O.C. Hopes End of Bankruptcy Stems Exodus

As Orange County prepares to emerge from bankruptcy next month, officials hope the milestone will send a message beyond Wall Street to county workers desperate for a sign that the worst is behind them.

The largest municipal bankruptcy in U.S. history has resulted in a steady exodus of some of the county’s most respected and talented employees.

The desertions were first noticed at the beginning of the financial crisis 15 months ago, but have continued into this year, affecting a wide array of departments from law enforcement to data processing.

In the Social Services Agency, for example, the Children & Family Service Department lost its director and one of his two deputies. The other deputy was going to retire this spring, but agreed to stay on for another year while replacements are found.

“We have a brain drain here,” said Supervisor Don Saltarelli. “It can’t continue. We need to keep the talent pool necessary to do a good job.”

Former county workers point to uniquely different sets of circumstances that prompted them to leave. But many cited the uncertainty of the financial crisis, as well as bankruptcy-related cutbacks that made it harder to do their jobs.

“I was at the point where I had 15 or 20 years of work left and had to ask myself where I wanted to spend that time,” said Bob Theemling, who stepped down as deputy director of children’s services in February and now heads a children’s home in La Verne. “It just seemed like a better place for me,” he said of his present position.

Prospective employees also seem wary about joining the county, making it difficult for officials to fill top posts such as that of the County Counsel, which has been vacant for nearly a year.

Still, county leaders expressed hope that as the county returns to financial normalcy this summer, employees and applicants will feel less anxious about the county’s future.

“No one wants to attach themselves to a ship that’s going down,” said Supervisor William G. Steiner. “We’ve lost a lot of talent. But as things stabilize, we will begin to attract new talent.”

It’s difficult to gauge how severely the “brain drain” is affecting the county. Department managers and union representatives estimate that the bankruptcy has prompted dozens, and perhaps more than 100 employees, to leave county government for jobs elsewhere.

In addition, more than 100 workers--including senior managers like former General Services Agency Director R.A. (Bert) Scott and former Registrar of Voters Donald Tanney--took early retirement. Each man had more than 25 years of service with the county, and officials said the early retirees represented more than 1,000 years of combined experience.

Beyond the voluntary exits, 535 workers were laid off as the county slashed its budget, and union officials said some of those who lost their jobs were promising young employees.

County leaders and union officials insist that despite the losses, Orange County retains thousands of hard-working and versatile employees who continue to provide top-quality service despite the cutbacks.

But they admit the cuts have taken a toll.

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Frank E. Eley, president of the Orange County Employees Assn., said the loss of veteran workers has lessened the sense of history and continuity that helps the bureaucracy run smoothly.

“The county works best when you have a long continuation of history with people mentoring newer people,” he said. “It takes time to learn how to do things in an efficient manner.”

In addition to veterans, the county has lost some younger engineers, data processors and other employees whose expertise is valued in the private sector.

“They have skills they learned from the County of Orange and now someone else is benefiting from it,” Eley said. “I don’t think they see the same opportunities for the future by staying here.”

One such worker is Joe Long, a civil engineer who left the county after the bankruptcy to work for a private design firm.

Long spent five years with the county helping design flood control projects and was known by colleagues for his interest in the work of William Mulholland, the famed Los Angeles waterworks designer.

But he said the uncertainty of the financial crisis forced him to consider a move into the private sector.

“There was so much disarray over the bankruptcy that my future became unclear,” he said. “I felt it was something just looming over my head.”

While some offices have lost rank-and-file personnel, others have been hit at the management level. The Human Resources Department, for example, lost its director and three top managers.

The Children & Family Services Department was also hard hit. One of the first to go was Gene Howard, the respected department director who announced last summer that he was leaving the county to run the Orangewood Children’s Home. Then in February, the deputy director, Theemling, stepped down after 22 years with the county to head the David and Margaret Home in La Verne.

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Both men said the primary reason for their departures was the opportunity to run facilities for abused and neglected children. But they acknowledged that the bankruptcy--which resulted in a 13% cut in the Social Services Agency budget--made it harder for them to serve their clients.

“When you add the drain of resources that the bankruptcy imposed, it makes an already difficult job 10 times harder,” Howard said.

Not only were employees asked to do more with less, Theemling added, but they were also forced to comply with frustrating bankruptcy regulations designed to monitor expenditures of county funds.

The rules required managers--and in some cases the Social Services Agency director--to approve routine expenditures that lower-level staffers used to handle. For a time, the department had trouble securing facial tissues for the Orangewood Children’s Home, Theemling said.

“I’ve heard it characterized as the politicization of the day-to-day process,” he said, noting that the perfunctory purchase of a $40 court-ordered bus pass required the approval of his supervisor.

Both Theemling and Howard said they are agonizing over their decision to leave. “It was a real push-and-pull situation,” Howard said. “I had a tremendous amount of guilt about leaving behind my colleagues, who were dealing with such a difficult situation.”

Beyond the working conditions, employees said they are also disheartened by criticism from citizen activists and others who have complained that the county didn’t lay off enough workers and pays exorbitant salaries.

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“Psychologically, the feeling of being unappreciated and almost being a leper is taking its toll on a lot of government employees,” said Larry Leaman, director of the Social Services Agency.

Complicating matters is the county’s mixed record in recruiting new managers to fill top positions.

After Howard left the children’s services section, the county launched a nationwide search for a replacement and eventually settled on a Florida health professional with more than 28 years of both public and private sector experience.

But when he was offered the job, the candidate turned it down and later accepted a post in Arizona.

His decision was not based on the bankruptcy, Leaman said, but on the high cost of living in Orange County. Sylvia Walls, a veteran child services manager, was eventually tapped to head the department until next year, when she is scheduled to retire.

Another position the county has yet to permanently fill is County Counsel, which was vacated 11 months ago when Terry C. Andrus stepped down.

The county last year conducted a recruitment drive for the post that failed to produce a winning candidate. This spring, the county again accepted applications and is now reviewing materials from about 20 serious candidates, according to Personnel Director Jan Walden.

The county recently placed an ad in the Wall Street Journal seeking candidates for the posts of chief financial officer and director of internal auditors. The ad promised applicants “exciting opportunities in a dynamic, evolving government environment.”

Officials hope the ad’s optimistic description will become more readily accepted as the county’s finances become more stable. The county is scheduled to emerge from bankruptcy in June.

Getting out of bankruptcy will remove a psychological barrier, Saltarelli said. “It’s been hard to get qualified people with the bankruptcy hanging over our heads. But that’s going to change,” he said.