ORANGE COUNTY IN BANKRUPTCY : County, State Officials Discuss Crisis Solutions : Legislation: Sacramento visit by Popejoy team appears to reverse ill feeling that surfaced last week.

Eager to mend fences with disgruntled state officials, Orange County Chief Executive Officer William J. Popejoy and his bankruptcy recovery team held a series of meetings Monday to continue the push for solutions.

The meetings came on the heels of a troubling episode for the county last week, when Sen. William A. Craven (R-Oceanside) refused to continue pushing several key recovery bills because of irritation with the county’s lack of help.

Craven, one of the county’s biggest allies in its efforts, reversed his stance only after a heavy round of telephone diplomacy by county officials.

Popejoy characterized the meetings, which included long stints with staff members from both sides of the political aisle, as well as a session with the governor’s finance director, as “an ongoing part of the education process.”

“These are complex matters and require a whole lot of information to be disseminated and understood,” he said.

Popejoy was joined at most of the meetings by a contingent that included county bankruptcy attorney Bruce Bennett, bond counsel Dale Collinson, chief aide Paul Nussbaum, lobbyist Dennis Carpenter and others.

Scott Johnson, Craven’s chief of staff, said the visit seemed to ease problems that had been building between county officials and the county’s state delegation. Tensions have flared most notably since the Board of Supervisors backed a June 27 special election on a half-cent sales tax increase that is opposed by most of the state delegation.

“I feel like we’re in an extremely cooperative mode now,” Johnson said. “We better understand each other’s needs. We’re here to assist the county in any way we can, and the feeling seems to be mutual.”

Johnson said Popejoy and other county officials have already begun helping him re-create several bills Craven is carrying that had been drawn too broadly to have a chance in the Legislature.

Among them is a measure that, as originally drafted, would have exempted from state environmental laws a county plan to raise revenue by importing trash from neighboring counties.

In meetings with legislative staffers, Popejoy reviewed all the alternative solutions that had been examined by the county and emphasized that the county has “no interest” in defaulting on its debt, Johnson said.

“That’s an important message up here in Sacramento,” he said.

During a break in his schedule, Popejoy continued to push the half-cent sales tax as the only viable solution.

“There seems to be more and more agreement that we have researched the various alternatives and that the plan we’re proposing makes the most sense,” Popejoy said. “No one likes the idea of a sales tax, including ourselves. But we can’t figure a different way to get this problem behind us other than putting one in place. We need the revenue it would generate.”

Not everyone is buying the tax hike. A trio of Republican state lawmakers from Orange County--Assemblyman Curt Pringle (R-Garden Grove) and state Sens. Rob Hurtt (R-Garden Grove) and John R. Lewis (R-Orange)--continue to push for the county to tap instead into funds from Measure M, the 1990 sales tax increase that is financing county transportation projects.

Popejoy and his aides also met with state Finance Director Russell Gould, whose office has been reviewing whether the state could back about $250 million in recovery notes the county wants to use to pay participants in its toppled investment pool.

“They’re still reviewing the possibility of backing those notes,” Popejoy said. “Frankly, we hope and believe that we can have recovery notes structured in such a way that they will have real value without state backing.”