Next O.C. Cut: $80 Million More : Bankruptcy: The slashes--for next fiscal year--will be on top of $40 million in reductions and budget shifts this year. Devastating fallout is foreseen.


One day after announcing that hundreds of layoffs are likely from massive budget cutbacks, Orange County officials said Friday that they plan to slash an additional $80 million in costs next summer.

News of more cutbacks came just 24 hours after top managers stunned the county's 18,000 employees by revealing more than $40 million in budget reductions and shifts planned over the next six months. Of that, nearly $30 million will be in cutbacks at dozens of county departments, such as courts and social services. The rest will come from early cash advances from federal, state and local programs, officials said.

The county's new management council said at an impromptu news conference Friday that the cuts will have to rise to $80 million over the next fiscal year, which begins July 1.

"We hope to double (the $40 million) next year," said Tom Uram, director of the county Health Care Agency, who with Sheriff Brad Gates and Dist. Atty. Michael R. Capizzi make up the council charged with reshaping the county's budget.

They would not give any specifics on how the second round of cuts would be implemented or how many additional jobs would be lost.

Supervisor William G. Steiner said that the downsizing of the county's programs and its work force is expected to become more severe and that the fallout will be nothing short of devastating to employees.

"People need to understand this is not some kind of impersonal bureaucracy," Steiner said. "People are reeling from this. These people are husbands and wives and brothers and sisters. For the thousand people or whatever it is that will be affected by this, it's extremely emotional and personal."

The exact number of layoffs was undetermined Friday. But the news has sparked fury, as labor leaders have scrambled to consult lawyers about possible legal action against the county for suspending numerous labor contracts and allowing department managers broad discretion to fire employees or cut their pay.

Bomb threats were made to the offices of Supervisors Gaddi H. Vasquez and Thomas F. Riley. Someone also called to threaten the life of former Treasurer-Tax Collector Robert L. Citron, who resigned this month as the county veered toward bankruptcy.

Meanwhile, Felix Rocha Jr., an Orange County Department of Education board member, served Supervisor Roger R. Stanton with recall papers Friday. But Rocha had not completed the necessary paperwork to file a petition with the county, so he vowed to return next week.

Rocha's attorney, Marvin L. Rudnick, said Stanton tried to dissuade Rocha from filing the papers and suggested they all meet next week, but Rocha turned him down. Rocha told Rudnick that he received several calls Friday from community leaders pressuring him not to file the recall petition.

In other developments Friday:

* The county began distributing property tax money to cities, school districts and other special districts. Officials from many cities--including Huntington Beach, Anaheim and Fullerton--were so eager to get the cash that they arrived in person at the Hall of Administration to collect checks rather than wait for them in the mail.

Seal Beach Mayor George Brown said his city decided to pick up the payment so the money could immediately be deposited in a bank and earn interest over the long holiday weekend.

* County officials searched for new ways to raise money, including selling or leasing county-owned properties. The county also is weighing whether to rent space in its landfills to other counties or to sign long-term contracts with county vendors in exchange for lower prices.

* Madera County's Department of Education, which put more than $5 million in Orange County's troubled investment fund, said in a U.S. Bankruptcy Court filing that it may default on several public debt obligations if it cannot immediately withdraw $2.48 million.

* Orange County department heads spent the day fielding questions from anxious employees--reassuring most that their jobs were safe--and trying to meet the cost-cutting demands imposed Thursday by the Board of Supervisors. Many managers said they were relieved that the initial reductions were not worse. The specifics of the blows to each department are expected to take at least a week to be worked out.

At the Hall of Administration and other offices across the county, workers fretted about their future two days before Christmas and wondered whether they would have jobs when they returned from holiday vacations.

Employees said the public will feel the crunch almost immediately in longer lines for various services and delays in processing paperwork by the county.

Workers huddled in hallways during breaks and whispered about the situation, then went back to their desks, anxiously waiting for any updates.

"There is a real sadness and a stunned silence," said public health nurse Karen Graffman. "It's very scary."

Many said they hoped that layoffs could be avoided by trying ideas such as shortened workweeks or reduced salaries.

Resignations Urged

Some workers vented their anger toward the Board of Supervisors and called for immediate resignations. Many had bitter words for Citron, whose high-risk investment strategies have been blamed for the county's $2.02-billion loss this year.

Union leaders fumed over the county's decision to suspend their bargaining agreements. That decision will allow the cutbacks to begin immediately.

"We think their actions are illegal," said Bill Fogarty, executive secretary-treasurer of the Orange County Central Labor Council, AFL-CIO. "We don't think they have the authority to do this."

Fogarty said the county's move is drawing attention from union leaders nationwide.

"Whatever happens in Orange County, I think it's going to set some precedent nationwide for employee rights," he said. "This is a classic case of union busting by Orange County and it's going to have national implications."

Supervisors decided to suspend collective bargaining contracts and other employee rights Thursday after the management council proposed a wide-ranging slash of services, targeting contracts that provide outside legal assistance for the poor, health care and welfare services, among others.

At their news conference Friday, Gates, Capizzi and Uram refused to speculate on the number of layoffs that might occur over the next six months. They said that the specific cutbacks will be left to individual department managers and that many agencies may be able to streamline programs without putting people out of work.

Some union leaders speculated that between 800 and 1,000 jobs could be lost.

"We're going to try to avoid laying off people," Capizzi said of his own department, which was one of the least-affected areas, with a 1.1% reduction planned. "The purpose of this was not to lay off employees, but rather to cut the county's costs. If we can do so and minimize the impact to employees, we will also minimize the impact to the public."

Capizzi said union officials told the management council that they preferred layoffs to an across-the-board reduction in salaries.

Uram clarified the council's recommendation of $40.2 million in cuts during the next six months, noting that the savings are expected to come from $29.7 million in straightforward reductions in the county's general funds and $10.5 million in accelerated revenue payments from other sources.

Gates said the aim of the cutbacks is a "leaner, meaner," restructured county government for the foreseeable future.

"Government's probably going to be reinvented here," he said. "It's not like we're going to be just sitting down and doing a budget like we did last year and over the last 20 years. It's a whole different process."

All three emphasized the importance of having acted quickly. Gates said each week costs the county $7 million in salaries alone.

'Invisible Wall' Falls

Though some county workers have raised questions about why cuts in the departments headed by Gates, Capizzi and Uram were among the smallest, council members said they were given a clear mission by the Board of Supervisors to retain services dealing with "public safety, health and welfare."

"The main concern I've heard from everyone is: Don't take away those police, don't take away those firemen," Gates said. "The cops are going to still be on the street. We're going to be prosecuting. Mike's going to be putting criminals in jail."

Gates, an Orange County native, said the past few weeks have been upsetting.

"There has always been this invisible wall around Orange County that has protected us from all kinds of things in my lifetime," he said. "That wall got punched a little bit with crime, it got punched a little bit with drugs, it got punched again with gangs. Things are happening here that we never in my mind thought could happen. It's like a major blow to the jaw."

Since the county filed for bankruptcy protection Dec. 6, several groups have called for the recall of the supervisors. On Friday, Rocha, of the county Department of Education, was the first to attempt such an action when he served Stanton with recall papers.

Don Tanney, the county registrar of voters, said Rocha filed a notice of intent to recall Stanton and told a registrar's office employee that he had served Stanton the notice earlier in the day.

Completing a notice of intent is the first step in beginning the recall process. Rocha's notice appeared to include the required 20 signatures from residents as well as the statement of 200 words or less explaining why Rocha wanted to recall Stanton, Tanney said.

But the notice was missing a section of the California Election Code that advises the target of a recall that he or she has seven days to file a response to the notice with the registrar's office.

"It was a defective notice. It was not complete," Tanney said. "We advised him that it didn't meet the code."

Rocha, a Board of Education member since 1992, would have to add the missing section to the notice, collect 20 new signatures and again serve Stanton with the document, Tanney said.

Registrar employee Bev Warner said Rocha appeared unhappy that the notice was rejected. "He was upset that we weren't going to accept it the way it was," Warner said. "He was a little upset, but he was upset before he got here."

Rocha said he will return with a new notice Thursday, Warner said.

Rocha, 49, is a special agent for the U.S. Immigration and Naturalization Service, according to voter registration information. He has been involved in local politics for years. In 1990, he ran an unsuccessful campaign for a seat on the Fountain Valley School District board.

Rocha declined to comment Friday.

Although Rocha's notice was the first one presented to the board against a supervisor since the financial crisis began, the number of public inquiries about how to begin a recall movement have increased substantially since the county declared bankruptcy.

Lake Forest resident Dianna Baumann said she circulated petitions door to door over the last two weeks and plans to launch a full-scale drive after the holidays.

Baumann and her young daughter attended Tuesday's Board of Supervisors meeting carrying red banners calling for supervisors to resign. Baumann has named her campaign the Coalition for Accountability and is urging residents to send empty wallets to supervisors as a protest against the bond crisis.

Under county election codes, recalls can only be attempted against officials who have more than six months remaining on their terms or have been in office for more than 90 days, said Rosalyn Lever, assistant county registrar.

Because they are about to retire, Supervisors Riley and Harriett M. Wieder "could not be subjects of a recall," Lever said. Because Steiner's term is about to end, Lever said he cannot be the subject of a recall until 90 days into his new term.

In Stanton's district, about 15,000 signatures would be required to hold an election on whether to remove him from office.

Baumann said she is getting ready to kick her recall drive into full gear.

'As soon as Christmas is over, we are going to hit this and hit it hard," she said. "We entrusted them to look after our interests. . . . But they are not looking out for the taxpayers' interests."

Times staff writers Don Lee, Greg Johnson, Lee Romney, Tracy Weber, Julie Marquis and Greg Hernandez, and correspondents Shelby Grad and Hope Hamashige contributed to this report.

More Coverage of O.C. Bond Crisis

* GRIM PROSPECTS--Those who survive the expected county layoffs face the prospects of increased workloads, longer hours and uncertain pay. A20

* CONFLICT SEEN--The roles of Sheriff Brad Gates and Dist. Atty. Michael R. Capizzi in determining which county departments are cut and by how much is questioned. A20

* EARLY WARNING--County Auditor-Controller Steve E. Lewis was a lone voice warning against Citron's investment strategies. A21

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