Court Fund Cut Deals O.C. New Budget Blow : Impact: Reduction is $11.5 million instead of expected $6 million. Utility districts confirm higher fees.

Blindsided by a surprise cut in court funding, Orange County officials scrambled Thursday to fend off a new fiscal crisis, while utility districts confirmed that thousands of consumers will have to pay more for services such as garbage disposal and water.

After anticipating for months that state lawmakers would cut local court funding by roughly $6 million, county officials are now faced with a reduction of $11.5 million as a result of a veto Wednesday by Gov. Pete Wilson.

Adding to the dilemma was Wilson’s vow to veto legislation that would permit courts to raise filing fees to plug the hole.

“They’ve created a major crisis here,” said County Budget Director Ronald S. Rubino, who notified county supervisors of the new cuts on Thursday, one day after Wilson signed a $57.4-billion state budget that had been held hostage during his 63-day standoff with the Legislature. “We have a major problem making up $11 million--and I don’t have any quick answers for you on how to solve it.”

The governor said he vetoed $206 million in trial court funding statewide because he believed a trailer bill intended to increase filing fees would not raise enough revenue to provide the additional funds. A spokesman for the governor indicated that officials might be able to “fix” the problem through future legislation.

Orange County officials, however, said they fear that the new cuts could force the courts to consider layoffs or shorter hours--moves that have been staunchly opposed in the past. At least one top-level county official was in Sacramento on Thursday looking for a legislative remedy to the Wilson veto.

If Thursday’s estimates prove accurate, Orange County’s losses in the two-month state budget battle will top the $40-million mark in total cutbacks for courts, general revenue and special districts, which provide fire protection, flood control, library and other services.

On a day of hand wringing that followed this week’s completion of the state budget, the court situation was the most surprising development to hit officials in the county Hall of Administration.

But elsewhere in the county, government officials responsible for providing services ranging from water and sewage disposal to cemeteries and transportation mulled over their own losses, totaling more than $26 million.

Although the state budget does not include new taxes, officials said Thursday that Orange County residents will pay more for water and sanitation services as local agencies struggle to make up for lost revenue.

“The state’s balancing the budget on the backs of the utility consumers,” said Dennis Erdman, general manager of the Capistrano Beach County Water District, whose 21,000 customers in Dana Point and San Clemente may see a 25% hike.

“Not shift--it’s shaft,” said Santiago County Water District General Manager Charlie Cron.

Under the budget, special districts will lose about 35% of their property tax revenue or 10% of their total revenue, whichever is less. Special districts are independent government entities that each provide a single specific service and, since Proposition 13 in 1978, have been funded with 1% of the local property tax base.

In Orange County, the Board of Supervisors oversees several large special districts, including the county library, fire and flood control services. There are also about 35 independent districts around the county.

Each district is governed by an elected board, which will have to vote in the coming weeks on any financing changes. But officials at water and sanitary agencies predicted rate hikes of 10% to 50%, while libraries and park departments said they would probably have to decrease services to accommodate the cuts.

For instance:

* Customers of Garden Grove Sanitary District, which serves 140,000 people, will probably see an increase of about $1.50 atop a monthly fee of $11.23. The 34,000 residents in Westminster and Garden Grove who use Midway City Sanitary District may see their $60 annual fee jump as much as $50.

* In Dana Point, where 6,000 customers already pay $112 a year for trash and sewage disposal, there may be $50 tacked on.

“The state is making the local agencies be the bad guys by raising user fees rather than raise taxes on the state level,” said Independent Special Districts of Orange County President James Evans, who also heads the Midway City Sanitary District Board of Trustees.

“In effect what they did is steal the money from the local governments, which they need to operate,” Evans said. “We’re the ones that are going to take the heat.”

The Orange County Water Districts, which controls the water supplied to about 70% of the county’s residents, will lose about $3 million from its $27-million budget, General Manager William Mills said. That means raising wholesale water costs for 15 other special districts, which in turn will probably raise customer rates.

The entire county will also be affected when the Orange County Vector Control District, which fights mosquitoes, flies and rats as well as the diseases they cause, loses more than $300,000 in property tax revenue. General Manager Gilbert Challet said the $1.10-per-parcel annual fee on property owners would probably rise 50 cents in response to the tax shift.

In Buena Park, home to one of two libraries in Orange County that are operated through special districts, Director Colleen McGregor said, “We’re going to do a little bit at a time, see if we can nickel and dime it in every area. We’re sorry we can’t deliver the same service we could before, but we’re going to keep the doors open. It will be a self-help library.”

As officials tried to nail down the budget numbers, uncertainty remained.

“As confusing as the budget process was,” said former state Sen Dennis Carpenter, Orange County’s legislative lobbyist in Sacramento, “it might be a few days or so before we get this analyzed down to the penny.”

Rubino said the conflicting reports throughout the week about the impact on trial court funding are “a perfect example of the confusion.”

So grave were the reports that county officials had Superior Court Administrator Alan Slater in Sacramento on Thursday doing “intelligence work to find out what’s going on,” Rubino said.

Rubino said he was still uncertain how the county apparently lost more than $5 million in court funds with a stroke of the pen.

“The deal was there. There was an understanding--but the governor made an executive decision. . . . You do your best to put something together, but ultimately the decision lies on the governor’s desk. We’re a victim of circumstance.”

Rubino added: “We’re not giving up. That’s why we’re in Sacramento. . . . We want to look for some legislative remedy here.”

It appeared that the veto may have contradicted Wilson’s repeated commitment during the monthslong state budget fight to protect local government services from heavy cuts.

Additionally, under an agreement reached last year with Wilson, the state this year is supposed to pay 55% of local trial courts’ costs, increasing the payments by 5% in subsequent years until the level of state funding reaches 70%. The governor’s veto actions appear to have rolled back the effort to last year’s 50% level.

A top Administration official, Chief Deputy Director of Finance Steve Olsen, conceded that vetoing the court grants and rejecting the fee bill raises concerns, but indicated he believed the issue was technical and could be smoothed out.

Board of Supervisors Chairman Roger R. Stanton, while heartened that Orange County had done better in the budget process than its own predictions indicated months ago, said he was frustrated by the veto.

“The worst case has occurred,” he said. “It pretty well puts us right back in the starting gate, without many options. I don’t have any panaceas.”

While reluctant to discuss how the county might make up the funding gap, Stanton said he still supports a proposal to keep courts open on weekends. The idea is aimed at easing congestion in the courts and jail, but some judges have resisted it.

“It seems to me that would have to translate into a cost savings,” he said.

Orange County Central Municipal Court Executive Officer Robert B. Kuhel said that a revenue shortfall could mean devastating cutbacks for the court system, resulting in possible layoffs and shorter hours of operation.

What the governor did was “shocking to most people,” Kuhel said. “It was a big shot, a big shot. . . . We’re still waiting to see what the bears in the forest (in Sacramento) will do.”

Orange County Superior Court Assistant Presiding Judge Theodore E. Millard said court officials have had “some preliminary discussions” about where to cut, though he declined to say what aspects of the court operations were being considered. “If I were to say something without really knowing, it would cause a lot of anxiety among some of the employees here,” he said.

And even when the current “mess” is settled, said Marlene E. Nelson, a court administrator, her staff will soon have to begin crunching numbers for the 1993-94 budget. “Seems like we’re doing budgets 13 months a year,” she said.

Staff writers Eric Lichtblau in Orange County and Carl Ingram in Sacramento contributed to this report.

SCHOOLS PROGRAMS DIE: Immediate budget-cutting effects felt in O.C. schools. A3

TRANSFER PLAN OPPOSED: Trustees don’t want county to take over Santa Ana library. B5