COUNTY FINDS UNEXPECTED $309 MILLION SURPLUS FUNDS WILL COVER PAY RAISES, BUILDING REPAIR.

Byline: Troy Anderson Staff Writer

After months of poor-mouthing, Los Angeles County supervisors suddenly found a $309 million surplus that they decided Tuesday to spend mostly on employee pay raises and fixing up county buildings.

All told, the county has a $1.4 billion balance left over from the fiscal year that ended June 30 - after the supervisors spent the first part of this year warning the public that they would have to close parks, libraries and probation camps because of state budget problems.

``This is a real poke in the eye for the taxpayer,'' said Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association. ``Here we have the supervisors promoting a half-cent sales tax increase on the November ballot for law enforcement when they are sitting on a huge surplus.''

But Supervisor Zev Yaroslavsky said county officials had no way of knowing a few months ago that the county would have such a large surplus. He said the supervisors have attempted to be fiscally cautious for at least a decade - making conservative estimates rather than spending money they aren't sure they have.

``I know there are eyebrows raised when this happens,'' Yaroslavsky said. ``I wish we could be a little more surgical in our estimates. We've set it up so if there is going to be a variance, it's on the plus side, not the minus side.''

When the Board of Supervisors initially approved this fiscal year's budget in April, its members feared they ultimately would have to cut as much as $739 million in programs; close 19 probation camps, 16 libraries and dozens of parks; and lay off up to 3,000 employees.

But by June - after voters approved a $15 billion statewide bond measure and local officials had worked out an agreement to prevent raids on their coffers - county officials announced they were flush, with $45 million in unanticipated property tax revenues. They gave final approval to a $17.6 billion budget that kept parks and libraries open.

Chief Administrative Officer David Janssen said the county has a total $872 million fund balance left over from the fiscal year that ended June 30, including the $309 million unanticipated surplus.

That doesn't include a $568 million fund balance in the health department, which has teetered on the edge of disaster for years and expects to go $148 million in the red in 2006-07 unless it receives an infusion of federal funds.

``It's what I'm calling a perfect storm,'' Janssen said. ``This is the most complicated budget year I've been through in 12 years of budgeting, starting with the recall of the governor.''

When the state took $2 million a day in vehicle license fee revenues away from the county earlier this year, Janssen said, he eliminated raises and ordered departments to clamp down on expenses and tighten up the hiring-and-promotion freeze.

Sheriff's employees and firefighters have gone without a raise for 16 months, although most of the 50,000 members of Service Employees International Union Local 660 will receive 2.5 percent raises in January 2005 and 2006.

The supervisors' vote Tuesday lifts the county's hiring-and-promotion freeze, which officials expect to help various departments reduce their overtime expenses.

The supervisors also voted to pay $103 million to the state, part of the county's two-year commitment to help offset the state's budget deficit. In return, Gov. Arnold Schwarzenegger has campaigned in support of Proposition 1A, which would prevent state officials from raiding local coffers in the future.

The county will have to make another $103 million payment next fiscal year.

``We are now able to restore some safety-net programs,'' board Chairman Don Knabe said. ``But if Prop. 1A doesn't pass, we could be back after the election, revisiting some of these issues.''

The supervisors voted to spend $145 million to improve county buildings and parking lots, including the seismic retrofit of the Museum of Natural History and $5 million for ``extraordinary maintenance'' projects at the Music Center and the brand-new Walt Disney Concert Hall.

The supervisors also voted to spend:

--$50 million for a new county data center.

--$24 million to replace the seismically unsafe Probation Department headquarters and make emergency repairs at Patriotic Hall.

--$20 million for a state-of-the-art public safety communication system that would allow police and firefighters to talk to one another on one frequency during a terrorist attack or other disaster.

--$16.7 million to address homelessness in the county, Sheriff's Department medical services and other sheriff's expenses.

--$16.2 million to increase the wages of home health workers from $7.50 per hour to $8.10 per hour.

--$2 million for an Infoline/2-1-1 phone system to direct calls to appropriate county departments.

--$1.9 million for Livescan equipment to fingerprint county employees who deal with children.

In addition, the supervisors will use $10.1 million to improve conditions in juvenile halls by hiring 100 workers. The expense allows the county to avoid a lawsuit from the U.S. Department of Justice, which conducted a tour of juvenile halls and found probation officials overly reliant on the use of force to control incarcerated youths.

``Their whole theory is the more staff you have to defuse situations, the less force that will be needed,'' probation chief Richard Shumsky said.

The board postponed a decision on allocating funds for the District Attorney's Office to hire 45 additional prosecutors until the supervisors see whether voters approve the half-percent sales tax increase on the Nov. 2 ballot.

Troy Anderson, [phone]

troy.anderson(at)dailynews.com

EXTRA FUNDS

Los Angeles County officials identified a $309 million surplus left over from fiscal 2003-04. It is the result of $160 million in department savings; $48 million in additional vehicle license fee revenues; $51 million in extra property taxes from the real estate market; $22 million in increased sales tax revenues from a statewide public safety proposition; and $28 million in carry-overs from capital projects not completed last fiscal year.

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EXTRA FUNDS (see text)