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22 years later, Orange County's bankruptcy is finally paid off
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The late Orange County treasurer Robert Citron in court in Santa Ana. His risky investments helped drive the county into bankruptcy in 1994.
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Nick Ut/AP
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After 22 years, Orange County is finally paid up. On Saturday, the county made the final payment on a $1 billion bond that helped it get out of its 1994 bankruptcy.
"I think it is very good news this is in the rearview mirror and we can move forward financially as a county," said Todd Spitzer, who was elected county supervisor soon after the bankruptcy and currently represents the county's third district.
In addition to the $1 billion principal, Orange County ended up spending about $500 million on interest payments – money it couldn't spend on public services.
"Our government buildings are in incredible disrepair," said Spitzer. "Our county parks have been neglected because money has been siphoned off and we’ve been importing other people’s trash into our landfills to pay off our debt."
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At the time, Orange County’s was the biggest municipal bankruptcy in U.S. history. Since then, Detroit, San Bernardino and Stockton have all gone under.
Orange County's Chapter 9 remains unique because of its eccentric former treasurer Robert Citron, who used psychics and star charts to help manage the county's budget, which he tried to prop up with risky investment schemes.
Citron, who died in 2013, pleaded guilty to criminal charges resulting from the bankruptcy. But Spitzer does not think Citron deserves all the blame.
"The Orange County Board of Supervisors told Citron to try to produce more revenue out of the investments than anybody else was getting in terms of yield," said Spitzer. "If it's too good to be true, it probably is."
Spitzer said Orange County’ budget is in a lot better shape today, but he cautions his fellow politicians not to get complacent.
"You have to live within in your means," he said.
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