Bankrupt O.C. Losing Many to ‘Brain Drain’

SANTA ANA â€”  A top district attorney’s investigator. The longtime head of one of the county’s largest agencies. The official in charge of registering voters and running elections. The guy who cut the checks for day-to-day county operations.

These are just a few of the Orange County employees who are making for the door in the midst of the government’s worst financial crisis.

They’re fleeing an employer racked by budget cuts, enticed into taking advantage of early retirement incentives because the getting might never be this good again. Some were just years away from calling it quits, but other, younger workers who weren’t ready to retire also grabbed for the incentives.

A select few, tainted by the fallout of the county’s unprecedented Dec. 6 bankruptcy, were virtually shown the door; and for yet others, talk of pay cuts and low morale is all the encouragement needed to turn to the private sector--or even other counties.

Those who are left behind worry that Orange County might be losing the very people it needs to guide the crippled county through the largest municipal bankruptcy in U.S. history. The exodus of some top county managers will leave a vacuum in government that some say may be near impossible to fill.

“It’s brain drain. It’s a real loss of talent,� County Supervisor William G. Steiner said. “You lose a sense of history, institutional memory that you just can’t replace.�

Some, however, say the changes will signal a new beginning, paving the way for a redefined county government that is more efficient.

“This kind of pruning goes on routinely in private industry, and I don’t recall it ever happening in county government,� said Margarethe Wiersema, associate professor of management at UC Irvine’s Graduate School of Management. “If you get a leaner staff, that provides promotional opportunities for the people who are there.�

Wiersema added that “the shake-up can actually send some strong signals that the status quo is no longer acceptable.�

It’s unclear how much of a brain trust the county is losing. But so far, 135 longtime employees--representing at least 1,500 years’ worth of working experience--filed their retirement papers to meet a March 30 deadline for those who wanted to take advantage of some added sweeteners.

To qualify for early retirement, employees had to be at least 50 years old with at least 10 years of service. The lure: They could exchange accrued vacation, sick leave and compensatory time for up to an additional two years of service, boosting the value of their retirement benefits.

Employees reaching for the early retirement are greatly outnumbered by those pared from the county payrolls by no choice of their own. Already, nearly 200 county workers have been laid off, and Chief Executive Officer William J. Popejoy has announced the need for more than a thousand additional layoffs in coming months.

The retirement, county officials said, was the broadest ever offered in county history and designed to save the pain of even more layoffs.

“It just seems more humane. That was the attempt from the county to try to have fewer people with disrupted lives,� said Gaylan Harris, the county’s manager of employee benefits.

Harris said the county does not yet have statistics on the age or rank of those who have taken the deal. Some, however, concede that the county’s sour circumstances, combined with the retirement inducements, pushed them to call it quits just a few years earlier than they might have otherwise.

General Services Agency Director R.A. (Burt) Scott, 62, has worked 28 years for the county. No one in county government had any illusions that Scott would stick around forever. Now, he can enjoy the benefits of retirement, while continuing to volunteer his services to help steer his former employer through the crisis.

But even for those who were planning on leaving fairly soon, the choice was not easy and their absence will be felt.

Take Gary Leach, 59, who handled all financial disbursements for the county before retiring after 35 years of government service. Leach said it would not surprise him if more county workers take flight. Leach wasn’t considering retirement just yet; then the unstable work environment drove him out earlier this year.

“Things were going down the tubes--are still going down the tubes--and it was just time to get out while I still could,� Leach said. “There are a lot of competent people left, but a lot are also leaving. And there’s just no way you can replace people with 30 years’ experience who know the workings of the county, who know who to call to get the job done.�

Others, like the county’s agricultural commissioner, with 40 years of service here, were also natural takers of the early retirement offer. But younger county workers have also called it quits.

One of those was Registrar of Voters Donald Tanney, 54, who worked 30 years for the county and managed virtually every state, federal and local election conducted in the county.

Tanney said there was a change in the air after the financial debacle came to light. The public began looking down on Orange County employees as if they were somehow to blame. Tanney wouldn’t stand for it and describes it as a key factor in his leaving.

“It seemed that the concept of county work was suddenly demeaned, both by the community in general and even the people in office,� he said. “The people I worked with in the county did a damn good job.�

Another early retiree: Jerry (Rusty) Hodges, 55, supervising investigator of the organized crime and grand jury unit of the Orange County district attorney’s office, and one of seven top investigators to retire since January.

Hodges has played a key role in the county’s biggest public corruption cases that led to convictions, including that of fireworks magnate and lobbyist W. Patrick Moriarty, former Supervisor Don R. Roth and the Santa Margarita Water District.

Hodges will continue on a temporary contract basis to guide the agency’s grand jury investigation into the county’s bankruptcy, and the county hopes to keep him on a part-time basis as long as possible. But Dist. Atty. Michael R. Capizzi called the loss of Hodges “an incredible blow� to the office.

Loren DuChesne, chief of the bureau of investigations, said the departure of Hodges and the six other investigators leaves the bureau without its most seasoned workers.

“When you lose those kinds of people you are going to have an experience drain,� he said. “You are going to have a big hole to fill, and we’re not able to bring people in to fill those holes because of the budget situation. Yes, it’s going to hurt us. It is hurting us.�

Russ Patton, 54, who worked nearly 30 years for the county, retired late last month as director of the Personnel Department, where he was responsible for overseeing labor relations and helping the county find the best employees to fit its job needs.

Personnel will be among the departments hardest hit. In addition to Patton, chief of employee relations Judy Davis; chief of operations C. Kenley Mays, and John Barker, deputy chief of operations for several recruiting teams, are also leaving.

“I think employee relations is going to play a crucial role for the county even after the bankruptcy is over,� said Robert MacLeod, general manager of the Assn. of Orange County Deputy Sheriffs. “They still have to recruit and maintain qualified employees. I don’t know how in the world they are going to do that without a personnel director and an employee relations director.�

Not everyone is going willingly. Some top-level people, like former Treasurer-Tax Collector Robert L. Citron, were forced out the door, tainted by their roles in the investment pool’s collapse. While Citron might not be missed, County Counsel Terry C. Andrus, also a casualty of his close connection to the unfolding debacle, will.

Andrus, right hand to the Board of Supervisors over the course of two decades, helped the board navigate complex legal issues, from campaign financing to drafting ordinances.

Andrus has maintained that he acted professionally, but he agreed to resign at the end of his appointed term after Popejoy recommended that he do so. Andrus withheld information from supervisors that some say could have alerted the board earlier to the county’s impending financial collapse.

Even his critics, however, say his wealth of knowledge and his personal style will be difficult to replace, and even Popejoy lavishly praised Andrus’ work at a recent board meeting.

MacLeod said he believes no one’s absence will be felt more sharply than that of Andrus.

“Terry Andrus is really something special,� MacLeod said. “He’s somebody who people rely on. They respect him. And losing someone like that is just terrible. . . . I don’t think they are going to be able to replace him.�

While the deadline for early retirement has passed, many more employees are expected to flee in coming months. And not all of those heading for the door fit the description of fat that Popejoy was hoping to cut.

The Los Angeles County Sheriff’s Department and the Los Angeles Police Department are beefing up recruitment efforts among rank-and-file Orange County sheriff’s deputies who face cuts in overtime and bonus pay. And nearly 280 top county management types who make more than $75,000 a year may also see their pay cut up to 10% as part of countywide budget cuts.

“I think you’ll see a lot of those people packing up,� Steiner said. “It will be hard to attract new employees.�

Finding qualified candidates isn’t the only problem.

Insiders who can step into newly opened positions might not want to stick around in the face of pending salary cuts and operating budgets that are stripped to the bone. Getting high-level people to come in from the outside is a tough prospect too.

County officials looking for Andrus’ replacement say outsiders are wary of signing on with a bankrupt employer that can’t offer competitive salaries.

“We did not get a large number of candidates,� says Mays, who was chief of operations for the county Personnel Department until he also retired March 30.

Poor morale is also a fallout of the bankruptcy--and must be turned around if the county is to retain quality workers or attract outsiders, many say.

Mays spent 25 years with the county, part of it as budget director. He was working on the county counsel recruitment when he filed his retirement papers and only returned to the county last week to finish the recruitment effort. He hadn’t planned on retiring until mid-1997, but decided as a short-timer that he no longer wanted to deal with the impact of the bankruptcy.

“I really didn’t want to go through all this period of uproar unless I was going to be here long enough to see how it all emerged,� said Mays, 59. “Someone here said, ‘Are you just going to walk through the desert or are you going to walk through the desert and get to the Promised Land?’ That was the proverb a lot of us were thinking of.�

Not everyone sees this as the time to be going, however.

Ronald R. DiLuigi, assistant director of the Health Care Agency, was so torn by the flight of talent from the county that he reversed his own decision to leave, recently returning to his county post after a pensive week as regional vice president with the St. Joseph Health System.

“I simply couldn’t just walk away from the county, particularly given the situation they are in right now,� said DiLuigi, 48, who has worked for the county 21 years. “I have significant expertise and skills in public sector health-care management. The more I thought about it, the more I thought that they are needed more now than ever in county government.�