Will the Board fiddle while our investments burn?

On the 13th anniversary of the 1994 County Bankruptcy the Orange County Employees Association (OCEA) called upon the Board of Supervisors to take immediate action on Chriss Street. Earlier this fall, OCEA called upon the Board to remove Chriss Street’s investment authority in light of federal and county investigations of his conduct.

The sudden revelation, at the Board of Supervisors meeting last Tuesday, of problems with investments that Street has made as Treasurer has sparked concerns that the Board may be ignoring the same types of problems that led to the 1994 County bankruptcy. The Board is scheduled to vote on the matter of Street’s investment authority tomorrow, but a delay in that agenda item has been requested by Supervisor Campbell, who will be out of town for the meeting. Read the letter for yourself on the flip.

December 6, 2007

Chris Norby, Chairman
Board of Supervisors, County of Orange
10 Civic Center Plaza, 5th Floor
Santa Ana, CA  92701

Dear Supervisor Norby:

OCEA was distressed to learn on Tuesday that $460 million in debt securities held by the County have been placed on a “credit watch” by Moody’s. Apparently the public and the Board of Supervisors received this information at the same time – during Treasurer Chriss Street’s presentation to the Board during public comment at Tuesday’s Board meeting.

OCEA has voiced its concerns about Mr. Street to Board members on numerous occasions over the past few months. The fact that this latest revelation came as a complete surprise to everyone, including the Board, further erodes Mr. Street’s already tattered credibility and reveals, at a minimum, yet another instance of poor financial management on his part.

We urge the Board of Supervisors to act promptly to demonstrate to County employees and the public that it takes seriously this latest in a series of what news reports have called Mr. Street’s “… pattern of abrupt revelations.” By this letter OCEA requests the Board of Supervisors to hold a special meeting devoted solely to the issue of the safety and security of investments by the County investment pool and Mr. Street’s role in selecting and managing those investments. Only by discussing this matter openly in a special meeting can the public be assured that any threats to the security of the County’s investment pool have been fully and fairly addressed.

In 1994 the Board of Supervisors ignored a series of early warning signs and the result was the largest municipal bankruptcy in United States history. While there may be checks and balances in effect today that were then lacking, the similar pattern of surprises is eerily familiar. OCEA urges the Board to take immediate, decisive action to ensure that the financial tragedy of 1994 is not repeated.



Nick Berardino
General Manager

So the question remains, will the Board fiddle while our investments burn?

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