THIS ANNUAL REPORT STATES THAT THE INCREASE IN CRIME MAY RESULT FROM THE CITY'S MOUNTING POPULATION WITH ONLY 2.01 OFFICERS FOR EACH 1,000 RESIDENTS - A RATIO WELL BELOW THAT OF FOUR OF THE OTHER FIVE LARGEST CITIES IN THE NATION. MOREOVER, THE DEPARTMENT WAS EXPERIENCING BUDGETARY CUTBACKS PRIOR TO THE PASSAGE OF PROPOSITION 13 WHICH WAS ONLY THE CULMINATION OF FISCAL RESTRAINT POLICIES. AS A RESULT, A PROGRAM OF POLICE REALIGNMENT IS BEING IMPLEMENTED. RETRENCHMENT FELL HARDEST UPON INVESTIGATIVE AND SUPPORT UNITS, ALTHOUGH FUNDS BUDGETED FOR OFFICER OVERTIME SUSTAINED A CUT OF 50 PERCENT AND ALL FUNDS FOR CIVILIAN OVERTIME WERE ELIMINATED. A TOTAL OF 852 DETECTIVES FELL TO 790 IN 1978, AND HIRING OF RECRUITS WAS HALTED DURING THE LAST 7 MONTHS. NEVERTHELESS, A NEW CHIEF OF POLICE WAS SELECTED. THE POLICE DEPARTMENT'S 3,000 SPECIALLY TRAINED OFFICERS ASSISTED IN THE PEACEFUL INTEGRATION OF THE COUNTY'S SCHOOLS; 38 FOOTBEATS WERE ESTABLISHED; THE HILLSIDE STRANGLER MANHUNT CONTINUED; 171 ARRESTS WERE MADE DURING PROTESTS; 60 LAPD PERSONNEL RESPONDED TO A MAJOR AIR DISASTER; 10 OFFICERS WERE CITED FOR VALOR; AND THE SOUTHEAST AREA WAS ACTIVATED WITH 240 OFFICERS. THE REPORT IS ILLUSTRATED WITH PHOTOGRAPHS; TABULAR DATA AND A MAP ARE INCLUDED. (MJW)