ORANGE COUNTY IN BANKRUPTCY : Students Get Word From Popejoy on Fund Fiasco

They’ve heard about it on television, read about it in newspapers and listened to their instructors expound about it.

And on Tuesday, Cal State Fullerton students got to hear about Orange County’s fiscal disaster from the man in the middle: Chief Executive Officer William J. Popejoy.

Relaxed but with a voice hoarse from talking, Popejoy carried his case for a half-cent sales tax increase to the campus as part of two days of business-related activities known as “Business Week.”

Some of the 400 or so people who filled the lecture hall for the pre-lunch meeting said they came because they are concerned about the implications of the bankruptcy filing by the county Dec. 6.

Others wondered about the new county leader, who has impressed many people by working without pay.

And some were on hand because their teachers said they had better be.

“In our classes, they use this as a great example of the relationship between risk and return,” said finance student Rick Hulme of Brea. “They keep hammering on that.”

“There must be surely some financial lesson we can learn from this,” said Vince Flynn, another finance student from Placentia. “It’s probably an expensive lesson, but it’s a good lesson.”

Popejoy will face tougher audiences as he continues his public relations campaign leading to the countywide vote June 27 on Measure R, the sales tax measure.

His audience Tuesday laughed at his jokes, appreciated his self-deprecating manner and applauded heartily as he ended his talk.

One student described Popejoy as seemingly “detached from the whole mess.”

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If Popejoy hasn’t gotten muddy, he is certainly immersed in the county’s financial woes. He has fired county officials, insisted that the supervisors put the tax increase before voters, and pushed for a budget that sliced services almost in half while drastically reducing the work force.

The county is also considering selling assets, such as John Wayne Airport, to try to get back on its financial feet.

Still, Popejoy said, having lost $1.7 billion due to risky investments, Orange County cannot simply buy or sell it’s way out of the calamity.

Popejoy, a graduate of Cal State Sacramento, said Tuesday that when he first read in December that Orange County had declared bankruptcy, he was astounded.

“My first reaction was really of anger--hang the people who are responsible,” he said. Eventually, he went after the job of trying to shore up the collapsing economy.

“This is the first job that I sought,” he said. “Here’s the humbling part: Out of a choice of three, I was the third choice. But I guess the price was right.”’

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Popejoy has championed Measure R as the only viable way out of an abysmal situation. And he said again that he sees no reasonable alternative to the sales tax if the county is to recover in the near future.

“ ‘Plan B’ is basically ongoing bankruptcy,” he said. “The solution in my mind is to get us out of bankruptcy as soon as possible.”

If the tax hike fails, Popejoy predicted a bleak future, saying schools will go broke, property values will take a nose dive and the state will move in to take control.

If bond payments due this summer are not made, Popejoy said, bondholders will sue and the county will be entangled in lawsuits that will keep lawyers busy for years to come.

“You should switch from business school to law school as fast as you can,” he joked.

Still, one man who questioned Popejoy said Measure R will likely go “down in flames.”

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Others called it the only alternative.

“I don’t see any other way,” student Flynn said. “There has got to be a tax increase, because there doesn’t seem to be any money coming from the state or federal government.”

Popejoy admitted that it’s “going to be very difficult” to win voter approval, but said that with public education, “we’ll see a swing” in opinion.

Some students expressed surprising optimism at the county’s future. Eventually, Hulme said, Orange County will again be “a booming, growing economy.”

“I guess I just have a lot of faith in Orange County,” he said. “Whether it be five years or whatever, it’ll return to its normal state.”

“I think that things--even though they’re grim--I think it’s temporary,” said Bridgette Rivera of Norwalk. “I think we have a fair amount of creative minds out there, and if they’re put to use, things can be fixed.”

And they applauded Popejoy’s efforts.

“He seems to have the experience to deal with problems of this magnitude,” Flynn said.

While Popejoy said he is “not much of a politician” because of “the way I’ve stepped on toes,” at least one student disagreed, saying he has a promising political future in California, should he take such a route.

“He’s very charismatic,” said Dean Evan, a finance major from Artesia. “I’d be surprised if he doesn’t run for political office.”

But Popejoy said he won’t.