County Again Faces Possible Layoffs as Income Falls Short

Two months after they believed that they had solved their budget problems, county officials are once again facing the prospect of program cutbacks and employee layoffs because anticipated revenues are falling short.

John Sibley, associate county administrative officer, stressed that “we are not sounding the gloom and doom.” But, he added, “it’s not looking great.”

Sibley said the county has until January to come up with about $23 million that was calculated into the current $2-billion-plus budget. By including the hoped-for $23 million in the budget last August, the county avoided the loss of at least 400 employees and several programs that were on the chopping block in an across-the-board 10% cut of county departments. The county has about 14,000 employees.

Officials were counting on a variety of funding sources to produce the needed money. But some of those plans have not worked out.

This week, Sibley said the county’s administrative office has learned that $10 million it expected from the sale of county property is not going to be available. Earlier, the state Legislature also failed to approve a block grant that was expected to give Orange County up to $3 million, Sibley said.

There are three other possible funding sources, but they all have strings attached. They are:

About $12.5 million the county hopes to get from a new program under which the state would assume the cost of operating the county courts. But the state money will only be available if court officials and the county administrators can agree on how it will be spent. For now, they are in disagreement. Court officials want much of the money spent to add more judges, rather than to relieve the general county budget shortfall.

Surplus Retirement Funds

Surplus funds that might be available from the Orange County Employees Retirement Board. The board has a surplus of about $100 million and has offered to loan the county up to $60 million over 2 years. But county fiscal officers warn that a loan would not be a prudent way to resolve the present budget crunch. They are examining whether the county has a right to claim any of the surplus money.

A $15-million county “contingency” fund, which is basically a savings account for such emergencies as natural disasters or unexpected lawsuits. For a budget the size of Orange County’s, the contingency fund is already as low as the fiscal experts believe is responsible. But county officials are considering it as a possible alternative to laying off employees and closing county programs.

Unless the county can claim the retirement fund money, county Auditor-Controller Steve Lewis said, he doesn’t expect to avoid layoffs or closing programs. “I would say the only way we would (avoid) that would be to run our reserves to zero,” he said. “The county is tighter this year than ever before.”

Sibley said the county will monitor its financial situation during November. If money is not found by January and cuts or layoffs are required, the first step would be to reconsider a 10% cut in all departments, he said. That cut would be reduced to the extent that other money is found or the county dips into the reserve fund.

Early for Predictions

“I want to stress that it is still early to be predicting that there is any drastic action required by the board to balance the budget,” he said. “I think we’re going to make it without major program cuts.”

County officials are scheduled to meet next week with court officials about the money available under the state’s Trial Court Funding Act. Pat Hern, assistant executive officer for the courts, said Friday, “We’re not going to try to hoard the whole thing, but we feel we have some needs that need to be addressed.”

Hern said a 1986 study found that Orange County needed 18 new judges to maintain a workload equivalent to that of other counties in the state, but no new judges have been added. He claimed that the $12.5 million in the state bill is intended to pay for some of those judges.

The land sale that was anticipated has not completely fallen through, but it is not going to generate money for the current fiscal year budget, said Robert G. Love, director of the property division of the county’s General Services Agency.