Retirement Funds Ruled Out for Budget : Finances: The employees association board tells the county to find some other way to reduce its deficit.

A proposal to use $150 million in Los Angeles County employee retirement funds to help balance the county’s rickety budget was pronounced dead Wednesday by retirement officials who said such a move might harm their own finances.

The county will have to find some other way to close its deficit, said members of the board of the Los Angeles County Employees Retirement Assn. at their monthly meeting.

“It means the county has less revenue to fund their services,” board Chairman Robert Hermann said after the meeting. “But that $150 million should never have been included in the county’s calculations.”

County Chief Administrative Officer Sally Reed said Wednesday that she had not had a chance to talk to the retirement association’s officials and could not judge what impact the loss would have on the county’s fragile spending plan.

“We will follow this now and see if it absolutely closes off any option or determine if there might be some other possibilities,” she said. “We are concerned about the $150 million, we are concerned about what is happening with the state budget; we are going to have to pursue every option for getting more state and federal revenue.”

Reed last month submitted a $14.7-billion budget to the Board of Supervisors that includes a deficit of about $184 million. The proposed budget calls for 1,100 layoffs and deep cuts in health, welfare, cultural and recreation programs.

A major source of revenue in Reed’s proposed budget had relied on agreement being reached with the retirement association to siphon $150 million in excess earnings to the county to help pay for programs that might otherwise face cuts.

Retirement officials early on said they opposed the plan. That opposition was cemented Wednesday when a report was presented to the association by an independent consultant showing that the pension fund’s own deficit grew by $362 million in the last year.

Officials declared that any excess earnings must be used to pay off the retirement system’s own debt.

Board of Supervisors Chairwoman Yvonne Brathwaite Burke expressed disappointment at the events but held out hope that the county and the association could reach some other agreement that would allow use of retirement funds to help pay for county programs.