Still, the county is one of the relatively few local governments able to easily obtain credit in the bond markets. But such borrowing, undertaken several times weekly to keep the county running, has gotten more expensive. In the last three weeks, the interest rate has risen from 1.5% to 4%.
Some steps have already been taken to fill holes in funding from the state.
For The Record
Los Angeles Times Friday, October 10, 2008 Home Edition Main News Part A Page 2 National Desk 2 inches; 100 words Type of Material: Correction
L.A. County aid: An article in Wednesday's California section about Los Angeles County's struggle to provide services as revenue dwindles said county Chief Executive Officer William T Fujioka and other officials plan to travel to Washington in January to negotiate a new Medicaid waiver. Fujioka and other officials plan to begin negotiations on a new waiver with state and federal officials in January but not by traveling to Washington. Also, the story said about 20% of the Los Angeles Department of Water and Power's existing debt is set at a fixed rate. About 20% is set at a variable rate.
Patients shut out of hospitals will be sent to lower-cost facilities. Welfare-to-work participants who had been referred to community colleges will instead be trained at lower-cost facilities such as occupational centers.
One particular area of concern is an anticipated increase in the demand for child protective services. County officials said they are moving to expand staffing for their child abuse hotline.
"When things tighten, stress and tension rise, unfortunately, leading to increased incidents of child abuse and neglect," said Patricia S. Ploehn, director of the Department of Children and Family Services.
Still unknown is how deep cuts in a variety of social services could go.
On the horizon are potentially massive hits to the county's fiscal health. Officials are still calculating how much money will be needed to cover losses suffered by the county employee retirement plan in the securities market.
Yaroslavsky said Tuesday at the regular board meeting that the cost of plugging the hole in the pension system might reach "nine figures."
Another big-ticket loss may come during negotiations for a new Medicaid waiver, which sets the rate of much of the federal support for the county's hospitals and clinics.
Fujioka and other officials plan to travel to budget-strapped Washington in January to try to negotiate the waiver, valued at $900 million for the county. Fujioka said in an interview Tuesday that he is worried "the federal officials might say there is no money."
At the same time, with a $22.3-billion budget and no plans, at least yet, to lay off anyone in its workforce of more than 100,000 people, the county is in better shape than some public entities.
Officials said they did not invest in securities whose values have collapsed, and they credit the searing experience of layoffs and cutbacks during the 1990s for more recent fiscal prudence. As a result, the county has yet to suffer a loss in its investment portfolio, the treasurer and tax collector reported in a Sept. 30 memorandum.
