O.C. and Courts to Seek Compromise on Budget : Spending: After heated debate, the two sides remain at odds on figures. Judges may have to make do with less.

TIMES STAFF WRITER

Orange County's top judge, who last week threatened legal action against the county to get more money for the courts, agreed after heated debate Monday to seek a compromise. But in the end, the judiciary must learn to do more with less, officials said.

It's likely to be a long negotiating session too: The two sides cannot agree on even the most basic of figures. The courts claim they have a deficit of more than $40 million. County officials say their best guess is less than half that, even as low as $16.6 million.

The figures are wildly different because until now, court officials have refused to open their books to county officials who are on the alert for fat and who have been unwilling in the past to discuss giving more money to the courts.

During one hot exchange Monday, Presiding Orange County Superior Court Judge James L. Smith told the board that he would prefer a legal standoff to subjecting the courts to questions that were "not intelligible" and demands to prove that every penny in the budget goes to basic, no-frills operating expenses.

"I don't know how to tell you this, but we are an efficient organization," Smith told Board of Supervisors members, ticking off examples of how the courts have saved millions in recent years. "We're not going to play that game. We're willing to just end up in court and defend that level [of funding] if we have to."

Last week, Smith warned the supervisors in a letter that he would seek a court order if necessary to boost court funding by an amount that would break the county budget for the 1995-96 fiscal year.

Monday's exchange came at the first of three public hearings on that budget. Since its unprecedented bankruptcy following the loss of nearly $1.7 billion in a risky investment strategy, the county's discretionary spending has been slashed 41% to $275 million. That is making the process a painful one in which scarce dollars must be doled out carefully.

As tempers cooled, Board of Supervisors Chairman Gaddi H. Vasquez prodded both the judge and county officials to sit down together in the hope of working out an agreement. But county criminal justice analyst Ron Coley said afterward that even if the county can find more in its coffers, the courts will have to face the harsh realities of life in a bankrupt county.

"They cannot do the same as they did last year," Coley said, adding that the court will have to find a way to do less, work more efficiently, or both.

State court officials approved a $140-million operating budget for Orange County's municipal and superior courts, with about $43 million of that from state funds.

The bankrupt county, meanwhile, is offering to pay $33.8 million, about $20 million less than last year. The courts also get about $20 million annually in fines, fees and other sources.

That, Smith said, leaves the courts more than $40 million short.

Part of the problem is the convoluted way in which the county and the courts calculate their budgets. It's like two languages that have to be translated into a third so both parties understand, one county official said.

The cumbersome budget calculations are under fire by Supervisors Marian Bergeson and Jim Silva, board newcomers who have co-authored a motion on today's agenda to revamp the process. Silva said it was difficult for county officials to make heads or tails of the thick documents.

"We need to know where the money is going," Silva said. "The objective is to have a budget that is much easier for the public to understand."

Compared to the debate over court funding, the rest of the day's budget hearings went smoothly and focused mainly on public-safety spending. While the county has promised to keep public safety a priority, many of its agencies are taking a hit.

The budget of the district attorney's office, $56.5 million last year, is projected at $55.2 million this year. The county plans to pay $1.3 million toward prosecution, compared to $6.7 million last year.

The Sheriff's Department's budget is increasing from $178.8 million last year to an estimated $184.6 million, thanks mostly to an increase in state taxes set aside for law enforcement. The county is paying $11.3 million toward those costs, compared to $19.4 million last year.

Sheriff Brad Gates told the board that higher operating costs and cuts to his budget last year were partially to blame for an increase in jail inmate fights, attacks on guards and escapes. While county jails nationally have an average of one guard for every 4.7 inmates, the ratio in Orange County is 1 to 10, sheriff's officials said.

"It's had a significant impact," Gates said.

The Probation Department also feels the crunch. Its budget has been reduced from $68.1 million last year to $60.4 million. The county is paying $36.9 million of that, compared to $45.6 million last year.

The department already has scrapped prison alternative programs that ultimately save money, such as electronic monitoring for less serious offenders.

Department supervisor Michael Schumacher told the board that juvenile camps intended to help turn around young offenders also were in jeopardy, because a federal program that funnels $12 million a year to them is on the cutting block.

"It has been a serious blow," Schumacher said.

The budget is expected to be finalized at next Tuesday's board hearing.

In other developments, Vasquez, who announced earlier that he would resign Sept. 22, now plans to leave office no sooner than Oct. 1.

A spokesman for Gov. Pete Wilson said Vasquez recently contacted the governor and said he had underestimated the length of time the county needs to resolve its budget by a week or two and would be pushing back his resignation to the first week of October.

Times staff writer Peter M. Warren contributed to this story.

* MERRILL LYNCH SUED: Dozen agencies seek to recover investment pool losses. A20

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