More seek county aid

Just as Los Angeles County government enters a season of belt tightening, more people each month are asking for its help.

A newly passed state budget will send at least $128 million less to the county than officials expected -- money that would have gone to pay for such things as child protective services, health programs for the poor and disabled and the processing of rising applications for food stamps and Medi-Cal.

“That’s the paradox of county government,” Supervisor Zev Yaroslavsky said. “Unlike other levels of government, demand for services increases exponentially as revenues decrease. We have an increased number of people on public relief, more people losing their homes and more people with children needing services.”

The need for help has spread beyond poor communities.

“Poverty is up in a serious way,” Yaroslavsky said. “I was at a food pantry in Tarzana, and folks there . . . told me that from August of 2007 to August 2008, the number of families partaking of free food is up 20 to 21%. This is in a relatively affluent community.”

Over the last year, the number of people receiving general relief checks -- $221 available monthly to those struggling to make ends meet -- has increased by more than 8,500, up to 70,260 from 61,715. That figure is the highest it has been since 1998, when the county sharply tightened qualifications for public assistance.

The number of county residents on Medi-Cal has grown by 100,000, up to 1.6 million from 1.5 million a year ago. Over those same months, the number of people receiving food stamps increased by 26,000 to 296,000.

Some of the shortfall in state funds might be replaced with county money, but officials note that the cuts come at a time when they were already planning to shorten county hospital stays for some patients and reduce the number of welfare-to-work participants sent to community colleges. In another cost-saving move, county officials say they will not fill many vacant positions.

But county officials caution that the full effect of the current economic downturn is yet to come.

County Chief Executive Officer William T Fujioka -- who said Tuesday that he is concerned about steep losses in the county’s pension fund as well as diminishing Medicare reimbursements from Washington -- has asked county department heads to prioritize their programs in preparation for further cuts. He said many proposed projects are being placed on hold.

Still, the county is one of the relatively few local governments able to easily obtain credit in the bond markets. But such borrowing, undertaken several times weekly to keep the county running, has gotten more expensive. In the last three weeks, the interest rate has risen from 1.5% to 4%.

Some steps have already been taken to fill holes in funding from the state.

Patients shut out of hospitals will be sent to lower-cost facilities. Welfare-to-work participants who had been referred to community colleges will instead be trained at lower-cost facilities such as occupational centers.

One particular area of concern is an anticipated increase in the demand for child protective services. County officials said they are moving to expand staffing for their child abuse hotline.

“When things tighten, stress and tension rise, unfortunately, leading to increased incidents of child abuse and neglect,” said Patricia S. Ploehn, director of the Department of Children and Family Services.

Still unknown is how deep cuts in a variety of social services could go.

On the horizon are potentially massive hits to the county’s fiscal health. Officials are still calculating how much money will be needed to cover losses suffered by the county employee retirement plan in the securities market.

Yaroslavsky said Tuesday at the regular board meeting that the cost of plugging the hole in the pension system might reach “nine figures.”

Another big-ticket loss may come during negotiations for a new Medicaid waiver, which sets the rate of much of the federal support for the county’s hospitals and clinics.

Fujioka and other officials plan to travel to budget-strapped Washington in January to try to negotiate the waiver, valued at $900 million for the county. Fujioka said in an interview Tuesday that he is worried “the federal officials might say there is no money.”

At the same time, with a $22.3-billion budget and no plans, at least yet, to lay off anyone in its workforce of more than 100,000 people, the county is in better shape than some public entities.

Officials said they did not invest in securities whose values have collapsed, and they credit the searing experience of layoffs and cutbacks during the 1990s for more recent fiscal prudence. As a result, the county has yet to suffer a loss in its investment portfolio, the treasurer and tax collector reported in a Sept. 30 memorandum.

By contrast, other Southland government entities are worried that they will be unable to find affordable credit.

* The Los Angeles Department of Water and Power is planning to sell $550 million in bonds in November to upgrade its power system, including new power poles, circuits and transmission lines. Should the credit crunch continue, the utility would consider postponing the work.

About 20% of the agency’s existing debt is set at a fixed rate.

“Over time, that’s been very good for us because the rates have been so low,” said DWP General Manager H. David Nahai.

But the variable rate recently quadrupled from 2% to 8%, causing a $2.7-million hit, Nahai said.

* The Los Angeles Unified School District’s chief financial officer, Megan Reilly, said the district’s bond rating has been harmed somewhat by the state government’s worsening fiscal health. The district had planned to sell $950 million in bonds at the end of November for school construction, maintenance and repairs, but that may be postponed at least until after the December holidays.

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garrett.therolf@latimes.com

molly.hennessy-fiske@latimes.com

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100,000

Increase in Los Angeles County residents on Medi-Cal in last year

26,000

Increase in food stamp recipients

8,500

Increase in people on general relief

Source: Los Angeles County Department of Public Social Services