Cut the Deficit, Besieged Chief Orders Dept. of Education

After three years of spending more money than it takes in, the 800-employee Orange County Department of Education is under orders from its chief, Robert Peterson, “to cease deficit spending” within the next year.

Peterson outlined the county department’s budgetary problems in a July 28 memo sent to employees. Peterson, the elected county superintendent of schools, said in the memo that the Department of Education has had to tap about $5 million from its reserves to cover expenses in the past four fiscal years. Any further dwindling of reserves could bring state intervention, he said.

Critics of the Department of Education, including some former Orange County Grand Jury members, said Friday that Peterson’s memo indicates that the department’s money is not being wisely handled. But Peterson categorically denied the charge.

Peterson has been under siege by past grand juries for the way he operates the $50-million-a-year county department. As a result, voters on Nov. 8 will be asked to decided whether Peterson’s job should continue as an elective one, or whether the superintendent should be appointed by the elected members of the County Board of Education, as are superintendents of local school districts.

Dipped Into Savings

Peterson said in an interview Friday that the Department of Education had to dip into its savings because state government has inadequately funded all such county agencies in recent years.

“Most school districts--and I don’t know an exception--have had to consume reserves (in recent years) because of the inability of (state government in) Sacramento to keep up with inflation and prior commitments,” Peterson said. “The purpose of reserves is to have money available when income doesn’t meet expenditures. Our department is much better off than

most county departments of education in the state because we had reserves available.”

Nonetheless, Peterson acknowledged that his department can no longer afford to dig into its savings.

In his July 28 memo, Peterson told employees: “The deficit spending has eroded our $6.6 million 1985-86 balance to a projected $1.5 million for 1988-89. If our balance goes much lower, the state will not approve our budget and may intervene.”

On Friday, Peterson explained that state government usually asks school districts to hold reserves equaling about 2% of its current budget. The current budget for the Orange County Department of Education is about $50 million, and therefore, the department needs to keep at least about $1 million in savings for emergencies, he said.

The little-known county Department of Education is a state-funded agency. It provides schools for about 10% of Orange County’s handicapped children, schools for juveniles in court custody, and audits the budgets of 28 local school districts. It also offers a variety of service programs, including workshops for teachers and a video and textbook library.

In the past 20 years, at least four county grand juries have charged that most of the non-teaching services offered by the Department of Education are unneeded. The 1984-85 grand jury called for virtual abolition of the department to save tax dollars.

Valerie Ransom, current president of the Grand Jurors’ Assn. of Orange County, an organization of past grand jurors, said Friday that the 1983-84 grand jury on which she served had recommended a management study of the county Department of Education out of concern for its operation. She added that Peterson’s memo about deficit spending indicates “that a management study of the department is still something that needs to be done.”

Ransom said she hopes Orange County voters will take time to study the Nov. 8 ballot question on an elected versus appointed schools superintendent.

Current law calls for voters to elect the superintendent, and Peterson has handily won those elections since he first ran in 1966. His current term expires in 1990, and no change in how a superintendent is picked would be made until after that date.

Another former grand juror, James Gage of Newport Beach, said Friday that Peterson’s memo about deficit spending renews questions previous grand juries have had about whether the department might be spending money for unneeded services.

“The grand juries have never questioned the legality of how money is spent by the (county) Department of Education,” Gage said. “But the juries have been concerned that the department is spending money to duplicate services that are already provided by local school districts.”

Peterson, however, contended that he runs one of the best county departments of education in the state.

Confidence Expressed

He further noted that as an elected official, he faces the voters every four years. And those voters, he said, have expressed their continued confidence in him and in the department by repeatedly returning him to office.

As for the Grand Jurors Assn. criticism of his department, Peterson responded, “It’s irksome that the members of that association are trying to cloak themselves in the supposed continuation of grand jury invulnerability long after they have left the jury.”