State Budget Crisis May Crimp O.C.’s Wish List

Despite a grim economic outlook, Orange County has set an ambitious agenda for funding several priorities next year, including affordable housing, jail sprinklers and antenna sites for an emergency radio system.

Most of the projects have already received some funding, but by placing them on a priority list, county supervisors gave them “strategic planning projects” status.

But that move came with a warning: “This is a time for belt-tightening and monitoring,” Gary Burton, the county’s chief financial officer, warned Tuesday.

His comment to the Board of Supervisors came during a workshop on how the local economy’s condition may affect next year’s $4.6-billion county budget. Esmael Adibi, a Chapman University economic forecaster, briefed the group.

The county may escape a recession next year, but job growth and car and home sales will be flat, Adibi said.

“Things look grim, especially at the national level,” he said. “Orange County and Southern California as a whole will be doing OK but suffering from a slowdown.”

The economic picture was gloomy even before the Sept. 11 terrorist attacks. Adibi said that since then, retail sales have slowed because consumer confidence is down. He predicted a rebound by next year’s second quarter.

Of 34 programs on the county’s priority list, 11 were already on this year’s strategic plan. Another five were regarded as “critical” by county department heads and included the emergency radio-system upgrades, jail sprinklers, Proposition 36 drug testing, ground-water-contamination prosecution and water-quality improvements.

Uncertainties over the amount of money the state will provide the county have made local finance officials wary of fully funding some programs. In years past when the state’s budget was in crisis as it is now, Sacramento has funneled money from the counties to keep state programs afloat and promised to pay the counties at a later date.

Gov. Gray Davis, who acknowledged last week that California could face a budget deficit of as much as $14 billion, has called for a state hiring freeze and department budget cuts of 15% for next year.

Burton said the county has enough in its reserve funds to withstand an economic downturn and continue some critical projects, although other projects would need to be delayed. “But it would be disastrous if the state comes after our revenues,” he said.

Some Water Projects Face Uncertain Future

Several supervisors who have pushed for special projects said they are worried.

“The prospects are rather bleak so I’m not very optimistic about this coming year,” said Supervisor Tom Wilson, who with fellow Supervisor Jim Silva, has pushed for coastal projects that would improve ocean water quality.

Although finance officials at the workshop said the county still considers water quality a strategic priority, Wilson questioned why they have not upgraded the program.

“I saw that testing was still [in the budget] but I didn’t see any expansion of testing and money to assist the water quality laboratory at Newport Beach,” he said. “I want to make sure that all the items we did last year are still in place to staff and fund.”

Most sensitive to changes in the local economy is the county’s $475-million general purpose fund, which is used for programs such as improvement of unincorporated areas, El Toro master leases and other programs.

Among the programs county department leaders regard as critical areas needing funding:

* More antenna sites for the county’s $80-million emergency radio system. The 800-megahertz system has been criticized by some firefighters and police officers because of transmission problems. About $8 million is needed for four new sites.

* Sprinkler systems at the Central Men’s and Women’s Jail in Santa Ana are obsolete, according to the fire marshal. A permanent system is estimated to cost $2 million. Deputies had to be on fire-watch patrols until temporary repairs were recently finished.

* The Probation Department has estimated that since July 1, it has received 1,450 new probation cases needing drug testing and evaluation under Proposition 36, the initiative approved by voters last year that requires treatment for abusers rather than incarceration. The department has had to absorb all testing costs because it has yet to receive any state money, although some was recently approved. Projected first-year costs are $360,000.