THE COSTS OF THE COUNTY’S COST-CUTTING : Santa Ana Still Can’t Seem to Learn Financial Lessons : While other cities find places to cut back and save money, it proceeds with plans for a grandiose--and perhaps unneeded--jail to be built with ‘free’ federal government funds.

The day that the Orange County bankruptcy became public knowledge brought a brief moment of relief for Santa Ana residents who thought surely, in the wake of this catastrophe, the city would finally wake up and discover what a priority looked like and begin managing taxpayer funds in a responsible manner. They were destined to be disappointed.

While 187 Orange County local government entities scramble to prioritize services and trim budgets, Santa Ana unfortunately persists in the myth of free money. Unwilling to trim costly and questionable development projects, which have resulted in loss after loss in the courts, the city is instead gambling on the belief that federal HUD funds will bail out the city’s latest debacle, a sumptuously appointed police facility, which the city knew at the outset it lacked the means to finance.

The jail in question is an intriguing study of city priorities. The need for it was never clear. While popular belief is that increasing crime has resulted in violent criminals being released on bail back onto local streets because of County Jail overcrowding, Santa Ana law enforcement statistics indicate the contrary: Crime is decreasing.

Interagency cooperation may be the latest buzzword, but in this case it portends ill. The word is out, from the feds on down: no Orange County bailout! And for good reason. It’s not as if the city of Santa Ana has a stellar track record in its own forays into the field of creative finance. The city that now piously insists on full repayment to the schools does so with one hand in the proverbial cookie jar. The fact is that the city of Santa Ana has itself diverted considerable property tax revenue from the schools for various redevelopment scandals that the city has had to unsuccessfully defend in the courts. The city claims that redevelopment is “free” money, just like HUD funds are presumably free.

But, free to whom? The fact remains that various Santa Ana redevelopment projects have cost Santa Ana Unified schools more than $5 million. Statewide, municipal redevelopment costs the K-12 system $500 million annually in property tax revenue.

Take HUD, for example. All it does is provide community development block grants for projects such as housing. But Santa Ana, in its infinite fiscal wisdom, has decided to share its fiduciary wizardry with the feds by redefining HUD’s mission as jail builder extraordinaire. Local activists have repeatedly complained that while the city is zealous in obtaining various HUD funds, it has simultaneously engaged in a policy of housing supply reduction through redevelopment and restrictive housing ordinances. Santa Ana is not a HUD-friendly city from the user standpoint and, if it gets its wish, will become even less so as federal funds earmarked for housing are spent instead to provide police with pricey new digs.

What does this mean for Orange County’s bankruptcy? More of the same irresponsible fiscal policies that got us in this mess in the first place. If Santa Ana is successful in obtaining a HUD bailout, what’s to stop the other 186 municipal entities from following suit? When HUD’s money runs out, who will be raided next?