Officials in Orange County, California, are hoping that they've finally found a cure for the decade-long hangover stemming from the county's 1994 bankruptcy. The county has hired consultants to determine the wisdom of using spare general funds to pay off its debt early.

The county borrowed more than a billion dollars after its investments went south a decade ago. In addition to slowly chipping away at the debt, county supervisors in recent years have been setting aside any extra dollars in order to pay off their bonds more promptly.

They now have $98 million saved up and could potentially buy back the lot of outstanding bonds next June. "Several of our long-serving board members are real sensitive to the fact that the county has all of this bankruptcy-related debt," says Thomas Beckett, the county's public finance manager, "and they're anxious to retire it as soon as possible."

Such a move could save about $5 million a year through fiscal 2015. The only stumbling blocks are the task of sorting out the legality of repaying capital debt with general fund money and the political question of whether the money might not be more profitably spent meeting current needs. The county's baseline spending is still lower than it might be due to the bankruptcy, which forced county officials to cut discretionary spending by about 40 percent back in 1995.