Board Mulls Future of County Administrator : Crisis: Sources say two supervisors seek third vote to oust Schneider. OCTA leader Oftelie touted as replacement.

With Orange County’s chief administrator under scrutiny following the government’s unparalleled plunge into bankruptcy, county supervisors are already discussing possible replacements, including Stan Oftelie, head of the county’s transportation authority.

Sources say that two supervisors--Roger R. Stanton and Jim Silva--are unhappy with Ernie Schneider, the county’s chief administrative officer since 1989, and are seeking a third supervisorial vote to help oust him.

Although Stanton and Silva declined to discuss Schneider’s future in depth, they have made no secret of their disappointment in his performance, particularly in the weeks following the disclosures that the county’s investment fund had lost about $2 billion.

Stanton, in his proposal to restructure county government, called for a new chief executive officer to take over.

“Ideally, a person blending both private and public sector expertise will be recruited for the job through a comprehensive executive process,” Stanton wrote.

Silva said he is also concerned about the county’s administrative leadership.

“There are some questions that have to be answered,” Silva said. “Why did we not have a crisis center when this thing first erupted? Where were the top administrators with the information that needed to go to the investors--the cities and schools and so on--in the pool? It seemed that nobody was in control and it was very chaotic.”

As questions continue to surface about what Schneider could have done to warn county supervisors about the impending financial disaster and whether he failed to chart a clear path out of the mess once it happened, county officials have begun to frequently mention Oftelie as Schneider’s likely successor.

Oftelie, a former supervisor’s aide who oversees an annual transportation budget of $594 million, said he is not pushing for the job nor has any supervisor approached him about replacing Schneider.

However, in putting together a proposal to restructure county government in the wake of the bankruptcy, Stanton did solicit and compliment Oftelie’s ideas.

“He said something like, ‘That’s why we need a guy like you to be the CAO,’ ” Oftelie said Monday.

The irony of possibly replacing Schneider with Oftelie is striking. In 1989, Schneider beat out Oftelie for the top administrative job. Although the public vote for Schneider was unanimous, it was a split choice behind the scenes. Stanton and then-Supervisor Don R. Roth preferred Oftelie.

The majority--Gaddi H. Vasquez, Harriett M. Wieder and Thomas F. Riley--wanted Schneider. Now that Riley and Wieder have retired and been replaced with former state Sen. Marian Bergeson and Silva, a former Huntington Beach city councilman, Schneider may truly be in trouble.

Sources said Silva has already told Schneider that they cannot work together and Stanton has been actively lobbying for a third vote to oust him.

In discussing his vision for restructuring county government and how to avert a similar crisis, Stanton said two of the questions he wanted answered were, “What did the CAO fail in doing? What are his responsibilities of oversight?”

Supervisors William G. Steiner and Vasquez are still in Schneider’s corner. “The jury is still out on the level of accountability of a whole variety of individuals, including Ernie Schneider . . . and the Board of Supervisors itself,” Steiner said. “But at this point, I am not willing to make Ernie the scapegoat on this one.”

Bergeson called for a full evaluation of Schneider’s performance and said much will depend on the management plan he develops in the days ahead to deal with the crisis.

“The pressure on him is intense,” she said. “I want to make a determination of who is going to be leading us and how services are going to be provided in the future.”

Schneider did not return a call for comment Monday.

Supervisors have already demoted one county official--acting treasurer Matthew R. Raabe back to his assistant treasurer’s job--in the wake of the fiscal crisis, which occurred under the stewardship of former Treasurer-Tax Collector Robert L. Citron. Citron, who had managed the investments of 187 schools, cities and special districts, resigned two days before the county declared itself bankrupt and filed for protection from its creditors.

Oftelie said that despite Stanton’s seeking his views on how to retool county government, no supervisor has spoken to him about replacing Schneider. And as was the case in 1989, Oftelie is not actively seeking the job.

“People other than the supervisors have talked to me about this and it’s very flattering, but that’s all it is: something for people to talk about,” Oftelie said. “I won’t be applying for the job.”

But there is clearly official interest in Oftelie, who top county officials believe has the intelligence and political acumen to lead the county out of its bankruptcy. That Oftelie would be considered for the post and compared favorably to Schneider is not surprising.

Following the initial stages of the crisis, Schneider was upstaged by a newly formed management council of the county’s sheriff, district attorney and health care agency director in trying to come up with budget cuts.

At the same time, Oftelie was calling upon his staff and outside consultants to come up with a 100-day plan to keep transportation projects moving. The plan was drafted less than a week after the county declared bankruptcy.

In the past few days, Schneider has continued to lie low. Oftelie, however, has been named chairman of an investor committee charged with reviewing requests for money. Oftelie’s Orange County Transportation Authority is the single largest investor in the troubled investment fund, which lost $2 billion this year.

Some county officials believe that Schneider did not do nearly enough to warn supervisors about the financial dilemma until it was too late.

Schneider was among five county officials who visited supervisors’ offices on Nov. 10 to talk about a “liquidity problem” with the $7.8-billion investment fund and then did not mention it again until days before a Dec. 1 press conference to announce that the county’s portfolio had suffered $1.5 billion in “paper losses.”

In the days that followed, it was Stanton, not Schneider, who recommended that former state Treasurer Thomas W. Hayes come in to straighten up the county’s finances. And it was Hayes who recommended that Thomas E. Daxon--Oklahoma’s finance director--be hired to fill the Orange County acting treasurer’s post for the next four months.

Meantime, Sheriff Brad Gates and other department heads were pressing county supervisors to do something about budget cuts while they waited for Schneider to make decisions, furthering the impression that Schneider was not in charge.

“For the first few days after the bankruptcy, there was a lot of disarray at a lot of levels,” Steiner said. “The CAO’s office was under siege. In terms of knowing exactly what to do and how to run the county in the context of the investment pool’s collapse was almost overwhelming for any one person.”

Despite his support for Schneider, Steiner said that “I don’t think we have been able to see the CAO’s office rise to the occasion yet but I expect that will happen once we develop a recovery plan.”

While Steiner said he has heard Oftelie’s name surface as the new chief administrator, he discouraged comparisons between the two.

“It is one thing to be the head of the Orange County Transportation Authority and quite another to be in charge of the county,” said Steiner, himself a board member of the transportation agency. “I think very, very highly of Stan Oftelie. I think he’s one of the best managers anyone can have. His staff is well-managed but he is not running a $3.7-billion operation with the same complexity as the county of Orange.”

Gary Granville, the county clerk-recorder, is close to both men and said they have two distinct managerial styles.

“If Ernie has a weakness, it’s that his shoulders are too broad and he tends to carry the weight himself,” Granville said. “He’ll work until he drops. Stanley’s style is to call his top managers and outsiders and distribute the load. Stanley is a master group psychologist. He has an immense loyalty from a lot of good people he has hired.”

Oftelie has another advantage, Granville said. While he can handpick a top-notch staff for his autonomous transportation agency, Schneider has been a victim of repeated budget cuts and hiring freezes and has had to fill positions from within his own staff rather than choosing from outside. In the past few years, Schneider has lost outstanding talent, Granville said, including former budget director Ronald Rubino.

“Stanley has had the freedom to develop his own staff and he has put together an organization of quality people,” Granville said. “Ernie hasn’t had that luxury. You’ve got to go with what you’ve got and the bureaucracy is already in place. It’s tough to blame Ernie.”

Schneider, who makes $141,000 a year, or any chief administrative officer, moreover, is hampered by the limits of the job itself, officials said. Department managers, many of whom are independently elected, do not all report to Schneider and many, having cultivated their own relationships with board members over the years, bypass the chief administrator and communicate directly with county supervisors.

Stanton, for one, is in favor of changing the job to chief executive officer, and having all department heads report to that executive instead of the board. Although the idea has surfaced from time to time over the years, it has never been adopted. Stanton and Steiner believe that may now change.

“To be able to have someone rise to the occasion and provide leadership, you have to give him the authority, and to some extent, his authority was diminished during this crisis,” Steiner said. “I think you’ll see (the position of) chief executive officer come out of this whole debacle.”

The financial crisis, meanwhile, has almost overshadowed all of Schneider’s hard work over his many years of government service, Granville said.

“You take away this current debacle--which is hard to do--and Ernie has been a terrific CAO,” he said.