SANTA ANA, CALIF. — PERCHED conspicuously against walnut panels of the Orange County Board of Supervisors boardroom here, protest placards tell the story:
``Arrogant politicians. Throw the bums out.'' ``Disgrace to yourselves and the county.'' ``Bankrupt philosophy for a bankrupt county.''
While citizens await details of the planned massive overhaul of this county's debt-laden investment pool, the Hall of Administration building here has become ground zero in a emotional fight over government - and personal - security that may last years into the future.
``Everybody who works for the county is on edge, wondering if they are going to be out of a paycheck,'' says Gordon Labedz, a 20-year resident, who has come to unload his beefs in a public meeting before the board. He had just received a letter from a credit union offering an interest-free loan if his wife, a schoolteacher, is deprived of salary.
``I've also got all the money I saved to pay my income tax frozen for now,'' he says. ``I doubt if I'll ever see it.''
A hearing today by US Bankruptcy Court Judge John E. Ryan will reconsider whether the county can begin selling off its troubled bond holdings. Earlier in the week Judge Ryan argued, over strong objections from city and school officials, that liquidation should begin if the county is to avoid further losses threatened by a possible further rise in interest rates.
Positioned partly in highly leveraged investments, the county's $7.5 billion investment fund plummeted at least $2 billion in value because of rising rates. The case represents the largest-ever government bankruptcy filing in United States history.
``There was a bet made on the interest rates, and the county lost the bet,'' says former state Treasurer Thomas W. Hayes, now directing the county's strategy to restructure its finances.
Until this strategy is formally unveiled - in about 120 days, by law, but possibly later - life in one of the nation's wealthiest counties is being kept off balance by unknowns.
``Frankly, it's too early to tell anything,'' says Sandy Sternberg, a county spokeswoman. ``The county has put a stop to projects that are not directly involved with health and welfare. Beyond that, each division is prioritizing top to bottom, keeping in mind a worse-case scenario.''
The county did receive a boost Wednesday when it won court approval for a $200 million credit line from BankAmerica Corporation, clearing the way for the government to pay its mounting bills - by using credit cards if necessary.
For now, a hiring freeze has been imposed, locking the number of county employees at 16,000, including sheriff's deputies, firefighters, and social workers.
Because the Orange County Transportation Authority has more than $1 billion invested in the county fund, several big-ticket projects are expected to be slowed, among them the building of three toll roads and plans to install car-pool lanes on a major route, Interstate 5.
Thirty-one county school districts, representing about 500 campuses and 400,000 students, had invested $1 billion in property-tax revenue in the fund.
Some districts say the crisis will not disrupt daily operations, but will force the delay of improvement projects and building repair. Others say the renovation of schools damaged in a series of brush fires last year will be delayed.
The investment-fund fiasco is also expected to impact a major, $3-billion expansion of Disneyland. The theme park is counting on $800 million in road and other improvements financed with the city of Anaheim as well as state and federal funds. But Anaheim has $170 million frozen in the troubled portfolio, and city officials are considering a freeze on capital-improvement projects.
TWO ballparks - a $200-million football stadium and a $170-million baseball park - are also jeopardized, as well as a $1-billion commercial airport.
Welfare and police are expected to continue at current levels of funding. Nearly 400,000 county residents receive some form of government aid, according to Sternberg. But most payments are funded by federal and state governments.
``Everyone is waiting to hear the bottom line numbers,'' says Dan Martini, spokesman for the county Sheriff's Department. ``Until they do, every outlay is coming under strict administrative approval.''
Forecasters at Chapman University, who have just unveiled an economic forecast for the county for the next five years, remain optimistic that the area will recover. About 1.2 million workers are employed at 200,000 businesses in the region, producing a gross annual product of over $80 billion - close to 10 percent of the state total.
``We have been trying to stress that the county has solved most of its structural problems it faced in the past three years,'' says Esmael Adibi, head of the research unit.
The group's 1995 forecast, prepared a week before the financial crisis was announced, predicted an increase of 21,000 jobs by 1999. ``We are only modifying downward by about 4,000 jobs because of the bankruptcy,'' Dr. Adibi says.
A decrease in taxable sales of about $100 million annually would be part of a modest ripple effect, he says, and a $540 million decline in gross county product.