County Considers New Fees to Narrow Deficit : Crisis: Other money-raising ideas range from waiving trials to naming buildings for those who can contribute.

Desperate for cash, Orange County officials suggested for the first time Wednesday that they may impose a wide variety of extra fees--on park admissions, overdue library books and real estate transactions--and even sell advertising on county buildings and vehicles.

In the midst of an unprecedented government bankruptcy, county supervisors have pledged that they will not raise taxes. But officials working behind the scenes are considering proposals that include charging county employees for parking, eliminating some library and park services, and billing jail inmates for medical and dental services. Another plan would “solicit endowments” from people in exchange for having county buildings named after them.

County officials also are planning to ask the state to temporarily waive jury trials for people accused of some misdemeanor crimes and to pick up the costs of a myriad of programs, such as child welfare services and the $2.5 million the county pays annually to care for emotionally disturbed children.

County Administrative Officer Ernie Schneider has suggested impounding the cars of unlicensed drivers, charging them $30 a day for storage--and selling off cars that go unclaimed. Schneider figures that impoundments alone could bring in an extra $14 million a year.

“Fees and charges will be on our list of things to discuss,” said Schneider, who is expected to give county supervisors a briefing today on his plans for raising money.

In other developments:

* Bond market experts said that Merrill Lynch & Co.’s acknowledgment that it knew of the precarious nature of Orange County’s investment portfolio raised questions about why the Wall Street giant continued to underwrite Orange County bonds last year if it believed that county finances could be in jeopardy.

“The question here is whether those same warnings and concerns Merrill made to (then-Treasurer Robert L.) Citron in 1994 and earlier should have been made to bondholders,” said Sam Gruenbaum, a securities lawyer in Los Angeles and former SEC enforcement agent. “If they were material facts, they should have been disclosed.”

* County Counsel Terry C. Andrus has recommended to supervisors that the county pay the legal fees of Citron, his assistant, Matthew Raabe, and County Auditor-Controller Steve Lewis in connection with the investigation by the federal Securities and Exchange Commission. The federal agency is investigating the relationship between government officials and various broker-dealers, including Merrill Lynch, who did millions of dollars of business with the county.

Although Andrus suggests that the county pay for any costs involving civil actions, he drew the line at defending the three men against any possible criminal prosecution.

* Two county supervisors--Roger R. Stanton and William G. Steiner--said they now favor reinstating provisions of county employee labor contracts guaranteeing that seniority take priority when future layoffs are made. The Board of Supervisors, which suspended those provisions last month, announced Tuesday that more than 400 county workers would lose their jobs and nearly 300 other positions would be eliminated.

* An attorney representing the county’s 10 employee organizations--which together represent most of the 18,000 county workers--met with U.S. Bankruptcy Court and county officials in a bid to win recognition for the groups as an official creditors committee. That would give the workers status in negotiations over the reorganization of county finances and a say in how money remaining in the county’s investment pool is divided.

* Orange County bondholders also will demand that the court give them a voice in the bankruptcy proceedings. Angry individual investors--worried they will get less than a full refund for their municipal bond investments--plan to gather in Anaheim Feb. 7 to form a bondholder committee. Richard Roberts, commissioner with the Securities and Exchange Commission will speak at the meeting, which is sponsored by a nonprofit bondholders information group.

* Members of the Committees of Correspondence, an anti-tax group, voted to recall Supervisors Gaddi H. Vasquez and Marian Bergeson in a non-binding straw vote. Group members complained that Vasquez and Bergeson were the only two supervisors who had not met the group’s demands, which included reducing the size of county government and cutting the supervisors’ salaries, staffs and perks. Group leaders stressed the vote was meant only to assess the mood of the membership and does not mean the organization will immediately begin a recall effort.

* The county asked U.S. Bankruptcy Court Judge John E. Ryan to approve the payment of $4.8 million in bond interest and principal payments due in February. County officials consider the payments critical to reassuring bond markets that the county is making every effort to pay off its debts, thereby improving the prospects for new short- and long-term borrowing. A hearing on the request is set for Feb. 1.

* Merrill Lynch officials said broker Michael Stamenson, who sold Citron many of the county’s high-risk investments, is expected to appear at a state Senate hearing on the bankruptcy next Tuesday in the Capitol.

Because attempts to serve him with a subpoena have failed, officials of the Senate Special Committee on Local Investments expressed concern that Stamenson might duck the hearing. Senate sergeants-at-arms were told that the broker would be in New York until Jan. 18, the day after the hearing.

“Somebody jumped to the conclusion that that could only mean he’s staying outside California until the 18th,” said Timothy Gilles, a Merrill Lynch spokesman. “But they didn’t ask the right question. His plan is to be in Sacramento to testify on the 17th.”

* The Senate panel--stung by criticism from the nation’s top municipal securities regulator that the state has not stepped forcefully enough into the Orange County crisis--began taking steps to see if California should emulate New York state, which helped to bail New York City out of a financial crisis in the 1970s.

In Santa Ana, the day after massive county layoffs were announced, private businesses with vacancies to fill had already started approaching the county in hopes of picking up qualified workers.

County officials have opened an placement assistance center at the old county courthouse, where the heads of companies such as O’Rourke Engineering, a Carlsbad-based company with offices in Santa Ana, have started recruiting. PacBell was seeking workers too, scheduling interviews for Jan. 20.

“There are a lot of very talented people who are being laid off,” said Tom Fitch, a Heritage Park branch librarian who is helping staff the new center a few days a week. “While it’s an awful time for the county, it might be a real boon for private industry. They can get some great workers.”

Meanwhile, county department managers predicted slowdowns in public service after the cutbacks.

At the Health Care Agency, Assistant Director Ronald R. DiLuigi said residents may experience longer lines and more difficulty getting medical appointments after $3 million in cutbacks were announced this week. The agency laid off 43 employees, from clerks to supervisors, and will leave 14 jobs unfilled.

“The positive side of it is, we won’t be pushing any patients out the door,” DiLuigi said. “But with fewer people remaining, we are asking them to do much more.”

The county’s Probation Department, meanwhile, eliminated its house-arrest and gang-prevention programs, because of $3.1 million in cuts.

The house-arrest program relieves pressure on the overburdened county jail system by permitting lower-risk offenders such as drunk drivers to complete their jail terms at home, with the help of electronic surveillance devices.

The county may soon seek a private company to take over the house-arrest program, which usually keeps tab on 160 offenders at any one time, said probation spokesman Rod Speer. But for now, and if the county can’t privatize the program, the house arrestees will either be set free or ordered to return to jail, Speer said.

Despite the cuts, county officials are still scrambling to raise money.

In a wide-ranging legislative package spearheaded by Supervisor Bergeson, the county will ask for relief on a number of unfunded or partially funded state mandated programs, such as welfare services, in hopes of saving tens of millions of dollars.

Additionally, the county will ask the state for authority to initiate a host of actions that could save millions more. According to a 35-page document of legislative proposals, the county hopes to save $9 million by transferring the costs of collecting and distributing property taxes to schools and special districts; $5 million by having the state forgive all outstanding debts owed by the county; and $878,000 to waive pregnancy tests during county-issued family planning services.

“We’ve got a big hole to fill and maybe government can’t subsidize these services like it used to. In order to make change, you’re going to have to be disruptive,” Bergeson said.

The county also proposes eliminating jury trials for those charged with misdemeanor crimes that carry possible sentences of up to six months. Instead, judges would hear the cases.

Futhermore, the county wants to keep all of the county’s court fines and fees rather than sending them to Sacramento, where officials say they are shortchanged when the money is divided among Orange and other counties.

Locally, the county is considering addtional fees, including an extra $1 charge for the filing of each real estate transaction at the county recorder’s office.

Contributing to this report were Times staff writer Eric Bailey in Sacramento and staff writers Jeff Brazil and Martin Miller and correspondents Shelby Grad and Mimi Ko in Orange County.

* GETTING PUBLIC INPUT: School districts, cities seek residents’ oversight, advice. A12

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