In a stark reminder of Los Angeles County's continuing fiscal crisis, the Board of Supervisors signaled its willingness Thursday to cut the pay of all county workers by 5% and to ease--but not eliminate--sweeping cuts in the county's health system. Those cuts could still cost 2,800 workers their jobs.
After hearing personal appeals from Sheriff Sherman Block, Dist. Atty. Gil Garcetti and the troubled county coroner's office, the supervisors rejected another $47.7 million in outright cuts to county programs outside the beleaguered health system.
Instead, the board went on record in favor of a 5% pay cut for all county employees to avert deeper reductions in law enforcement, criminal justice and other programs. Any reduction in pay for unionized county employees must be negotiated at the bargaining table and is expected to face stiff resistance.
The potential 2,800 layoffs--an estimate made by county personnel director Mike Henry--are far more than the initial estimate of 1,600 made in the immediate aftermath of a $364-million federal bailout.
With the bailout, the supervisors approved a plan that will keep open county hospitals, six comprehensive health centers and all of the county's community clinics. (Many of those clinics will eventually be turned over to private medical providers.)
However, without the money to support the entire health care system, the board accepted health czar Burt Margolin's recommendation to proceed with less severe but still significant cuts in outpatient services that will cost thousands of health workers their jobs and eliminate 500,000 patient visits annually--about 25% of the current total.
Margolin said the county will still cut health programs by $285.4 million. Almost $154 million will come from services at hospitals, almost $55 million from administrative costs, $38 million from mental health programs, nearly $25 million from health centers and clinics and $14 million from public health programs designed to prevent the spread of tuberculosis and sexually transmitted disease.
He said the federal rescue package, announced last month by President Clinton, provides "a stabilization of the [health care] system that was in free fall, that was in a state of collapse. We've avoided that."
Even so, he said, "there will still be significant layoffs." After computer runs are completed, new layoff and demotion notices will be issued. In two phases, employees will be laid off Oct. 15 or Oct. 30, depending upon when they receive their pink slip.
By day's end, Supervisor Zev Yaroslavsky said non-union workers already were complaining bitterly about the looming pay cut. "It's a bitter pill for a lot of people to swallow," he acknowledged, "but we're in a crisis." He said the pay cut could be in place by Nov. 1. On another front, the union representing half of the county's 86,000 workers sued the board to block privatization of county health clinics.
The Service Employees International Union, Local 660, contended that in approving public-private partnerships without guaranteeing that county health care workers will staff them, the supervisors violated terms of their labor agreements with county workers designed to protect union jobs.
Walter Gray, assistant director of the county's Department of Health Services, said the greatest impact of the layoffs will be felt in outpatient clinics at County-USC Medical Center, followed by Martin Luther King Jr. / Drew Medical Center and Harbor-UCLA and Olive View-UCLA medical centers.
While the infusion of federal aid will save the health system from collapse, Margolin told the supervisors that efforts to downsize the vast health care system must proceed and will take years to complete.
"The county's health care delivery system is badly broken and continues to face severe structural and financial problems," Margolin wrote in a report to the board. "This system cannot be repaired with a piecemeal approach and must be completely restructured. The system must literally be reinvented."
He strongly urged the supervisors to hire a new director of the massive Department of Health Services as soon as possible.
Hours earlier, the board heard personal appeals from Block and Garcetti not to cut any deeper into spending on the sheriff's and district attorney's offices. To do so, the two men said, would risk unacceptable reductions in public safety programs.
"We're not doing the job that we can and should do," Garcetti said. "My office cannot take a dollar cut."
Unwilling to follow the recommendations of county Chief Administrative Officer Sally Reed to eliminate $47.7 million from the budgets of most county departments, Supervisor Gloria Molina urged her colleagues to spend more than half of the county's meager budget reserve to avoid a new round of cuts that would hit public safety the hardest.
The suggestion triggered a scathing rebuke from Yaroslavsky, who branded Molina's proposal to raid the contingency fund as "business as usual," an allusion to the county's recent history of extensive borrowing.
"Using one-time, non-recurring revenue to pay operating expenses is what has gotten us to the brink of insolvency and it is exactly why we're in this mess," Yaroslavsky said.
"It's because we have raided. If it wasn't Marina del Rey one time, if it wasn't the pension fund another time . . . today it's the reserve."
Nevertheless, after much procedural wrangling Yaroslavsky voted for Molina's motion after it had been amended to include the 5% pay cut for all county workers.
While the supervisors have the power to reduce the salaries of 9,000 employees who are not represented by any union, they cannot do so for their unionized work force of about 77,000 without formal negotiation.
The pay cut proposal was immediately rejected by Gilbert Cedillo, leader of Service Employees Local 660, which represents half of the county's unionized employees.
Cedillo, echoing comments of Supervisor Yvonne Brathwaite Burke, said the board has other options for dealing with the county's fiscal crisis, including taking a $100-million loan from the Metropolitan Transportation Authority.
So far, the supervisors have rejected the loan to pay operating expenses, a practice that has contributed to the county's worst-ever fiscal crisis.
"What we need to do, members of the board, is make real cuts," Yaroslavsky said. "Not across-the-board innocuous cuts . . . but real cuts. And some of those cuts ought to start with ourselves. . . . It's time to start to face up to our responsibilities."
Molina said the pay cut for non-union employees--people such as the supervisors and department heads--was a symbolic gesture, as well as a way of saving millions of dollars. "It starts with us," Molina told her colleagues. "This is a crisis situation."
But Supervisor Deane Dana objected to the pay cut for non-union employees, saying it would simply force those employees to also unionize.
County personnel chief Henry said many department heads have the right under their personal contracts to refuse to take a pay cut if the board passes an ordinance actually reducing the salaries of the 9,000 non-union employees. The five elected supervisors would be among those who would have to volunteer to take such a cut.
Burke took issue with the concept of pay cuts, saying there are other alternatives, including accepting the $100-million, five-year loan from the MTA, which the supervisors have rejected.
"What we seem to be doing is looking for all kinds of ways to get around an opportunity that is right in front of us," Burke said.
Turning to Yaroslavsky, she said: "These are hard decisions," and used as an example a proposal to close some of the county's highly regarded probation camps for juvenile offenders. "If you turn all these gang members out onto the streets, that is a hard decision. These are life-and-death decisions."
The supervisors agreed to wait until Feb. 1 to close the juvenile camps, saying they prefer to wait for a state bailout.
Probation Department Director Barry J. Nidorf told the supervisors that he is running out of money to operate the camps, which try to rehabilitate often-violent juvenile offenders as an alternative to placing them in California Youth Authority correctional facilities.
Nidorf said the state Legislature was prepared to approve $17 million to keep the camps running through this year, but partisan squabbling on the last night of the legislative session Sept. 16 scuttled that aid.
Nidorf said Gov. Pete Wilson has indicated his support for the probation camps, but said he will have to close all the camps in February if the money does not come from the state.
"Is this a gamble, is this brinkmanship?" Nidorf asked rhetorically in an interview. " . . . If it doesn't work, we close all the camps."