In news from the Republic of Orange County, we found the not so surprising tidbit that OCTA has voted to refinance the 91 Express Lanes Bonds. The 91 toll roads, supposedly an award-winning design, has been a money losing operation from the beginning. Originally a private enterprise wherein mostly foreign investors bilked the state out of real estate on the center divider of the 91 freeway to build a business, that business turned out -as predicted by many- to be a deep hole to sink taxpayer money into. And, sink it they did.
When California Private Transportation Company developed the toll road complex, they quietly transferred ownership back to the State of California who then leased it back to CPTC (confused yet?). CPTC then continued to operate the toll road on a for-profit basis, presumably for the next 35 years.
In 2003, when CPTC couldn’t make a dime off the venture, they wisely conned the Orange County Transportation Authority to take it off their hands for a cool $207.5 million in cash and tokens (OK, I’m kidding about the tokens – everyone knows the toll road uses FastTrak).
The toll roads use “congestion pricing” to set toll prices for any given hour – except it’s not, really. True congestion pricing would require real-time input on congestion to determine pricing. That wouldn’t work for the toll road, which the developers (and OCTA) knew would display a grossly underused road at any hour of the day. Instead, they use a predictive model to determine the most heavily congested hours and adjust every so often for changes. That, of course, is not exactly transparency in government. But, then, one only has to look at the Toll Road website for the inside information. Oh, wait, that paints a rosy picture that just isn’t true.
And staff at OCTA know it.
In May of this year, a staff report titled, “91 Express Lanes Debt Restructuring” was sent to the OCTA Board, of which our own Al Murray and Todd Spitzer belong. That report, which you can read here, outlines deep trouble with the debt structure of the toll roads and the immediate need to refinance both the 2003 and current bonds for the Toll Roads. Recommendation by staff, of course, is to refinance.
Now, what I know about bonds and debt restructuring could be put on a pinhead. But, I do know how to read bond ratings (thanks, brother John) and can tell you that, when your bonds go from an original Aaa/AAA/AAA rating to A1/A/A-, you are in deep doody. This is akin to your going from an 800 credit score to a 400 credit score only, while your interest rate goes up to buy that house, the interest rate goes down on the bonds and they become difficult to sell-unless you offer artificially attractive interest. Oh, but there are laws against that sort of thing, aren’t there? Well, according to Spitzer, who sits on the OCTA Finance Committee, the rates went from 2.75% to 2.65% practically overnight. Spitzer, who in his latest newsletter to constituents is trying to paint a portrait of a rose from a picture of a sow, is clearly losing the battle on the Toll Road.
Al Murray, by the way, is of the same mind as his predecessor Jerry “Boss Tweed” Amante was, that we should turn the carpool lanes on the San Diego Freeway (there, I said it) into toll roads as well. All this while not one toll road in the county can meet its ridership or its financial goals. Another Tustin Councilmember, Chuck Puckett, is a member of the Foothill/Eastern Transportation Corridor Agency and, although we haven’t checked, we are betting he is in favor (like Amante was) of the Foothill Extension that would wreak havoc on the Trestles area.
Peas in a pod.
What we can’t figure out is why the Republicans in this county continue to chase after the toll roads, a proven money loser for government and a bane to the public. If you have ever ridden any of the county’s toll roads, you know that -at any time of the day- they are grossly underused. None of the toll roads have been able to reach their lofty projections. Their answer to low ridership? Raise tolls, making the roads even more expensive and out of reach for the everyday commuter. The 91 Toll Roads show the best ridership of any in Orange County. But, they are still vastly underused. An old non-compete agreement threatened a widening project at one time. When the issue was settled, mostly due to the sale to OCTA, ridership fell when the widening was completed. Will connecting the 91 and the 241 Toll Roads help matters? Possibly. But, are we, as taxpayers, willing to fund another possible boondoggle to find out?
We, as taxpayers, are stuck with the existing toll road boondoggle foisted upon us by a so-called conservative leadership shouting the privatization mantra. But, time and time again, we’ve seen that privatization of government enterprises creates substandard product amidst the cronyism and backroom deals. Toll roads are not the answer and it is time to tell our elected officials to get off the same broken record. We may be stuck with what we have. It doesn’t mean we should continue to propagate the species.
Hot on the heels of a scathing grand jury report and the announcement of an investigation by the Fair Political Practices Commission, the FBI announced Wednesday, they have created a task force to investigate corruption here in Orange County. The earlier probe stems from management issues with CalOptima, the county’s low income health system for the poor.
Earlier this year, the Grand Jury issued two reports highly critical of the Board of Supervisor’s mismanagement of the CalOptima system. Supervisor Janet Nguyen, along with others, has been accused of conflict of interest and ethical breaches.
On June 18th, Supervisors lashed out at the Grand Jury, saying it was not their job to publicly embarrass the county. Supervisor John Moorlach, in one of his typical misconceptions, stated, “Your here to help us, not embarrass us nationally.” Todd Spitzer, who will eventually run for district attorney, went as far to say that their is no corruption in Orange County. The Board then moved to cut the grand jury stipend in apparent retaliation.
As it turns out, the FBI formed the task force in April, about the same time as the FPPC announced its own investigation. The FBI, which has a permanent anti-corruption unit, said they typically form a task force to focus on specific issues. According to the Voice of OC report, the task force consists of agents from the FBI, the IRS and other agencies, bringing in experts in all fields. In other words, they form a task force when a small, boutique investigatory unit just won’t do.
This is not the first time the county has undergone investigation by the Feds. The FBI was involved in investigations during the 1994 bankruptcy as well as the more recent witness tampering charges that brought down former OC Sheriff Mike Carona, who is serving a 6 year sentence in Colorado. That investigation revealed widespread corruption in the upper ranks of the sheriffs department.
The formation of the task force highlights the ethical woes of the county. And, although it may seem the task force is pointed at the Board of Supervisors, other elected and former officials of cities and special districts would do well to watch themselves. The FBI has a tendency to cast a wide net when it is looking for information. Typically, during an investigation of this type, other deeds of mismanagement on the peripheral of the investigation are brought into the light and reviewed.
Coming to mind are the charges brought by the Grand Jury last year against our own Jerry Amante, accusing him and another councilman from Laguna of misusing their official positions with their cities to interfere with Brandman University officials. Although the city of Tustin made an official response to the report, as required by law, they never actually denied the charges. Rather, they stated the Grand Jury got it all wrong and, even if there was a misuse of power, the city could hardly be held accountable for what two renegade councilmen did on their own time.
The rhetoric got so bad, self-appointed and well-respected watchdog, Shirley Grindle actually fired off a letter to the Register saying the two officials owed Smoller of Brandmand University a “huge apology for their unethical behavior.” She said they should then resign in disgrace.
So, while the conservative Republicans of this town continue to be incensed at the thought of their dirty laundry coming to light, it looks like the FBI has gladly set up shop in their back yard to eke out corruption. While I expect much of the work to be done in secrecy, one can expect an investigation of this size will bring out a wide variety of players in county politics. Don’t be surprised to find the fickle finger of fate pointed at a variety of folks, both public and private. Coming to mind are those behind the well funded smear campaigns against Tracy Worley-Hagen and David Waldram that brought in hidden money from local contractors we suspect do business with the city.
Denial is one thing. But, our city fathers may have to prove it this time. And no amount of ranting on the dais will keep the FBI from their task.
“You’re here to help us, not embarass us nationally.” That’s the words from Orange County Supervisor, John Moorlach, as he lashed out at the Orange County Grand Jury for their latest missive dinging the Board of Supervisors for massive mis-management of CalOptima. Two scathing reports caused the Fair Political Practices Commission to initiate an ethics investigation into the handling of the organization by the Board.
All I can say is, it’s about time.
I can also say it is shameful the way the Board of Supervisors reacted. Although any reader of Our Town Tustin knows I have little regard for the Orange County Grand Jury, it never surprises me how the, so-called, Republican Leadership continues to deny corruption and, when denial fails them, lashes out at those who speak the truth.
PBS SoCal televised the ranting supervisors in the video above. Each supervisor took a swipe or two at the Grand Jury. But, it was Todd Spitzer, future District Attorney and, presumably the Grand Jury’s boss, who actually had the gall to infer that Orange County has no corruption. News flash, Todd, Orange County is about as corrupt as can be and no amount of denial by you or your corrupt cronies on the Board can allay the belief of the voters here in the Real OC.
Supervisor Janer Ngyuen, saying the report “demoralized” her and her family as well as “the 500 employees who work at CalOptima”, was laughable in her defense of a situation that she clearly manipulated to garner favor wtih her constituency when she was appointed as the Board’s representative to the organization. I have news for her, the 500 employees of CalOptima were probably laughing their collective asses off when they saw this video.
Grand Jury Foreman, Ray Garcia, says he stands by the reports. “The only thing I will say about the corruption thing is, you ought to read the corruption thing. It’s a chronology of four decades of malfeasance, misfeasance and downright crime.” Unlike us, Garcia says he was surprised on the backlash from the ethics commission suggestion. Of course, we’re not.
This video shows one thing: the Orange County Board of Supervisors have shamed themselves, more than any report or investigation possibly could. Instead of whining about this, as Shawn Nelson and poor, little hurt Janet Nguyen did, they should be taking an honest look at themselves and how they have acted during their tenure. From failures to identify and rout out sexually criminal behavior to how they have treated the employees in general of this county, they have led among Republican leaders in this county to hide the truth from the public. And now that they have been called on it, all they can do is scream and yell at the messenger.
The investigation will take a year or more. In truth, I don’t expect much to come of it. Ann Ravel, the chief of the FPPC is a milkweed at best. She has never outed any politician, Republican or Democrat for a substantial infraction and I don’t expect her to do much more than pay lip service to this. It is refreshing to see this out in the open, however. And it is fun to watch the worms squirm.