COUNTY BUDGET TARGET STUDIED TOBACCO MONEY BIG PART OF FUNDS.

Byline: Krystn Shrieve  Staff Writer

VENTURA - The county should rely on tobacco settlement money and savings from a hiring freeze to hit its targeted $15 million general fund balance, and may have to cut programs or identify new revenue to do it, a new report says.

But, the report adds, rather than cutting any programs now, Ventura County supervisors should wait until fiscal 2000-01, which begins July 1, to determine whether they need to implement a cost-savings plan to help bolster this year's balance.

``The time to do that is when we're going through the adoption of the budget in June,'' said Harry Hufford, the interim chief administrative officer who compiled the report. ``We'll have more complete figures and we'll have four more months of the hiring freeze under our belt.

``The fact is that, at this late date, we can't achieve significant savings by going into heavy service cuts. It will cost more than the savings.''

The report, to be considered Tuesday by the Board of Supervisors, proposes starting fiscal 2000-2001 with a $15 million surplus - the same amount used as the basis for this year's budget.

Hufford proposes meeting that goal using $3.9 million from an ongoing hiring freeze of hundreds of county jobs, plus $7.5 million in tobacco settlement money.

The balance - $3.6 million - will have to be made up with additional revenue or program cuts next year, he said.

The county has been facing a declining general fund balance for several years, and officials have been struggling for ways to reverse this downward trend.

Supervisor Frank Schillo said Friday he was disappointed with the report, especially its reliance on the tobacco settlement revenue.

``That's one-time money. It's not money that was derived from reductions of expenses in the departments,'' he said. ``It's just business as usual at the county.''

But board Chairman Kathy Long said she is happy with the recommendations.

``There was an expectation to see budget cuts back in October, but because of the freeze and controlling the cost of expenditures for new programs or purchases, we've been able to stabilize things,'' Long said. ``We look a lot better than we did three months ago.

``We started this year with a rollover of $15 million,'' Long said. ``And if we don't have the same amount next year we will have to make cuts.''

But Long doesn't anticipate program cuts will be necessary. She expects the county's property values to increase, generating a revenue surge, and the state to return at least half of the $53 million it took from Ventura County for its Education Realignment Adjustment Fund.

``The state has been shifting local dollars away from the counties and I've been working with the state Association of Counties to say that now that the state is healthy it should give that money back,'' Long said. ``We probably wouldn't see it until mid-year next year, but it's great. These are both healthy signs.''

Supervisor John Flynn stressed that even if the tobacco settlement money is spent now to bolster the year-end fund balance, it doesn't change the county's long-term commitment to use the tobacco money for housing mentally ill residents.

``The issue here is that we're developing a plan for housing for the mentally ill and that won't go away,'' Flynn said. ``Harry Hufford is just recommending that we retain that money and not allocate it yet, but that doesn't take away from the fact that we've made a commitment to build housing and we'll keep that.''

But Schillo argued that even if the tobacco settlement money isn't technically spent, it's lost if it gets lumped into the year-end fund balance.

``That money becomes the basis for the next year and once you roll it into next year it's gone. You can no longer identify it and it ends up going to departments who spend more than they have in revenues.''

Schillo said if the county didn't have the tobacco settlement money on which to fall back, the county would have had to make cuts.

Schillo recommends starting a study to compare Ventura County to other counties in terms of its expenses and productivity; creating performance or benchmark programs; continuing the hiring freeze through next fiscal year; and conducting a study to determine which which programs have performance mandates by the state and cutting programs to the minimum requirements.

``If the state mandates us to do it but doesn't tell us to what level, I say we cut back,'' Schillo said.