The California Budget: Local Impact : Riordan Returns to Confront Harsh Realities : City Hall: Mayor-elect studies key appointments and the overhaul of his 85-member staff. State budget plan leaves him with at least a $30-million shortfall.

Mayor-elect Richard Riordan returned Thursday from his bridge-building mission to Washington to grapple with a series of key staffing decisions and new budget realities that could affect his ability to deliver on campaign promises.

Riordan sat down late in the day with transition aides to begin examining the pressing issues that will face him when he takes office Thursday, including tens of millions in additional budget cuts required by the new state budget.

Over the next few days, he also will select top City Hall staff, who will be crucial to guiding his legislative agenda. And he will select appointees to several prominent commissions that oversee agencies such as the police and airport departments, where his public safety and private contracting initiatives will be tested.

Transition team officials say that Riordan’s main goal is to select a chief of staff who is knowledgeable about the inner workings of City Hall--an area where Riordan may be weak.

“One of the criteria of that position, with an outsider like Riordan, is you have to have somebody who does know the building, who can relate to the general managers and can relate to the City Council,” said Stan Sanders, a member of the transition team.

Among the names being mentioned by transition officials and City Hall sources for top staff posts are city legislative analyst Bill McCarley, Los Angeles Chamber of Commerce President and onetime Deputy Mayor Ray Remy and Harbor-area Councilwoman Joan Milke Flores, who lost a reelection bid in April. All are widely respected at City Hall.

Riordan declined to comment on whom he is considering. McCarley, Remy and Flores said Thursday that they have not been offered positions but were open to discussing such possibilities.

An obstacle--particularly in the case of McCarley and Remy--is that their current salaries are more than 50% higher than the top $100,000 salary permitted in the mayor’s office. Boosting mayoral staff salaries would require new legislation that could be politically awkward for Riordan, who has promised to cut spending to help pay for more police.

Flores said her name had been mentioned as a possible deputy mayor to oversee economic development, or as Riordan’s liaison to the City Council.

It is unclear how Riordan will reorganize the 85-member mayor’s staff. Transition sources say that he is considering whether to add one or two deputy mayor positions to oversee broad policy areas, such as public safety and economic development. There are now two deputy mayors.

Sanders has been prominently mentioned as a possible Police Commission member and said he hopes to be considered for the job.

Attorney and city Planning Commission President Ted Stein, who is reviewing city operations for Riordan, is a possible candidate for the Airport Commission. Stein has only said that he hopes to leave the Planning Commission after serving four years under Mayor Tom Bradley.

As a result of the state budget adopted by the Legislature during his absence, Riordan faces an estimated $30-million to $40-million shortfall in the 1993-94 city budget, which takes effect the day he assumes office.

“One of the first obligations of the new mayor next week or shortly thereafter will be to present a plan on how to deal with” the latest budget cuts, McCarley said. “That will be a heck of way to start out.”

In addition, the mayor-elect’s centerpiece campaign proposal--to lease Los Angeles International Airport to pay for thousands of new police officers--got mixed reviews during his two-day round of meetings with federal officials in Washington.

Upon landing at the airport, Riordan insisted that he is not discouraged and that he will quickly come up with the tens of millions needed to put more officers on the street.

“I feel quite good about it,” he said. “There is a good consensus (among federal officials) that money from the airport should be able to be used to add police to the city of Los Angeles.”

But he said he intends to pursue other alternatives to generate money because it may take time to work out a deal to lease the airport. Citing programs he discussed with the mayors of Indianapolis and Philadelphia during his trip, Riordan said he will press to save money by contracting out some city services. He said he will also seek cost-saving rule changes from labor unions and will explore ways to stretch money spent on health care.

“We’re going to be off and running from Day 1,” he said.

Asked what his first order of business will be at City Hall, Riordan jokingly said: “Kill my enemies.”

More seriously, he quickly added that continuing to “cement relations with the City Council, to earn their respect and cooperation” will be a top priority.

In that vein of building rapport at City Hall, Riordan is planning a rare, informal gathering Monday with city department heads at a downtown hotel. He said he will make a pitch for streamlining operations in a new era of cooperation, creativity and openness.

He said he is planning to hold such meetings regularly to emphasize that “the obligation of any one department doesn’t end at that department. You’ve got to cooperate with each other, and you can make government a lot more efficient (and) deliver a lot more services.”

Riordan also spoke at a luncheon of the Latin Business Assn. on Thursday, where he promised to work to cut City Hall red tape for small firms and to pressure lending institutions to grant more business loans to minorities and inner-city areas.

He said he also has high hopes for a new, 20-square-mile federally subsidized “empowerment zone” that could bring new businesses to South-Central and Los Angeles’ Eastside.

At the meeting, he sought to ease concerns among some minorities that his plan to contract out city services could cost many African-American and Latino workers their City Hall jobs.

Philadelphia has saved $200 million without any workers losing their jobs.

Riordan also said: “I think you’re going to see some very quick and very tough moves to reorganize the business of City Hall.”