ORANGE COUNTY IN BANKRUPTCY : School Employees Get Checks, But Officials Worry About Future Payrolls : Education: Uncertainty reigns as district and city administrators try to assess impacts of the crisis on operations, projects.

School employees throughout Orange County breathed a sigh of relief Friday after receiving their paychecks on schedule. But school administrators, city managers and special district officials worried that future payrolls and projects might yet be affected by the county’s financial crisis.

“For this week’s payroll, we have a written guarantee,” said Garden Grove Unified School District spokesman Alan Trudell. “For next week’s, we have a verbal guarantee. For the end of December, we have verbal assurances. As dates become further away, guarantees become more diluted.”

Still, it was a relatively normal day at the schools, with teachers, staff and parents throughout the county saying they were struggling to keep their equanimity in the face of the week’s stunning developments.

As promised, the school system’s 28,000 classified personnel, including aides, secretaries, bus drivers and cafeteria workers, received their paychecks on time Friday. The county’s teachers are not scheduled to be paid until Jan. 3.

Some officials confessed, though, to feeling more than a little trepidation about the future.

Tom Burnham, president of the board of trustees of the Irvine Unified School District, said Friday that he feared the crisis “could lead to the devastation of the finest public school system in the state of California”--his own.

“This thing is going to slowly peel like the layers of an onion, I’m afraid, and smell about as bad as we go along,” Burnham said.

In other actions by cities, schools and special districts Friday:

* The Yorba Linda Water District and the City of Placentia, in separate actions, announced that all capital improvement projects have been placed on hold.

* Huntington Beach sent out a memo with its paychecks hoping to reassure worried employees that the city had sufficient funds to continue all daily operations.

* Anaheim, with several major development projects hanging in the balance, organized an internal crisis team that will meet each weekday to assess the financial situation.

* The boards of the Newport-Mesa Unified School District, the Laguna Beach Unified School District and the Saddleback Community College District followed several other school boards in directing Orange County officials to keep their funds separate from the failed investment pool that triggered the county bankruptcy. The Anaheim Union High School District will meet today and is expected to take similar action.

* Laguna Beach Unified School District trustees also passed a resolution asking the county supervisors to meet as soon as possible with school board representatives.

So far, Laguna Unified Supt. Paul M. Possemato said, county officials have spent far more time meeting with major investors than with school representatives, the latter of whom had no choice but to invest in the troubled pool. Possemato said he worried that the schools might be the last to get their money out.

“The State of California requires that children be educated,” the superintendent said. “Whether (school districts) have only 14% of the pool or not, I believe that the county must reply to that mandate first. . . . We must be protected.”

As city and school district officials grappled with the situation, parents were also feeling the stress. Despite reassurances from school district officials, some say they are upset and fearful of possible ill effects on the quality of their children’s education.

Dan O’Conner, 34, said Orange County’s bankruptcy status is of special concern because he has three children in the Los Alamitos Unified School District, and his wife, Barbara, is the principal of a Huntington Beach school.

“It affects me profoundly. Our main concern is payroll, but from what I understand, they’re going to pay the payroll and leave the bills,” O’Connor said as he picked up his children at McGaugh Elementary School in Seal Beach.

“All we ever hear is that we don’t have enough money,” said Lynn McLain, 40, as she sat in her mini-van waiting for her son Nathan, a fourth grader at California Elementary School in Costa Mesa.

“If we had $1.5 billion to lose, why didn’t we give it to the schools?” McLain asked. “I have four children in school. It’s definitely going to affect us in one way or another.”

Meanwhile, six city managers met in Irvine on Friday morning to discuss the crisis but said they were still unable to assess the full impact on their cities because “the situation changes by the minute,” as Anaheim City Manager James D. Ruth put it.

The managers, acting on behalf of the 29 cities that are participants in the investment pool, are expected to hire legal counsel next week to represent them. They said they are most concerned about receiving property tax money due to them this month.

Anaheim, for instance, is expecting two payments totaling $15 million from the county fund within the next four weeks.

“If we don’t get the property tax disbursements, that could present a problem with cash flow for many cities,” said Irvine City Manager Paul O. Brady Jr. “It’s critical that we get that disbursement out of the fund in a timely fashion.”

The managers met with two representatives of Thomas W. Hayes, the county’s newly appointed financial adviser. The two, former Santa Ana Mayor Daniel H. Young and former San Juan Capistrano Mayor Gary L. Hausdorfer, promised the group that Hayes would meet with them early next week. Also present was Montebello City Administrator Richard Torres, whose city has $47 million invested in the pool.

Brady said he hopes city officials will begin to get answers to a number of troubling questions now that they have organized and the county has hired Hayes. Among their concerns, he said, are whether the investments they have in the pool are legally a part of the county’s assets and if property taxes the cities have already paid are going to be tied up in bankruptcy.

“We have had one week of hysteria,” Brady said. “It has been horrendous. We’re trying to bring calm and reason.”

The advisory group, which consists of the city managers of Irvine, Anaheim, Santa Ana, Fullerton, Huntington Beach and Laguna Niguel, will meet again Monday to discuss hiring legal counsel to speak for all the cities in their dealings with the county.

“Each city is taking a look at what it needs to do to protect its own city’s interests,” Brady said. “What we are doing by hiring legal counsel is to have one attorney who can speak for us.”

But in some cities, the worries are somewhat less significant.

In Seal Beach, which has $2 million in the county pool, officials said the only project that could be threatened is its plan to continue to buy sand to replenish badly eroded beaches.

But even that project is not of immediate concern. The city does not plan to continue the beach rebuilding until next spring, after the rainy season, and officials hope the situation will be at least partly clarified by then.