O.C. Budget Passes, With Ouch Factor

On schedule and without the acrimony seen in Sacramento, Orange County’s Board of Supervisors on Tuesday approved a $4.8-billion budget that will probably lead to cutbacks in health care and social services.

Orange County health officials say that unless they get an unexpected increase in state funding, they will be forced to significantly cut mental health services, shut down eight part-time health clinics and reduce testing of sexually transmitted diseases.

The county managed to avoid even bigger cuts by using savings that many county agencies put aside during better times. Dist. Atty. Tony Rackauckas used all of his department’s $2.39 million in savings, while Sheriff Michael S. Carona used $23.5 million, or nearly two-thirds of the $37.2 million he had stockpiled.

Although the county’s 2003-04 fiscal year budget is about $130 million smaller than the current year’s budget, the county still managed to create 11 jobs, for a total of 17,752 employees. The spending plan is based on the governor’s latest proposed state budget, which could change dramatically before adoption in Sacramento.

Supervisor Bill Campbell said he was concerned about tapping reserves and said the county must pay especially close attention to its finances during the coming year to avoid even more significant cuts a year from now.

“This is a very, very serious situation. We really have less than one year of reserves remaining,” he said.

Campbell and fellow board members said that though they may be able to scrape by in the coming year, they will need to do some serious cost-cutting to avoid disaster.

“Next year will probably be equally, if not more, difficult,” said Steve Dunivent, the county’s budget manager.

Evidence of this concern surfaced throughout Tuesday’s meeting.

Supervisor Chris Norby voted against 13 proposed contracts that allowed department heads to spend up to 10% more than the contracts called for without approval of the board.

“That’s a dime on a dollar. When you start talking millions of dollars, that’s a lot,” Norby said. “I’m not going to support any of them.”

The board approved the contracts, with Norby dissenting, for expenditures ranging from health clinics to drug testing but asked the county’s executive office to come up with a policy for new controls over contract expenses.

“I don’t think we should be putting any cushions in this budget. This ought to be tightly managed,” Campbell said.

Campbell questioned an $80,000 contract proposed by personnel officials to provide emergency assistance for county employees. The contract had not been put out to bid. Even though county officials said the price was a bargain compared with a similar contract obtained in Los Angeles County, the supervisor was still concerned.

“I can’t support this kind of thing.... It’s not proper for competition,” Campbell said.

Although most county departments plan to spend about as much in the coming year as they did the past year, and in some cases more, department heads said the dollar is not stretching as far as it once did.

Rising costs of health insurance and larger contributions for employee pensions have made things particularly tough for agencies trying to provide even the same level of services they did in the past year. The Health Care Agency is preparing for massive service cuts in a year that it is planning to spend $18 million more on salaries and benefits than it did in the past year.

Juliette Poulson, director of the Health Care Agency, said the rise in employee expenses is directly related to higher benefit costs.

The Orange County Grand Jury recently faulted county officials for agreeing to a series of benefit increases with employee unions, including a 2% bonus that is given to virtually every county employee, and for turning sick leave into a benefit that can be converted into cash in some circumstances.

The county’s new budget includes $850,000 to keep afloat commissions promoting business, tourism, film and art in Orange County -- expenses that one health advocate said should have been cut so the county’s poor could be served.

“A person’s health is not a deferrable expense,” said John Davies, president of the Health Care Council of Orange County. “Protecting our most vulnerable residents must be the top priority for every civilized society.”

Because much of Orange County’s money comes down from Sacramento, the extent of the county’s service reductions won’t be known until the state passes its budget. With lawmakers deadlocked on how to fill a gaping budget hole, the state is on the verge of going into the next fiscal year without a working budget.

Tom Wilson, chairman of Orange County’s board, said that even though a proposed state tax increase would mean more revenue for Orange County, he doesn’t view that as an answer.

“We have had quite a few stresses put on our budget by Sacramento,” Wilson said. “We survived a bankruptcy. We have prepared ourselves.”