TWO things about Santa Clara County's juvenile hall were immediately apparent: The place was huge and severely overcrowded. The knee-jerk solution was to expand the building, add beds, and increase staff. But in a surprise move in 1986, Santa Clara County did just the opposite. Now, the juvenile hall that serves California's burgeoning Silicon Valley is undergoing a $1.5 million remodeling job that will reduce the number of beds by 40.

What is going on here?

Santa Clara County, formerly characterized by juvenile-justice experts as one of the worst examples in the United States of juvenile detention, is changing its ways. Threatened with a lawsuit after two boys killed themselves while in custody, the county finally did some soul-searching - and it didn't like what it saw, according to chief probation officer Pete Silva.

``We were really becoming derelict in our duties,'' he says. ``We were not providing what we should for kids, and we were losing our bright, young staff because we were making nothing but wardens out of them.''

Now juvenile hall each day confines 62 fewer kids on average than it did two years ago, a 21.6 percent decrease. Use of isolation has been cut, as has the number of youths confined to their cells on ``suicide watch.''

Equally as important, Mr. Silva says, public safety has been protected. Locking up fewer youths did not start a juvenile-crime wave, as some critics had predicted.

Like most of the 481 detention centers in the United States, Santa Clara County Juvenile Hall is primarily intended to hold youths who are in the pretrial process - that is, they may or may not be guilty of a crime.

But the facility also held a larger-than-usual proportion of other youths, including homeless Vietnamese youngsters, runaways, abused and neglected children from the child-welfare agency, and mentally ill kids, as well as convicted delinquents who were either serving out sentences or awaiting placements elsewhere. In short, juvenile hall had become a ``hodgepodge lodge,'' according to juvenile-justice consultant Paul DeMuro.

CO-AUTHOR of a 1986 report on Santa Clara County detention practices, Mr. DeMuro discovered that the county operated one of the five largest detention facilities in the United States, even though the county had fewer referrals to its juvenile court than comparable jurisdictions. Further, the county detained 67.2 percent of all kids referred to juvenile court - 3 times as high as the rate nationwide and almost twice the average rate for the rest of California.

``Juvenile hall had become a dumping ground for kids no one wanted,'' agrees Judge Leonard P. Edwards, who presides over juvenile court in Santa Clara County. ``Of those who asked, we were able to demonstrate that public safety wasn't the issue.

``I mean, we used to have parents who'd drive up to juvenile hall on Friday afternoons and drop their kids off for the weekend because they didn't want them home,'' Judge Edwards says.

Probation officer Silva decided that his department needed to regain control of the front door at juvenile hall. ``Our staff had turned over the screening responsibility to the district attorney's office, which wasn't such a good idea,'' he says. ``We are the ones charged with running juvenile hall, and we'd better find a way to determine who stays in and who doesn't.''

The department's troubles date back a decade, when juvenile services in the county were cut to save money. Between 1978 and 1982, the department lost a third of its probation officers, eliminated all its police-outreach workers, ended its home supervision program - and became increasingly demoralized, Silva says.

The long decline might have continued, but the threatened lawsuits finally forced county officials to reinvest in juvenile services, he says.

With some extra county money and the help of the National Council on Crime and Delinquency (NCCD), Silva's department adopted an ``intake form'' that has been instrumental in driving down the juvenile hall population. All youths charged with violent crimes, such as murder, manslaughter, rape, robbery, or aggravated assault, as well as all captured escapees, still are automatically detained at juvenile hall to protect the public from further harm.

But other kids - about 84 percent of the cases - are individually rated when they first arrive at juvenile hall to determine whether they should be detained or released.

The key criteria in making this judgment are the seriousness of the offense, previous arrests, drug and alcohol use, and whether the youth is already on probation. The intake form gives probation officers a uniform, objective way to make decisions about the youths, Mr. Silva says.

So far, the new intake system appears to be working. Santa Clara County has experienced a 15 percent reduction in juvenile detention since the reforms were adopted, says the NCCD's David Steinhart.

``They've made a number of changes,'' says Mr. Steinhart, ``and are certainly trying to improve their program for kids.''

The probation department, however, still has a long way to go, says Silva, who wants gradually to reduce the average daily population at juvenile hall to 170. He says the department also needs to find new ways to handle many of its probation violators besides locking them up again.

``Maybe the kid [on probation] sassed his mom, or missed a cur- few,'' Silva says. ``We need to have other options.''

The word about Santa Clara County's experiment is getting out. Now other jurisdictions - notably crime-troubled Los Angeles County - are making similar changes in efforts to ease severe overcrowding and control exorbitant detention costs.

NATIONALLY, the average cost of confining a juvenile in a short-term facility like Santa Clara County Juvenile Hall is $76 a day - or nearly $1,000 for an average 13-day stay, according to a 1985 US Justice Department report.

Other alternatives, such as home supervision, shelter care, or specialized foster homes, are considerably cheaper, a number of experts say.

Although encouraged by the groundswell of interest in detention reform, Mr. Steinhart cautions that improvements ``must be viewed in the context that California still over-detains.'' California houses a third of all detained youths in the United States, but the state has only 10 percent of the total youth population of the country, he says.

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