SETTLEMENT WILL GO TO MEDICARE; TOBACCO FUNDS WILL BEGIN TO REPAY DEBT.

Byline: David Greenberg Staff Writer

Ventura County will spend its tobacco settlement money to begin to repay the federal government for faulty Medicare billing and will likely dip into contingency funds to keep its only homeless shelter operating.

Supervisors agreed Tuesday to the 1999-00 spending plan that includes the first payment toward the $15.3 million Medicare debt as the county handles continued fallout from last year's failed behavioral health and social services merger.

``We simply have no choice there,'' said Supervisor John Flynn. ``We've made an agreement with the U.S. attorney. I don't think the U.S. attorney understands the financial situation counties are in to provide these services.''

Supervisors voted 4-1 to earmark $3.1 million in projected tobacco settlement money to repay the federal government for faulty Medicare billing - a recommendation many thought would close the shelter.

But they also agreed to consider using contingency funds to allocate $289,000 to keep the Camarillo-based RAIN homeless shelter open through the fiscal year. That allocation will go before the board Nov. 2.

The county faced a $1.97 million shortfall in its $955 million spending plan and cut $4.5 million in new expenditures.

The vote on the homeless shelter came after more than an hour of health and law enforcement officials as well as community members vehemently urging supervisors to keep the 59-bed shelter open.

``To close RAIN would be more than sad,'' said Laura Purcell, a member of the Camarillo-based Padre Serra Catholic Church, which donates money and clothes to the shelter. ``To balance the budget on the backs of the poor and the marginalized would be unconscionable.''

Other speakers at the packed public hearing were concerned about using tobacco settlement funds to repay the federal government.

Ventura Mayor Jim Friedman, speaking on behalf of the county's 10 mayors, urged supervisors to delay their vote on allotting the tobacco settlement money until city officials are included in the planning process.

``There has been virtually zero input from the cities,'' he said.

The charge brought a firm rebuttal from Supervisor Judy Mikels, who said the tobacco money was given to the counties for health care services and does not belong to the cities.

``I think it's kind of sad that everybody sees a pot of money out there and says, `I want my share,' '' said Mikels, who voted in favor of repaying the federal government.

She did, however, stress that future tobacco settlement funds - counties are expected to receive 20 annual payments - might not go toward the Medicare debt as was needed this year.

``This will buy ourselves the time to have a solid financial plan,'' said Mikels.

Most supervisors were swayed by interim Chief Administrative Officer Burt Bigler's report.

He strongly recommended leaving the $25 million general reserve fund alone, as it helps the county maintain a high credit rating for short-term loans.

Supervisor Frank Schillo, the lone dissenter on the tobacco funds vote, said he thought it was only fair that the Health Care Agency absorb the debt since its mismanagement created it in the first place.

``This money should be for health-related problems,'' he said. ``The lawsuit has nothing to do with setting aside money for health care.''

But Mikels responded in the majority by saying that patient services would be curtailed if the Health Care Agency was forced to shoulder the debt.

``It's not wise to try and penalize our patients,'' she said. ``Ultimately, that would be the result.''