County Budget Avoids Deep Cuts : Finances: The $11.9-billion proposal maintains basic services and counts on one-time infusions of funds. Last year, chief administrator called such a strategy too risky.

In a dramatic departure from her bottom-line approach, outgoing Chief Administrative Officer Sally Reed on Monday unveiled a “compromise� $11.9-billion budget for Los Angeles County that avoids deep cuts in public safety and social programs by counting on one-time money she previously considered too risky.

After the Board of Supervisors rejected much of her tough fiscal medicine during last year’s contentious budget battles, Reed concluded that recommending hundreds of millions of dollars in new spending cuts for the coming year would be too devastating and is not realistic politically.

“I am doing some of what Sally Reed told them last year not to do,� Reed acknowledged in an interview before she released her last budget. Reed will join the Wilson administration in June as director of the Department of Motor Vehicles.

After preaching that the county must move away from reliance on one-time revenues to pay for ongoing programs, Reed relented and is counting on hoped-for federal funds, plus nearly $400 million from county pension funds and carry-over balances to avoid cuts in the fiscal year that starts July 1.

In short, her steady-as-you-go spending plan reflects a desire not to engage in political combat with her bosses.

It cuts $220 million in spending from the current year’s adopted budget but maintains most basic services and will not reduce county services in the San Fernando, Santa Clarita or Antelope valleys with anything like the impact of last year’s budget.

Unlike last year, when an unprecedented $1.2-billion deficit caused Reed to recommend cutting one of every five county jobs and closing County-USC Medical Center, the new budget proposes a minor reduction in positions and avoids sweeping cuts in the troubled health care system. It would, however, continue a freeze on employee pay raises.

Reed’s more politically palatable approach generally pleased county supervisors, who will adopt a final budget this summer.

Supervisor Zev Yaroslavsky expressed relief that the county is in a stronger financial position this year because of actions taken last summer and fall. He said what Reed offered is “largely a hold-the-line budget� that does not change much from current operations.

“There is no significant movement in her budget to further belt tightening,� Yaroslavsky said.

*

Public safety would remain the county’s highest budget priority. But the Sheriff’s Department would not receive enough money to open the high-security Twin Towers jail downtown, which stands ready to receive inmates but cannot because of the county’s fiscal problems.

Sheriff Sherman Block called Reed’s proposal “the best budget we have seen in years� and expressed the hope that the new jail may actually open midway through the new fiscal year.

Block said opening one of the towers in January would make available 2,000 badly needed beds for inmates.

Reed said the only option for opening part of the ultramodern jail involves use of $18 million in taxes that are being kept in reserve because of a court decision which invalidated tax increases imposed without a vote of the people.

In the San Fernando Valley and the rest of the northern part of the county, the most dramatic impact will be seen in the area’s health clinics, as the county continues to move toward a scaled-back health delivery system.

By June 30, according to Reed’s plan, health clinics in Tujunga, North Hollywood, Burbank and Pacoima are scheduled to be privatized.

Last year, county clinics in Canoga Park and Valencia were privatized, along with four other clinics in the county.

Mid-Valley Comprehensive Health Center in Van Nuys--which offers a greater variety of services than regular county clinics, and which narrowly escaped the budget ax last year--will be left largely untouched.

Also relatively unaffected will be the Antelope Valley Health Center in Lancaster.

The area’s two county hospitals--Olive View/UCLA in Sylmar and High Desert in Lancaster--could face some job reductions, but not nearly as many as last year.

In 1995, both hospitals were on Reed’s closure list in order to bridge the county’s budget deficit.

Eventually, the Board of Supervisors decided to privatize High Desert’s services over a two-year period. The hospital is scheduled to be privatized by next year.

Reed’s proposal also envisions handing over the county’s regional parks--four of them in the San Fernando or Antelope valleys--to the cities in which they are located. Although Reed’s plan does not name any parks, a Department of Parks and Recreation official said they include Apollo in Lancaster, Crescenta Valley in Glendale and El Cariso in Sylmar.

The Department is also considering giving the Tapia Natural Area in Calabasas to the state of California.

Sandra de la Riva, acting head of budget and management services for the parks department, said however that the department would ask the board to allow the department to keep the parks, which cost about $500,000 a year to operate.

“We don’t want to give these up, but since they are located in cities, it is the most palatable idea,� she said.

Today, the board is expected to approve a plan to hand over county-operated Bouquet Canyon Park to the city of Santa Clarita in order to save money.

Significant funding from the state or federal government, or from bond money, will allow construction or improvement projects at the following, although the county will contribute no money: The San Fernando Valley Juvenile Hall; a municipal courthouse in the west San Fernando Valley; Whiteman Airpark in Pacoima; Fox Airfield and a library, both in Lancaster; Castaic Lake and Pitchess Honor Rancho, both in Castaic; a library in Agoura Hills; and Stevenson Ranch Park in the Santa Clarita Valley.

Reed did not recommend providing the county’s overburdened criminal justice system with an infusion of new money to pay the costs of the state’s “three strikes� sentencing law, which is clogging the jails with felony defendants and the courts with criminal cases. The only addition was a scant $1.3 million to hire a small number of additional sheriff’s deputies.

Reed’s budget assumes that the county will not have to meet certain requirements to match state funding for welfare. If that isn’t true, the budget calls for imposing a three-month-a-year limit on general relief payments to the poorest of the poor, who are now eligible for grants for up to a year.

Rather than urging sweeping reductions in the county’s vast health system as she did last year, Reed reversed course and is counting on President Clinton to come through with more federal funds to avoid deeper downsizing of the hospital system. Reed said the county has no contingency plans and would be plunged into another health crisis like last summer’s if the additional federal assistance is not realized.

The county has promised the federal government that it will move the nation’s second-largest public health system away from its heavy reliance on expensive hospital treatment to less-costly outpatient care at community clinics.

If the privatization proceeds, the Health Services Department would lose the vast majority of the 1,000 county positions that would be eliminated if Reed’s budget is adopted by the supervisors. The Probation and Internal Services departments also could see a loss of jobs.

Nevertheless, the county would remain the region’s biggest employer, providing nearly 80,600 jobs.

To hold the line on spending, Reed’s budget again contains no pay raises for county workers. She said the virtual freeze on most salaries in recent years has proved to be “one of the most successful cost-containment tools� used by the supervisors to address the county’s fiscal problems.

Asked if she gave up on her strict regimen of fiscal medicine in advance of her departure to become head of the DMV, Reed said: “I don’t think it’s a capitulation. I think it would be a capitulation if I said I was only kidding last year.�

“There are options this year,� Reed said. “I didn’t see any options last year. In fact, the only option ended up being a special trip by the president and absolutely unique federal intervention� to save the health system.

The supervisors’ initial reactions to Reed’s budget were tempered compared to last year.

Yaroslavsky cautioned that the budget could convey the erroneous impression that the county is out of the financial woods, when it is not. ‘We have to restructure the health system radically. We cannot go back to the way we’ve been doing business in previous years.�

Reed’s strongest detractor, Supervisor Gloria Molina, said the budget ‘presents some good [longer-term] goals.� But she said adopting a budget ‘isn’t just a dollars and cents balance. It is also a responsibility and moral duty to provide services.�

Already, the two Republican supervisors are appealing to Gov. Pete Wilson for more financial help for the state’s most populous county.

Times staff writer Josh Meyer contributed to this story.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

A Spending Blueprint for L.A. County

The $11.9-billion Los Angeles County budget proposed Monday by Chief Administrative Officer Sally Reed is $220 million smaller than the current spending plan for the nation’s largest county government. The budget maintains most basic county law enforcement, health and welfare services and avoids deep cuts in programs by relying on nearly $400 million in one-time revenues.

THE HIGHLIGHTS

* Public Safety: The budget does not contain funding to open the new high-security Twin Towers jail in downtown Los Angeles. But one tower of the complex could be opened in January, if the Legislature acts to overturn a recent court decision that invalidated local tax increases not approved by voters.

* Three Strikes: With the exception of a minor increase in the Sheriff’s Department, Reed is proposing no additions to the budgets of criminal justice agencies to pay for the costs of the state’s “three strikes� sentencing law. That could further delay civil court proceedings.

* Health: Significant reduction in services at Rancho Los Amigos Medical Center in Downey as part of the county’s effort to privatize the renowned rehabilitation center and 22 community health clinics.

* Looking to Washington: Budget assumes a further bailout from the Clinton administration to pay for restructuring the county’s health system from its emphasis on expensive hospital treatment to less costly primary and preventive care at community clinics. There are no contingency plans if the federal assistance is not provided.

* Job Losses: More than 1,000 positions would be eliminated, mostly in the health department, as a result of privatization, but precise figures on layoffs are not available. Some job losses are likely in the Probation and Internal Services departments.

* Pay Increases: Budget contains no pay raises for county workers.

* Revenues: Unlike last year, Reed’s budget relies on onetime monies, including $202 million in carry-over balances from the current budget and $186 million in excess earnings from the county’s pension fund because of a sharply higher stock market.

* Parks and Recreation: The budget proposes turning over four of the county’s community regional parks to cities where they are located and reducing county support for those parks by 50% in the next year.

* Libraries: No further reductions in operating hours.