The DeVore-Spitzer Debate & the One Million Dollar OC Man
Posted By CotoBlogzz May 13, 2011
Rancho Santa Margarita, CA – If you think gas prices are exorbitant, have you seen how much it takes to get a candidate elected to the Orange County Board of Supervisors (OCBOS)?
Looking at the open seat in the Orange County Third District as an investment, under what conditions would you buy stock at some 1000 price to earnings (P/E) ratio? Consider that brand-centric companies usually command a 10-30 multiple, whereas financial-centric ones usually go for 1-5 times. Now, Hot Market-Centric Companies Such as the ones listed below, did not get over a 500 times multiple:
Company PE Market Cap
1. AOL 253 $109.4B
2. Yahoo 311 $39.6B
3. Excite 491 $7.3B
4. Amazon -119 $20.2B
Further, according to Forbes, Quarter Ending Date 2011/03 results for Apple Computer, show the following price to earnings ratios:
Current P/E Ratio = 16.7
P/E Ratio 1 Month Ago = 16.0
P/E Ratio 26 Weeks Ago = 20.3
P/E Ratio 52 Weeks Ago = 19.6
12 Month Normalized P/E Ratio = 16.7
Then consider that just this week, a study by Millward Brown a global brands agency found that thanks to the iPhone and iPad Apple, is now worth $153 Billion
Chuck DeVore
Todd Spitzer
According to an email blast from Third candidate Chuck DeVore, his likely opponent Todd Spitzer “….has a million dollars – money from government unions and special interests,” adding that “with a million dollars, my opponent’s consultant can pump out thousands and thousands of slick mailers attacking me with all kinds of false charges – I know, because my opponent’s consultant was the same consultant my defeated 2004 opponent “
So what is the P/E ratio for the Third District? Roughly close to infinity. Why? Because in this case the E is not earnings, as much as it is entitlements. That is, a taxpayer pays for the price and for the entitlement!
We have been trying to get Mr. DeVore and Mr. Spitzer to have a substantive debate on the issues the county of Orange faces, but to date Mr. Spitzer has been unresponsive and Mr. DeVore’s responses have lacked substance. While we have suggested certain bold initiatives, Mr. DeVore has largely responded with reasons why the proposals are not doable – not with his own bold proposals:
A. Audits – We are calling for an audit of the OCSD. The county apparently does not have the necessary tools. The state is supposed to conduct audits to make sure everything is in the up and up. However, no county or state agency contacted so far has records of any audits performed. Further, law enforcement officials and Governor Brown are asking for a tax increase. Does it make sense to have a tax increase when we cannot trace how the public safety dollar is being managed? Mr. DeVore says that “.. the county has the authority to order its own audits, and it should.” The problem with such a response is analogous to having the fox audit the hen house.
Stephen Connelly, OCSD’s Executive Director of Independent Review, for example, when asked about department accountability, he said “Accountability means different things to different people”. Further, Mr. Connely was aware of tools and or metrics used by management in the department to make sure there was some sort of accountability. And a just-released-OCSD follow-up to a 2008 audit criticizing the OCSD for allowing out-of-control, “ because the department lacked sufficient rules and controls “ misses the mark: The new audit credits new overtime rules with a drop in overtime costs of $21.6 million.. We have asked to county to clarify the rationale used to reach such conclusion, as the evidence indicates the reason is "because the department lacked the proper management"
Then there is the issue of an outdated manual timecard system, which needs to be overhauled, and according to Sheriff’s Executive Director Rick Dostal. A new system could save the county as much as $225,000 a year. We are also asking the county to clarify. After all, most reputable payroll processing services provide timecard systems for free. Worse case, there are plenty of open source solutions at no cost to the county.
B. BRCI - We are asking Third candidates to consider an Orange County bureau realignment and closure initiative, whereby 80% of the bureaucracies should either close or merge – initiative patterned after the military closure initiative. If successful, the notion can be a prototype that can be exported to other counties and the nation. No real response from Mr. DeVore
On a related note, Mr. DeVore’s email blast refers to “…an independent poll taken in March shows me beating my opponent, Todd Spitzer, by 39 percent to 25 percent.” Our proprietary Poldex© Index, a measure of relative popularity in the county, places Mr. DeVore at a major disadvantage with only 15%
While it may be understandable that a substantive debate may be too early, given a one million dollar war chest that can be used for demagoguery, voters deserve better. Particularly when the P/E ratio approximates infinity.
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