Orange County is renewing its deal with a financial advisor for 3 years at a cost of 150 thousand dollars per year. Many people we talked to about this spending on the street believed Orange County should have someone in house that would do that work for them? They also wondered if 450 thousand dollars over 3 years could be better spent elsewhere. Taking care of the homeless was one example we were given.
The County does have a Comptroller's Office with 218 employees, including 75 working in the Accounting and Financing. Orange County says they need an outside financial advisor because they deal with complicated debt issues. They also have 3 people in the Office of Management and Budget that specifically deal with debt issues.
We asked certified financial planner Joe Bert of the Certified Financial Group if he thought it made sense for Orange County to use an outside vendor for looking at debt issues?
"You've gotta make sure the T's are crossed and the I's are dotted, and it is done right, because if it is not, it is a huge mess, and it is going to cost the taxpayers a lot of money."
The outside advisor will deal with the more complex financial transactions Orange County does, like bonding money for things like roads, the Convention Center, or the venues. Joe Bert told us the County is backing themselves up to make sure they don't lose millions of dollars.
"What they are doing is they are really protecting the taxpayers. Basically they are buying insurance to make sure it is done right, and that's why the people that you bring in, the professionals, that's why they have insurance. They have professional liability, and errors and omissions insurance, because if something goes wrong you can fall back on them and recover damages."
Orange County says they have saved 125 million dollars over the past 10 years in refinancing debt deals. They also point out the financial advisor will get a lower rate in this new contract than they have earned in previous years.