Popejoy Warns of 2,000 Layoffs : Bankruptcy: County CEO, in a confidential memo about cuts to be announced next week, says the human toll will be ‘severe.’ Stunned labor leaders call news a disaster.

As many as 2,000 county employees could face layoffs when sweeping budget cuts are announced next week, according to a confidential memo to county supervisors written by Orange County Chief Executive Officer William J. Popejoy.

The anticipated layoffs, which represent the biggest reduction of county personnel to be forecast since the county declared bankruptcy Dec. 6, sent shock waves of dread among county workers, department heads and labor leaders.

“The morale (among employees) would probably be better if they were told that Adolf Hitler was taking over the county tomorrow,” said Bill Fogarty, executive secretary treasurer of the Orange County Central Labor Council, AFL-CIO. “I think they’d feel there was more hope. It’s a disaster.”

“Popejoy himself has said there’s not a lot of fat in the county,” added Tobye Lovelace, a spokeswoman for the 11,000-member Orange County Employees Assn. “When you talk about thousands of people being laid off, you’re cutting the bone. You’re cutting vital services that are going to felt by the public.”

In the Feb. 24 memo to the board, Popejoy wrote that preliminary estimates received from department heads--who have been asked to slash 28% of their budgets--indicate that the human toll from future budget cuts will be “severe.”

“The personnel reduction component alone may well involve termination of between 1,500 and 2,000 employees,” Popejoy noted in the memo, which was obtained by The Times. Those cuts would go significantly beyond the approximately 200 layoffs ordered so far in the wake of the county’s financial disaster.

When asked about the memo Thursday, Popejoy said the figures still were evolving. “That damn memo was personal and confidential,” he said. “The numbers could go deeper or be less.”

Popejoy added that the intent of the memo was “to impress” supervisors about the severity of the financial debacle and spur them to make significant cuts in their own office budgets.

Supervisor William G. Steiner said that if board members didn’t get the message earlier, they did Wednesday, when Popejoy laid off 25 employees in his own office.

“What he did yesterday went like an earthquake through county government,” Steiner said.

Supervisor Gaddi H. Vasquez said Popejoy told him Thursday that the layoff figures are “inconclusive.”

County department heads, nonetheless, are preparing for drastic cuts.

“We’re now realizing how much more severe the numbers are,” said Health Care Agency Director Tom Uram, one of three county officials who earlier this year struggled to come up with $30 million in budget cuts for the fiscal year that ends June 30.

“This is not a fun exercise. It’s not something we signed up to do when we took these (management) positions.”

During that early round of budget cutting, Uram said, county officials “were trying to reduce as much as we could and still protect the public health, safety, welfare and economic necessity.”

But Uram said he was uncertain whether the county could still protect those vital interests if more than 1,500 employees are terminated.

“That remains to be seen,” said Uram, who said he was unaware of Popejoy’s memo until questioned by a reporter. “(Massive cutting) obviously limits your ability. You have to choose to make those reductions in the least offensive way, the way that has the least impact on people in the county.”

Sweeping cuts and massive layoffs also would be devastating to the Orange County public defender’s office, which was forced to slash its budget 22%, or $7.4 million, during the last round of budget cuts in December.

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“It would not only be severe, it would be fatal,” Superior Court Presiding Judge James L. Smith said. “It would impossible for that office to provide indigent defense and this county has no option but to do it. It would be the miracle of the fish and loaves for them to cut any more money.”

In a presentation to board members earlier this week, Popejoy warned that tremendous “pain” would be imposed on employees as the county struggles to prepare a fiscal 1995-96 budget. Popejoy said the next year’s discretionary general fund will be $188 million--41%--less than this year’s.

Even with deep cuts, Popejoy said, the county may operate at a deficit during the next fiscal year, which begins July 1.

Popejoy also told supervisors that most of the layoffs will have to come from the 4,500 county positions that are part of the general fund budget. The 10,500 other county jobs are largely funded by state and federal money. Popejoy said layoffs would occur over the next three months.

Popejoy declined Thursday to discuss which departments will suffer the layoffs or precisely how many there will be, saying he will present a detailed plan with the exact number Tuesday.

Labor leaders reacted with anger and surprise Thursday to the news that there could be thousands of layoffs to come.

County employees have been locked in conflict with the county ever since the financial crisis first unfolded. County officials, citing the emergency conditions of the fiscal crisis, initially laid off 152 workers represented by labor organizations in a move that their leaders said ignored longstanding contracts and seniority rights.

That move landed them in court, where a coalition of labor organizations won some concessions from U.S. Bankruptcy Judge John E. Ryan, who ordered the county to reinstate some workers and ruled that the county should do everything possible to respect seniority in cutting the labor force.

But Lovelace of the county employees association said Thursday that disagreements still exist about which senior workers should be allowed to “bump” other workers by moving to other work units to take the jobs of less senior employees.

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Morale has plummeted so low among workers that some are calling union leaders and suggesting a general strike, Fogarty said.

“There are people who are just willing to do whatever,” he said. “We’re advising against it, because we don’t think it would serve them well.”

Lovelace predicted that the public will begin to feel the pinch of the financial crisis if road crews, public health nurses and county assessors are laid off, Lovelace said. Child abuse workers who held a news conference earlier this week said they feared all preventive programs would be slashed.

Uram said if drastic budget cutting does occur, each department will have to fashion its own approach to trimming costs. “This is not an exercise in reducing employees,” Uram said. “It’s an exercise in reducing costs.

“Some (departments) can cut contracts, others will cut internal services and management,” he said.

Because state and federal agencies contribute a hefty portion of the county’s operating funds, department managers would consider whether a specific layoff would jeopardize money received from those outside sources, he said.

At the Health Care Agency, for example, 83% of the funds come from sources outside the county, so “it wouldn’t make sense to cut (a position) that’s 100% federally funded,” Uram said.

But if massive layoffs are required, he added, some federally funded employees might be laid off and “you could lose some of those funds.”

Times staff writer Mark Platte contributed to this report.

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Clash of the Titans

Orange County CEO William J. Popejoy, who predicts as many as 2,000 county employees face layoffs, clashed this week with Supervisor Jim Silva over Silva’s refusal to make additional cuts in his office budget--a position the supervisor said Thursday he has changed.

Popejoy’s complaint:

“Your (Silva’s) adamant refusal to make any voluntary reduction from your existing budget level is an insult to the employees of the county, who must carry much of the burden of the upcoming budget cuts.”

“Your dual standard represents, in my opinion, a total lack of leadership and is an unfeeling position for you to assume during this crisis.”

Silva’s response:

“The implications in that letter are not even close to being true. I have a very good reputation with city employees and county employees. I think it’s going to be difficult working with (Popejoy) now.” But Silva said he is now considering more budget cuts: “I feel that (Popejoy) was right that the board must lead by example.”

Source: Times reports; Researched by MATT LAIT / Los Angeles Times