ORANGE COUNTY IN BANKRUPTCY : County Searches for Ways to Trim Its Cash Outlays : Operations: Agency heads are told to determine which goods and services are essential. Officials seek to reassure vendors, who worry that they won’t be paid.

As county department heads scrambled Tuesday to determine what goods and services provided by outside vendors are essential and what can be cut, the vendors worried about whether they would get paid at all.

As the day wore on, county officials mollified vendors who demanded cash up front and fretted about whether their state and federal grants might be jeopardized because of possible cutbacks.

“We are concerned with a wide range of things, from security guards to toilet paper,” said County Librarian John M. Adams. “We are attempting to evaluate all of those on a very short-term basis: What is most crucial to keep opening our doors?”

The County Board of Supervisors directed all agencies late Monday to prioritize the vendor contracts vital to the “health, welfare or safety” of county residents and to submit lists “immediately” to the county administrative office outlining their barest needs to keep the county running.

While it was still unclear Tuesday just what services would go, Adams speculated that no new library books would be ordered, and Health Care Agency Director Tom Uram said he was agonizing over whether to include private security guards that escort county workers to their cars on his list of essentials.

“We do all the county physicals,” Uram said. “Do we continue that type of thing? We have some private guards that help us at 17th Street. Do we continue that service or not? Is employee safety a concern right now? Yes. Is it more important than what we’re going through? I don’t know.”

Uram said he hoped to submit his lists to the county administrative office by today.

All other contracts will be canceled, and vendors who rendered nonessential services before the county’s bankruptcy filing will not be paid for the time being, according to county officials.

Uram said about 80% of his budget is state and federally funded, but he is concerned that he could jeopardize some of that funding if he can’t match some of it with the required county dollars.

General Services Agency Director Bert Scott had “several dozen” employees working Tuesday to prioritize contracts and services provided by thousands of vendors. The agency not only contracts for its own goods and services, it handles $100 million in annual purchasing for the entire county, Scott said.

“All I can tell you is, we’re working on it,” Scott said. “It’s a big task, it’s a very important task.”

Sheriff Brad Gates said his officials were meeting with some of the 600 vendors who provide services to the Sheriff’s Department. “There may be a chance down the road that they may not get all or part of their money,” he said.

Meanwhile, the county auditor-controller’s office began writing checks to food vendors “so we can keep prisoners and children fed,” and discussed the possibility of replenishing petty cash reserves of departments more regularly, said Gary H. Leach, manager of claims and disbursing.

Several county agency heads said vendors had sent them letters stating they will not provide any services unless they are paid cash on delivery.

The vendor who supplies toilet paper to the county jails had balked at delivering until he received money up front, Gates said, and there has been “a lot of confusion” among other vendors too.

“We’ve got it all resolved,” Gates said. “We’ve been on the phone with all our vendors and we picked up some checks today. It’s all taken care of.”

Bruce Bennett, the county’s bankruptcy attorney, said it was still too early to tell which vendors will be paid and how much. There just is not enough money to go around right now, he said.

“I doubt very much that the end result will be that vendors are paid nothing,” he said. “What is likely is that there is going to have to be a plan developed to distribute this loss to the constituencies of this county, and it’s just too early to tell exactly where it will fall and in what proportions.”

Anxiety has also descended on many private social service agencies that receive funds from the county.

It was somewhat reassuring to them that the county plans to honor obligations to essential health, welfare and safety service providers, but what “essential” means, they said, is open to interpretation.

Margot Carlson, executive director of CSP Community Service Programs, said the county owes her agency more than $409,000--money that she needs to keep operating.

“We are caught in that bankruptcy aura. Nonprofits don’t have deep pockets,” said Carlson, whose agency contracts with the county to provide such services as diversion programs, gang intervention and assistance to victims of domestic abuse. “We desperately need answers. We cannot continue to fund programs, because we’ll run out of money.”

Several nonprofit agencies that depend heavily on state and federal money that funnels through the county said they have been told those funds are frozen as well.

County officials said such “pass-through” funds would not be affected. But Rifka Hirsch, executive director of the Cambodian Family Inc. in Santa Ana, said she has been notified by county officials that the federal funds for her agency’s refugee assistance programs, administered by the county, were frozen as of Dec. 6. And there is no assurance of funding for services provided after that date, she said.

If the organization does not receive some assurance by the end of the week, she said, it will have to cut services to hundreds of refugees. The agency provides English instruction and vocational assistance under contracts worth about $45,000.

Others said they have opted to stop doing business with the county altogether.

Paul Ruelas, owner of SSC, a 37-person engineering consulting firm in Orange, said he will stop doing business with the county, which has provided 10% to 15% of his firm’s revenue.

“I’m not going to be taking any chances,” he said. “First they were saying it was $1.5 billion, now it’s $2 (billion). I don’t know whether they know themselves.”