MOORLACH UPDATE — Ebola — October 29, 2014

Out of the some 310 million people in the United States only 4 have contracted Ebola, and they contracted it while they were in the West African countries of Guinea, Liberia and/or Sierra Leone. All the same, it has been a major story on every news network in the nation. Consequently, Orange County Public Health Officer, Dr. Eric Handler, M.D., MPH, FAAP, provided a presentation at yesterday’s Board meeting, titled “Ebola: Focus on the Facts” (see http://cams.ocgov.com/Web_Publisher/Agenda10_28_2014_files/images/23-10282014_9845236.PDF). For more details on the Ebola Virus Disease, visit the County’s website at http://ochealthinfo.com/phs/about/dcepi/epi/disease/ebola. This website also includes the regular updates that Mark Refowitz, Orange County Health Care Agency Director, is sending to me and my Board colleagues. He is keeping us well informed, including personal phone calls when necessary. The Voice of OC covers the topic in the first piece below.

The OC Register provides its observations of yesterday’s Board meeting’s discussion on the Board’s efforts to obtain a year-round homeless shelter (see MOORLACH UPDATE — Santa Ana City Council — October 28, 2014) in the second piece below. A clarification: Supervisor Nelson’s Fourth District does not include the city of Santa Ana, as this city is completely within the First District.

The third and final piece is from the Daily Pilot. At the end of last week, the County received a letter from Vanguard University of Southern California notifying our Human Resource Services Department of its intention to withdraw from the employee tuition reduction program (see MOORLACH UPDATE — Tolerance — October 7, 2014 and MOORLACH UPDATE — Political Stunts — October 11, 2014).

OC Health Officials: Ebola Risk "Nonexistent"

By THY VO

The much-ballyhooed Ebola fever has seized national attention in recent weeks as news media and politicians alike have focused on the four Americans who have contracted the virus, one of whom has died.

Now Orange County Supervisors want to know what the county is doing to prepare for the unlikely day that Ebola fever arrives at their doorstep.

At the Board meeting Tuesday, Supervisor Todd Spitzer peppered public health officer Dr. Eric Handler with questions about the county’s preparation for a potential Ebola outbreak.

“Even though you’ve made a very good point about how it’s not airborne and takes direct contact with either feces or other bodily fluid…but people are still scared,” Spitzer said. “We want to get as much information as possible.”

According to Handler, the risk of contracting Ebola in either Orange County or the United States is virtually “nonexistent,” unless a person has recently had contact with the bodily fluids of an infections Ebola patient.

The Ebola virus has killed nearly 5,000 people in Guinea, Sierra Leone and Liberia, where years of war and instability has eroded both the economy and public health infrastructure.

Ebola is a highly infectious disease, but not a very contagious one, meaning that while you don’t need much contact with infectious fluids to become ill, the virus does not move very easily from person to person.

Individuals aren’t contagious until they begin to show symptoms, which include fever, nausea and vomiting, diarrhea, red eyes, bleeding and bruising.

On Tuesday, Spitzer’s questioning of Handler prompted the disclosure that two people in Orange County have returned from travel in West Africa, but they have not shown symptoms and were not exposed to the disease, Handler told supervisors.

Like many volunteer health workers returning from the region, the travelers will take their temperatures twice a day for 21 days, during which time health officials will monitor their conditions, Handler said.

Five U.S. airports are currently accepting flights from the region, where travelers are all screened for the disease. Health officials are notified if any of those travelers are headed to Orange County, Handler said.

“The more recent cases have been isolated quickly so they pose no threat to the general population to the US,” Handler said.

“While we focus on preparing for the possibility for an Ebola case, let’s be mindful that influenza is a preventable disease that causes 36,000 deaths in the United States,” he added.

Spitzer, who requested the presentation at a meeting last week, asked Handler if he would consider restricting the movements of those two travelers.

Handler said restricting their movement was not necessary given that neither person was exposed to Ebola-affected regions.

Spitzer was also concerned about individuals who might refuse to comply with the precautionary measures.

“Let me ensure you, I will not hesitate to do a public health order of quarantine,” Handler said.

The Health Care Agency is conducting on-site visits at hospitals and training drills to educate staff on federal guidelines for Ebola response. Handler said county hospitals are also screening patients based on their travel history and symptoms.

Supervisor Shawn Nelson pointed out that the only four cases of Ebola that have occurred in the United States were among healthcare professionals who treated fully symptomatic, and therefore contagious, Ebola patients.

“Everyone who has gotten it, it’s made perfect sense how and why they got it,” Nelson said.

Supervisor John Moorlach asked at what point he, as a county official, should be concerned and step in.

The best anyone can do, Handler said, echoing the message of federal officials, is stem the outbreak at its source.

“I think the most important thing is how we control [Ebola] in Africa. That clearly is the front line,” Handler said.

Short-term homeless shelters approved for Fullerton, Santa Ana

The sites may open Nov. 10 and remain so until mid-April

BY NICOLE SHINE

Seasonal homeless shelters could open as early as Nov. 10 under a plan approved Tuesday by the Orange County Board of Supervisors.

The temporary shelters at armories in Fullerton and Santa Ana would provide beds and services to the homeless until about mid-April.

Supervisors agreed to shift $500,000 in funds meant for year-round shelter operations to the temporary facilities after plans for a year-round shelter in Santa Ana stalled.

In July, supervisors agreed to buy a $3.6 million industrial building in Santa Ana at a location the city identified two years ago. But last week, amid residents’ concerns, the Santa Ana City Council unanimously approved a 45-day moratorium on new homeless shelters in the city.

Shawn Nelson, who chairs the board and whose district includes Santa Ana, expressed frustration over what he described as “fear-mongering” in the city.

“It is a universal truth everyone believes we should fix the homeless situation and everyone agrees that it’s urgent,” Nelson said at Tuesday’s meeting. “Everyone agrees that right up until they find out the address is near them, it should always be somewhere else.”

The year-round shelter is part of the county’s 2010 Ten-Year-Plan to End Homelessness. An estimated 12,700 people in Orange County are homeless, according to county data from 2013.

Supervisor John Moorlach suggested approaching Santa Ana lawmakers with the idea of a short-term pilot project, possibly at the bus depot; he suggested the board consider the concept at a future meeting.

Nelson expressed “no appetite” for bringing a pilot project before the board.

Supervisors have not approved the final purchase of the 23,000-square-foot building in Santa Ana. The matter is likely to come before the board in late November, a county spokeswoman said.

Staff writer Alejandra Molina contributed to this report.

Contact the writer: nshine or Twitter:@nicolekshine

Vanguard pulls out of tuition program

O.C. employee files a complaint alleging that the policies of the Christian school conflict with county’s non-discrimination promise.

By Hannah Fry

Vanguard University ended its participation in a reduced-tuition program with the county after a complaint was filed alleging that the religious school’s guiding principles violate the county’s non-discrimination policy.

Before withdrawing its participation in the program Friday, the Costa Mesa Christian university was one of three local higher-education institutions that offered reduced tuition at a rate of 25% to county employees in exchange for advertising on the county’s internal web communication system.

A letter from Vanguard to the county said the university will still offer tuition discounts to county employees through its "professional colleagues" program.

"Due to concerns voiced by a few county citizens, it appears prudent to withdraw from the formal agreement so that the university and the county can continue to serve our community as faithful stewards and trusted advocates," the letter states.

Vanguard officals could not be reached for further comment.

Brandman University and National University are still part of the program.

Chris Prevatt, a program facilitator with the Orange County Health Care Agency, filed a complaint with human resources in September after receiving an email notification about the program.

Vanguard is affiliated with the Pentecostal Christian sect of Assemblies of God, which rejects premarital sex, homosexuality and gay marriage. Students who violate the school’s policies in those areas can be subject to discipline, according to the university’s website.

"The behavioral standards, coupled with the faith confession, make it clear that this institution specifically promotes, advocates and defends discrimination against individuals on the basis of religious faith and sexual orientation," Prevatt wrote in his complaint.

The 17-year county employee, who is gay, believes the principles outlined on Vanguard’s website conflict with the county’s equal employment opportunity policy, which states that the county "provides for equal opportunities in all aspects of employment" without regard to sex, race, religion, age or sexual orientation.

"If Vanguard wants to have its policies, then as a private school they are able to do that," Prevatt said in an interview. "The issue is the role of government. If the county’s policy is that we don’t discriminate, then why are we promoting an opportunity that by its very nature is discriminatory?"

Employees who choose to take advantage of the program are able to select which college meets their needs. The county does not force anyone to attend a particular institution, according to a disclaimer on its website.

"The views and opinions of the universities do not necessarily reflect those of the County of Orange, and the county’s partnership with an educational institution is not meant to convey or endorse any particular view or opinion," the disclaimer states.

Prevatt said that since Vanguard offers certain degrees that the other schools do not, by partnering with a university that accepts students on the basis of religious beliefs, the county isn’t providing an equal opportunity for all of its employees.

"The county feels that the relationship with Vanguard was not discriminatory," said Supervisor John Moorlach.

Prevatt said he hopes the situation will force the county to look at its policies when negotiating contracts in the future.

"I’m just glad that it’s resolved," he said. "Vanguard made the honorable decision."

Disclaimer: You have been added to my MOORLACH UPDATE communication e-mail tree. In lieu of a weekly newsletter, you will receive occasional media updates, some with commentary to explain the situation, whenever I appear in the media (unless it is a duplication of a previous story).

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Posted in California

MOORLACH CAMPAIGN UPDATE — Second and Stanton — October 28, 2014

The OC Register provided two pieces in the last two days on the upcoming election. One on the Second District Supervisorial race and the other on Measure GG in the city of Stanton by Rick Muth. Rick’s piece is spot on and Stanton residents should vote against this measure.

You know that I’m supporting Allan Mansoor for the Second District. Two recent mailers confirm why he deserves your vote. The first is from the Association of Orange County Deputy Sheriffs (AOCDS). They have mailed a hit piece on Allan. The rules are simple for conservative voters: Vote for the candidate that the unions are opposing and not for the candidate that they are supporting. AOCDS involvement in the race should make your selection in this race a no-brainer: Allan Mansoor will be the independent Supervisor.

Allan’s opponent just sent out a piece stating that she really cares about schools. Who doesn’t? I’m not sure it was sent because many voters are gullible or for comic relief. But, stating education priorities shows how little she knows about the job of a County Supervisor. If she wants to improve schools, then she should have run for a school board. Speaking of school boards, my recommendations are provided below.

If time permits, I’ll try to get more details on these and other races out in the next few days.

My October 16 MOORLACH CAMPAIGN UPDATE did not load properly on my blog, so I’m repeating my recommendations below for the six Republican candidates running for county and countywide positions (bold is an endorsement, italics is a good alternate, regular print is the other candidate in the race):

Orange County Supervisor, Second District

ALLAN R. MANSOOR

MICHELLE STEEL

Orange County Supervisor, Second District

ROBERT MING

LISA BARTLETT

Superior Court Judge Office No. 14

KENNETH C. "KC" JONES

KEVIN HASKINS

Here are a few selected additional recommendations for Community College and School District candidates:

Coast Community College District

DAVID GRANT (DEM)

Rancho Santiago College District

TRUNG QUANG NGUYEN (REP)

South Orange County College District

QUINLAN RAKIN (REP)
NANCY PADBERG (REP AND INCUMBENT)

Centralia School District

HENRY CHAROEN (REP)

Capistrano Unified School District

CRAIG P. ALEXANDER (REP)
MARTHA MCNICHOLAS (REP)

Fountain Valley School District

SANDRA CRANDALL (REP AND INCUMBENT)

Newport-Mesa Unified School District – Trustee Area 1

STEVE SMITH (DTS)
VICKI SNELL (REP AND APPOINTED INCUMBENT)

Newport-Mesa Unified School District – Trustee Area 7

LISA MANFREDI (REP)
WALT DAVENPORT (REP AND INCUMBENT)

Ocean View School District

JOHN BRISCOE (REP AND INCUMBENT)

Supervisor contenders show their differences

Veteran politicians Allan Mansoor and Michelle Steel are competing for the county seat.

The race to replace termed-out Orange County Supervisor John Moorlach is shaping up as a slugfest over a contentious proposal to create a toll lane on a stretch of I-405.

Both candidates – Michelle Steel, who is termed out of her elected post at the state Board of Equalization, and Allan Mansoor, the state Assemblyman representing the 74th District – say they oppose a toll lane on I-405.

Steel says Mansoor voted for toll lanes in January 2009 while on the Orange County Transportation Authority board.

Mansoor, 50, said it wasn’t a vote on a specific alternative. Failing to study all alternatives, he said, would result in a lawsuit or challenge.

Meeting minutes indicate that Mansoor voted with the board to give OCTA staff “permission to explore the idea” of a future high-occupancy toll lane as part of a slate of alternatives.

Mansoor says Steel, 59, is trying to buy the election with a blitz of negative campaign mailers. Steel has raised $381,025 this year and loaned her campaign $175,000 since 2012, campaign finance records show. Mansoor has raised $117,579 this year.

“I’ve been outspent in every race I’ve ever run,” Mansoor said.

Mansoor paints himself as a homegrown, grass-roots candidate. He worked at the county Sheriff’s Department for 16 years and served as mayor and city councilman in Costa Mesa. He was elected to the state assembly in 2010 and re-elected in 2012.

He is endorsed by county Supervisor John Moorlach, Huntington Beach Mayor Matt Harper, Westminster Councilwoman Diana Carey, the state Small Business Association and others.

Mansoor said he’d increase oversight of county agencies to curb government errors, citing as an example the Orange County Fire Authority, which charged fees for inspections that never took place. He said he’d ask new hires and existing county employees to contribute more to their pensions to tackle the county’s ballooning pension liability.

“Let’s not be a Stockton or San Bernardino,” Mansoor said of the two cities that are grappling to pay their pensions and other debts after declaring bankruptcy.

Steel, a self-described taxpayer advocate, would also ask public employees to pay more, including public safety employees.

Steel is serving her second term on the state Board of Equalization, the body that handles the administration and collection of state sales taxes.

Steel said a proposal she championed while on the board led to the release of $296 million in security deposits to roughly 11,000 California merchants.

Steel said personal experience shaped her politics. As a college student, Steel said she helped her mother run a clothing store, and later helped run a friend’s liquor store.

Stanton GG: One of smallest cities wants highest sales tax

BY RICK MUTH

CONTRIBUTING WRITER

Stanton and the city of Bell, in southern Los Angeles County, have a lot in common. Both encompass a modest three square miles and have unemployment rates higher than the state average. Both cities’ average percapita income is well below the state average.

Just like the city of Bell, I see Stanton’s elected city officials skirting the facts for their campaign for a sales tax increase, called Measure GG.

There is a beauty in Stanton that I see and care about. It’s where my family’s business has called home since the 1950s, predating the city’s incorporation. Recently, Orange County Supervisor John ‍Moorlach appointed me to serve on the Oversight Board of the Stanton Redevelopment Agency, and I attended the Stanton Blue Ribbon Advisory Committee meetings.

Through my involvement, I’ve grown increasingly worried about Stanton’s fiscal health. Troubling trends mirror Bell’s lack of transparency and fiscal mismanagement that are coming to a head this November.

Stanton’s City Council voted last July to place Measure GG on the ballot and, if passed, Stanton residents and shoppers will pay 12.5 percent more in sales tax in Stanton. It will be the highest sales tax of any of the county’s 34 cities, making Stanton businesses less competitive when consumers and residents can simply drive to a neighboring city. They will likely net less revenue if Stanton businesses move to neighboring cities.

The city’s trying to sell this tax as needed to maintain police and fire protection. Over 70 percent of Stanton’s budget is already dedicated to police and fire services. Consider that crime, according to a campaigning council member, is down 41 percent. It’s a sad campaign to mislead voters.

The city claims they need the extra $3 million in tax revenue that Measure GG is estimated to bring in to cover a $1.8 million structural budget deficit. They argue the state stole their money. I don’t agree; the main problem is mismanagement. While they say they cut the number of city staff positions by 30 percent, they’ve also increased the salaries of remaining staff by upwards of 30 percent (the average Stanton resident makes significantly less).

A better way of attracting businesses, thereby increasing city tax revenues, would be to lower some of Stanton’s issued fees and taxes to attract private investment.

I urge Stanton voters to support and stand by its community by saying no more to higher taxes. Taxpayers and residents in Stanton are being asked to foot the bill for the fiscal mismanagement of Stanton city council and employees. Vote No on Measure GG.

This UPDATE was e-mailed from my personal address.

Posted in California

MOORLACH UPDATE — Santa Ana City Council — October 28, 2014

At today’s Board meeting, under Agenda Item #26, I provided my colleagues with a brief update on my attendance at the beginning of last Tuesday evening’s Santa Ana City Council meeting. Supervisor Nguyen was unable to attend because she was greeting a dignitary from Vietnam at Los Angeles International Airport, someone she had been trying to assist out of that country for some four years. I informed Chair Nelson that I would be attending and he asked if he could join me for a brief time. So we are seen in the first Voice of OC photo below going through the security screening process. The second photo was taken before the start of the Council meeting, by Julia Bidwell of OC Community Resources, just before Chair Nelson left for his next commitment. Pictured from left to right: Santa Ana Mayor Miguel Pulido, Chair Nelson, Karen Roper, OC Community Services Director and CEO of the Commission to End Homelessness, and myself.

My first home was in Santa Ana, near Carl Thornton Park. I had been to the City Council Chambers while a resident, attending on behalf of Lewis Whitehead and the Orange County Rescue Mission, which the city was evicting from the downtown area for a redevelopment project. Now, 35 years later, I have come full circle, returning to the chambers to speak on the topic of the homeless. This time it was for the item on the potential acquisition by the County of a year-round homeless shelter on Normandy Place in Santa Ana (see MOORLACH UPDATE — Happy to Discuss — September 22, 2014, MOORLACH UPDATE — Santa Ana Homeless Shelter — August 21, 2014, MOORLACH UPDATE — Homeless Shelter, et al — July 16, 2014, and MOORLACH UPDATE — Homeless Shelter — October 18, 2013.) I felt that the City Council handled the matter in a professional manner. I informed the Council that the County found a location within its approved SB 2 zone, allowing a homeless shelter, and that due to the nature of real estate transactions, it was reviewed first in closed session, according to state law. The County was not trying to surprise anyone (it was the state’s legal requirement for a closed session on real estate negotiations that made this process look awkward). I stated that I and key County executives were there to listen to the residents and reminded them of our previous efforts and our mutual desire to address this concern.

Today I requested the establishment of an Ad Hoc Committee of two Supervisors to work with representatives of the Santa Ana City Council. Chairman Nelson was apprehensive about doing so, stating that the city of Santa Ana should be coming to the County with a specific recommendation. He did allow for the opportunity to put the matter on the Board’s agenda at a future meeting.

As to the Voice of OC piece below, the Santa Ana Unified School District did not comment when the City Council approved the SB 2 zone last year. It also has James Monroe Elementary School next door to the Santa Ana Armory (the topic of item #26), which is a temporary homeless shelter during the winter months. To correspond to the Board of Supervisors that it has a problem with the Normandy Place location, due to its being near schools, strikes many as being a tad disingenuous.

Battle Over Homeless Shelter Continues in Santa Ana

By ADAM ELMAHREK And NICK GERDA

Although temporary and largely symbolic, the Santa Ana City Council’s vote last week to put a 45-day moratorium on a zoning ordinance that would allow a permanent county-funded homeless shelter to be located on the city’s southeast side has opened a new front for those battling to stop it.

The proposed site, near the Madison Park, Wilshire Squire, and Cornerstone Village neighborhoods, has drawn fierce opposition from residents who, along with school district officials, argue the shelter would be too close to an Elementary School and put neighborhood children at risk.

Meanwhile, some county officials, as well as homeless advocates, say the proposed site is in a light industrial area and that the residents’ concerns are unrealistic and rooted in bigoted stereotypes of homeless people.

Dora Lopez, a Madison Park neighborhood resident and one of the shelter’s most vocal opponents, told the council during public comments that the shelter is “unacceptable.”

“We deserve proper representation,” Lopez said. “We want our due process and for our rights to be respected.”

Lopez and other residents have complained that the county tried to quickly push through the shelter without doing adequate community outreach.

Councilman Vincent Sarmiento, who proposed the moratorium said it is intended to slow the process down and provide the community more opportunity to be heard.

The first opportunity for that will be a community forum for Tuesday at 6:30 p.m. at the Century High School auditorium at 1401 S. Grand Avenue.

Also contributing to the council’s decision to issue the moratorium was a letter sent by the Santa Ana Unified School District board president to the Orange County Board of Supervisors saying that the county has yet to respond to an August letter outlining the district’s concerns.

“We believe that it is critical that the voices of our parents be heard,” board President Audrey Yamagata-Noji wrote.

“We want to be part of the solution. We understand the need for these types of facilities, and support providing needed transitional housing within Orange County," she continued.

The message was addressed to county supervisors Chairman Shawn Nelson and was sent to all county supervisors and Santa Ana City Council members.

Supervisor John Moorlach said “there was no intent to be surprising anyone,” but cited the fact that real estate negotiations to buy the building for the shelter by law were done in secret.

“The homeless have been here, right here, they’re on your lawn, for my entire adult life,” Moorlach said. “So we need to do something.”

Many supporters of the homeless community, meanwhile, say the opponents’ fears are unfounded and that a workable solution can be found.

Massimo Marini, an activist who helped organize a lobby group made of homeless people called Civic Center Roundtable, spoke via a camera feed from outside the council chambers and called for making the shelter a reality soon.

He said the scores of homeless people with no place to sleep and who have for years resided on the public grounds of the county government seat in Santa Ana are being “eaten alive” by mosquitoes and face daily threats of physical and sexual violence.

Marini also decried the shelter’s opposition from working-class neighborhood residents as a tragic fight between the two lowest classes of society, an ominous sign about society at large.

“Now the lowest levels of society are fighting between each other for their own right to exist,” Marini said.

City staff, meanwhile, are warning that imposing a moratorium on the shelter zoning would likely break state law, given a recent requirement that cities have zoning for homeless shelters.

Additionally, Planning Director Karen Haluza writes in her staff report that there is “little evidence” that emergency shelters cause an increase in crime or other public safety impacts.

That would make it difficult to argue there’s an “imminent threat to the public health, safety and welfare,” she said, as would be required to pass the emergency moratorium.

Meanwhile, Councilwoman Michele Martinez brought up the idea of housing homeless people in the downtown Orange County Transportation Authority’s shuttered bus depot, a solution that has long been championed by Moorlach.

That idea was killed after former City Manager Paul Walters penned a letter to county leaders saying that housing homeless people downtown would pose negative impacts to the growing restaurant and business district.

But Martinez said that Walters wrote that letter without getting the approval of council members, and that the option should be on the table.

“When we talk about fairness, equity, shame on the city of Santa Ana for excluding that site,” Martinez said.

Please contact Adam Elmahrek directly at aelmahrek and follow him on Twitter: twitter.com/adamelmahrek

Disclaimer: You have been added to my MOORLACH UPDATE communication e-mail tree. In lieu of a weekly newsletter, you will receive occasional media updates, some with commentary to explain the situation, whenever I appear in the media (unless it is a duplication of a previous story).

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This message should appear at the bottom of every e-mail you receive. If these e-mails should stop arriving in your mail box, it will be because your address has changed and you did not provide a new one. If you do not wish to receive these e-mails, then please e-mail back and request to unsubscribe.

Posted in California

MOORLACH UPDATE — Section 8 Distribution — October 27, 2014

Perhaps the opening paragraph for the Voice of OC piece below should start with the following substitution: “While Federal Housing and Urban Development (HUD) officials give Orange County’s Housing Authority high marks. . . there may be an imbalance in the distribution of housing vouchers.” The data seems to speak for itself, but the reason for the divergence is not clear. In the search for the truth, I have not been privy to the specifics or details of the District Attorney’s investigation of certain allegations within Orange County’s Housing Authority. What I do know is that no criminal charges were filed and internal discipline has been pursued, but not related to the alleged imbalance in the issuance of vouchers. Prior to the District Attorney’s investigation, OC Community Resources invited the County’s Internal Audit Department to review the concern and it could not substantiate that discriminatory practices were present.

My discussions with Philip Cheng concerning the recent Performance Audit of this department did not focus on the concerns raised in the piece below. My major critique was regarding the number of staff required to handle the number of available vouchers and how that correlated to identical programs within other similar jurisdictions. Based on follow up information that Mr. Cheng recently provided to me, Orange County is somewhere in the middle. I do not recall that the concern about the allocation of available vouchers was a topic of discussion in my private briefing or in the Board’s public review of the Performance Auditor’s report. Consequently, I only have a broad perspective on the concerns that have been raised. Since the Carlos Bustamante revelations, many employees appear to be using the fraud hotline as a vehicle to harass management. Accordingly, investigations are pursued and reports are written. All of this is exhausting on management and must be all the more frustrating when no charges are filed on perceived illegal activities and/or audits provide more positive than negative observations. Adding to the drill is that if all of this activity didn’t provide the results one was hoping for, then you go to the media. One wonders if we’re hearing from sincere “whistleblowers” or disgruntled employees. There may be certain potential factors that need to be taken into consideration, like the communication vehicles in both communities and the requirement to have legal status to be eligible. At least the piece hints at certain reasons for the perceived imbalance, as the cities of Santa Ana and Anaheim do have significant Latino communities and have their own Section 8 programs.

There is the story that Abraham Lincoln used to tell about someone having the right facts, but drawing the wrong conclusion. It seems that this may be the theme that can be placed on the piece below. The County has done its best to pursue the allegations and could not substantiate them. It appears that management has done its job admirably, but the results are due to circumstances that have no connection to the implementation of the services required by HUD.

Discrimination Alleged at County Housing Authority

By YVETTE CABRERA

While Orange County officials give themselves high marks for the county government’s housing authority, internal whistleblowers allege that the agency’s Vietnamese-dominated hierarchy systematically discriminates against Latinos and knowingly allows Vietnamese residents to defraud the county’s housing voucher program.

Whistleblowers assert that some Vietnamese rental voucher tenants have been underreporting their income and receiving housing assistance despite running lucrative businesses, owning luxury cars and designer purses, and living in homes with high-end appliances and electronics.

Even when housing inspectors and other agency employees refer these tenants for further investigation, whistleblowers allege housing authority superiors, also Vietnamese, block fraud referrals from moving forward.

Demand for rental assistance programs is so high among low-income residents in Orange County that the last time the Orange County Housing Authority opened its waiting list in 2012, the agency was inundated with more than 48,000 applications.

That same year, DA investigators launched a probe after a group of eight whistleblowers stepped forward. Many are Latino housing inspectors who have been complaining about their Vietnamese counterparts for more than a decade.

The ensuing 18-month-long DA investigation was completed last fall and didn’t result in formal criminal charges. Yet several sources said the probe revealed widespread misconduct within the housing agency.

Leon J. Page, a senior deputy in the County Counsel’s office, confirmed that the situation prompted the county to hire a risk management consulting firm last December to delve into the allegations..

Given ongoing media questions about the DA probe – along with the personnel investigation – county supervisors last month publicly balked at approving a glowing audit report by Orange County’s Performance Auditor Philip Cheng.

Cheng’s report was completely silent on the long-standing internal whistleblower complaints.

Given that background, several county supervisors publicly questioned why Cheng went silent on those issues in his report, which does make several recommendations on improving anti-fraud programs without mentioning any problems inside the agency.

That kind of approach seems to fly in the face of the intent supervisors expressed when they established the Performance Audit in 2008, aiming to have an aggressive management analyst who could connect the dots between sound accounting and good management practices.

“…If there is a conclusion in [the auditor’s] report that management is performing well and hitting all their targets, but this ‘investigation’ reveals that management is not properly, say, supervising employees or things are going on where employees have been doing certain things under the nose of management, I would think that we would have a lot of questions about that,” County Supervisor Todd Spitzer said during the meeting last month.

The complaints filed by the group of whistleblowers at the agency are tied to alleged tenant and employee fraud within the Housing Choice Voucher Program, also known as Section 8.

Whistleblowers have also raised issues about nepotism in hiring and promotion practices, preferential treatment and special consideration for employees involved in intimate or personal relationships with their superiors, a lack of workplace diversity, discrimination and a multitude of other issues at the agency, according to documents reviewed by the Voice of OC, including letters, emails, memos and other correspondence between the whistleblowers, their representatives and various local and federal agencies over a span of nearly four years.

Cheng’s performance audit did note challenges in fraud investigations, noting that in the past, when potential fraud or abuse was identified internally, the “decision whether to refer these potential fraud/abuse cases to the Orange County District Attorney (OCDA) for investigation was inconsistent, leading to some frustration among staff looking for action to be taken on their referrals.”

At last month’s public board meeting, County Supervisor John Moorlach questioned OCHA Manager John Hambuch about why fraud investigations at the housing agency had dropped from 485 in the fiscal year 2010-11 to 83 investigations during the fiscal year 2013-14.

“Is that because everybody is doing a good job or is that because you have a lack of staff,” asked Moorlach.

Hambuch blamed the DA’s office, saying that DA investigators conduct the fraud investigations, and adding that the housing authority doesn’t have the ability to control their assignments.

“I believe [the DA investigators] were diverted in their assignments from investigating some of our cases to do some other work,” Hambuch told the board.

Calls to Senior Assistant District Attorney for special projects Michael Lubinski were not returned, and DA spokeswoman Susan Kang Schroeder declined to address a reporter’s questions.

Both the performance audit’s assessment of the fraud referral process and Hambuch’s characterization of how the fraud investigations are handled stand in stark contrast with what whistleblowers first reported to federal authorities in 2011.

Whistleblowers alleged that some supervisors deliberately impede fraud referrals from being forwarded to investigators from the DA public assistance investigations division who work within the housing authority, and that underlings who properly submitted fraud referrals experienced reprisals, in the form of retaliation and intimidation for simply doing their job.

Records provided by the county counsel’s office confirm that until last April, when the agency implemented an overhaul of the fraud referral policy, supervisors were given the sole discretion of reviewing all internal fraud referrals. The housing authority created a fraud referral committee, which now reviews all internal fraud referrals, however, despite these changes, sources within the agency say supervisors are still given final authority on fraud referrals.

The fraud committee is also working with the DA investigators to prioritize referrals and review a two-year backlog of fraud cases awaiting further investigation. Housing Authority records show that at the start of the year the backlog was at 214 cases, and by June the staff had made only a small dent in the total, with a total of 192 still awaiting investigation.

Cheng’s Performance Audit report is totally silent on whether housing fraud referrals were being mishandled by agency supervisors or whether there was any collusion between employees and the Section 8 tenants.

The DA investigations are key to routing out housing fraud as investigators gather evidence that can conclusively determine if a tenant is defrauding the housing authority. In some cases, tenants have been forced to repay the agency tens of thousands of dollars and have been criminally prosecuted and convicted for failing to accurately report their income.

Cheng defended the accuracy of his review to county supervisors publicly last month, pointing out that his office was aware of the DA’s investigation, but left it to the outside investigator to handle the personnel issues, and instead focused the audit on operational efficiency and performance outcomes.

“So whatever the personnel issues were overall, we still stand by our recommendation and our finding that overall the housing authority is doing well,” said Cheng, who praised the agency’s management for doing a “very diligent job” overseeing a more than $140 million budget and administering more than 10,000 housing vouchers.

OC Human Resources Director Steve Danley confirmed to the board that he has reviewed a summary draft of the investigation into the personnel issues, but said that the issues seem to be limited to “line staff.”

“I don’t think it’s going to come out to be something that’s – although there are issues – that it’s going to be pervasive throughout the organization,” said Danley.

Information provided to the Voice of OC by the county counsel’s office indicates that the personnel investigation is focused on time sheet fraud violations committed by some housing authority inspectors, as well as the failure of some inspectors to sufficiently conduct housing inspections.

The Voice of OC’s request to interview the Orange County Housing Authority’s top ranking officials, Executive Director Karen Roper, and Hambuch was declined by Page, who stated in a letter that the county was obligated to maintain the confidentiality of the DA’s investigative files.

However, late last month, Roper told members of the Housing and Community Development Commission – an advisory board appointed by the county supervisors that focuses on general policy direction and provides oversight of housing related issues – that after receiving a “couple of anonymous allegations of fraud” the housing authority “immediately engaged” its internal audit department to address the issue.

“All of these were proactive in the county requesting these…to make sure that if there is any fraud or wrongdoing we are really proactive in helping out…,” Roper told the commission.

Roper also informed the commission that the DA’s investigation found “no fraud or mismanagement,” but that the process helped the agency pinpoint areas for improvement, such as training and collaboration.

“We’re very happy [with] the results of what came out of that,” said Roper. “That brought us together as a team…working with the DA and county counsel…and staff at all levels in the housing authority."

In an interview after the audit was released, Moorlach said that he had not seen a copy of the DA’s investigation, but pointed out there were no criminal charges stemming from that inquiry.

After studying the audit report and speaking with Cheng as well as the lead auditor, Moorlach said that from the standpoint of reviewing the agency to improve performance, reduce costs and ensure efficiency, “I thought the report was rather thorough.”

Supervisor Patricia Bates’ interim chief of staff Brian Probolsky also said shortly after the audit report was released that he didn’t think his boss had seen the DA’s investigation.

Given that criminal charges were not filed as a result of the investigation, and that the performance audit gave the housing authority a “clean bill of health” he said it sounded like the Voice of OC was making a “mountain out of a molehill.”

Yet statistics on the Orange County Housing Authority’s Housing Choice Voucher Program, do seem to show that among both Section 8 applicants and tenants, Asians are disproportionately represented when compared to their population size.

Census records show that in Orange County, where Latinos comprise more than a third of the residents and more than 21 percent of all people living in poverty, Asian residents receive a greater share of public housing subsidies from the Orange County Housing Authority despite representing a significantly smaller portion of the general population and those living in poverty.

The latest U.S. census figures show that countywide, Latinos comprise 34.2 percent of the population, while Asians represent 19.2 percent of the county’s residents. About one fifth, or 21.6 percent of the county’s poor are Latinos compared to 12.2 percent of Asians, according to the latest estimates from the 2013 American Community Survey of the U.S. Census Bureau, which defines poverty as a family of four, including two children, earning less than $23,624 annually.

The housing authority’s jurisdiction includes 31 cities and unincorporated areas throughout Orange County, but doesn’t include the cities of Garden Grove, Anaheim and Santa Ana who operate housing authorities of their own.

Anaheim and Santa Ana have sizable Latino populations and those residents would likely apply to get on the waiting list of their respective city. However, if a person works in the Orange County Housing Authority’s jurisdiction, they could apply for that waiting list as well.

Federal data from the Department of Housing and Urban Development show that among those receiving tenant based vouchers from the housing authority, 38 percent are Asian, while 18 percent are Latino, according to a snapshot of head of household data from May 2013 through August, 2014.

And according to data in a May 2014 report submitted by OC Community Services to the federal government, the demographics of applicants from the most current waiting list (2012) show that of the 48,392 applicants, 26 percent (12,568) are Asian, while 22 percent (11,038) are Latino.

Similar data submitted by OC Community Services in a 2010 report shows more disparate figures from the OC Housing Authority’s 2005 waiting list for the Section 8 vouchers. Of the 13,270 applicants on the waiting list at the time, 42 percent were Asian, while Latinos comprised 21 percent of the applicants.

The statistics may be skewed by Latino residents who don’t apply to the Orange County Housing Authority for Section 8 assistance because they don’t fall within the agency’s jurisdiction. However information that might have clarified this – such as how many Latino wait list applicants receive Section 8 vouchers – is not available.

In response to a Voice of OC public records request for a breakdown of Section 8 voucher recipients by race/ethnicity and nationality from the housing authority, the county responded that the agency doesn’t collect this data and referred a reporter to racial/ethnic data compiled by HUD.

Cheng’s audit report also doesn’t include a racial/ethnic breakdown of tenants served by the Orange County Housing Authority, but does have a city breakdown of the households receiving housing assistance.

By a wide margin, Westminster outpaces every other city with a total of 1,994 households that have active vouchers. Irvine comes in second, with 1,194 households.

Combining the two cities represent about 30 percent of the agency’s households. Westminster is home to one of the largest Vietnamese populations in the country on a per-city basis.

These statistics reflect inequities in the Section 8 program that internal whistleblowers allege have arisen from years-long discrimination and corruption within the agency.

Voice of OC reporter Thy Vo contributed to this story.

Disclaimer: You have been added to my MOORLACH UPDATE communication e-mail tree. In lieu of a weekly newsletter, you will receive occasional media updates, some with commentary to explain the situation, whenever I appear in the media (unless it is a duplication of a previous story).

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Posted in California

MOORLACH CAMPAIGN UPDATE — Newport-Mesa — October 26, 2014

Election Day is drawing near and you’ve got to love all of the mail. One piece told me to "Check the Facts," stating that Allan Mansoor had voted "for toll lanes on the 405." It provides a copy of a correspondence from 2009.

Here are the facts. Five years ago the OCTA Board was told that unless a tolling option was considered, there may not be enough funding to widen the 405 Freeway. Consequently, we moved forward with this potential option until the facts disclosed that it would not be needed for funding purposes. This vote was the proper position for Allan Mansoor to take at that time.

Now, if only Michelle Steel had been a resident in the County of Orange five years ago, she may have been familiar with the context of the vote.

Reviewing many of the Republican candidates this season in Orange County, one sees a pattern of phony addresses and phony names. It will make for a fun, but very awkward, story to tell after the votes are cast.

The big news, Allan Mansoor was here in the County five years ago as a Costa Mesa City Councilman and a Director of the Orange County Transportation Authority. Five years ago, Michelle Steel was living in a lovely home in Palos Verdes. Isn’t it nice that we can import candidates from another county to run for this County’s Second District Supervisorial seat?

The Daily Pilot has a lengthy piece this weekend from the candidates in the jurisdiction it covers. The responses of the two Supervisorial candidates are provided below.

Here is my Voter’s Guide for those living in Costa Mesa and Newport Beach. I have listed the registered Republicans, with exceptions for those of different parties that I am very familiar with. Since the article refers to the city council candidates, they are included. I am neutral in the Assembly race. I’ll try to provide this type of information for as many other races as I can as time permits. Remember, Bold means an endorsement, italics means a good second choice, and regular print is for informational purposes:

COSTA MESA CITY COUNCIL (VOTE FOR 2):

JIM RIGHEIMER (Rep and Incumbent)
JAY HUMPHREY (Dem)
RITA LOUISE SIMPSON (Rep)
LEE RAMOS (Rep)
CHRISTOPHER SCOTT BUNYON (Rep)
ANTHONY D. CAPITELLI (Rep)

NEWPORT BEACH CITY COUNCIL – DISTRICT 1:

DIANE DIXON (Rep)

NEWPORT BEACH CITY COUNCIL – DISTRICT 3:

MARSHALL "DUFFY" DUFFIELD (Rep)

RUSH HILL (Rep and Incumbent)

NEWPORT BEACH CITY COUNCIL – DISTRICT 4:

ROY ENGLEBRECHT (Rep)
KEVIN MULDOON (Rep)
TIM BROWN (Rep)

NEWPORT BEACH CITY COUNCIL – DISTRICT 6

SCOTT PEOTTER (Rep)
MIKE TOERGE (Rep)

Daily Pilot

3 questions: Where Costa Mesa City Council, Orange County Board of Supervisors and State Assembly candidates stand on the issues

Orange County Board of Supervisors District 2

State Assemblyman Allan Mansoor and former state Board of Equalization member Michelle Steele are running for county supervisor. The Daily Pilot asked each candidate the same three questions:

1) What do you think is the most important function of the Orange County Board of Supervisors?

2) What issue do you plan to address first on behalf of District 2 constituents, specifically?

3) What is one decision that the current board has made that you disagreed with and how would you have handled the situation differently?

Their responses, edited for space and clarity, are below:

*

Allan Mansoor

1) The function of the supervisors is to serve the people we seek to represent, not use it as a springboard to Congress via moving here from Los Angeles. Oversight and accountability to the taxpayers regarding how county funds are spent is crucial. Also, an open-door policy with the people I seek to represent and open discussion of the issues. I have earned the endorsement of trusted leaders like outgoing Supervisor John Moorlach because of my true advocacy on behalf of taxpayers. I have also led by example and refused all pay raises in the Legislature.

2) I will work to get the board and Orange County Transportation Authority to proactively reject toll lanes. My opponent is backed by proponents of toll lanes, while I have been an outspoken voice against this triple taxation. It’s not enough to say you’re against toll lanes, as using Measure M funds to widen bridges will enable toll lanes. We have enough funds right now for two free lanes on the 405 if you take into account the $500 million in documented waste on the 10 and 110 toll lanes. Make no mistake, their goal is toll lanes on all "freeways."

3) The board recently voted to give pay increases to offset employee pension contributions. This defeats the purpose, is not reform and treats employee groups differently. With the recent decision by a judge in the Stockton bankruptcy case saying that existing pensions can be cut, we all have a vested interest in needed reform. My opponent refused to tell the press how she would have voted on that contract. How can you seek to represent the people when you play both sides and don’t tell them what your position is on the most important fiscal issue facing our county?

*

Michelle Steel

1) I firmly believe that the most important function of the board as a whole, as well as its individual members, is to ensure that the county government serves the residents with as much efficiency, fairness and transparency as possible. It is a role that I am familiar with while serving the residents of District 3 of the Board of Equalization, including all of Orange County. As residents, we depend on the board to ensure that the bureaucracy is following all the rules, operating at the lowest possible cost and delivering the highest level of service.

2) I want to make sure that Measure M funds will not go toward building toll lanes on the 405. With the recent news that the state is willing to ignore the wishes of the voters of our community, we need to be prepared to stop actions by those in Sacramento who have an agenda of their own. That will require a unified board working with Orange County legislators on both sides of the aisle, to communicate clearly with Caltrans and the governor. I am prepared and determined to lead this effort on behalf of our neighbors in District 2.

3) We call Orange County our home because there are many things we do right here. And although we can learn a lot from the past, I am focused on the future. I am committed to working with the entire board to have a balanced budget, transparency throughout county government, and a positive environment for small businesses. Furthermore, I want to ensure that the county is on a path to stronger financial footing so that quality public safety services remain in place, we continue investment in infrastructure, and we aggressively paying down our unfunded pension liability.

I have e-mailed this from my personal account.

Posted in California

MOORLACH CAMPAIGN UPDATE — Fifth District and Cypress — October 24, 2014

The OC Register provides an update on the Fifth Supervisorial District race. I have endorsed Robert Ming and this piece affirms my decision. Robert Ming is not accepting union funding, which is a policy I utilized in 2006 when I ran the first time for County Supervisor (long before the Baugh Doctrine). For decades, I could not understand how a candidate could accept contributions, directly or through independent expenditures, from the largest contractors that come before the Board of Supervisors. It’s a blatant conflict of interest and should be a major concern for the voters.

If you accept union contributions, you have the potential of being a sellout to the taxpayers and beholden to the unions. Just look at recent articles about Governor Brown. I also believe that if you accept union contributions, you’re not about public service, you’re just about getting elected in any form or fashion that you can. So, Robert Ming (see MOORLACH CAMPAIGN UPDATE — Supervisorial Candidates — August 30, 2014) and Allan Mansoor (see MOORLACH CAMPAIGN UPDATE — County-Wide Races & Measures — October 17, 2014 and MOORLACH CAMPAIGN UPDATE — Allan Mansoor — September 21, 2014) are the purists in the Supervisorial races. And that’s what we need, true public servants in elected office, not win-at-any-price politicians.

The Orange County Breeze provides a treatise on Measures Q and R in the city of Cypress that includes footnotes! Go figure. Although I am not a fan of ballot measure land planning, I concur with the piece’s conclusions. One clarification: The Irvine Company is in the process of gifting 2,000 acres to the County and the transaction should be consummated before the end of this year.

VOTERS GUIDE (Continued):

Allow me to provide additional ballot recommendations (see MOORLACH CAMPAIGN UPDATE — County-Wide Races & Measures — October 17, 2014 and MOORLACH CAMPAIGN UPDATE — Rossmoor CSD — October 12, 2014). I hope to provide more between now and election day (with apologies to those who have already mailed in their absentee ballots). Remember, I try to provide the candidates that are registered Republicans with bold being an endorsement, italics is a good second choice, and regular print is for informational purposes.

Prop. Title Recommendation Reason

1 Water Bond NO General Obligation – Paid out of State Budget

2 Rainy Day Fund YES State Reserve Policy – No Brainer & Over Due

45 Healthcare Insurance Rates NO Managed Care Nightmare

46 Medical Negligence Law Suits NO Increases Limits – Will raise insurance costs

47 Criminal Sentence Reductions NO Sets Aside Imaginary Savings – Accounting Bunk

48 Indian Gaming Compacts NO Keep Indian Casinos on the Reservations

Title Name Registration

Governor NEEL KASHKARI Rep

Lieutenant Governor RON NEHRING Rep

Secretary of State PETE PETERSON Rep

Controller ASHLEY SWEARENGIN Rep

Treasurer GREG CONLON Rep

Attorney General RONALD GOLD Rep

Insurance Commissioner TED GAINES Rep

Superintendent of Public Instruction MARSHALL TUCK Dem

For Associate Justice of the Supreme Court

Vote “NO” for Goodwin Liu, Mariano-Florentino Cuellar, and Kathryn Mickle Werdegar. None of these judges were willing to hear Orange County’s case pointing out that the California Constitution does not allow the incursion of any debt without two-thirds approval by the voters. Consequently, retroactively granted pension benefits are now an exempted debt from the State’s Constitution. This means that now there is blood on the hands of every branch of government in the State (Governor/Executive, Legislature, and Judicial) when it comes to the recently approved unsustainable defined benefit pension plan unfunded liabilities threatening the solvency of every level of government in California.

For Associate Justice, Court of Appeal, 4th Appellate District

I don’t have heartburn with any of the judges up for reelection.

Supervisor primary pits Republicans against each other

District 5 Party Affiliation

The district has 335,623 registered voters, with 46 percent of them Republican, 27 percent Democratic and 23 percent selecting no political party, according to county voter data. Four percent cited "other."

By Nicole Shine

South County voters will have their pick of two Republican candidates on Nov. 4 in the District 5 supervisorial race, a contest that is shaping up as one of the county’s closest.

Lisa Bartlett, mayor of Dana Point, and Robert Ming, a Laguna Niguel councilman, are staking out traditional GOP positions. They’d reform pensions and increase government efficiency. Both want to ensure that major infrastructure projects in the district – the Dana Point Harbor revitalization and the La Pata extension between San Clemente and San Juan Capistrano – are completed on time and within budget.

The candidates’ performance in the June primary was a near-tie: Ming took 30.9 percent of votes to Bartlett’s 28.4 percent of votes.

But their campaign endorsements highlight key distinctions between the two Republicans vying to take the seat now held by termed-out Supervisor Pat Bates.

Ming, who is endorsed by the influential Lincoln Club of Orange County, said he has pledged not to take union money. Bartlett, meanwhile, is endorsed by Association of Orange County Deputy Sheriffs, the union whose more than 1,800 deputies patrol most South County cities.

THE CANDIDATES

Bartlett, 54, positions herself as proven leader, whose collaborative style results in “good policy solutions,” she said.

With a master’s degree in business administration, she cites her corporate experience and a series of governmental leadership roles. In 2006, she was elected to the Dana Point City Council. She was appointed mayor in 2009 and 2013. Bartlett is the former chairwomanfor the Foothill Eastern Transportation Corridor Agency, the entity that manages the 133, 241 and 261 toll roads.

As founder of the Contract Cities Working Group, an advisory group composed of the county Sheriff’s Department and mayors of contract cities, the Southern California native describes herself as an advocate for public safety.

Bartlett is endorsed by 30 council members and mayors in the 11 cities that comprise District 5, Congressman Darrell Issa, former county sheriff Brad Gates and others, according to her campaign website.

Bartlett had cash on hand of $42,721 as of Sept. 30, campaign finance disclosures show. Since January, she has raised $291,899. Since last fall, Bartlett has made a series of loans to her campaign totaling $117,000.

Bartlett said in an interview this week that the loans show she’s “personally invested.”

Ming, 44, describes himself as a fiscal conservative. A proponent of outsourcing, he says “some of the best ideas come from the private sector.”

An attorney and managing director at an investment banking firm, Ming was the founding president of the Association of California Cities – Orange County, a public policy group, and now chairs its pension reform committee. He serves on the board of the San Joaquin Hills Transportation Corridor Agency, which manages the 73 toll road. Earlier this month, he was one of two board members to vote against a plan to refinance the agency’s estimated $1 billion debt.

Born in Orange, Ming has served on the Laguna Niguel City Council for the past eight years, including two stints as mayor.

Ming had cash on hand of $42,130 as of Sept. 30, campaign finance disclosure forms show. This year, he has raised $189,158. The total includes $40,000 from a personal loan Ming made to his campaign in December.

County supervisors John Moorlach and Shawn Nelson have endorsed Ming, as have the Howard Jarvis Taxpayers Association, the Register and others.

Opponents of Cypress Measures Q and R fight the wrong battle

By Shelley Henderson

I have read letters and editorials for and against Measures Q and R, which Cypress residents will vote on in the Nov. 4 general election. (See the reference section below that includes articles published here at oc-breeze.com.)

A lot of dust has been kicked up over these ballot measures.

In a moment, I will go through the arguments against the measures, but I want to say up front that I will personally be voting in favor of Measures Q and R.

I think that opponents of Measures Q and R should pour their energy into working with the Cypress School District to pay down outstanding callable bonds and enhance educational programs, including funding arts in the classroom.

Yelling about non-callable bonds is not productive.

The Cypress School District’s foundation should be examined as a funding funnel, in a manner similar to Los Alamitos Education Foundation (LAEF) [1] in conjunction with independent fundraising entities like Run Seal Beach [2], School Ghoul [3], and Our Los Al [4]. (A link to a copy of the Foundation bylaws is in the reference section below.)

They should also support the District in an effort to restructure itself — perhaps as a unified school district that includes Lexington Junior High School and Cypress High School plus their feeder schools. Restructuring the District will not be easy, not least (but not only) because of Sacramento politics.

Late update: Orange County Register

Reading through only our second home-delivered copy of the Orange County Register since Oct. 3, we found that the paper has a split decision on Measures Q and R: up on Q [5], down on R [6].

That published opinion does not change my opinion.

Now let’s go through the arguments against Measures Q and R one by one, as published here.

Arguments against Measures Q and R, and responses

Measures Q and R are of a kind with Measures A and L

Voters in Cypress are drowning in an alphabet soup of ballot Measures. (See the reference section below.)

Measure M is the bond measure that funded modernization of the remaining six schools in Cypress School District. It is the source of fury regarding Capital Appreciation Bonds (CABs), described in the Grand Jury report. The only school remaining to be modernized using Measure M funds is Landell Elementary School.

Note that Measure M bonds are a mix of more traditional CIBs (interest and principal paid over the term of the bond), five-year COPs (a bondish sort of financial instrument paid with lease income), and CABs with debt ratios of almost 20:1.

The Measure M CABs are not callable — that is, they cannot be paid down prior to maturity.

The real killer is a CAB’s compounded interest. From the Grand Jury report:

A Capital Appreciation Bond (CAB) typically defers the payment of both the principal and interest until the end of the term of the bond. The interest accretes, which means the interest due each year continues to accrue, or accumulate, until the entire amount of interest due is paid for the CAB at the end of the the term of the CAB. Since the interest is not paid when it is accrued, the interest cost compounds, which can have a dramatic effect on the total interest paid over a long term…

Measure D is the reason that Measures Q and R appear on this November’s ballot. Enacted as Sections 5.28.020 and 5.28.050 of the Zoning Code of the City of Cypress, it requires a vote of the citizens of Cypress to change the zoning of any property currently zoned Public or Semi-Public.

Realistically, that means property owned by Los Alamitos Race Course (LARC) or surplus property owned by Cypress School District. Nobody expects Forest Lawn or Cottonwood Church to request rezoning.

Editor’s note: I would like to thank a reader for correcting me that I flipped Measures A and L. The mislabeling does not materially change the analysis.

A lot of people are still angry about Measure L, which successfully re-zoned 33 acres on the southwest corner of property owned by LARC. The re-zoning was sold to voters by claiming that the property would be developed into senior housing, similar to Sunrise Senior Living in Seal Beach [7].

That proposed development project fell through. Many suspect the proposal was never real in the first place.

The property owners turned around and sold to ProLogis [8], which for its community outreach walked into a buzz saw. That sale was reversed and the property remains undeveloped but re-zoned.

When LARC attempted to re-zone two other parcels, resentment over how Measure L was handled boiled over. The new Measure A was shot down by voters, despite covenants requiring residential housing on the corner of Lexington Dr. and Cerritos Ave. that remain in place.

Those bad feelings are misdirected at both the Cypress City Council and Cypress School District.

The City Council responded to the request of the property owners, as well it should. In the first two instances, the property owner was LARC. In the current instance, the property owner is Cypress School District.

Neither the City Council nor Cypress School District should be held responsible for bad feelings generated by Measures A and L.

Why were no other options considered for either Mackay or the District Headquarters property?

Other options were considered, as described in the final report and recommendations published by the Surplus Property “7-11” Advisory Committee:

  • Mackay property: First priority: lease; second priority: exchange; third priority: sale…
  • District office property: First priority: exchange; second priority: lease; third priority: sale…

Why were there no competitive bids for either Mackay or the District Headquarters property?

Competitive bids are not required by law. (Climb down! Keep reading!)

According to Tim McLellan, Assistant Superintendent of Cypress School District:

Our District spent approximately 6 months (beginning sometime after the District’s settlement with the City of Cypress regarding Measure D), seeking out interested developers that would be open to an Exchange of identified surplus properties.

An independent consultant was hired to seek out potential developers who might be interested in performing an Exchange of any identified surplus properties. Given the following three challenges:

  • The City of Cypress having a Measure D Ordinance,
  • The District’s established goal of generating ongoing revenue (not a one-time sale), and
  • The method needing to be performed to have any property be valued at its highest and best use (i.e., approval by community election to have identified properties rezoned for homes),

(given the above) many developers showed minimal interest.

The Board took action and accepted the 7-11 Committee’s report in March 2013 to establish Mackay as a surplus property. The City of Cypress expressed interest in exercising their Naylor Act rights and purchasing part of the property.

Warmington Residential was one of the many developers approached. Given the above, they showed an interest and willingness to accept all risk associated with both proposals (Mackay and the District Office). They provided a proposal to the District which was then reviewed by our Board of Trustees.

Around this same time period, CenterStone also showed an interest and willingness to assume the risk described above. CenterStone was in the process of finalizing their 16-home development across the street from the District Office. Also, CenterStone had a realistic property within the City of Cypress that could be used as a possible and viable relocation site for the new District Office property.

After several Close Session meetings, the Board of Trustees approved Exclusive Negotiation Agreement with both, without utilizing a competitive bidding process.

  • Warmington was selected for Mackay (though they provided a proposal too for the District Office property).
  • CenterStone was selected for the District Office property (mainly for two reasons: the development across the street and the possible new property, across from Cypress College, that will be used in the exchange).

(As has been shared to other inquiring community members) Utilizing a competitive bidding process is not required when a school district elects to exchange real property. Pursuant to Education Code 17536 et seq., a governing board of a school district may do so upon such terms and conditions as the parties agree. Attached, for your reference, is a letter of response provided to one such inquiring individual.

That said, Warmington & CenterStone were NOT the only developers considered. It should be noted that a separate developer (William Lyon) has been utilized for the Dickerson property Exchange Agreement.

Why swap the 6.3-acre District Headquarters for a smaller 1.4-acre parcel on Valley View St.?

The short answer is that the District will make up the difference in value through improvements: a new headquarters (that includes leasable income-producing space) and a new maintenance yard (in the northwest corner of the former Swain Elementary School site).

Why rely on developer costs for new District headquarters and maintenance facility without independent studies or analysis?

According to CSD Assistant Superintendent Tim McLellan:

The valuations for the scope of services to be performed for construction of the new proposed District Office and Maintenance & Operations building were performed jointly between CenterStone and Cypress School District. Meaning we both agreed to use an outside developer (Slater Builders, Inc.).

It was important for the District to have an outside developer to perform this valuation because CenterStone primarily is a residential type developer; not a commercial building developer. We provided a list of facility needs for both projects and then were provided anticipated value costs. These costs were taken, reviewed and approved by the Board last December 2013 (for reference, attached is a copy of the First Amendment Agreement with CenterStone [9] (pdf)).

In addition, Cypress School District had these identified costs reviewed independently by our current consultant/project director (Schoolhaus Advisors) for modernization, and confirmed that the valuations provided were within reason.

Why exchange Mackay for an unknown property?

Short answer: Warmington, the developer, does not have a property in its inventory that meets the exchange criteria set by the District. That means a property must be purchased from someone else.

Given the bitter wrangling over previous re-zoning, who is going to put a valuable property in limbo waiting to see if the Mackay property will be re-zoned?

So if Mackay’s re-zoning is approved, a search for a proper exchange property will begin.

From CSD Assistant Superintendent Tim McLellan:

The exchanged property for Mackay is unknown at this time, because the voters have yet to actually approve the proposed rezoning.

The District’s Exchange Agreement with Warmington Residential is based on the highest and best use of the Mackay property, which is based on the premise that the property will be rezoned to allow single-family, detached homes be built like its surrounding neighborhood.

I believe the best way to answer your question is…If Measure R does not pass, and the Mackay property is not able to be rezoned, then the District does not have an available property to trade.

We know that Warmington Residential does not have a possible exchange property within their known inventory of owned properties. Given that fact and after it is clear that the Mackay property has been approved for rezoning, the District will perform the task of finding a revenue generating property that meets our established goals and conditions.

Why not sell Mackay and use proceeds to pay down bond debt?

California Education Code section 17457 restricts the use of the proceeds of a sale of surplus property: “no proceeds… shall be used for general operating purposes of the school district.”

Section 17462 states positively that “funds derived from the sale of surplus property shall be used for capital outlay or for costs of maintenance of school district property…”

Section 17463.7 at first looks like a way around these restrictions, but applies only to surplus properties “purchased entirely with local funds…”

Why is the District focused on income for the general fund?

General fund money is the least restricted, hence the most desired. It can be used to plug whatever budget holes need plugging.

That doesn’t mean that the administration and Board of Trustees will use any new general fund money to increase their own compensation.

In any case, the District budget [10] (pdf) is open to public scrutiny. If you think that staff is over-compensated, you may take your grievance to the School Board. If you are unsatisfied with the School Board, you may vote in replacements.

In Tuesday’s election, you have a chance to vote on three members of the Cypress School Board from a selection of four:

  • Lydia Sondhi
  • Sandra Lee
  • Steve Blount (incumbent)
  • Valeri Peters Wagner (incumbent)

Or you can write in someone else!

As Mr. Rose, Mr. Mauss, and Mr. Pardon chose not to run for School Board, perhaps they can severally or collectively be convinced to work on community-building projects in support of Cypress School District and Cypress Educational Foundation, as suggested in the introduction to this (overlong) article.

Why is the District planning to build a new headquarters twice the size of its current facility?

Short answer: half the new headquarters building will be leasable income-producing space.

Where is the bus yard facility going?

This item is still being pondered. Currently, the small fleet of buses are parked on the District Headquarters property when not in use.

According to Assistant Superintendent McLellan:

The District is not proposing to have the new bus yard at the closed Swain site. The new Maintenance and Operations facility will not include our bus transportation department.

We do plan on maintaining our bus transportation program. If voters approve Measure Q, then we will explore options for where to relocate our bus transportation department. We have a very small transportation program of 6-7 buses, used primarily to support our Special Education program. Also, we still provide a very limited home-to-school bus program.

We have had some informal initial discussions with neighboring school districts about utilizing their existing bus yards. They appear open to the idea.

Also, when the timing is right, the District will ask the City of Cypress about the possibility of utilizing the City yard (this could allow our bus transportation department to possibly stay within the City of Cypress).

What goes on at a maintenance facility?

Given that the proposed new maintenance facility on the northwest corner of the former Swain School site will not include a bus yard, what should neighbors expect?

According to Assistant Superintendent McLellan:

The activities that take place in the Maintenance & Operations facility are:

  • Routine maintenance work/support area – This facility is a centralized hub area where basic materials, equipment, tools, and supplies are kept, etc.
  • Mechanical garage / Wood shop area
  • Grounds keeping team – supply room, planning area, vehicle storage (for lawnmowers and trucks)
  • Warehouse facility – Centralized hub area for all textbooks and classroom supplies and other storage area
  • Food Services – Supply area/storage room
  • Offices for Director of Maintenance & Operations and Food Services / this includes important records storage
  • Restrooms and general parking

Given that the Swain Site will NOT be used for bus transportation, we do anticipate to generate some traffic. Currently the District’s Maintenance & Operations team utilizes the following vehicles:

  • 3 maintenance trucks
  • 1 warehouse truck
  • 1 Sprinkler truck
  • 2 Gardener vans (that utilize trailers for towing lawnmowers)

Regional-sized park proposal

Desirable but unlikely unless a funding angel poofs into existence.

The City of Cypress does not have the money to purchase the Mackay site outright for such a use.

The County of Orange most likely has no interest in doing so. Supervisor John Moorlach reminded me that Donald Bren gifted the County with 2,000 acres that the County must figure out how to maintain indefinitely. A small regional park in Cypress is a distraction in comparison.

References

  1. Articles published by Orange County Breeze:
  2. Background documents from Cypress School District
  3. Relevant sections of the California Education Code
  4. Ballot measures relevant to the discussionEditor’s note: a reader corrected me that I have flipped Measures A and L. The mislabeling does not materially change the analysis.
    • Measure D, as enacted in the Cypress Municipal Code [25], Appendix I, Zoning Code, Sections 5.28.020 and 5.28.050.
    • Impartial analysis of Measure A [26] (pdf) to rezone a portion of property formerly part of the Cypress Golf Course and another property, both owned by Los Alamitos Race Course, at the request of the property owner
    • Impartial analysis of Measure L [27] (pdf) to rezone a portion of property owned by Los Alamitos Race Course, at the request of the property owner
    • Measure M allowed the Cypress School District to sell captial appreciation bonds (CABs) to pay for modernization of its six remaining schools. The school board received a presentation on the status of Measure M funds [28] (pdf) over last summer. That presentation does not address long-term consequences of issuing CABs.
    • Full text of Measure Q [29] (pdf) to rezone the Cypress School District headquarters site to allow development of single-family detached homes
    • Full text of Measure R [30] to rezone the former Mackay Elementary School site to allow development of a public park and single-family detached homes
  5. Items related to the Grand Jury report on school bonds

Definition of terms

From a glossary of terms [34]

Administrators: administrators are certificated employees who are not teachers or student services personnel. Administrators include principals, assistant principals, program directors or coordinators, and other certificated staff members who are not providing direct services to students.

Classified staff: a classified employee is an employee of a school district who is in a position not requiring certification. The classified staff data are collected in three subgroups with an individual staff member counted in only one of the subgroups. The “paraprofessional” subgroup consists of teaching assistants, teacher’s aides, pupil services aides, and library aides. The “office/clerical” staff are the employees who perform clerical or administrative support duties, such as a school secretary. The “other” subgroup consists of the remaining noncertificated staff, such as custodians, bus drivers, and cafeteria workers. The numbers of classified staff members do not include preschool, adult education, or regional occupational center or program classified employees. The data are not collected in a manner that will allow full-time equivalent (FTE) reporting.

From a FAQ published by the Human Resources Department [35] of the Contra Costa County Office of Education:

Certificated employees are required to have a Credential from the California Commission on Teacher Credentialing. Classified Employees are not required to have a teaching credential.

Certificated employees belong to the California Teachers Association (CTA) and include, teachers, speech therapists, school psychologists, nurses, and similar classifications.

Featured photo

Current Cypress School District headquarters building on the northeast corner of Orange Ave. and Moody St. in Cypress. File photo by C.E.H. Wiedel.

Posted in California

MOORLACH UPDATE — Jericho John — October 21, 2014

The Voice of OC covers a topic that was to be on today’s Board agenda. However, I was informed yesterday afternoon that this item has been continued. When I was an elected Department Head, the Treasurer’s office had more audits than any other department in the County, as a result of having been the epicenter of the County’s Chapter 9 bankruptcy filing. If I were still an elected Department Head, I would gladly welcome the Performance Audit Department. If someone has recommendations for improvement in efficiency and reductions of costs, I’m all ears.

BONUS: My new grandson has a beautiful name: Jericho John.

County Performance Auditor Calls out DA

By NORBERTO SANTANA JR. Voice of OC

Orange County Performance Auditor Phillip Cheng is calling on the board of supervisors for some advice.

How does he make District Attorney Tony Rackauckas sit down for an audit he apparently doesn’t want to schedule?

Rackauckas’ shop was originally scheduled to be audited in 2015 but was moved up to this year at the urging of County Supervisor John Moorlach last December.

Given the county’s tight budgets facing a loss of $73 million in property taxes to the state, supervisors like Moorlach are privately wondering what Rackauckas is doing with the winnings from class-action lawsuits he initiated against Toyota.

There are also quiet questions about the fiscal implications of Rackauckas’ sex offender ordinances that have been overturned and cities potentially seeking compensation from the county.

Add to that the recent questions being raised about Rackauckas’ gang injunctions and the lack progress on corruption investigations in Santa Ana, the county fairgrounds and Irvine.

Rackauckas’ management of his own DNA lab also could be reviewed.

That’s if he ever agrees to sit down for an audit.

Cheng revealed in an Oct. 6 memo to county supervisors that his long awaited audit of the district attorney’s office has never gotten off the ground because he can’t get Rackauckas’ office to respond to inquiries.

“Regarding this performance audit, my office has been unsuccessful in scheduling an entrance conference since August,” Cheng wrote in his memo. “As such, we have not officially commented the DA audit.”

In an interview, Cheng noted that his office auditors sat down with top officials from Rackauckas’ office on Aug. 26 to explain how his team would come into the district attorney’s shop and start looking around at programs and issues, eventually developing their own scope of work at critical issues facing the agency.

They have never heard back from prosecutors about getting started.

“We tried and tried,” Cheng said. “Email, phone.”

Rackauckas’ chief spokeswoman Susan Kang Schroeder declined comment.

At this point, Cheng said he needs direction on where to go.

Supervisors’ Chairman Shawn Nelson said he’s had his own private conversations with Rackauckas and there’s no problem.

“Sounds like he’s embracing the idea,” Nelson wrote a reporter. “They had an audit a few years back and its time for a refresh. Just best business practice and he agrees.”

Yet Moorlach, who originally called for the audit, admits “there’s always been this unique internal tension between department heads that are elected (like Rackauckas) and appointed (like OC Waste & Recycling).”

Auditors at the County of Orange have not had an easy time auditing independent elected officials.

Internal Auditor Peter Hughes drew the ire of State Assemblyman Tom Daly who fought with Hughes throughout a long internal audit of his internal funds as Clerk Recorder. That inquiring resulted in a scathing report. Daly later offered legislation impacting the oversight of the internal auditor.

Moorlach noted he had already met with Cheng and sensed a frustration that he couldn’t get a response from DA officials. “He’s been trying,” Moorlach said.

But given the delay, Moorlach sees that for Rackauckas, “there’s a hesitation and a reluctance.”

Disclaimer: You have been added to my MOORLACH UPDATE communication e-mail tree. In lieu of a weekly newsletter, you will receive occasional media updates, some with commentary to explain the situation, whenever I appear in the media (unless it is a duplication of a previous story).

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Posted in California

MOORLACH UPDATE — Wisconsin Boy — October 20, 2014

Thirty-four years ago, the wedding present that my friend Chris Mueller gave me was a book, titled “Shadow of the Almighty,” by Elisabeth Elliot. Chris now serves as the Pastor of Faith Bible Church in Murrieta. And the movie, “End of the Spear,” which was released in 2005 provides the story of Elisabeth and Jim Elliot. I pulled the book from my library yesterday morning to accurately pass along a quote from Jim Elliot that has stuck with me these past three decades. It is provided in the opening of the book’s Prologue: “When Jim was a college student in 1949 he wrote these words: ‘He is no fool who gives what he cannot keep to gain what he cannot lose.’” This is a deep spiritual principle, but I also see a financial reality in it as well.

What if you purchased a retirement annuity, that was going to pay you a monthly benefit for life as your only source of income, but the purchase price was too low and the benefits would not meet the expected results. Would you take the monthly benefits until they ran out, taking the risk that you would outlive the income stream? Would you take the monthly benefits and wait for a receiver to notify you that the payments would be decreased, in order to match your life expectancy with the remaining principal? Or would you negotiate a lower monthly benefit now, in order to eliminate the financial disruption at a time in your later years when it would be very difficult to adjust to a reduction or elimination of the annuity payment? Sometimes life gives you a situation, like this one, where it might be better to give up what you cannot keep in order to receive something where the possibility of a reduction or loss is minimized or eliminated. This will be the decision that public employee unions will be facing. And it seems that it would be much better for union members to get in front of this fiscal dilemma now, than to have to face personal financial crises later in life. I believe this is the nugget from yesterday’s Watchdog piece in the OC Register below. For a more detailed discussion on the topic, see MOORLACH UPDATE — San Diego U-T — October 13, 2013.

BONUS: The big news for the Moorlach family is that our second grandchild, a healthy boy, was born on Saturday in the state of Wisconsin. He was born at 8 pounds, 8 ounces, and 20 inches long. Mother and father are doing well and my daughter and new grandson left the hospital today (see below). Mrs. Moorlach will be flying out later in the week. And the discussion on his name has not concluded, so his name will be announced soon. Congratulations, Sarah, Joseph and Jordi!

BONUS: Many of you know that I’m a big World Series of Poker (WSOP) fan (see the final LOOK BACK at MOORLACH UPDATE — Conditions of Children — October 24, 2013). I was pleasantly surprised last night while watching Part 8 of this year’s WSOP to see Orange County’s Peter Placey in the top 50. Peter is a long-time friend and, since I didn’t catch too many of the series’ parts in sequence, I fell out of my chair when I saw him. Now I’m going to have to watch the remaining episodes (and catch up on the past ones). Good luck, Peter! The County wisely blocks Poker sites, so the conclusion is still a secret to me (although you dodged a bullet last night – fun stuff!).

Cities could save pensions in bankruptcy

Stockton’s fiscal crisis could open the door at last to reducing costs.

By TERI SFORZA

Mother said that if you don’t ask for what you want, you’ll never get it.

We mention this because, even though rising public pension costs have helped drive cities into bankruptcy, none has ever asked the court to reduce those pension costs. Not even by one single penny.

Stiff those who bought the city’s bonds! Hike taxes on Joe Citizen! But don’t think about reducing pensions, because in California the pension promises made to public workers the day they were hired are considered eternal, immutable, unalterable. Even if the city can’t afford them.

Recently, however, the stone tablets on which all that was written shattered, changing the game for every public agency and Joe Citizen in California.

“California public employee retirement law … is simply invalid in the face of the supremacy clause of the United States Constitution,” declared the federal judge handling the city of Stockton’s bankruptcy case. “I’ve concluded the pension could be adjusted.”

Wow. Was Mother wrong?

Mind you, Stockton never asked to adjust pensions (it wants to pay pension bills in full and give bondholders just pennies on the dollar). And the gargantuan California Public Employees’ Retirement System – which has long (and some say arrogantly) argued that pension obligations are sacrosanct, even in federal court – says, “The real precedent … is that even if municipalities are allowed to impair pensions in the rare situation of bankruptcy, cities like Stockton can make the smart decision to protect the pension promises for their public employees.”

They could. But that doesn’t mean a bankruptcy judge will agree.

Judge Christopher Klein declined to rule on Stockton’s we’ll-pay-pensions-in-full-and-give-bondholders-just-a-penny-on-the-dollar-thank-you-very-much recovery plan, unsure if it’s, you know, fair.

Klein said he needed to think more about it and will take up Stockton’s recovery plan again next week. Every pension reformer and defender in California is essentially holding his breath in the meantime.

The judge may approve Stockton’s plan, or he may not. But with his declaration – and a similar one in Detroit’s bankruptcy last year – one might argue that every public agency in California has been handed a big stick that can hover over bargaining tables in employee union negotiations: How about maybe let’s agree to reductions here, voluntarily, and avoid the whole messy business?

“There is no question that decisions like Stockton have a chilling effect on employees and their representatives,” said Nick Berardino, general manager of the Orange County Employees Association, which represents some 18,000 public workers at city and county governments.

“It’s like a wake-up call,” said Karol Denniston, a municipal bankruptcy expert and partner at Squire Patton Boggs in San Francisco. “Everybody should be looking at this and saying, ‘There’s a game changer under way, and we’re going to have to re-evaluate our positions.’ It would be a good time for everyone to exercise some common sense.”

So California cities apparently have this big stick. Will they use it? Will legislators find a way to stop them?

‘CREATIVE RESULTS’

Orange County Supervisor John Moorlach, dubbed “pension warrior” in this space, suspects that the real impact will be at the bargaining table. More and more groups will find it in their best interest to follow in the footsteps of the aforementioned Orange County Employees Association.

In 2006, the county had racked up $1.4 billion in unfunded liabilities for retiree medical benefits. The county negotiated with OCEA and other bargaining units, and they all embraced reductions that shrunk the liability by $1 billion, or 71 percent.

In 2009, the county and OCEA struck a groundbreaking agreement: Workers could choose to decrease their pension formulas going forward and opt into a 401(k)-type program. It would give workers more take-home pay and cost the county less. It was viewed as win-win but has been blocked by the Internal Revenue Service, which frowns upon formula changes.

The bigger picture, however, may be that such things can be negotiated, and the new hammer might help it all come to pass. “The Orange County Employees Association showed that working at the bargaining table can provide creative results,” Moorlach said.

OCEA’s Berardino is more circumspect. He’s not sure Klein’s conclusions will have much impact, “especially in light of the governor’s pension reforms last year and the recovering economy,” he told us. “I think our reformed retiree medical program will have the best chance to be accepted by other labor groups, but our defined benefit/contribution hybrid plan will find very little interest or support.”

Stockton, for its part, strongly argues that pension reductions would leave it decimated as workers flee to other agencies with better benefits. But that might not persuade the court.

“In Stockton, it sure looks like the city is going to be forced to cut the pensions, at least a little,” said David Skeel, a bankruptcy expert and corporate law professor at the University of Pennsylvania Law School. “It will be interesting to see what Stockton does, since the city clearly isn’t anxious to go down that road. But the judge has signaled that Stockton needs to, and I personally think he’s right.”

YANK THE HAMMER?

Last month, Moody’s Investors Service calculated that the 25 largest public pensions in the U.S. – including CalPERS and the California State Teachers’ Retirement System – face about $2 trillion in unfunded liabilities. They averaged “robust” returns on their investments despite the recession, but liabilities tripled in the same period.

If public agencies can give these obligations a haircut in bankruptcy court, yet another front may open up in the pension wars: State lawmakers could make it harder for cities to declare bankruptcy.

California lawmakers control this process, and they’ve already made it more cumbersome: After Vallejo, the Legislature required cities on the brink of fiscal insolvency to go through 90 days of arbitration with their creditors before filing in federal court.

Legislators could slam shut the door to bankruptcy court altogether. “I wouldn’t be very surprised to see a coalition of teachers, nurses, firefighters, law enforcement people, district attorneys – and the list goes on – all lobby to the Legislature to change the rules so that no municipality can bring a bankruptcy action,” state Treasurer Bill Lockyer said recently.

But what happens when a struggling city does not adjust pension obligations?

VALLEJO

After giddily boosting pay and benefits for workers – lifetime health coverage for employees and their families after one year of service, the 3-percent-at-50 formula allowing public safety folk to retire with potentially 90 percent of their salaries, etc. – tax revenues in the little city of Vallejo plummeted.

It filed for bankruptcy in 2008, shedding more than $30 million in debt, renegotiating worker contracts and reducing retiree health care obligations by some $100 million.

That wasn’t enough. Vallejo emerged from bankruptcy in 2011 and already is scrambling. The city failed to scale back retiree medical benefits for all bargaining units during the bankruptcy and didn’t even try to alter pension obligations.

Among the top costs, of course, are higher payments to CalPERS for retirement benefits.

Contact the writer: tsforza Twitter: @ocwatchdog

Disclaimer: You have been added to my MOORLACH UPDATE communication e-mail tree. In lieu of a weekly newsletter, you will receive occasional media updates, some with commentary to explain the situation, whenever I appear in the media (unless it is a duplication of a previous story).

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Posted in California

MOORLACH CAMPAIGN UPDATE — County-Wide Races & Measures — October 17, 2014

We received a Michelle Steel mailer at our home this week. Allow me to make an observation. To criticize a City Councilmember or Supervisor for raising fees is the biggest display of ignorance about these positions that one can make.

Let me give an example. The Orange County Transportation Authority (OCTA) runs the transit system in Orange County. State law dictates that the taxpayers of the County subsidize 80 percent of the costs of providing bus services, including the costs of purchasing the buses, fuel and maintenance, and the personnel costs required to drive them. The bus riders pay fares equal to 20 percent of the costs. The bus riders are getting a great deal.

If the costs of running the bus system rise, then the fares must also increase. Consequently, in order to meet the state requirements, the OCTA Board must vote for a fare increase.

This is just one example of many that I could provide. Government subsidizes many unique services. Many of them should be borne by the users, either partially or in total. Otherwise, we have an entitled citizenry and elected officials who do not know how to be fair to taxpayers. Consequently, when someone states that they have never voted for a fee increase they do not understand their job or the business math involved.

To not raise fees for specific and rarely used services is to put more of the subsidy on all of the taxpayers. This is not being taxpayer friendly. It is the opposite. To put it more succinctly, you can train a monkey to vote against fee increases. Leadership demands that elected officials do the homework and know when the fee increase is just and appropriate.

Going after someone for voting for fee increases, without the proper context, is about as juvenile as it can get in a campaign hit piece. It proves to me that Allan Mansoor’s opponent has no clue about the job she is running for and does not display that she has the skill sets and acumen to properly adjudicate the position. That is why I am comfortable in endorsing Allan Mansoor for my position. He has served as Mayor of a major city and gets what the job involves.

VOTERS GUIDE

Here are my County-related recommendations (all of the top-two candidates are registered Republicans, except for Orange County Assessor Webster Guillory, who is Declined-to-State; those in Bold are my endorsements, those in Italics are a good second choice):

ORANGE COUNTY-WIDE ELECTEDS

Assessor CLAUDE PARRISH
Assessor WEBSTER GUILLORY Yes
ORANGE COUNTY SUPERVISORS
Supervisor 2nd District ALLAN R. MANSOOR Rep
Supervisor 2nd District MICHELLE STEEL Rep
Supervisor 5th District ROBERT MING Rep
Supervisor 5th District LISA BARTLETT Rep
JUDGESHIPS
Superior Court Judge Office No. 14 KENNETH C. "KC" JONES Rep
Superior Court Judge Office No. 14 KEVIN HASKINS Rep

Note: I have worked with Webster Guillory for the past nineteen-plus years and believe that the residents of Orange County would be much better served with this experienced leader in the critical position of Assessor.

BALLOT MEASURES

MEASURE E – Authorize Ethics Commission to Enforce County Campaign Finance Rules

YES. I am not amused with the measure’s title. I see it as poor quality control by someone in the County, and it does not appear to be our County Counsel or Registrar of Voters (I’m still doing my personal investigation). However, I do believe that utilizing the Fair Political Practices Commission is a proper arrangement to pursue, as the alternatives have been a dismal disappointment . The County’s Grand Jury and/or District Attorney have been ineffective. And the Grand Jury’s recommendation for a $750,000 per year Ethics Commission is cost prohibitive and unrealistic.

MEASURE G – Prohibit Supervisor Election Loser from Taking Office as Supervisor

YES. This charter amendment corrects the original poorly written County Charter approved with Measure V (see MOORLACH UPDATE — Questioning Outsourcing — July 23, 2014 and MOORLACH UPDATE — Helping Homeless — February 21, 2012 – LOOK BACKS).

The Daily Pilot has an editorial submission by Allan Mansoor and it is provided below.

Commentary: We don’t need partisan rhetoric or people feigning dedication to O.C.

By Allan Mansoor

Former state Republican Party Chairman Shawn Steel, husband of supervisorial candidate Michelle Steel, recently wrote a commentary for the Orange County Register about the California Republican Party titled, "Not your granddaddy’s California GOP."

In it he decried that we have "watched our voter registration numbers dwindle with the state’s changing demographics." That may be part of the problem, but it is certainly not the majority of the problem. I hear from people of all backgrounds, and they want leadership based on the issues, not on race or how someone looks.

A major reason we are losing people is because of the poor words chosen by some in our party. Shawn Steel, for example, spoke at a recent tea party meeting in support of four Asian candidates, one of whom is running against Democratic Assemblyman Jose Solorio (D-Santa Ana). When talking about Solorio, he criticized him for being a vegetarian.

This type of rhetoric does not encourage people to become Republicans. It is not because of how we look that people choose a different party. Those words have absolutely nothing to do with the issues we face in Orange County, or in our country, and we don’t need to be associated with that.

Including more people from a variety of backgrounds and heritage is certainly a good thing. Both of my parents immigrated to this country and my wife’s mother came here from Vietnam. But should we be supporting people just because of how they look, or should we look at their position on the issues?

People have asked me why I am running for Orange County supervisor. I tell them because we need someone who is from Orange County, knows Orange County, and will represent them on the issues that are important to them. It is well known in Republican circles that my opponent moved here from Los Angeles County to run for supervisor so she can springboard to a congressional seat with U.S. Rep. Dana Rohrabacher’s backing when he steps down. In short, all the wrong reasons to run.

I have the endorsement of Republicans like Supervisor John Moorlach and Democrats like Westminster Councilwoman Diana Carey because I have stood strong with them on the toll lane issue, and I recently had a rehabilitation-home-reform bill pass with bipartisan support. I co-authored a bill with state Sen. Mark Leno (D-San Francisco) to allow hemp production in California.

Michelle Steel has expressed token, passive opposition to the toll lanes proposed for the 405 for political cover. I have been outspoken in the effort to keep Orange County Transportation Authority board members from caving in to Caltrans’ desire to use our Measure M funds to put in toll lanes. This is an ongoing battle that we can win, but it requires taking a stand for accountability to the taxpayers.

If the highly charged partisan rhetoric coming from the Republican establishment replaces discussion of the issues, then Orange County will be headed in the wrong direction for the next eight years. We need results-based, not politically based, leadership.

Do we really want Shawn Steel running our county and wielding power from behind the curtain? The hard-working people of Orange County deserve better.

Assemblyman ALLAN MANSOOR represents Orange County’s 74th Assembly District and is a candidate for the Orange County Board of Supervisors’ District 2 seat, currently held by John Moorlach.

This e-mail was sent from my personal account.

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Posted in California

MOORLACH UPDATE — Newport Beach City Council — October 16, 2014

For the length of the timeline. For the number of meetings. For the significant amount of research and legal analysis. For the sensitivity of the topic. For the impacts on the neighboring communities. For the turmoil that another proposed airport had on the politics of this County in the previous decade. And for the number of folks around the County that have been involved in the airport battles, it was astounding to me that I was half of the speakers at Tuesday’s Newport Beach City Council meeting, as mentioned in the Daily Pilot article below. The other speaker was opposed, and he was professional and polite. His facts may not have been accurate, but he was the only contrarian. I don’t know how to quantify a political victory, but to have such a major effort approved unanimously by both the Board of Supervisors and the City Council of Newport Beach without acrimony is unheard of. When I spend some time in the near future reflecting back on the many accomplishments during my eight years in office, the John Wayne Airport Settlement Agreement 15-Year Extension will be one of those to marvel about. It was great to participate in Tuesday evening’s historic occasion and to express my gratitude to many of the participants. I want to thank them, again, in this missive (see MOORLACH UPDATE — JWA Settlement Agreement — October 1, 2014). Now, let’s hope that the hearing at the U.S. District Court goes without a hitch. Then we can close this file and continue working on a few more initiatives before the end of this year.

QUASQUICENTENNIAL BONUS: Speaking of John Wayne Airport, Orange County students are invited to enter the 25th annual Student Art Contest. All Orange County public and private school students in grades kindergarten through 12 are encouraged to submit artwork inspired by this year’s theme: "OC125: Exploring Orange County’s Story." Entries should be submitted to the Orange County Department of Education, any Orange County Public Library Branch or participating city libraries, no later than 4 p.m., Wednesday, November 5, 2014.

Winning student artwork on display in the Thomas F. Riley Terminal (2013)

This year, the JWA Student Art Contest theme was selected to commemorate Orange County’s rich 125-year history. For inspiration, students are encouraged to visit JWA’s OC 125 Exhibition currently on display in the passenger walkway between Thomas F. Riley Terminal B and C or explore the OC 125 companion guide available at Jfrisch.

Newport approves A-frame signs for Corona del Mar

Signs would be allowed on sidewalks but not with balloons, flags or other additions meant to draw attention.

By Jill Cowan

They’re about hip height, they’ll tell you the daily specials and until Tuesday evening, if you saw them loitering on the sidewalk in Newport Beach, they’d have been considered scofflaws.

But at this week’s Newport Beach City Council meeting, members of the panel voted to make A-frame signs — those street-level mini-billboards so ubiquitous in most cities — legal for certain businesses in town.

The catch? The ordinance lifting a citywide ban on the signs applies only to commercial areas in Corona del Mar. That means that Balboa Peninsula bar owners hoping to draw in a few extra patrons with a quippy sign, or Lido Village vendors planning to advertise deals will be out of luck.

That’s just for now, though: Councilman Mike Henn asked for staff to bring forward a proposal that would let Balboa Village business owners test out A-frame signs for a year, per discussions with the Balboa Village Merchants Assn.

Provided the ordinance passes its second reading, merchants will be allowed to post A-frame signs within 10 feet of the "primary entrance" of their businesses, so long as they’re at least three feet from any other portable signs and they don’t block doorways necessary for people to enter or exit a building.

One sign will be allowed per business tenant space, and they can’t be more than 48 inches tall, or larger 10 square feet in size. Finally, they can’t have any "attention-attracting devices" attached to them, such as balloons or flags.

The vote to move forward with the rule change came after a planning commission debate on the matter, during which some commissioners dismissed the idea as a nuisance that could spark an "A-frame sign war," as Commission Chairman Larry Tucker put it in August.

But, with the support of the Corona del Mar Business Improvement District’s backing, the idea passed out of the planning commission and was sent before the council, with the recommendation that the change apply to Corona del Mar only.

This week, the council voted 6-0 to approve, with Councilwoman Nancy Gardner recusing herself.

No members of the public spoke on the issue.

**

In other news, the council breathed a sigh of relief and congratulated one another as they came to what City Manager Dave Kiff called "the end of a long road," and gave an agreement that will extend John Wayne Airport’s noise and traffic limits its final approval.

Last month, the Orange County Board of Supervisors approved an extension to the 1985 legal settlement that allows John Wayne Airport to remain one of the nation’s most tightly regulated for noise in surrounding communities.

The agreement, which keeps the airport’s curfews in place until 2035, but allows for passenger caps to rise starting in 2021.

After a short recap of the years-long negotiation process among the settlement parties — which include the city, the county and community groups Stop Polluting Our Newport and the Airport Working Group — officials lauded the level of cooperation throughout.

"I was at the [Orange County Board of] Supervisors meeting," said Councilman Keith Curry. "It was a great celebration of consensus-building."

Supervisor John Moorlach, whose district encompasses the airport and Newport Beach, addressed the council and thanked various city staff members who have helped in negotiations.

"I"m really pleased with the outcome," he said. "It’s a balance for the community — the extension was a big ask [of the Federal Aviation Administration, which essentially had ultimate veto authority over the agreement."

Still, not everyone was pleased with the deal.

Longtime council critic Jim Mosher, the only member of the public to take the podium before the council’s unanimous vote to approve the agreement, called the settlement extension an act of "self-delusion."

The deal, he said, sets "arbitrary" passenger cap targets that residents will be stuck with for years to come.

With the council’s approval, the agreement will be filed with a U.S. District Court.

Corona del Mar Today Editor Amy Senk contributed to this report.

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