LOS ANGELES -- Orange County, Calif., officials are considering selling dozens of county assets, including John Wayne Airport, to help offset a $2.02 billion loss on their battered investment pool.

The asset sales were suggested yesterday and Tuesday by several county supervisors following last week's flurry of closed-door meetings. Two meetings were canceled this week for lack of business, allowing officials more time to air their concerns publicly.

In addition to selling the airport, supervisors are considering auctioning off county-owned land, altering the public defender's office, and opening up county landfills to trash from neighboring communities.

"These are all just ideas," said Dave Kiff, executive assistant to supervisor Thomas F. Riley. "There is a lot of behind-the-scenes work going on in terms of trying to get a better handle on the cash flow, and looking at other potential cuts or costs savings. But nothing is on the agenda yet."

Based on previous attempts to sell the airport, there would be substantial public opposition, and no one is sure how much the airport is worth.

The idea was first put forth by supervisor William G. Steiner during a budget crunch two years ago. He brought it up again Tuesday in an interview with local reporters at the county Hall of Administration.

"Anybody offering a billion dollars for the airport can have it right away," Steiner said.

But not all the supervisors agree. Riley, the outgoing board chairman, has publicly opposed past sale plans. The 82-year-old supervisor is retiring from the board Monday, but he still wields a great deal of influence in Orange County.

"He thinks the most accountable group to operate the airport remains the county," said Kiff. "He lives in Newport Beach under the flight path, and he likes to know that it's in democratically elected hands."

It is also uncertain whether the sate of the airport would be approved by the federal government, which has invested millions of transportation dollars in the facility.

At least one company, Lockheed Air Terminal, has expressed interest in buying the airport. The company is a subsidiary of Lockheed Corp., and has managed the Burbank, Calif., airport in Los Angeles County for 35 years.

John Wayne Airport, located just south of Santa Ana, is an extremely successful operation, generating $58.1 million in revenue last year. Flights and passenger loads are up this year thanks to new low-fare air carriers.

The supervisors are hoping that other land sales might also prove to be a lucrative source of income. They have asked county staff to come up with a prioritized list of properties that could be put on the auction block.

Some of the candidates include a 7.7-acre parking lot near the Pond sports arena in Anaheim, an 11.7-acre parcel that houses county offices in Anaheim, and 100 acres of undeveloped land surrounding the James A. Musick Branch Jail in Irvine.

The county also is considering splitting the public defender's office into two separate entities. In the past, the county's public defenders have been barred from representing two clients involved in the same case because of conflict of interest.

That has forced the county to routinely hire outside attorneys, costing in excess of $3 million a year. An internal split would allow county attorneys to handle those cases at a substantially smaller cost.

In perhaps the most ridiculed cost-cutting proposal, the county may also "look to others' garbage to dig itself out of the fiscal dumps," as a headline in the Orange County Register put it.

Officials estimate Orange County could earn $60,000 a day for taking refuse from trash-jammed Los Angeles and San Diego counties. That would generate $18 million annually to help alleviate the county's estimated $40.2 million in necessary budget cuts.

County spokeswoman Sandra Sternberg on Tuesday said widespread reports that the actual budget-cutting figure includes an additional $80 million are incorrect.

Several wire services and newspapers, including The Bond Buyer, reported that the county planned to cut an additional $80 million in fiscal 1995, for a total of $120 million.

Sternberg said the error appeared to be a misinterpretation of her earlier statement that cutting $40 million now would save $80 million for the county during the next 12 months.

The budget cuts -- which would be achieved mostly through layoffs -- have angered leaders of the county's largest employee union.

The general manager of the 11,000-member Orange County Employees Association fired off a caustic letter Tuesday afternoon to the Board of Supervisors, saying the county is in "the grip of uncontrolled panic."

The union leader, John Sawyer Jr., chastised board members for their decision to suspend collective bargaining agreements and allow department heads to slash jobs at will.

Supervisors gave the department heads until Jan. 10 to come up with a recommended number of layoffs and other cuts.

"It was inexcusable for the board of supervisors to cancel employee rights arbitrarily and terrorize employees with the threat of immediate job loss," Sawyer wrote. "The recent action ... is an unmistakable indication that the county is in the grip of uncontrolled panic."

The union has suggested several alternatives to layoffs, including job sharing programs, reduced work hours, and early retirement incentives.

The supervisors say those measures would not save enough money to help offset the loss of $2.02 billion on the county investment portfolio, which prompted the county to file for bankruptcy on Dec. 6.

But some observers are suggesting that the best way for Orange County to emerge from the financial crisis is to return to the bond market as soon as possible.

This option is clearly under consideration, based on a letter sent out last week by Salomon Brothers on behalf of the county seeking underwriters for potential bond issues.

"The best thing the county can do to restore its credibility is go to market," said Chriss Stree, a Newport Beach investment banker and one of the few people who saw the fund crisis coming.

"I've been through these bankruptcies before," Street said. "My belief is you need to come to the market. You need to find some dedicated income streams that deserve to be financed, and prove yourself."

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