MOORLACH UPDATE — Pursuing Reforms — August 11, 2017

The OC Register’s lead editorial addresses a concern that spawned my bill, Senate Bill 247, to address unnecessary and over burdensome occupational licensing. It was kind of them to give this effort a shout out in the first piece below. It also appears in the San Bernardino Sun and the Los Angeles Daily News. For previous UPDATEs on this topic, in date order, see:

MOORLACH UPDATE — SB 247 — April 20, 2017 april 20, 2017 john moorlach

MOORLACH UPDATE — There Ought Not Be A Law — April 23, 2017 april 23, 2017 john moorlach

MOORLACH UPDATE — Snubbing — May 10, 2017 may 10, 2017 john moorlach

MOORLACH UPDATE — Legislative Efforts — June 29, 2017 june 29, 2017 john moorlach

The OC Register online also provides another perspective on the public employee defined benefit pension plan crisis. It is also in The Press-Enterprise. The challenge? Will there be reform?

Reform? Let me show you reform. And just from this year alone with a recap of my office’s efforts to address what I believe is the top concern of municipalities in this state. You can see all my bill material at my website, including background, white papers, newspaper articles, videos and hearing.

SB 32 — PEPRA II — The attempt to make the reforms that Gov. Brown could not get accomplished with PEPRA was killed by the Senate Public Employment and Retirement Committee (see MOORLACH UPDATE — PEPRA 2 With SB 32 — January 15, 2017 january 15, 2017 john moorlach).

SB 371 — Bargaining Conflicts of Interest — This attempt to prohibit those who benefit from the very bargaining unit agreements that they are negotiating was killed by the Senate Public Employment and Retirement Committee (see MOORLACH UPDATE — Snubbing — May 10, 2017 may 10, 2017 john moorlach).

SB 671 — Pension Pre-Payment Modifications — This attempt cleared up language in the code and broadened pension plan prepayment parameters for all municipal employers. This bill made it to the Governor’s desk and was signed into law (see MOORLACH UPDATE — SB 671/Prepayment — May 14, 2017 may 14, 2017 john moorlach and MOORLACH UPDATE — Bad News/Good News — July 18, 2017 july 18, 2017 john moorlach).

SB 681 — CalPERS exiting reform — This attempts to provide a fair withdrawal process that make for a clean break from a service provider (versus an onerous mother who can’t seem to let go) (see MOORLACH UPDATE — SB 861 and SCA 8 — March 10, 2017 march 10, 2017 john moorlach, MOORLACH UPDATE — PACE and HERO — April 30, 2017 april 30, 2017 john moorlach and MOORLACH UPDATE — 37th in the 37th — August 9, 2017 august 9, 2017 john moorlach — the Letter to the Editor provided in this UPDATE was printed in today’s LA Times). I elected to make this a two-year bill.

SCA 1 — Secure Choice Nonsubsidy — With the successful passage of SB 1234 (De Leon – 2016) (see MOORLACH UPDATE — SB 1234 — August 26, 2016 august 26, 2016 john moorlach) this effort attempted to prohibit taxpayer dollars from underwriting this private sector retirement proposal managed by a California bureaucracy (also see MOORLACH UPDATE — SCA 1 Warranty — March 7, 2017 march 7, 2017 john moorlach, MOORLACH UPDATE — SCA 1 — March 6, 2017 march 6, 2017 john moorlach, and MOORLACH UPDATE — Legislative Efforts — June 29, 2017 june 29, 2017 john moorlach). The federal Department of Treasury recently announced the elimination of the "myRA" program because of low public-interest and high fiscal costs. The Secure Choice program would be impacted by recent legislation passed by Congress and signed by the President that eliminates federal protections of such a program, further exposing California taxpayers.

SCA 8 — Abolish the "California Rule" — This attempt is discussed in the piece below. We are waiting on the California Supreme Court’s ruling on the Marin Case. Since the ruling has not been released, I have made this a two-year bill (see MOORLACH UPDATE — SB 861 and SCA 8 — March 10, 2017 march 10, 2017 john moorlach).

SCA 10 — Voter Approval for Pension Debt — This attempts to replicate Orange County’s Measure J (2008), but on a statewide basis. Simply, if a pension enhancement is negotiated that increases the unfunded liability, then the voters must approve it first to become effective (for a sampling of this pension reform measure, see MOORLACH UPDATE — Happy Birthday! — September 30, 2013 september 30, 2013 john moorlach, MOORLACH UPDATE — Alternative Investments — November 17, 2013 november 17, 2013 john moorlach, MOORLACH UPDATE — Social Host Ordinance — November 6, 2013 november 6, 2013 john moorlach, and MOORLACH UPDATE — Conditions of Children — October 24, 2013 october 24, 2013 john moorlach). We have also made this a two-year bill.

All to say, I am not afraid to pursue pension reforms. I’m sure my colleagues on the other side of the aisle believe that reforms should be discussed and approved. I just believe that the public employee unions, who finance their campaigns, are holding the majority of these legislators back. When the public employee unions realize that we are trying to make defined benefit pension plans sustainable, then they have the opportunity to be a part of the solution.

However, just like public safety officers in Arizona, I get the sense the old guard is soon to be replaced by a younger generation of public servants who want to be more mobile and have more control over their retirement decisions. Hopefully that moment isn’t far off.

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OPINION

Occupational licensing reform a bipartisan goal

http://www.ocregister.com/2017/08/11/occupational-licensing-reform-a-bipartisan-goal/

Something the Trump and Obama administrations agree on: occupational licensing laws need to be reformed.

In a speech delivered July 21, U.S. Secretary of Labor Alexander Acosta called on state legislators to reform occupational licensing laws which, he argues, are too often used “to limit competition, bar entry, or create a privileged class.”

He’s right. While upwards of one-in-four American workers require a government license to earn a living, there are often vast discrepancies between states regarding which particular jobs require licensing. According to a 2012 report from the Institute for Justice, of 102 low- and moderate-income occupations assessed, only 15 were licensed in 40 or more states. Whereas Louisiana licensed 71 of the studied occupations, Wyoming only licensed 24. California licensed 62.

The arbitrariness of which occupations are licensed and which aren’t can make it difficult for workers to move across state lines. One particular group of workers harmed by this is military spouses, who commonly have to relocate. Approximately 35 percent of military spouses work in a field requiring a government license or certification. In a 2013 Institute for Military Veterans and Military Families survey of female military spouses, 40 percent reported problems or delays in having their licenses or certifications renewed or reissued.

There are also wide varieties in the requirements for licensing that states impose, including fees and the periods of training and education needed to get a license. As IJ points out, while 10 states required four or more months of training for manicurists, Alaska and Iowa respectively only required three or nine days.

This is often done with minimal benefit to consumers. “There is little evidence to show that the licensing of many different occupations has improved the quality of services received by consumers,” a 2015 Brookings Hamilton Project paper noted.

Acosta’s proposed solution is sensible. “If licenses are unnecessary, eliminate them. If they are needed, streamline them. And, if they are honored by one state, consider honoring them in your own state.”

His remarks echo a report issued by the Obama administration in 2015 which made similar recommendations. Observing that current licensing practices are often “inconsistent, inefficient, and arbitrary,” the report called on states to “review current licensing practices with an aim toward rationalizing these regulations and lowering barriers to employment.”

In this spirit, last year, the state’s Little Hoover Commission called on California to reassess the value of its extensive licensing systems, citing the harm done to consumers, the poor, immigrants, out-of-state workers, military families and people with criminal records.

Unfortunately, reform efforts have been stifled to date in California. Sen. John Moorlach, R-Costa Mesa, proposed Senate Bill 247 to drop licensing requirements for a handful of occupations like upholstery not licensed in many other states, but the bill was killed by Democrats in April.

With Trump and Obama administration officials making the same observations of the same problems, occupational licensing reform ought to be a nonpartisan effort, and one that legislators concerned with economic liberty and economic justice alike should be able to work together on.

NEWS

Bull? Stocks can’t stave off California pension crisis forever

By TERI SFORZA

http://www.ocregister.com/2017/08/10/bull-stocks-cant-stave-off-california-pension-crisis-forever/

Remember 2003? Gray Davis was recalled, porn stars ran for governor, Arnold Schwarzenegger catapulted into office – and California’s state and, for the last time in many, many years, local governments paid more into their pension plans than they owed in outstanding pension debt.

In those halcyon days, your cities, state and local governments paid $7 billion to support their workers’ golden years, while the gap between what they owed those workers – and what they actually had squirreled away – was just a wee $6 billion, according to figures from the State Controller’s Office.

One year later – the year Ronald Reagan died, John Kerry faced off against George W. Bush, “The Lord of the Rings: The Return of the King” won 11 Oscars and newly sweetened public employee retirement formulas kicked in in earnest – the gap between what California governments had on hand what they owed workers exploded to $50.9 billion.

And so it went. Each year, state and local governments shoveled more and more cash into pension funds – $16 billion, $19 billion, $21 billion – but each year, the growth of their “unfunded pension liabilities,” as it’s called in government-speak, continued at a monstrous rate nonetheless – to $64 billion, $128 billion, $241 billion.

Then – hallelujah! – the hole shrank a tad in 2015, dipping to $234 billion.

Did California turn the corner?

Unlikely, experts say. That dip was the work of some stellar years on the stock market – the mammoth California Public Employees’ Retirement System clocked returns of 13.2 percent in 2012-13, and 18.4 percent in 2013-14 – mixed with a brew of overly-optimistic expectations on investment returns and less-than-realistic assumptions on how long retirees will live, among other things, which will soon be sobering up in such a way that the unfunded figures will grow even more.

Even at that lower figure, unfunded liabilities can be viewed as a $6,000 debt for every man, woman and child in the state of California.

Why should you care? Because it’s your pocketbook. If that hole is not filled up with meatier earnings and heftier contributions from public workers and agencies, taxpayers could be called upon to fill it directly.

This is where folks start talking about heady concepts like “generational equity.” Your children and grandchildren will be paying for the services that you are enjoying today. And there’s also the concept of “crowd-out;” as governments pay more into pension funds there is less available for services like roads and parks and libraries. They ask: Is that fair?

There are basically two things that can happen next: Workers and governments negotiate more modest benefits for work yet to be performed, or taxes go up.

The smart money is on some combination of the two, and the California Supreme Court may make a game-changing decision on all that soon.

California has long considered public pension promises as contracts etched in stone – i.e., the formulas in place on the first day of a worker’s employment can never, ever be changed, and any attempts to do so violate the California constitution. But state appellate courts have concluded that governments do, indeed, have wiggle room:

“While a public employee does have a ‘vested right’ to a pension, that right is only to a ‘reasonable’ pension — not an immutable entitlement to the most optimal formula of calculating the pension,” wrote Justice James Richman in a ruling regarding Marin County last year. “And the Legislature may, prior to the employee’s retirement, alter the formula, thereby reducing the anticipated pension. So long as the Legislature’s modifications do not deprive the employee of a ‘reasonable’ pension, there is no constitutional violation.”

The California Supreme Court has agreed to hear this, and similar cases. It’s unclear if it will agree.

Bear wrestling

Officials from retirement systems say they’ll be able to hold the line on the growth of unfunded liabilities and eventually catch up without changing the formulas. Observers remain skeptical.

“The economic downturn and the volatility in the market were still the primary drivers for CalPERS unfunded liability growth during this time period,” CalPERS spokeswoman Amy Morgan said after reviewing our numbers. “Our strong investment returns in fiscal year 2013-14 of 18.4 percent and pension reform savings helped offset the unfunded liabilities increase from growing significantly.”

Many agencies in California are trying to attack the problem by paying down their unfunded liabilities earlier and kicking in more than the minimum-required annual contribution, she said. The state will pay an extra $6 billion this year to fill its hole, which should save $11 billion over the next 20 years, Morgan said. In the last fiscal year, more than 150 agencies did much the same thing.

“CalPERS estimates that our unfunded liabilities are expected to decrease over time and not increase unless there is a string of losses,” she said.

Tom Aaron, vice president and senior analyst at Moody’s Investors Service, expects to see much the opposite, at least for a while.

“Something we’ve seen on a widespread basis in the past year or two is that public pension plans have reduced their assumed rates of return,” Aaron said. “Not long ago, CalPERS had assumed returns of more than 8 percent, but recently decided to drop that down to 7 percent. That results in liabilities going up.”

Even when systems hit targeted returns – and they exceeded those targets this year – the amount that governments and workers kick in isn’t enough to prevent unfunded liabilities from growing, he said. They tend to favor paying less now and paying more later, robbing them of the magic of compounding.

There is not a pension fund in America that can earn its way out of its liabilities, said Peter Kiernan, public finance specialist and chair of the New York State Law Revision Commission. Lost compounding is the primary reason.

Money makes money

Compounding, Mary Mary Quite Contrary, is how the money garden grows.

If you put $100 away today and earn 5 percent interest, viola! Next year you’ll have $105 to earn 5 percent interest, and so on. Money makes money. Exponential growth.

But, if you put $100 away today and lost money, not only is your principal gone, but the interest earnings you were counting on to pile up and earn even more interest are gone as well. Dramatic events, like the financial meltdown of 2008, wiped out billions from public pension funds – including nearly one-quarter of what was in the coffers of the CalPERS. That makes it very hard to regain lost ground.

There are larger changes at work: Forty years ago, contributions from governments and workers comprised two-thirds of what was in the pension funds, and one-third was expected from investments, Kiernan said. Today – driven by the bull markets of the 1980s and ’90s – it’s just the opposite.

Annual required contributions have more than doubled over last decade, from 6.2 percent to 18.1 percent, which leaves less money to pay for other things.

Paul Bersebach, The Orange County Register

John Moorlach. Paul Bersebach, The Orange County Register

State Sen. John Moorlach, who had been warning that the current system is unsustainable for years before the issue pierced the popular consciousness. The spike in liabilities seen between 2003 and 2004 was the work of new, more generous, retroactive retirement formulas adopted by one public agency after another in the early 2000s.

Meaning this: City A had been socking money away for Police Officer B’s retirement for decades. When City A adopted sweetened pension formulas, it suddenly was committed to paying Police Officer B quite a bit more every month for the rest of his life – even though it had ever set money aside to cover a pension that large.

Officials thought pensions were so super-funded that this retroactive thing would not come back to bite them. Add in “pension holidays” (when funds looked so healthy that officials quit putting money into them, sometimes for years), a crippling recession, lengthening life spans, a spike in retirements and reductions in what pension plans expect to earn on investments, and you get a hole hundreds of billions of dollars deep.

What’s next?

Or deeper. Current liability totals are computed assuming returns on investments that exceed 7 percent, which critics say won’t pan out over the long haul.

If one assumes lower return rates – as does former Democratic Assemblyman Joe Nation, now of the Stanford Institute for Economic Policy Research, on Stanford’s Pension Tracker – the hole can easily double, triple or quadruple.

But the end is not nigh, said Kiernan.

“California’s pension systems are underfunded significantly, but they are not in a death spiral,” he said. “An effort is being made to achieve reform and enhance funding. A good investment year easily could be followed by a bad one and there could be regression, however. It just is too early for gloom and doom.”

There must be political bargaining, he said. Since the recession, every state has tried to adopt reforms – but those modest formulas apply only to new hires, doing little to nothing to reduce current liabilities for the vast universe of public workers.

We invited several public pension advocates to share their thoughts on the numbers. They said they were studying them, but did not respond by deadline.

“The relevant question to ask is: Is there sufficient political will to achieve major reform?” Kiernan asked.

We’ll see.

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MOORLACH UPDATE — 37th in the 37th — August 9, 2017

First, I would like to wish my lovely, wonderful and patient wife a happy 37th anniversary! Thank you, honey, for putting up with the public service sacrifices for more than half of our married bliss. You’re incredible.

Second, the LA Times had a great Sunday California section front-page piece on the city of Loyalton (see http://www.latimes.com/politics/la-pol-ca-loyalton-calpers-pension-problems-20170806-htmlstory.html).

This city’s efforts to escape from the CalPERS "lobster trap" was the genesis for my legislative effort in Senate Bill 681, which is now a two-year bill. On June 28th, a joint hearing was held with the Senate Public Employment and Retirement Committee, on which I sit, and the Assembly Committee on Public Employees, Retirement, and Social Security. The California Policy Centerpiece below links to this hearing.

The little fact that a State Legislator was actually trying to address this matter, what is known as the Terminated Agency Pool procedure at CalPERS for exiting municipalities, was not addressed in the article. But, the California Policy Center’s Steven Greenhut realized it and provides his coverage in the first piece below.

Since this was missing from the LA Times article, I decided to let them know through a Letter to the Editor submission, with links to various segments of the hearing. Here’s what you may see in one of its upcoming editions:

Re “A tiny town’s massive pension trouble” Aug. 6: http://www.latimes.com/politics/la-pol-ca-loyalton-calpers-pension-problems-20170806-htmlstory.html

Your article ably reported on the problem the small city of Loyalton is facing with its unfortunate and expensive withdrawal from CalPERS. But, CalPERS created the problem some 40 years ago and Loyalton is the tip of the spear in reacting to the implications of this tightening fiscal straightjacket. The current procedure of withdrawing from CalPERS is in dire need of reform.

I authored a solution to help fiscally strapped municipalities get out of this “lobster trap,” as I called it during a recent joint hearing.

.

John Moorlach,

Costa Mesa

The writer is the Republican state senator for the 37th district

Third, Steven Greenhut is on a roll. In the second piece below he discusses the results of SB 185 that were prophesied in the same publication that he writes for today, CalWatchDog (see MOORLACH UPDATE — SB 185 — November 6, 2015 november 6, 2015 john moorlach). If you choose not to go to the link, let me at least give you the headline: "California pension systems stand to lose millions by divesting from coal." Spot on. Again. When will the monopoly party learn? This piece may provide a hint as to why many cities want to exit CalPERS.

BONUS: The summer evening BBQ and Taco Bar fund raiser at the home of Scott and Wendy Baugh tomorrow evening is almost at capacity. This is going to be a fun party. Thanks to those who have RSVP’d and to those who are making generous contributions, even though your summer schedules prevent you from attending. I am most grateful

There is still a little bit of backyard space available and I would love to see you there! For more information, contact Scott@MoorlachforSenate.com or go to MOORLACH CAMPAIGN UPDATE — BBQ Invitation — July 22, 2017 july 22, 2017 john moorlach. My thanks to Cox Communications for being our corporate sponsor.

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Same old story as Loyalton’s woes echo growing pension crisis

By Steven Greenhut

http://californiapolicycenter.org/old-story-loyaltons-woes-echo-growing-pension-crisis/

The tiny Sierra Nevada mountain town of Loyalton, Calif.—population: 862—has become the poster child for cities that want to check out of the California Public Employee’s Retirement System, but can’t swallow the insurmountable cost of leaving. Loyalton’s oft-repeated tale appeared again this week, on Sunday in the Los Angeles Times.

All the familiar characters are there, in the Times story. There’s CalPERS demanding far more money than the city spends on its entire annual budget. There are cash-strapped city officials struggling to make ends meet (even though their spending priorities were criticized by a 2014 grand-jury report). And there are retirees looking to get by on 40 percent of their promised pensions.

The only thing missing is a solution.

Sen. John Moorlach, R-Costa Mesa, has proposed a serious solution in the state Capitol, but the legislation has a ballpark-zero chance of passage given the power of union-allied Democrats. His Senate Bill 681 would allow an agency to “terminate its contract with CalPERS in a manner that does not result in excessive costs or penalties” while ensuring that the agency is responsible for the full costs of its employees without shifting them onto other CalPERS participants.

Though it would seem fair – and would better protect promised benefits in Loyalton and other agencies facing a similar situation – the measure is opposed by several unions. They know that once an agency has exited the system, CalPERS cannot collect anything from it in the future. That’s why CalPERS’ current approach reminds Moorlach of the lyrics from the Eagles’ song, Hotel California: “You can check out any time you like, but you can never leave.”

In 2013, the Loyalton City Council voted to end its contract with the California Public Employees’ Retirement System, the $300 billion behemoth that manages pensions for the city’s four retirees and single full-time employee. Loyalton “voted to pull out of CalPERS when its last pension-eligible employee retired,” according to the recent Times article, “deciding the monthly payments were too steep for a town that for years flirted with insolvency.”

But CalPERS wasn’t about to let the city go. In June 2014, it handed Loyalton a bill for a $1.66 million “termination” fee. Given its small $1 million annual budget, Loyalton couldn’t come up with the funds. The result was every public employee’s nightmare: Beginning last November, retirees had their modest pension checks cut by 60 percent. Some other small agencies that left the CalPERS system are looking at major cuts in retiree benefits, too.

The fund, whose sole purpose is to protect the retirement benefits of California public employees, was remarkably cold-hearted about the situation. “As a board, we have a fiduciary responsibility to keep CalPERS Fund on secure footing, and as part of this duty we must ensure that employers adhere to the contracts they agreed to,” CalPERS wrote in a November statement.

Certainly, contracts need to be honored, but there’s something seedy about the way the system is designed. During a recent legislative hearing, Moorlachfocused on the most relevant point: “When you want to exit, they use a whole different discount rate … It could be like 2 percent.” That’s a shocking revelation, although it needs some explanation.

The predicted rate of return on CalPERS’ investments determines the size of the system’s unfunded liabilities – i.e., the shortfalls to meet promises made to California public employees. CalPERS expects to earn 7 percent(recently lowered from 7.5 percent) on those investments. The higher the predicted return, the better the financial shape of the system.

Public employees are promised a pension based on a formula (the number of years worked multiplied by a percentage of the final years’ salary) and taxpayers are responsible for any shortfalls. So the pension fund, and the unions and politicians, have a vested interest in keeping the earnings assumptions as high as possible to downplay any predicted shortfalls.

Moorlach revealed a dirty little secret. The agency is bullish about the stock market when the public’s money is at risk, figuring that 7 percent is a fair rate to expect. But when cities want to exit the fund, CalPERS becomes shockingly conservative, given that its own money is on the line. It then assumes a miniscule rate of return. CalPERS assesses those high termination fees to make up the difference between its overall fund and the special fund for terminated agencies, which can no longer depend on taxpayers to make up for future downturns.

As that Times article noted, the federal judge handling the Stockton bankruptcy case “called the fee a ‘golden handcuff’ and ‘poison pill’ that prevents cities and other local governments from leaving CalPERS to find other options for employee pension benefits.” When the fund tried to assess a $1.6 billion fee on Stockton, that city stayed in CalPERS and didn’t reduce pensions for current employees and retirees. Those current and former employees still enjoy lush deals, even as the city raised taxes.

Ironically, CalPERS’ defenders criticized a 2011 Stanford study that projected a 4.1 percent rate of return as realistic, yet the fund’s handling of the Loyalton exit is a tacit acknowledgment that the system’s expected returns are unrealistically high and that pension debts are far larger than the state will acknowledge.

Meanwhile, CalPERS maintains big surpluses in the special fund for those agencies that terminated their accounts — $111 million, according to the Times. CalPERS apparently has thrown a handful of low-earning, small-town public employees under the bus to make an example for other agencies and protect the inordinately high earnings of many public employees, especially those in the public-safety and management professions.

Former San Jose Mayor Chuck Reed, a Democrat who had placed a pension-reform measure on that city’s 2012 ballot (it passed with 70 percent support, but was gutted by the courts), has described the Loyalton situation as a “wake-up call” for underfunded pension systems. “Failure to fund pension obligations as they are incurred makes retirement security impossible,” he wrote in the San Diego Union-Tribune in December.

For now, these retirement-security issues fall heaviest on some small agencies with the audacity to try to leave the nation’s largest state pension fund. Presumably, public employees and retirees in agencies deemed “too big to fail” can continue to sleep without fear. But it reminds one of another line from Hotel California: “Up ahead in the distance, I saw a shimmering light.” How long will it be before Loyalton’s problems afflict bigger California cities?

Steven Greenhut is a contributing editor for the California Policy Center. He is Western region director for the R Street Institute. Write to him at sgreenhut.

CalWatchdog.com

CalPERS’ divestment goals in crosshairs as coal stocks soar

by Steven Greenhut

http://calwatchdog.com/2017/08/09/calpers-divestment-goals-crosshairs-coal-stocks-soar/

SACRAMENTO – A newly released report from the California Public Employees’ Retirement System confirms that, fulfilling the Legislature’s directive to divest from coal-related investments, the pension fund has now largely exited from coal stocks. But as news reports this week suggest, this “socially responsible” investment policy has come at a price, as coal stocks soar under the Trump administration’s fossil-fuel-oriented energy policy.

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The Public Divestiture of Thermal Coal Companies Act of 2015 required CalPERS to “identify, engage and potentially divest from companies meeting the definition of ‘thermal coal companies.’” The pension fund was directed to do so “consistent with its fiduciary responsibilities,” providing some wiggle room for the fund, whose primary duty is to maximize investment returns to make good on its public-employee pension obligations.

Nevertheless, CalPERS promptly identified two dozen publicly traded companies that generate at least 50 percent of their revenue from mining thermal coal, as required by the law. As the recent report explains, three companies adapted their business model and redirected their investments toward clean energy. As such, they were exempt from divestment. CalPERS had no holding in eight other companies identified under the act.

But 14 companies “failed to indicate applicable business plan adaptations, or failed to respond to CalPERS engagement efforts and were subject to divestment,” according to the report. As the Sacramento Bee explained, “stocks for 13 of the 14 companies are worth more than they were a year ago when the pension fund was divesting from the industry.” The shares of one of those firms were trading at 15 times their April 2016 levels.

There’s little question that the act was designed to achieve a social goal, rather than one related to increasing CalPERS’ investment returns. “Coal combustion for energy generation is the single leading cause of the pollution that causes global climate change,” said the bill’s author, Sen. Kevin de Leon, D-Los Angeles, as quoted in the Senate bill analysis. He added that coal is “a leading cause of smog, acid rain, and toxic air pollution” and that “most U.S. coal plants have not installed these technologies.”

CalPERS’ investment staff tends to oppose socially oriented investments, but the CalPERS board has the final say. The issue was debated at the CalPERS Board of Administration meeting in May. The Sacramento Bee reported on union officials who criticized the policy at the board meeting. “We cannot afford to lose funding for law enforcement officers in exchange for a socially responsible investment policy,” said Jim Auck, treasurer of the Corona Police Officers Association.

This isn’t the first time that there’s been tension between the fund’s politically oriented investment goals and its desire to increase investment returns. At a board meeting last year, CalPERS investment officials argued for an end to a 16-year ban on tobacco-related investments made by the system’s own investment officers. (Tobacco investments by outside firms were still allowed.) Because tobacco stocks had rebounded since 2000, news reports estimated that the pension fund had lost about $3 billion because of that decision. The fund’s total investments are valued at more than $300 billion.

Instead of following the investment team’s advice, the CalPERS board continued to ban tobacco investments and also decided to divest about $547 million in tobacco-related investments handled by outside firms. That decision also was based on social goals. Advocates for tobacco divestment argued that CalPERS ought not invest in firms that sell deadly products.

At the time, the tobacco-divestment decision was particularly controversial because CalPERS faced investment returns of a measly 0.61 percent. Now, with CalPERS’ latest returns showing a robust 11.2 percent gain, it makes continuing with the coal divestment plan – and other socially oriented investment strategies – an easier option to pursue.

Regarding coal, CalPERS isn’t the only state agency to pursue divestment. Last summer, California Insurance Commissioner Dave Jones launched his Climate Risk Carbon Initiative, which called for any insurance companies that do business in California to divest “voluntarily” from most of their thermal-coal investments. The state vowed to publicize the names of companies that didn’t comply and ramped up mandatory reporting requirements.

Insurance commissioners regulate insurers to assure they have the resources to pay any claims. Yet the department’s divestment request clearly had a social (and some say political) goal. Jones justified it by arguing that such investments put the companies at risk. “As utilities decrease their use of coal and other carbon fuel sources … investments in coal and the carbon economy run the risk of becoming a stranded asset of diminishing value,” he said in a statement.

But critics of the policy, including a 2016 study by this writer, note that insurers are invested in extremely conservative positions, mostly in fixed-income bonds, and that even the insurer with the largest percentage of coal-related investments (TIAA-CREF) had only 1.76 percent of its total assets in such holdings. Furthermore, the value of the stocks already reflects the well-known uncertainties that the insurance commissioner raised. Jones’ office argued, in response, that “since 2011, coal prices, cash flows, and company valuations have fallen sharply thus adversely affecting and bankrupting numerous coal companies.”

The broad question, especially for CalPERS, is the one raised by the union officials at the recent board meeting: Are the political and social gains of divesting from these industries worth the costs in investment returns?

Chief investment officers “invest for value and don’t appreciate being hamstrung by legislators who don’t know how to manage a diversified portfolio,” said Sen. John Moorlach, R-Costa Mesa, who voted against Sen. de Leon’s divestment act. “I think I’m the only legislator who managed a $7 billion portfolio. And the studies I’ve seen have shown that social investing has produced lower returns.”

Despite the recent good-news returns, CalPERS has an enormous amount of unfunded liabilities – the shortfall in assets to make good on all the long-term pension promises made to government employees. The system is only funded at around 68 percent. This should be of concern not only to the agency, the Legislature and public employees who depend on a CalPERS retirement, but to California taxpayers. Ultimately, they are the ones who will pay for any pension shortfalls.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut.

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MOORLACH UPDATE — First SB 2-Zone Victory in the OC — August 6, 2017

The Senate District 37 nonprofit organization of the year for 2017 is HomeAid Orange County (see http://district37.cssrc.us/content/homeaid-orange-county-recognized-non-profit-year).

Scott Larson is HomeAid’s Executive Director. He has served on the Orange County Commission To End Homelessness (C2EH) from its inception. I was the initial Chair of this Commission and Scott now serves in this role. So we’ve collaborated on an editorial.

Looking back, it made me realize how involved I have been in addressing homelessness as one of my long time priorities. Dealing with Senate Bill 2 (SB 2) zones was an important matter while I served as County Supervisor. For fun I’ve provided a sample of my activities, with the first link below providing the best introduction to this burden.

My involvement as Chair of the C2EH provided the ability to address the implementation of Laura’s Law, pushing to use the empty bus depot on Santa Ana Boulevard for the Civic Center homeless population, to trying unsuccessfully two times to purchase a location for a year-round homeless shelter (only to have the first two cities abrogate their SB 2 responsibilities). These involvements would also lead to my efforts to obtain funding for more psychiatric beds in Orange County. And there is still more to do.

SB 2 Zones

MOORLACH UPDATE — Santa Ana Homeless Shelter — August 21, 2014 august 21, 2014 john moorlach

MOORLACH UPDATE — Homeless Shelter — October 18, 2013 october 18, 2013 john moorlach

MOORLACH UPDATE — Voice of OC — March 14, 2013 march 14, 2013 john moorlach

Commission to End Homelessness

MOORLACH UPDATE — San Diego Freeway — December 10, 2013 december 10, 2013 john moorlach – 2008 LOOK BACK

MOORLACH UPDATE — Laura’s Law – Plus — November 22, 2011 november 22, 2011 john moorlach

MOORLACH UPDATE — New Chair — January 25, 2012 january 25, 2012 john moorlach

MOORLACH UPDATE — Ending Homelessness — January 27, 2012 january 28, 2012 john moorlach

MOORLACH UPDATE — Hob-Knobbing with Homeless — February 14, 2012 february 14, 2012 john moorlach

MOORLACH UPDATE — Voice of OC — February 16, 2012 february 16, 2012 john moorlach

MOORLACH UPDATE — Laura’s Law — March 19, 2012 march 19, 2012 john moorlach

MOORLACH UPDATE — Voice of OC — March 23, 2012 march 23, 2012 john moorlach

MOORLACH UPDATE — Steve Kight — May 1, 2012 may 1, 2012 john moorlach

MOORLACH UPDATE — Year-Round Emergency Shelter — January 16, 2013 january 16, 2013 john moorlach

MOORLACH UPDATE — Voice of OC — February 5, 2013 february 6, 2013 john moorlach

MOORLACH UPDATE — Homelessness — February 14, 2013 february 14, 2013 john moorlach

MOORLACH UPDATE — City of Stanton — March 4, 2013 march 4, 2013 john moorlach

MOORLACH UPDATE — Laura’s Law Legislation — April 26, 2013 april 26, 2013 john moorlach

MOORLACH UPDATE — Poised for Laura’s Law — September 8, 2013 september 7, 2013 john moorlach

MOORLACH UPDATE — The Wall Street Journal — December 7, 2013 december 7, 2013 john moorlach

MOORLACH UPDATE — C2EH — December 11, 2013 december 11, 2013 john moorlach

MOORLACH UPDATE — Homelessness Review — December 19, 2013 december 19, 2013 john moorlach

MOORLACH UPDATE — Quasquicentennial — December 24, 2013 december 24, 2013 john moorlach

MOORLACH UPDATE — Kelly Thomas Reverberations — January 15, 2014 january 15, 2014 john moorlach

MOORLACH UPDATE — Homeless Shelter, et al — July 16, 2014 july 16, 2014 john moorlach

MOORLACH UPDATE — Laura’s Law Journey — August 11, 2014 august 11, 2014 john moorlach

MOORLACH UPDATE — Santa Ana City Council — October 28, 2014 october 28, 2014 john moorlach

MOORLACH UPDATE — Seeking Shelter 2014 — December 26, 2014 december 26, 2014 john moorlach

MOORLACH UPDATE — Day Two — March 26, 2015 march 26, 2015 john moorlach

MOORLACH UPDATE — AB 718 — July 8, 2015 july 8, 2015 john moorlach

MOORLACH UPDATE — More Prop. 63 Repurposing — January 6, 2016 january 6, 2016 john moorlach

MOORLACH UPDATE — Mental Health Crisis — July 31, 2016 july 31, 2016 john moorlach

MOORLACH UPDATE — Attaboy — August 5, 2016 august 5, 2016 john moorlach

With all of this documented history, it is an honor to team up with Scott Larson, a true homeless advocate, in presenting the editorial submission below in the online Daily Pilot piece.

Since the homeless population continues to grow in Orange County, I would like to pursue a conference on how you, individually, can address this crucial need during the Fall. Together, we must make the most of every opportunity to give a hand up, and not just a hand out. Stay tuned.

BONUS: The summer evening BBQ and Taco Bar fund raiser at the home of Scott and Wendy Baugh on August 10th is almost at full capacity. There are still a few spaces available and I would love to see you there! For more information, contact Scott@MoorlachforSenate.com or go to MOORLACH CAMPAIGN UPDATE — BBQ Invitation — July 22, 2017 july 22, 2017 john moorlach. My thanks to Cox Communications for being our corporate sponsor.

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Commentary

Orange County needs temporary and permanent housing solutions for the homeless

Homeless people live in tents on the Santa Ana River bike trail encampment next to Angel Stadium of Anaheim (Raul Roa/Daily Pilot)

By Scott Larson and John Moorlach
http://www.latimes.com/socal/daily-pilot/opinion/tn-dpt-me-commentary-20170804-story.html

Somewhere in cars, on streets or in shelters across California, more than 20,000 homeless families — infants included — will sleep tonight. Among them will be unaccompanied homeless children and youth too.

Californians are used to trending, but here’s one category where our leadership shows our failings: The Golden State leads the United States with the largest number of unaccompanied homeless youth under 18 years of age.

Families with chronic patterns of homelessness are nothing short of an epidemic in California and a moral outrage that engulfs nearly every community. Orange County is no exception. About 1,650 school-age children in this county are housed in motels, vehicles or are unsheltered. Their families are caught up in never-ending cycles of poverty, often forced into homelessness through job loss, divorce, domestic abuse or medical crises.

Orange County’s housing market is one of the most expensive in the nation, creating a gap between rental costs and median family income. This economic trend is forcing the lowest-income families onto the streets and into shelters. As reported over a three-day outreach during Family Assessment Week in May, 131 homeless families were identified and connected with housing resources. This outcome is not the same for all families, however, their plight must be addressed through cooperative public-private partnerships.

One way we can encourage robust solutions to homelessness is through Senate Bill 2, which took effect Jan. 1, 2008, and applies to all cities and counties in California. Legislators designed SB 2 to cut through red tape and strengthen state law.

The bill requires every jurisdiction to identify potential zones where new emergency shelters can be located without discretionary review by the local government. SB 2 also increases protections for providers seeking to open a new emergency shelter, transitional housing or supportive housing development by limiting the instances in which local governments can deny such centers.

Without a doubt, a lot of bills only worsen the problems legislation was intended to solve. SB 2 isn’t one of those, especially here in Orange County.

The county’s Ten-Year Plan to End Homelessness surfaced a real problem. Emergency homeless services in Orange County are inadequate when it comes to sheltering homeless families and are not designed to keep family members together safely.

This is where public-private partnerships can rise to help distressed families, youth and infants languishing in interim housing situations across Orange County. SB 2 gives cities and providers the runway to open new emergency shelters suitable for families and get them on the road to permanent housing through supportive services. And it’s not a pipe dream because it’s being done in the city of Orange.

After SB 2 was passed, HomeAid Orange County initiated a $5 million capital campaign to develop a direct response and embarked on a one-year quest to identify the city with the most workable ordinances and best opportunity to build an emergency shelter exclusively for families.

The result is the new 10,000-square-foot FamilyCare Center in Orange, where 10 to 15 families, all with at least one minor child, will sleep safely tonight at the 56-bed facility. They will be among the more than 500 residents annually who gain not only life-saving emergency shelter but also an entry point to other resources – a passageway to a family life outside of shelters – thanks to SB 2.

HomeAid’s Family CareCenter features amenities for families waiting to check in — including a reception area, snack bar and lockers a technology learning center, client intake area for referral services, outdoor patio, kitchen and dining areas, six full bathrooms with showers and laundry facilities, and more. This center will increase the year-round availability of low-threshold emergency shelters by focusing on rapidly rehousing families within 30 to 45 days through case management.

Every Orange County city has carved out SB 2 zones within their jurisdictions, yet the Family CareCenter is the first new project in Orange County developed under provisions of this nearly decade-old landmark bill. While we can celebrate this one victory, we can’t let it distract us from the reality that hundreds of other families and children who are homeless still are in need in other O.C. cities.

Of course, emergency shelters are only a short-term solution. Orange County needs permanent supportive housing for families.

But until that exists, we must open up to the idea of other public-private partnerships in other cities. We invite community leaders to reflect on the win that the Family CareCenter in Orange represents as a model to apply the lessons learned to their communities.

SCOTT LARSON is executive director of HomeAid Orange County. JOHN MOORLACH is a California state senator from Costa Mesa.

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MOORLACH UPDATE — Changing Behaviors — August 4, 2017

As a Certified Public Accountant, I had the privilege of watching how changes in Federal income tax law would modify the behavior of high net worth individuals. But, the middle-class also changes behavior with the times. For example, when interest rates went down to historic lows, homeowners refinanced their mortgages to lower their monthly payments.

When Gov. Pete Wilson raised the bunker fuel tax charged to ocean-going vessels, major shipping companies refueled in the states of Oregon and Washington and California’s fuel tax revenues took a dive (pun intended).

California is now intentionally raising the cost of a gallon of gasoline through higher taxation, thanks to Senate Bill 1 (see see MOORLACH UPDATE — Not Amused — April 17, 2017 april 17, 2017john moorlach) and Cap and Trade (see see MOORLACH UPDATE — Crushing Blow — July 21, 2017 july 21, 2017 john moorlach). What changes in behavior will we see?

With Gov. Brown releasing state prison inmates with Assembly Bill 109, personal property crime has risen (see MOORLACH UPDATE — AB 109 & CalOptima — December 12, 2011 december 12, 2011 john moorlach). And Propositions 47 and 57 have not helped this increase in lawlessness (see MOORLACH UPDATE — Propositions 47 and 57 — December 8, 2016 december 8, 2016 john moorlach).

Following the trend and being logical about it, get ready for an increase in another behavior, siphoning gasoline. The Sacramento Bee presents my editorial submission on this likely premise. I’m just trying to warn you and to save you a little money.

But, that’s not all. The Democrats are also looking at adding a service tax to the mix. Therefore, if you are an attorney and bill a client $500 for services rendered, you may have to bill $600 and remit the $100 service tax of 20 percent, to the State of California.

How will this impact behavior? Well, the country of India just implemented its Goods and Service Tax (GST) approach and its economy has taken a dive in the last few weeks. Just Google it.

BONUS: The summer evening BBQ and Taco Bar fund raiser at the home of Scott and Wendy Baugh on August 10th is almost at full capacity. There are still a few spaces available and I would love to see you there! For more information, contact Scott@MoorlachforSenate.com or go to MOORLACH CAMPAIGN UPDATE — BBQ Invitation — July 22, 2017 july 22, 2017 john moorlach. My thanks to Cox Communications for being our corporate sponsor.

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SOAPBOX

Why you should buy a locking gasoline cap

BY JOHN MOORLACH

Special to The Bee

We should anticipate black and gray markets in fuel, now that the Legislature has approved a cap-and-trade gasoline tax increase, estimated by the Legislative Analyst’s Office as much as 73 cents a gallon, plus the 12-cent increase from the gas-tax hike passed earlier this year.

A gray market is legal, but not officially sanctioned. The black market already is here.

“Organized crime gangs are buying hundreds or thousands of gallons of diesel fuel, and reselling them to make an untraceable profit,” NPR reported in 2014. Such crime is prevalent, Glendale police Officer Dan Suttles told the network.

In April 2012, then-Los Angeles Controller Wendy Gruel reported $7 million in missing city gasoline. That led a reader to contact the police about a city gardener, who later was arrested for allegedly selling thousands of dollars of city-owned gasoline on the black market, the Los Angeles Times reported.

One can’t predict how much gas and diesel thefts could rise, but the tax increase coming in November may give an indication of what will happen when the new cap-and trade tax takes effect.

April’s $2 boost to the price of a pack of cigarettes changed behaviors. An LAO report noted that in the two months before the tax increase took effect, tobacco tax revenue ran 24 percent and 37 percent above 2016 levels.

But the extra revenue was quickly snuffed out. The May 2017 cigarette tax revenues dropped 64 percent from May 2016. According to the report, some cigarettes could be coming from states with taxes lower than California’s.

Crime has been getting worse since Jerry Brown was elected governor. The Bee reported, three-quarters of California’s largest cities saw violent crime rise in 2015, with Sacramento’s up 25 percent.

When fuel is contraband, the perpetrator makes a quick profit and pays no cap-and-trade or other taxes of any kind. Before the gasoline tax hike comes on Nov. 1, I would recommend buying a lock for your gas tank.

Sen. John Moorlach, R-Costa Mesa

Sen. John Moorlach, R-Costa Mesa, can be contacted at senator.moorlach.

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MOORLACH UPDATE — Groundbreaking Relationships — July 30, 2017

Friday morning, I had the privilege to attend the groundbreaking ceremony for what will be the new Costa Mesa library. It was great to be among friends and to celebrate a momentous occasion. It gave me time to reflect.

I started my love for libraries in grade school. Danbrook Elementary School in Anaheim found me checking out numerous books. And, the Buena Park Library would bring the library to my front door with its bookmobile.

And, there is the parent tape from my mother, "why spend your money on candy when you can buy a book, which lasts longer?" So, I started a habit of purchasing books while attending Orangeview Junior High through a service that may have been called "Scholastic Book Club." My own library was beginning.

When I moved into our first Costa Mesa home, passing by the Mesa Verde Library on a Saturday morning would find me pulling over for the outdoor Friends of the Library book sale. I am now a compulsive library used book sale attender — even when I’m traveling. If I see a used book sale sign up at a library, I pull over. The only thing that has slowed me down of late, besides this job, is the lack of space for more shelving in my home. Let’s just say, I have become a serious book collector. Especially in the areas of California and Western States Jewish History.

While serving as Vice President of the California Sesquicentennial Foundation Board, I had the privilege of working with State Librarian Kevin Starr, a California historian extraordinaire (see MOORLACH UPDATE — New Geography — September 4, 2013 september 4, 2013 john moorlach, MOORLACH UPDATE — CalWatchdog — February 23, 2010 february 24, 2010 john moorlach, MOORLACH UPDATE — Seal Beach Sun — March 8, 2013 march 8, 2013 john moorlach, and MOORLACH UPDATE — The New Yorker — August 30, 2011 august 30, 2011 john moorlach). I own most of his books and he kindly autographed them with genuine notes. It was difficult to adjourn in his memory on the Senate Floor this year.

In my early years as a County Supervisor, one of the fun grand openings was the Katie Wheeler Library in the city of Irvine. Joan Irvine Smith called me. She had just taken a tour of the facility, which replicated her childhood ranch house, and shared her impressions. She felt that she had gone back to the fourth grade, she was so giddy, excited and pleased with the final result.

Now, as a State Senator, I’m enjoying a fun relationship with the current State Librarian, Greg Lucas (see MOORLACH UPDATE — Future of Crime — December 12, 2016 december 12, 2016 john moorlach).

Why all the rambling? Well, the Daily Pilot was kind enough to attend the event and it even took a great photo. But, I was the only one mentioned by name in the description. So, for old and new friends, here is the list from left to right.

Tom Hatch, City Manager — Tom would recruit Rick Francis away from me. Rick is now working for John Wayne Airport, so we are members of the Rick Francis Former Bosses Club (see MOORLACH UPDATE — Alumni and Recognition — June 7, 2017 june 7, 2017 john moorlach).
Raja Sethuraman, Costa Mesa Public Services Director. Raja and I spent plenty of time plenty of time together at Orange County Transportation Authority meetings over the years (see MOORLACH UPDATE — Tom Johnson — September 6, 2013 september 6, 2013 john moorlach).

Steve Johnson, principal of the Culver City-based Johnson Favaro architectural firm.

Costa Mesa Mayor Katrina Foley, who has been carefully reviewing our efforts to assist the city during the closing of the Fairview Development Center (see MOORLACH UPDATE — Crushing Blow — July 21, 2017 july 21, 2017 john moorlach, MOORLACH UPDATE — Legislative Efforts — June 29, 2017 june 29, 2017 john moorlach and MOORLACH UPDATE — Fairview Developmental Center — February 11, 2017 february 11, 2017 john moorlach).

Helen Fried, Director of the Orange County Libraries, for whom I voted to replace her predecessor, John Adams, as the Department Head. And she has been working on Costa Mesa’s library improvement concerns for quite some time (see MOORLACH UPDATE — Libraries — March 29, 2013 march 29, 2013 john moorlach).

I’m having too much fun reminiscing. I’ll save the others for another day. Next is me, then my successor, Supervisor Michelle Steel, Costa Mesa Councilwoman Sandy Genis, Costa Mesa Councilman Jim Righeimer (who has been mentioned in more than 50 UPDATEs), Costa Mesa Assistant City Manager Tamara Letourneau, and Costa Mesa City Councilman John Stephens.

Senator John Moorlach, center, members of the Costa Mesa City Council and other dignitaries turn soil during the Lions Park Projects Groundbreaking Ceremony for the Donald Dungan Library on Friday, July 28, 2017.

http://www.latimes.com/socal/daily-pilot/news/la-1501277177-mnbsy1txku-snap-image-photo.html

Photo by DREW A. KELLEY, CONTRIBUTING PHOTOGRAPHER

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MOORLACH UPDATE — State of the California Republican Party — July 27, 2017

It’s been a few months since Reid Wilson of The Hill has interviewed me, so he must have reviewed his old notes for my quote in the first piece below. For recent pieces by Reid Wilson, see MOORLACH UPDATE — More Taxes With SB 567 — May 18, 2017 may 18, 2017 john moorlach and MOORLACH UPDATE — Governor’s 2017-18 Proposed Budget — January 11, 2017 january 11, 2017 john moorlach.

I’m not sure that I have much of a rebuttal to his analysis of the state of the Republican Party in California. After the last two big tax votes, the Republican Party is either anemic, rudderless, or on life support. With one Republican Senator providing the deciding vote to approve the gas tax (see MOORLACH UPDATE — Not Amused — April 17, 2017 april 17, 2017 john moorlach) and last week’s tragic mass rebellion in the Assembly for Cap and Trade (see MOORLACH UPDATE — Crushing Blow — July 21, 2017 july 21, 2017 john moorlach), the brand may have suffered the final blows.

All to say, I don’t now remember making the quote that is used, but I’m not shrugging away from it. I was raised with the understanding that you don’t air your dirty laundry. But, something has to happen and happen soon.

The Legislature is on a four-week recess. This means we’re in our Districts and meeting with constituents and preparing for the final barrage of legislative votes when we return to Sacramento. When we return, the Republicans in the Assembly will be grappling over who should be their next leader. Let’s hope that it is quick and painless. Then the Republican Caucuses for the Senate and the Assembly will need to convene shortly after the Session concludes on September 15th and work on messaging and developing an exciting product to offer Californians. With all of the recent tax increases approved at the behest of the majority party, there is plenty of material for the leaders of the Republican Party to work with.

In the meantime, I am enjoying my District and the big workload that being a State Senator entails. The Lake Forest Patchprovides a piece submitted by Lake Forest Councilman Jim Gardner. This second piece is accompanied by his photos, one providing a view from the middle of the room and the other with himself, fellow Councilwoman Leah Basile and Assemblyman Steven Choi. One of the highlights was to announce the signing of three of my bills by Governor Brown the week before (see MOORLACH UPDATE — Bad News/Good News — July 18, 2017 july 18, 2017 john moorlach).

BONUS: It’s time for a summer BBQ near the beach. Please come to my August 10th evening BBQ at the Baugh residence in Huntington Beach. For an affordable fund raiser that is filling up quickly, go to MOORLACH CAMPAIGN UPDATE — BBQ Invitation — July 22, 2017 july 22, 2017 john moorlach. Thank you to Cox Communications; their representatives attended the Lake Forest Chamber of Commerce Luncheon and offered to become a corporate sponsor of this event.

TheHill.com

Trump sounds like Pete Wilson — and that scares Calif. GOP

BY REID WILSON

http://thehill.com/homenews/state-watch/344020-for-californias-gop-trump-rings-familiar

SACRAMENTO — As Gov. Pete Wilson (R) plotted his reelection bid nearly a quarter-century ago, he turned to a secret weapon that would mobilize his core voters: a ballot measure to bar undocumented immigrants from accessing state services like nonemergency healthcare and public schools.

The ballot measure, Proposition 187, passed. Wilson won an unlikely reelection.

It was a gambit that would have made Pyrrhus of Epirus, namesake of the Pyrrhic victory — or one that inflicts substantial damage on the winner — blush.

Wilson’s short-term victory came at the long-term expense of the state Republican Party. For more than two decades, Democrats have used Proposition 187 as shorthand with California’s growing Hispanic and Asian communities, one that has marginalized the GOP in the nation’s most-populous state.

In 2016, another candidate running a Wilson-like campaign with regards to immigrants and Hispanics reached a new nadir. Donald Trump won a smaller share of the vote in California than any GOP presidential nominee candidate since Alf Landon lost to Franklin Roosevelt in 1936.

Now, some Republicans in the state wonder if their party is about to sink further into irrelevancy.

At the same time, some Democrats are mulling just how far to the left their party can afford to govern.

This is the 14th story in The Hill’s Changing America series, in which we examine the demographic and economic trends driving American politics today. California’s story reflects the culmination of the trends that favor Democrats: an increasingly diverse population densely packed in economically vibrant urban cores, one that sees the Republican Party as out of touch at best and actively hostile at worst.

In a state where nearly 40 percent of the population is now Hispanic and another 20 percent are of Asian or African descent, the long legacy of Proposition 187 has driven minorities to the Democratic Party. And Trump pushed more voters away from the state GOP.

“The Democratic Party is increasingly urban, coastal and Latino. And what defines California demographics? Increasingly urban, coastal and Latino,” said Ron Nehring, a former chairman of the California Republican Party and a former spokesman for Sen. Ted Cruz’s (R-Texas) presidential campaign.

California is often cast as a virtual nation apart, a state with an economy so large it can force changes to the global economy. Today, the state generates one-seventh of the nation’s gross domestic product. It generates more economic activity than France. And its new businesses attract nearly half the venture capital investments made in the entire United States, according to the Martin Prosperity Institute.

The state is so influential that, after Trump announced he was pulling the U.S. out of the Paris climate accord, Gov. Jerry Brown (D) was the first American official to meet with Chinese President Xi Jinping — where he signed a deal committing China and California to further reducing carbon emissions.

“California is always going to be the trendsetter,” said Sacramento Mayor Darrell Steinberg (D), a former state Senate president.

The state’s political power is growing, too, at least within the Democratic Party. Even as she lost the presidency, Hillary Clinton broke new ground in California. She took 61.7 percent of the vote there, and she beat Trump by 4.3 million votes. Nationwide, Clinton won the popular vote by nearly 2.9 million votes.

Clinton’s margins are a microcosm of what works for Democratic candidates around the country. The 33 counties she won are more diverse, more populous and more prosperous than the 25 counties Trump won: Ninety-four percent of all personal income earned in the state of California was earned in counties Clinton carried, according to the Bureau of Economic Analysis.

Of the 33 counties Clinton carried, all but two added population between 2010 and 2015. Of the 25 counties Trump won, 15 lost population over that span.

Most observers say California’s leftward shift is a result of both changing demographics and the harsh rhetoric Trump employed — language that worked for Wilson but that now hurts California Republicans. Wilson, now 83, told the Los Angeles Times earlier this year he has no regrets about pushing Proposition 187.

“California voters are explicitly reacting against the direction of the modern Republican Party,” said Thad Kousser, a political scientist at the University of California, San Diego. “So many of these California districts now have this critical mass of voters who are immigrants themselves, or first- or second-generation immigrants, and that’s not where Donald Trump plays.”

Clinton even made inroads in what has long been deeply red territory: She won Riverside County, in the heart of the Inland Empire. She won Nevada County, once the epicenter of the California Gold Rush. And, stunningly, she won Orange County, once the core of California conservatism.

“Clinton won in Orange County because they didn’t want Trump,” said state Sen. John Moorlach (R), who represents the area. “The Republicans just haven’t provided an exciting product.”

As Clinton ran the table around the state, Democrats ascended to new heights down the ballot as well. The party picked up a supermajority in both the state Senate and the state Assembly. State Republicans were so dismally organized that the runoff for an open U.S. Senate seat featured two Democratic candidates.

Nearly 20 percent of Democrats in the U.S. House of Representatives hail from California. No single state has ever held a higher percentage of one party’s seats in Congress. And California Democrats believe they have more opportunities to win back seats: Clinton beat Trump in districts held by GOP Reps. Jeff Denham, David Valadao, Steve Knight, Ed Royce, Mimi Walters, Dana Rohrabacher and Darrell Issa — all districts with heavy minority populations.

But some Democrats are wary of becoming victims of their own success. The major fights happening in the state legislature today are rarely between the two parties; rather, they are between the liberal and more moderate factions of the Democratic Party.

One wing, loyal to progressive Sen. Bernie Sanders (I-Vt.), is advocating for a single-payer healthcare system; the other is loyal less to Clinton than to Brown, a social liberal but fiscal centrist.

“You have very similar sides lining up as you did in the Democratic primary,” said state Sen. Mike McGuire (D). “What is happening at the national level has spilled over here.”

So far, what might be called the Brown-Clinton faction has notched virtually all of the victories. The single-payer proposal was shelved by state Assembly Speaker Anthony Rendon (D), who worried about a lack of a funding mechanism. A contentious race for state party chairman was won by a longtime party insider who narrowly held off a Sanders-backed insurgent, though the runner-up claimed there were voting irregularities. And a cap-and-trade proposal Brown backed, seen as too conservative by some in the environmental community, won approval from the legislature.

But state Democrats see the fault lines emerging within their own party.

“There is a progressive end in our party pushing to upend the status quo,” said state Sen. Toni Atkins (D), a former state Assembly Speaker.

The demographic changes that have delivered California so completely into Democratic arms are showing up in other states, too. Already, Hispanic voters have moved states like Nevada and New Mexico out of the swing category and safely into the Democratic column. Similar changes are taking place, albeit more slowly, in states like Arizona, Florida, Texas and Georgia.

Those states will not become the hotbed of liberalism that California represents — but the Golden State offers a worrying harbinger for the GOP.

“There’s a tendency to write off California as just the odd person out,” Nehring said. “But it’s not. It is a glimpse into the future, and it is a warning to Republicans nationally [about] what is in store unless we take that into account.”

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State Legislators Talk to the People

Senator John Moorlach and Assemblyman Dr. Steven Choi speak at Lake 1 luncheon

State Legislators Talk to the People

State Legislators Talk to the People

By Jim Gardner (Patch Contributor)

https://patch.com/california/lakeforest-ca/state-legislators-talk-people

The Lake Forest Chamber of Commerce sponsored a luncheon event with California Assemblyman Dr. Steven Choi and California Senator John Moorlach. Stan Yombo was the host and the venue was the beautiful clubhouse on Lake 1 overlooking the remodeled lagoon that was recently voted one of the best beaches in California. In attendance were Mayor Pro Tem Basile, Mayor Voigts, and City Manager Debra Rose. About 100 people were there.

BIGGEST ISSUE IN SACRAMENTO

Moorlach – the growing deficit and the increase in taxes. “We have the highest tax rate and we’re broke and no one cares” he lamented.

Choi – party politics. The Democrats have a super majority. “They can do anything” he said.

BIGGEST ISSUES FOR YOUR DISTRICT

Moorlach – (1) sober living homes, (2) high speed rail, (3) converting Fairview Development Center (which is closing) into a resource for homeless, mentally ill, and other needy populations.

Choi – (1) how can we continue the high growth that we have been experiencing, (2) over-regulation, (3) providing incentives for companies to do business locally

USE OF SOCIAL MEDIA

Moorlach – tweets, uses Facebook extensively, and e-mail blasts

Choi – use Facebook and e-mail blasts, but doesn’t tweet

LIFE IN THE CAPITAL

Moorlach – chaotic, not enough time to study bills, don’t get agenda in advance so it can be studied

Choi – too many bills (5000 in the Assembly), assigned to committees that meet at the same time.

ABOUT THE AUTHOR

Dr. Jim Gardner is on the City Council for Lake Forest. You can check him out on LinkedIn and/or Facebook and you can share your thoughts about the City at Lake Forest Town Square on Facebook. His comments are not meant to reflect official City Policy.

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MOORLACH UPDATE — Mentoring — July 25, 2017

The Voice of OC provides its perspective on how the city leadership of Laguna Niguel is dealing with a Councilmember who is not playing team ball according to their preferences.

I love to work with reporters and deeply appreciate the journalism profession. Since it’s not too often when the reporter of a piece is referred to as an intern, after reading the Voice of OC piece below, I have a few suggestions to offer. And I do it as someone who wants to mentor, as I think this piece is the first of many more.

First, be more specific about what is actually happening. Do you remove someone from the city council? That would be done through a recall. Do you remove someone from the ceremonial position of Mayor? That would only take three votes of the city council. Not necessarily a big deal and should be in Robert’s Rules of Order.

Second, what is the cause or compelling reason for a special meeting? Asking that former employee’s names not be included on a brass plaque? Oh my. Finding out that the Mayor was a disappointed father who vented when his daughter was scorned? Whoa. This is not significant stuff.

Third, clarify what my relationship is to this brouhaha. I am currently a State Senator. But, I do not now have an "advisory committee."

Let me provide a little helpful elaboration. Current Laguna Niguel Mayor Jerry Slusiewicz served on my Treasurer’s Oversight Committee while I served as the elected Orange County Treasurer-Tax Collector more than ten years ago.

Jerry has been involved in the community long before he ran for city council. And, he was an asset to my team and to the County of Orange (see MOORLACH UPDATE — “Vaxxed” — December 15, 2016 december 15, 2016 john moorlach). For a 2002 mention, see MOORLACH UPDATE — Proper Etiquette — December 4, 2012 december 4, 2012 john moorlach and, for a 2006 mention, see MOORLACH UPDATE — Toll — December 2, 2011 december 3, 2011 john moorlach.

Fourth, scratch below the surface. There was a special meeting to address a potential removal from the office of Mayor. Really? There is a better way to handle strong personalities than this. So, there must be something more.

Fifth, ask one of the best editors and publishers in the county, your boss, if you can spend more time on this matter. Perhaps the draft audit report must be very damning for the staff and its possible release may not reflect well on the sitting city council?

I get the sense that the audit report is providing awkward reportable conditions. What’s to do? Suppress it? Or go after the member who won’t go along with this tactic? Didn’t someone say that the cover up is even more disturbing than the crime?

I’ve been here before. I know what it’s like when a governing board has made up its mind and finds that retracting their position is too difficult. So let me provide some context. It happened to me a couple of times while serving on the Orange County Employees Retirement System (OCERS) Board.

The first was a closed session meeting where we were informed of concerns about the system’s CEO. This was not the first time that issues were brought against her and I voted to terminate. The Board went nuts. They loved the CEO. How dare I step out of line and not support their idea to move her to a completely different building, where she would not have to interface with staff? Are you kidding me? For a glimpse of this fun experience, see MOORLACH UPDATE — POBs — February 5, 2011 february 5, 2011 john moorlach.

The second experience was the fixation of the OCERS Board to purchase premium land from The Irvine Company, as facilities at the Santa Ana Civic Center would be too dangerous. Are you kidding me? For an account of this fun chapter, find it in a classic Rick Reiff interview some twenty-one years ago, that garnered statewide attention, in MOORLACH UPDATE — Wild Animals — August 5, 2011 august 5, 2011 john moorlach.

Sixth, the publisher of the Voice of OC knows that drafts are not subject to public records requests. But, audit workpapers are not client privileged documents. Jerry Slusiewicz is dropping bread crumbs. Follow them and you may have a really note worthy story and a great intern experience.

BONUS: It’s time for a summer BBQ near the beach. Please come to my August 10th evening BBQ at the Baugh residence in Huntington Beach. For an affordable fund raiser that is filling up quickly, go to MOORLACH CAMPAIGN UPDATE — BBQ Invitation — July 22, 2017 july 22, 2017 john moorlach.

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Laguna Niguel Investigates Complaints Against Mayor And How To Possibly Remove Him

IMG_8421EDIT-1170x658.jpg

By SPENCER CUSTODIO

http://voiceofoc.org/2017/07/laguna-niguel-investigates-complaints-against-mayor-and-how-to-possibly-remove-him/

The Laguna Niguel City Attorney will investigate a list of complaints and alleged municipal code violations against Mayor Jerry Slusiewicz and explore how to remove the mayor from office, a first for the south Orange County city.

“It’s a witch hunt,” Slusiewicz said during his opening comments on Monday night’s special meeting. “It’s a massive squandering of taxpayer resources.”

The City Council voted 4-1 Monday night to authorize City Attorney Terry Dixon to begin fact-finding on the alleged violations and complaints and come back Aug. 7 with his findings and a process for removing a mayor from office. Slusiewicz voted no.

“I believe it’s a conflict of interest for the Mayor to run this meeting,” Councilwoman Laurie Davies said during opening remarks.

“I’m here to run the meeting,” Slusiewicz shot back. “I’m the Mayor,”

Laguna Niguel, like many OC cities, is a council-manager form of local government. That means the mayor is appointed by the council and steers the council meetings and can place items on the agenda. However, the mayor can’t act on behalf of the City Council — the council has to vote on such directions.

Furthermore, city code prohibits any council member — including the mayor — from bypassing the city manager and giving direct orders to staff.

Since it’s incorporation in 1989, Laguna Niguel has never had a process to remove a mayor.

“In our 28 year history, we’ve never had to consider removing a city mayor. I don’t know, once we have all the information, if that’s something we want to do,” said Councilwoman Elaine Gennawey, adding the city should have already had a policy on how to remove a mayor.

Among the allegations is that Slusiewicz violated the city code by telling Public Works Director Nasser Abbasazadeh to remove the names of just-retired City Manager Rod Foster and former Assistant City Manager Dan Fox from a plaque on a bridge.

Foster retired Monday and Fox left Laguna Niguel for Diamond Bar last month — both due to Slusiewicz, according to a June 8 email from Foster to the City Council and city attorney.

While Slusiewicz didn’t address all of the accusations against him, he did say he was within his rights when he instructed their names be taken down.

“Acting within the scope of my duties as a mayor, that is exactly what I did. Have I bruised some feelings over the past six months? Perhaps. Since when was carrying out my duties as mayor grounds for removal by my colleagues?” Slusiewicz said about removing Foster’s and Fox’s names from the plaque.

Although Dixon didn’t say if Slusiewicz violated city code order or not, he summed up the allegations against Slusiewicz.

“What it really comes down to, to a great extent, is allegations of bullying … by Mayor Slusiewicz,” Dixon said.

“There’s always more than one version of reality,” Slusiewicz said.

Slusiewicz, in a phone interview Sunday, said the allegations surfaced once he started bringing to light possible code violations in a draft financial audit that indicate there are inconsistencies in spending limits within city staff. He also said he has more than 10 years of financial auditing experience, including time on state Sen. John Moorlach’s advisory committee and the city’s investment, banking and audit committee.

“My duty remains solely to the Laguna Niguel taxpayers, if the price of honoring my commitment to the taxpayers costs me the title of mayor, so be it,” Slusiewicz said Tuesday night.

“The audit is a concern of all of us, but the audit is incomplete,” Gennawey said. “I don’t want anyone to think that we are minimizing the audit or any review of the audit.”

Gennawey called on the city attorney to review the audit once it’s complete to make sure it wasn’t interfered with.

However, Finance Director Steve Erlandson said although the draft audit came out in late June, it wasn’t until July 12 that he and Dixon received a copy because of interference from Slusiewicz.

Dixon said Sluciewicz wouldn’t provide a copy of the draft audit and he tried calling the audit firm, but was told they couldn’t provide him with it due to Sluciewicz’ orders.

“That was the first time as city attorney that I was denied that document,” Dixon said, adding he had to “basically, in my opinion, force you to provide me with that draft audit.”

Laguna Niguel has been considered a leader in financial auditing because the mayor and mayor pro tem are permitted to direct the auditing firm to look at areas they instruct, which adds layers of transparency and surprise to the audit that make it harder for staff to hide finances, according to an article published by the OC Register last year.

Others on the council claimed Slusiewicz was sidestepping the real issues at hand by constantly referring back to the audit.

“It sounds like, to me, that you’re using this audit to defer your responsibilities and your behavior how you acted as mayor. And it never has come up yet. You keep talking about the audit,” Davies told Slusiewicz. “It’s your behavior … that’s the bottom line.”

“I support there being a special meeting for one purpose and that is to get out the complaints that were presented to us,” Councilman John Mark Jennings said, reminding residents the meeting wasn’t about the audit. “That’s something I can’t take lightly and you don’t want me to take that lightly.”

Additionally, Slusiewicz allegedly tried to use his city standing to get his daughter a part in a Laguna Niguel Community Theatre play, according to a June 5 email from theatre director Jeremy Golden.

“For the next 26 minutes he yelled at me, stating that he did a favor for me by supporting our fee waivers and allowing us to use city space for our productions and that I had failed to return the favor by granting his daughter a part in the play,” Golden wrote in the letter to Dixon.

Meanwhile, Slusiewicz called on the council to immediately send the draft audit to the District Attorney’s office.

“I don’t want the fox watching the henhouse,” Slusiewicz said.

“At this juncture, to turn over any documents to any other entities, is a little premature,” Mayor Pro Tem Fred Minagar said about turning over the audit, reminding Slusiewicz it wasn’t finalized yet.

Spencer Custodio is a Voice of OC intern. He can be reached at spencercustodio.

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MOORLACH CAMPAIGN UPDATE — BBQ Invitation — July 22, 2017

Aloha! What a year this has been! You’ve been observing my efforts through the UPDATEs that I have been issuing, in real time, about the fun I’m having in the Capitol. You know that I’m working very hard for you and the 37th District.

Now I need you to work hard for me. Please come to a fun backyard BBQ and enjoy a gathering of generous supporters for a fun evening near the beach. I don’t ask you for financial support very often. But, with the recent craziness up in Sacramento, I need to raise funds in order to assist candidates that know how to read a balance sheet. I need reinforcements. We’ve got to fight for California!

The price of admission is extremely reasonable. Please invite and bring as many friends as you are able. Just forward this e-mail to those who would be interested in attending. I’ll make this a little more interesting. Those who raise $2,000 or more will receive the brand new Vintage California Hawaiian shirt just released by High Seas Trading Company (it’s not even on their website so see the photo below). For those who enjoy wearing Hawaiian shirts, like I do, this is a real classy conversation starter. Just be ready to give me your male or female shirt size.

I look forward to your joining me for a fun summer evening event by responding to the information provided below. We’ll need your name to get you pre-approved at the manned gate. I am grateful to have you on my team. Mahalo.

Please join us for a Backyard BBQ Bash in support of

Senator John Moorlach

**Hawaiian Shirt Optional Attire**

At the home of OCGOP Chairman Emeritus

Scott and Wendy Baugh

6662 Blue Heron Dr, Huntington Beach, CA 92648

August 10th, 2017

5pm – 7:30pm

$100 ticket, $150 per couple

(Maximum donation per person is $4,400. Contributions are not deductible for income tax purposes)

State Law requires that we obtain the following information:

Name:_________________________

Street Address______________________________________________________

Email _____________________________________________________________

Occupation________________________________________________________ 

Employer__________________________________________________________

Phone____________________________________________________________ 

Mobile____________________________________________________________

Name or Company Name as you wish to be acknowledged 

publicly:                                 ______________________________

 

RSVP to: scott@moorlachforsenate.com or call (818) 389-0385

Please make checks payable to:

Moorlach for Senate 2020 

and mail to:

Campaign Compliance Group at 9070 Irvine Center Drive,

Suite 150, Irvine, CA 92618

You can also contribute online:

https://www.efundraisingconnections.com/c/Moorlach2020/donate.aspx?PageID=MoorlachBBQ

Paid for by Moorlach for Senate 2020

ID# 1392543

MOORLACH UPDATE — Crushing Blow — July 21, 2017

The topic of the closure of the Fairview Development Center continues in the first piece below. The Daily Pilot is doing the heavy lifting on the details, including a link to the Department of Finance’s budget proposal, on the site study (also see MOORLACH UPDATE — Cap and Trade — July 14, 2017 july 14, 2017 john moorlach and MOORLACH UPDATE — Legislative Efforts — June 29, 2017 june 29, 2017 john moorlach).

How refreshing. When was the last time you saw a publication peel the layers of the onion? And there are a lot of layers to be peeled. Bravo!

The reverberations from this week’s "cap and trade" vote will be felt for years to come (see MOORLACH UPDATE — Bad News/Good News — July 18, 2017 july 18, 2017 john moorlach, MOORLACH UPDATE — Cap and Trade — July 14, 2017 july 14, 2017 john moorlach and MOORLACH UPDATE — Surprise! — July 11, 2017 july 11, 2017 john moorlach).

The disloyalty of eight Republican legislators will have a dramatic impact on the Party’s brand in California that may be as profound as to destroy it permanently.

Why?

It’s not because Republicans are not allowed to compromise on the non-important stuff or swim with the current. But, in matters of principle, members of my Party need to stand like a rock. Not for our own vanity, but for the people that we represent.

Right now, it’s not working that way in the Capitol. Every time the state legislature comes to a critical vote, where Republicans are needed, just enough Republicans caved to approve a Democratic initiative. Then it is called "bipartisanship," when in fact, it is not. Rather than stand for something, certain members of our party breathe too much of the Capitol air and forget who elected them. And all we have is an eroding, sandy beach Party, that diminishes every time there is a small storm or wave. This has been the case for the last two or more decades!

Cal Coast News addresses this week’s chapter in a litany of Republican turncoats in the second piece below. Now the awkward dance of rationalizing a very awkward vote begins. As the piece names names, allow me to be very candid. It is my policy not to identify colleagues by name, as it is bad form. But, since the piece does, let me comment just a little.

Sen. Tom Berryhill did not have to vote for AB 398. His vote was not necessary, as all 27 Democrats voted for the bill. He has been around the block a long time and could have abstained. This would have satisfied those who convinced him to bolt from the Republican Senate Caucus. He should also have passed on the photo ops, thus minimizing the damage to his reputation. This old pro missed a simple solution for an awkward vote.

The Republicans in the Assembly, however, have a completely different story to tell. Their votes in support of AB 398 allowed Democrats targeted by Republicans in next year’s election to vote in opposition. Consequently, a few key Democratic Assemblymembers critical to the super majority were able to break with the Democratic Party’s ranks. Assemblymembers Gray, Limon, Quirk-Silva, and Stone could vote in opposition. Assemblywoman Cervantes could abstain. Now former Assemblyman, and just sworn in Congressman, Jimmy Gomez was not missed. And Assemblywoman Irwin did not have to show up, as she made longstanding arrangements to be out of town this week. Most of them knew AB 398 was a bad bill and there would be repercussions to supporting it, and they dodged the bullet.

So, members of the Irrelevant party allowed members of the Monopoly party to get a pass. Terms like "self-sabotage" and "voter betrayal" are being used by commentators for these Republican legislators. What’s worse is that they didn’t just marginalize themselves, they also marginalized the rest of their Republican colleagues. And, I can’t defend my "cap and tax" accommodating colleagues against these assaults.

This is a critical inflection point in the Party’s history. It’s crisis management time. I just hope the Party can survive the next few months and years. Let’s see if it has any leaders left to claim that "these are not dark days; these are great days." I will try to buck it up, but with friends like these, as the old expression goes, who needs enemies?

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Fairview’s $2-million mystery is solved, and it doesn’t look promising

By Barbara Venezia

http://www.latimes.com/socal/daily-pilot/opinion/tn-dpt-me-venezia-20170720-story.html

Last week I started to track down the parameters of the $2-million site survey the state is planning for closing the Fairview Developmental Center in Costa Mesa by 2021.

What prompted this was my column last month about Fairview and Sen. John Moorlach’s bill, SB 59, which would require the state to include the city and county in any decision regarding repurposing of the state-owned property. Currently, Sacramento doesn’t have to do that.

I also talked about how Moorlach, a Costa Mesa resident, was working with a coalition from Hoag and St. Joseph hospitals, as well as county and Costa Mesa city officials, to address mental health issues and homelessness as part of a network.

Included in this coalition’s scope is how a portion of Fairview could be used by such a network.

Costa Mesa Mayor Katrina Foley says of the more than 105 acres at Fairview, 50% could be set aside for single-family housing, 25% for open space, 15% for mental health institutional services of some sort and 10% left for an undetermined use.

In that column, Moorlach mentioned a $2-million site study in the state’s budget for the property. A reader wondered what that “site study” meant.

That simple question certainly lacked a simple answer. It has taken me two weeks of emails and calls to get somewhat of an answer.

Moorlach’s office tracked my progress. They too were interested in the details of the survey.

The question on everyone’s mind was: If you don’t know the scope of the survey to begin with, how do you price it at $2 million?

The answer would finally come from the state Department of Finance in a seven-page budget summary request document, which I posted to bvontv.com.

The summary starts out explaining how on April 1, 2016, the California Department of Developmental Services submitted a closure plan for Fairview that was approved by the Legislature.

It also said the state Asset Management Branch (AMB) is responsible for identifying alternative reuses for the Fairview campus and is requesting $2,168,000 toward contracting consultants.

It goes on to say the “consultants will assist with the evaluation of appropriate re-use options in order to identify constraints and opportunities; to make revenue estimations; to work with the city of Costa Mesa to identify local stakeholder interest in the reuse of the property; and to identify options that will generate the highest return to the state.” Such a return could include revenue to fund programs for the developmentally disabled community.

With Californians paying a high rate of income taxes and the large government bureaucracy in Sacramento, you’d think there’d be staffers who could handle this and not have to spend $2 million on consultants. Apparently not.

The document states that for a “project of this size and complexity, AMB needs to contract for external consultants with expertise in stakeholder outreach, biological and cultural resource assessment, property condition and infrastructure capacity assessments, traffic studies.”

It also says in phase one and two, if required, will need “environmental site assessments, hydrology and water resource studies, master planning studies and collaboration, alternatives analysis and adaptive repurposing studies, market studies, economic modeling, cost estimating and financial analysis, appraisal, and contract negotiations that are not available within existing staff.”

This wordy document is drafted in the broadest of terms with the sole purpose of justifying hiring consultants.

Between the legalese and repetitiveness, it seems this was written so no one could actually understand the specifics totally — a prime example of government circle jerk at its best.

So here’s what’s budgeted in the $2,168,000 for consultants:

Project management: $160,000

Civil engineering and “site related”: $210,000

Environmental assessments: $740,000

Market and economic analyses: $210,000

Traffic analysis: $75,000

Structural engineering: $30,000

Architectural and planning services: $485,000

Cost estimating: $60,000

Disposition costs: $130,000

Distributed admin: $68,000

I question how they can budget for architectural and planning services, as well as structural and civil engineering, when there’s actually no building plan in place.

And taking into consideration how Fairview has operated since 1959, why is there $740,000 for environmental assessments? Shouldn’t they know its impact already?

Do we really need to start from scratch here?

I could go on and on taking this consultant list apart, but this proposal is only the first step for the state to determine what to do with the property.

It has nothing to do with a post-closure plan, which will eventually fold into this multistep process. Who knows how many millions each step along the way will cost.

I’m sure consultants are already lining up for those paydays.

So how much of our tax dollars will the state eventually spend on this Fairview closure?

BARBARA VENEZIA lives in Newport Beach. She can be reached at bvontv1.

News For The California Coast

Jordan Cunningham bucks his base on cap-and-trade

https://calcoastnews.com/2017/07/jordan-cunningham-bucks-base-cap-trade/

While nationally Republicans are attempting to roll back climate polices, Assemblyman Jordan Cunningham of Templeton joined seven other Republican legislators in voting to support Governor Jerry Brown’s cap-and-trade program. The vote has led to a backlash against the eight Republican legislators who are accused of supporting tax increases.

Launched in 2012, cap-and-trade is a controversial mechanism designed to lower greenhouse gases. Under the program, many industrial companies are required to garner permits for emission allowances.

Companies can purchase the permits from other companies or from auctions held by the California Air Resources Board. Portions of the costs are then passed on to taxpayers.

The Legislative Analyst’s Office said in a March 29 letter to Assemblymember Vince Fong that cap-and-trade could raise gas prices by an estimated 63 cents per gallon in 2021, increasing to 73 cents per gallon in 2031.

Earlier this week, eight Republican legislators voted to extend the cap-and-trade bill for 10 years: State Senator Tom Berryhill (R-Stanislaus), Assembly members Jordan Cunningham (R-San Luis Obispo), Catherine Baker (R-Walnut Creek), Rocky Chavez (R-Oceanside), Heath Flora (R-Modesto), Devin Mathis (R-Visalia), Mark Steinorth (R-Rancho Cucamonga), and Chad Mayes (R-Yucca Valley).

Cunningham said the vote to extend cap-and-trade will reduce taxes and support California businesses.

“Today my colleagues and I were able to reduce the costs of taxes, fees and regulations by $16 billion a year,” Cunningham said. “This bill ends the fire tax permanently and extends a manufacturing tax credit that will keep jobs in California. We have commitments that revenues from the auction will support agriculture, help farmers upgrade their technology, and enable local fire departments to buy new trucks and equipment.”

At Wednesday evenings Republican Central Committee meeting, Cunningham called in to defend his vote saying it helps puts a nail in the coffin of the bullet train and lowers taxes.

Nevertheless, many Republican leaders contend the extension will raise the cost of living for most Californians.

“We believe that the proposed cap-and-trade extension combined with the gas tax and the car tax hikes will be a crushing blow to California residents and small businesses negatively impacting their quality of life,” Senator John Moorlach said in a letter to Governor Jerry Brown.

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MOORLACH UPDATE — Bad News/Good News — July 18, 2017

I have bad news and I have good news. Let’s start with the bad news. Last evening, both chambers of the state legislature voted to approve AB 398, the Cap and Tax extension bill. It passed thanks to the votes from the majority party, with a few Republican votes (very few) thrown in.

This is another Governor-Brown-cram-down, rushed through with the knowledge that the monopoly party would deliver the votes. Now, time will tell who is more prescient about the ramifications. Will California prove to the world that you can tax your way out of carbon dioxide? Or will it damage the state’s economy enough to push it ahead of other failing states, like Illinois or Connecticut, to insolvency?

All I can say, with such a short and hurried time line, we did our best to engage in the debate (see MOORLACH UPDATE — Cap and Trade — July 14, 2017
july 14, 2017 john moorlach). Only one Democrat rose to defend AB 398 yesterday afternoon, so I decided to jump in on the Senate Floor anyway, and shared my thoughts on a real threat to California: fiscal solvency (see https://www.youtube.com/watch?v=Cw29ra1e7X0&feature=youtu.be).

CBS Sacramento provides its perspective in the first piece below. The Associated Press had its world famous photographer, Rich Pedroncelli, on the Floor and he caught me listening during the discussion. My seat mate is Senator Andy Vidak. It’s the second piece below.

Now for the good news. Even with my opposition to his climate change agenda, the Governor signed three of my bills last evening. Thank you, Governor Brown.
The Highland Community News provides the Governor’s press release in the third piece below. For a refresher, here are the helpful links:

SB 665 — See MOORLACH UPDATE — SB 2: Another Tax! — July 7, 2017 july 7, 2017 john moorlach

SB 671 — MOORLACH UPDATE — SB 671/Prepayment — May 14, 2017 may 14, 2017 john moorlach, MOORLACH UPDATE — District Events — May 13, 2017 may 13, 2017 john moorlach, MOORLACH UPDATE — Snubbing — May 10, 2017 may 10, 2017 john moorlach, and MOORLACH UPDATE — Repealing the Cap — May 7, 2017 may 7, 2017 john moorlach.

SB 742 — MOORLACH UPDATE — SB 2: Another Tax! — July 7, 2017 july 7, 2017 john moorlach, MOORLACH UPDATE — Legislative Efforts — June 29, 2017 june 29, 2017 john moorlach, and MOORLACH UPDATE — PACE and HERO — April 30, 2017 april 30, 2017 john moorlach.

California Cap And Trade Bill Passes Legislature With Republican Support

http://sacramento.cbslocal.com/2017/07/17/california-cap-and-trade/

SACRAMENTO (CBS13) — California legislators passed an extension of the state’s program to reduce greenhouse gas emissions on Monday night, sending the bill to Gov. Jerry Brown’s desk.

The bill was supported by one Republican senator and seven Republican Assembly members, which were needed to narrowly pass the legislation in both houses.

“That’s why we have Republicans voting here. That’s why we’re all here, Democrats and Republicans because we have a path forward,” said Brown in a news conference following the assembly vote.

He called Assembly Bill 398 a “durable foundation moving forward” and a way to “cut costs and cut emissions.”

The “cap and trade” bill requires companies to buy permits to release greenhouse gas emissions. The new legislation would keep it operating until 2030.

Supporters say it will move the state closer to lower emissions goals and set the stage for the world to follow. There are also protections for rural communities and areas with high unemployment and poverty.

“This is a huge win for all Californians,” said state Senate Pro Tem Kevin De Leon, “the world is watching.”

De Leon said the bill was “not perfect” during his comments on the Senate floor. He continued saying, “we shouldn’t let perfect stand in the way of good.”

Opponents of the bill worry the financial burden of potentially rising energy costs could hurt all Californians.

“We continue to put pressure on poor people in California on the middle class, and we need to figure out other ways to address environmental concerns in California,” said Sen. Ted Gains.

Other Republicans chimed in on social media.

Sen. John Moorlach tweeting, “I don’t understand how addressing a minor change in temperature 100 years from now should rest primarily on CA taxpayers #capandtrade”

The California Environmental Justice Alliance also opposes the bill. The group stated the bill would “undermine the state’s ability to achieve California’s greenhouse gas emission reduction targets.”

The statement continued “we are deeply concerned about the role Big Oil has played in drafting this legislation behind closed doors.”

Governor Brown finished his remarks late Monday night saying CO2 emissions are “not a local issue. They’re a global issue.” He called on California to be the example for the rest of the world.

Drew Bollea

State Sen. John Moorlach, R-Costa Mesa, left, listens as lawmakers debate a climate change bill, Monday, July 17, 2017, in Sacramento, Calif. The Senate approved Assembly Bill 398, a bill to extend California’s cap-and-trade bill, and sent it to the Assembly for a final vote.

Governor Brown Issues Legislative Update

http://www.highlandnews.net/news/political/governor-brown-issues-legislative-update/article_032888a0-6bc5-11e7-b332-df271401bfdc.html

SACRAMENTO – Governor Edmund G. Brown Jr. today announced that he has signed the following bills:

AB 212 by Assemblymember Lorena Gonzalez Fletcher (D-San Diego) – California Victim Compensation Board: claims.

AB 321 by Assemblymember Devon J. Mathis (R-Visalia) – Groundwater sustainability agencies.

AB 323 by Assemblymember Marc Berman (D-Menlo Park) – CalFresh: emergency food provider referrals.

AB 1460 by Assemblymember Matthew M. Dababneh (D-Encino) – Licensees: fiduciary funds.

AB 1492 by Assemblymember Lorena Gonzalez Fletcher (D-San Diego) – State claims.

SB 141 by Senator Janet Nguyen (R-Garden Grove) – Personal income taxes: exclusion: loan discharge.

SB 240 by Senator Bill Dodd (D-Davis) – County service areas: farmworker housing: County of Napa.

SB 324 by Senator Richard Roth (D-Riverside) – Public officers: custodial officers.

SB 610 by Senator Janet Nguyen (R-Garden Grove) – Wrongful concealment: statute of limitations.

SB 665 by Senator John Moorlach (R-Costa Mesa) – Elections: ballot measures.

SB 671 by Senator John Moorlach (R-Costa Mesa) – County employees’ retirement: retirement funds: transfers.

SB 742 by Senator John Moorlach (R-Costa Mesa) – City treasurers.

The Governor also announced that he has vetoed the following bill:

SB 341 by Senator Scott T. Wilk (R-Lancaster) – School bonds: citizens’ oversight committee: member terms. A veto message can be found here.

For full text of the bills, visit: http://leginfo.legislature.ca.gov

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