based salary system; developing HR strategic plan; online applications; pilot program to speed up hiring; improved grievance process; extensive, successful pay-for-performance program; new employee-recognition program.
Negatives: Too many classifications; minimal central workforce planning, although emphasis on improvements; hiring and termination take too long; decentralized environment makes oversight of HR practices difficult.
Positives: Superior long-term strategic planning; all 23 departments prepare business plans to align with countywide plan; all department business plans are on the Internet; good use of advisory boards and surveys.
Negatives: Citizen input not always well used; performance measurement only in early stages; validity of measures uncertain; targets don’t drive performance; minimal public access to performance measures.
Positives: Collaborative atmosphere, with broad input into IT decisions; powerful network allows easy information sharing between agencies; though information from entity-wide systems can be difficult to utilize by managers, data warehouses make information about financial management and human resources accessible — goal is to phase out 70 percent of paper-based financial reports; Web site offers large number of transactions; full online bidding for procurement; although IT powers are decentralized to agencies, county has sufficient central oversight and control; successful outsourcing of many IT functions; excellent procurement standardization, except where federal or state requirements interfere.
Negatives: Systems to track fixed assets short of needs; no countywide GIS, although some agencies make excellent use of GIS.
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even years ago, Orange County declared bankruptcy and became a national symbol of bad county government. That’s not a symbol anybody would want, and in some quarters, the county’s reputation is still recovering. But Orange — one of the nation’s wealthiest jurisdictions even at the height of its troubles — has come a long way in those seven years.