Supervisors Reject Sale of Hospital as Budget Option

Although pressed for revenues, Los Angeles County supervisors Tuesday unanimously rejected a proposal to sell Rancho Los Amigos Medical Center to help balance a projected $8.9-billion county budget for the next fiscal year.

The board, which formally received Chief Administrative Officer Richard B. Dixon’s spending plan, abruptly turned what is normally a perfunctory review into a test of political priorities.

In presenting his plan to the supervisors, Dixon said his budget includes few major cuts--except in mental health programs--but relies heavily on anticipated revenues from state and federal sources.

Zeroes In on Hospital

Even as Dixon summarized his 2-inch-thick budget document, however, Supervisor Pete Schabarum zeroed in on a proposal to sell the Rancho Los Amigos Medical Center for $20 million.

Under the Dixon plan, the rehabilitation hospital in Downey would be sold by June, 1989. In turn, the county would arrange with the new owner to provide medical services on a contract basis. The money from the sale would help fund $87 million in health service programs outlined in the proposed budget, according to Dixon.

But Schabarum, whose supervisorial district includes Rancho Los Amigos, vehemently objected to any consideration of such a plan and refused to go further with Dixon’s budget proposal unless the item was deleted.

“Mr. Dixon, I think you’re so far off base with this that you ought to be embarrassed,” Schabarum said.

The supervisors told their chief financial officer to seek the $20 million elsewhere. Dixon said later that he would try to find alternative revenue sources before the supervisors begin deliberating on the final budget, which will follow public hearings next month.

“If we don’t, we will have to recommend program cuts,” Dixon said.

Funds From State

The budget proposal, which includes more than $11 million in reductions in mental health programs, is already dependent upon the state to provide about $52 million in public health, trauma care and other health programs.

In addition, the county is relying on $135.3 million from the state for local trial courts. Despite the state’s own troubled finances, including an anticipated $2-billion budget shortfall over the next 14 months, Dixon told supervisors he is confident that the money for trial courts and other county programs will be forthcoming.

If not, the county could face a financial crisis, and the board could confront some unpleasant choices over which programs to cut. The debate over Rancho Los Amigos was only the beginning of what is usually a tug of war among the supervisors over what to keep and what to jettison at budget time.

In recommending the sale of Rancho Los Amigos to Dixon, Robert Gates, the county’s health services director, said his staff felt it was an alternative to cutting programs.

“It’s not anywhere near desirable,” Gates said. “It’s like someone who comes up and points a gun at you and says, ‘Give me your wallet.’ OK, I gave the CAO a proposal. It’s not something I would have done had it not been for severe financial constraints.”