County May Sue to Get Flood Money

With Orange County facing a $57-million budget deficit, Supervisor Jim Silva on Tuesday proposed suing the state to recover more than $90 million in flood project money owed the county.

Silva directed county counsel to explore taking legal action to help balance the proposed $4.9-billion budget for 2002-03 and hold off from tapping into the county’s “strategic priorities reserves.”

The discussion came during a budget presentation by county finance officials, who proposed using $17 million in reserves because of a grim economic picture stemming from the stagnant economy and the state’s $23.6-billion deficit.

The budget shortfall could force the county to reduce or end programs in mental health, probation and other areas.

“What I’m hearing is that we’re going to use $17 million and that it could cost us more next year,” Silva said.

“I’d like to seek litigation to try and recover the $90 million in flood money that the state owes the county.”

Such a lawsuit would be rare, if not unprecedented, said the county counsel’s office and a Sacramento association representing the state’s 58 counties.

Complicating the issue is the fact that Orange County is owed the most by the state for flood-control projects, said Karen Keene, a spokeswoman for the California State Assn. of Counties.

Supervisor Todd Spitzer also asked county officials to investigate whether other counties owed money would consider joining the lawsuit and help share litigation costs.

Otherwise, legal costs could be prohibitive, Spitzer said. He suggested pooling resources and perhaps investigating whether a consortium among counties could be formed.

Silva, whose district includes Newport Beach and other coastal cities that have benefited from flood-control projects, has been displeased with the state’s inaction for years.

The money owed is the state’s matching funds for such federal flood-control projects as the Santa Ana River reconstruction and Prado Dam improvements, a Silva aide said.

The funds have only trickled in. But now with the county facing major program cuts and potential layoffs, Silva said he at least wants to explore the county’s legal options.

A spokesman for the state Department of Water Resources, which coordinates flood-control matching funds, could not be reached for comment.

In other action Tuesday, supervisors gave preliminary approval to spend $4.6 million from the county’s general fund to help cover a $10.6-million shortfall in the district attorney’s budget.

Dist. Atty. Tony Rackauckas told supervisors that he had been counting on receiving an increase in sales tax revenue to fully fund his department’s budget; instead, that revenue dropped by 10%.

Rackauckas had sought the full $10.6 million from the county’s general fund. But after County Executive Officer Michael Schumacher worked with Rackauckas to find other cost-saving measures, the county agreed to pay the reduced amount of $4.6 million.