County to Give Some Surplus Funds to Libraries, Keep Rest : Budgets: Molina fails in effort to restore welfare cut. The board sides with new chief administrator, who wants to hold the bulk of the money in reserve.

Heeding the advice of Los Angeles County’s new chief administrator, the Board of Supervisors on Tuesday decided not to spend most of a recently discovered surplus, dipping into it only to keep libraries slated for closure open two days a week.

The board’s unanimous decision to leave $40 million, or 89%, of the surplus untouched angered general relief welfare recipients, whose monthly grants were cut in September from $293 to $212. Wearing T-shirts with the slogan “Restore GR,” about 105 recipients pleaded with the board to immediately increase the grants or face growing numbers of homeless people.

“It’s your job to end the year in the black, but it’s also your job to make sure it’s not a long, black winter for 105,000 people on general relief,” said Bob Erlenbusch, executive director of the Los Angeles Coalition to End Homelessness.

But the board sided with Chief Administrative Officer Sally R. Reed, who advised that most of the $44.8-million surplus be kept in reserve for at least a month while she studies the county’s worsening fiscal situation. The county’s first priority should be funding public safety and building its reserves, she said.

Reed also warned that the county could face a budget shortfall next year of more than $1 billion.

Supervisor Gloria Molina gave up Tuesday on her proposal to restore the general relief benefits, saying it is extremely unlikely that she will be able to muster the four votes necessary.

But the board agreed to consider next week whether to take other measures Molina has suggested to help general relief recipients. One proposal is a pilot program that would allow 1,000 recipients to save up to $1,500 and earn up to $200 a month without having their grants reduced, as is now the case.

The county’s crippled public library system, which saw $30 million slashed from its budget in July, fared better Tuesday. The supervisors allocated $4.8 million to libraries, which means 43 branches scheduled to close Jan. 31 can remain open two days a week.

The funds also will allow the library to renew 19,000 periodical subscriptions that were to expire in December, said Lilly Loo, a library administrator.

The cash infusion was necessary because Gov. Pete Wilson last month vetoed legislation that would have allowed the county to create a library assessment district that would charge property owners for library services.

“The board did the best they could for us,” said County Librarian Sandra Reuben, who had asked for $10.8 million. “Our condition has stabilized, but we’re still lying on the emergency room table because we have no funding for next year.”

Los Angeles County’s financial woes did not end earlier this month when voters approved Proposition 172, a half-cent sales tax extension that will net the county $348 million this year, Reed warned Friday in a memo to the board. That money was already built into the county’s $13.5-billion budget.

Now it appears that the county’s revenues could fall $22.4 million short of estimates, largely because of lower property tax revenues, said Gerald A. Roos, the county’s senior assistant administrative officer.

Also, some of the county’s 43 departments are reporting that they may exceed their budgets by a total of at least $70 million, largely because of overtime costs, Roos said.

Although a recently negotiated settlement with the county’s labor unions defers overtime payments for two years, some county departments, including the Sheriff’s Department, are claiming they are prohibited by federal law from postponing those payments to certain experienced employees, Roos said.

Other unanticipated expenditures include $8 million in increased foster care costs that officials from the Department of Children’s Services link to a reductions in welfare benefits to families.

Reed said she plans to meet with the courts and public safety departments to come up with a plan to maintain services by reallocating current budgets. At the board’s request Reed also said she would report back in a month about the cost of funding new books for the library system and for county lifeguards.