March 8, 2001
Office of Economic Adjustment
ATTN: Nancy Brown
400 Army Navy Drive, Suite 200
Arlington, VA 22202
SUBJECT: Misappropriation of Commingled Funds
Dear Ms. Brown:
As Members of the Orange County Board of Supervisors and The Local Redevelopment Authority (LRA), we are writing to request your immediate review of an action that we contend is a violation of the Department of Defense Office of Economic Adjustment (OEA) and County of Orange policies. On March 6, 2001 the Orange County Board of Supervisors (Board) approved the unilateral transfer of $5,000,000 in Orange County John Wayne Airport (JWA) revenue along with concurrent delegation of Board statutory and regulatory duties to a separate public entity, the Orange County Regional Airport Authority (OCRAA). The purpose of the transfer and delegation is to fund the development and dissemination of public information - in our opinion substantive services. The Board, by a 3-2 vote, approved the action without approval of the OEA.
We allege that the transfer and delegation of duty is an "impermissible delegation" of county statutory and regulatory duties as proprietor of JWA. And, we further allege that such transfer and delegation is in direct contravention of OEA policy regarding Board policy, as the Local Reuse Authority, for permissible actions in the planning for reuse of Marine Corp Airstation El Toro (MCAS El Toro).
BACKGROUND
On November 4, 1999, Laurence M. Watson, Orange County Counsel submitted a memorandum to our former Chief Executive Officer, Jan Mittermeier (Exhibit A). The memo discusses in detail the County's stance in obtaining services from the Orange County Regional Airport Authority (OCRAA).
OCRAA is a joint powers authority comprised of fifteen cities, formed under Government Code Sections 6500 et seq. The governing document for OCRAA is the joint powers agreement, which sets up OCRAA as an separate, independent public agency. (Agreement, Sec. 2.1; Gov't Code § 6507). The County is an ex officio member, in which they can be represented , but the County can not vote. The goals and objectives of OCRAA are to "actively participate in the El Toro reuse planning process to represent and protect the interests of the members and their constituents."
In this memo, Mr. Watson states that "airport master planning activities, including the master planning public information program may not be delegated, assigned or transferred to the OCRAA, a separate public entity, nor may the county expend John Wayne Airport revenues or grant funds for such purposes. Such an assignment or transfer would in effect, constitute a unilateral delegation of the essential Local Redevelopment Authority duties without the approval of the Department of Defense Office of Economic Adjustment. Such a transfer would also constitute an impermissible delegation of the County's planning duties as the proprietor of JWA."
Mr. Watson's opinion also states "airport master planning duties, including the public information program, may not be delegated by the County to OCRAA, which has no official status with regard to Marine Corp Air Station El Toro Reuse or JWA planning. The OEA has not recognized OCRAA as the LRA for MCAS El Toro."
Mr. Watson's opinion continues, "it is our opinion that CEO 14M funds (JWA revenues) and FAA grant funds may not be transferred to OCRAA for any Airport Master System Planning purposes. Therefore, it is our opinion that the County, as the LRA for MCAS El Toro and as the proprietor of OCX (Orange County International), must retain exclusive and sole authority over all airport master planning activities, including the public information program."
The opinion went on to state: "airport master planning duties, including the public information program, may not be delegated by the County to OCRAA, which has no official status with regard to MCAS El Toro Reuse or JWA planning. The OEA has not recognized OCRAA as the LRA for MCAS El Toro. Such airport system master planning duties involve the exercise of discretion by the County and thus cannot be delegated to another governmental agency, Mitchell v. Walker, 140 Cal.App.2d 239,at 243-44 (1956). The County retains exclusive jurisdiction to perform such airport system master planning functions by virtue of its legal status as a proprietor of JWA, the only officially designated LRA, and by its status as the legal sponsor for FAA grant funds to be used for airport system master planning purposes. Based upon the foregoing, it is also our opinion that CEO 14M funds (JWA airport revenues) and FAA grant funds may not be transferred to OCRAA for any airport system master planning purposes.
Watson's document concludes by stating, "we do believe, however, that the County may delegate to and/or contract with OCRAA or any other public entity to perform ministerial services which are not in conflict with the County's exclusive statutory and regulatory authority as the officially designated LRA for MCAS El Toro and as the proprietor of JWA. As an example, we believe it would be lawful for OCRAA to distribute and disseminate documents prepared by the LRA/County public information program and to use CEO 14M funds for this purpose."
The expenditure of CEO 14M Funds for a delegated, discretionary public information program gives us great concern, because according to Mr. Watson's memorandum in 1999, it is clearly evident that providing funds to OCRAA's public information program is, as Mr. Watson stated, "impermissible and unauthorized expenditure of JWA Funds."
It is at this time that we are respectfully requesting that your agency investigate this very sensitive matter and provide an opinion, whether or not the Orange County Board of Supervisors has violated OEA regulations, by providing OCRAA with a $5 million dollar contract for 15 months of service.
Thank you for your expeditious attention to this critical matter of public trust and responsibility.
With warmest regards,
TODD SPITZER THOMAS W. WILSON
EXHIBIT B - AGENDA ITEM TRANSMITTAL
C.C Jane Garvey, Administrator, Federal Aviation Administration
David Gamble, Office of Inspector
General, Department of Transportation