MOORLACH UPDATE — Costa Mesa Thankfulness — November 22, 2015

After six decades of life, it is incredible how many friends that I have made and kept along the way. I am most grateful and this time of year it is good to share our thankfulness.

The Daily Pilot provides a Thanksgiving column by the Mayor of Costa Mesa, Steve Mensinger, in the piece below. Mayor Mensinger has been mentioned a few times over the past two years in my UPDATEs, mainly for authoring the appropriate, yet controversial, COIN. For some fun look backs, check out:

MOORLACH UPDATE — Winsome Session — September 12, 2015 september 12, 2015 john moorlach

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

MOORLACH UPDATE — Front and Center — April 6, 2015 april 6, 2015 john moorlach

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

MOORLACH UPDATE — CRONEY Comedy — September 2, 2014 september 2, 2014 john moorlach

MOORLACH UPDATE — COIN Modifications — July 18, 2014 july 18, 2014 john moorlach

MOORLACH UPDATE — Debating/Delaying — May 21, 2014 may 21, 2014 john moorlach

MOORLACH UPDATE — COIN Discussion — May 19, 2014 may 19, 2014 john moorlach

MOORLACH UPDATE — COIN — May 2, 2014 may 2, 2014 john moorlach

MOORLACH UPDATE — Daily Pilot 103 — December 27, 2013 december 27, 2013 john moorlach

It is nice that my Mayor would mention me. Speaking of friends and being mentioned. Please save the date of December 7th for my upcoming fund raising event.

INVITATION: My quinquennial milestone birthday event is coming up quickly and will be held the evening of Monday, December 7th. It will be held at the world famous Grand Californian Hotel.

There are four levels of participation. Sponsors are contributing or raising $4,200 or more. Toast Committee members are raising $2,000 (find a friend that is able to assist you, if necessary, in reaching this goal). Open seats are $250 each. Those unable to attend, but would like to assist my re-election efforts can mail a contribution. A save the date flyer is below.

I am trying to reach you with a personal e-mail to serve on the Toast Committee, but the task has been a daunting time commitment, as you can imagine. If you have not heard from me, be patient or send me an e-mail asking me to hurry up.

Commentary: I have much to be thankful for this Thanksgiving
By Steve Mensinger
With Thanksgiving and the holidays fast approaching, I thought it might be a good time to mention that for which I’m thankful this and every year.

As a mayor, I’m thankful to represent the exceptional citizens of Costa Mesa. I’m thankful for all those individuals who reach out to me and share how much they care about their city and its future. I’m thankful for my fellow council members, who share my vision for what Costa Mesa can become, and to make the tough decisions needed to get there.

I’m thankful for those who care enough about Costa Mesa to spend their valuable time on Tuesday nights providing us with public input.

I’m thankful to our leadership team, CEO Tom Hatch, City Attorney Tom Duarte, Police Chief Rob Sharpnack and Fire Chief Dan Stefano, whose leadership, tenacity and vision are impressive to watch.

I’m thankful for assistant city CEOs Tamara LeTourneau, Rick Francis, Ernesto Munoz, and all the city department leaders who work tirelessly behind the scenes on the many tough issues we face, such as, how to help the homeless, how to best regulate group homes and how to engineer public places.

I’m thankful for our rank-and-file police and firefighters, who work every day to help uphold our laws, protect the vulnerable and earn our trust. We are all grateful for our general employees, who work behind the scenes to make this town a better place for residents and businesses alike. People like Gaetano Russo, who starts his shift daily at 4 a.m., cleaning, painting and polishing our city’s public areas.

I’m thankful for our active military members of the Army, Navy, Air Force, Marines and Coast Guard and the veterans, including members of my own family who have served, and especially those who have given the ultimate sacrifice.

I’m thankful for residents Julie Mercurio and Bruce Krochman, both of whom had the vision to create the Costa Mesa Public Square Facebook page, where well-meaning citizens have a forum for city issues, feedback, debate and civil dialogue. I’m also thankful for Costa Mesa TV, and the "Costa Mesa Minute."

I’m thankful for all those who walk with the mayor or attend our regular meet the mayor sessions. The input and suggestions I get from those who attend is essential, if not priceless.

I’m thankful for our exceptional schools and sports programs. I’m especially thankful for our school trustees and their downstream vision that has given us people like Estancia High School teacher and football Coach Mike Bargas, who has dedicated his life to the next generation in many quiet ways.

I’m thankful for the Rene and Henry Segerstrom Concert Hall, the Segerstrom Center for the Performing Arts and South Coast Repertory for bringing us world-class stage productions.

I’m thankful for the OC Fair and the Pacific Amphitheatre, and the four-week-long annual summer extravaganza that puts our city in the spotlight.

I’m thankful for South Coast Plaza , Metro Pointe, the Camp, the Lab, SoCo and Harbor and Mesa Verde Centers, the Orange County Marketplace, and all the great shops and merchants, action sports manufacturers, restaurants and centers that make Costa Mesa second to none in dining, retail and entertainment.

Oh, and I’m especially thankful for Skosh Monahan’s and its venerable owner and former mayor, Gary Monahan.

I’m thankful for our elected leaders at the federal and state levels, especially Rep. Dana Rohrabacher (R-Costa Mesa) and state Sen. John Moorlach (R-Costa Mesa) and my great friend, former mayor Jim Righeimer.

I’m thankful for the longtime mentorship provided to me by what I refer to as life coaches: George and Julie Argyros, the Gianulius and Lucas families, and Lew Schmid.

I’m thankful for my health, for the Palm Harvest Church community and my strong faith in God.

Finally, I’m eternally thankful for the love and companionship of my family, especially my wife, Robin, and our sons Cole and Hunter.

Together, the Mensinger family would like to take this time to wish you all a happy Thanksgiving and a blessed Christmas and holiday season.

STEVE MENSINGER is the Mayor of Costa Mesa.


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MOORLACH UPDATE — Outstanding Public Servant — November 19, 2015

Getting something done at the last possible minute can be fraught with things forgotten or incorrectly addressed. That’s why my wife keeps asking me questions before we go on a long trip, like "did you remember to turn off all the lights?"

All of us have perspectives on what someone else’s motives and methods might be. But did our former Orange County Assessor commit a felony or felonies? For me, the answer is, "no."

Should someone who worked closely with him for some two decades stand up and come to his defense? "Yes."

The joy of life is that you have to live with the calls that umpires and referees make. The OC Register covers one of the calls where I respectfully disagree in the first piece below. So too does the Newport Beach-Corona del Mar Patch and My News LA, providing the City News Service piece, in the second article below.

Also see MOORLACH UPDATE — Webster Guillory — September 10, 2014 september 10, 2014 john moorlach and MOORLACH UPDATE — Laws, Contracts and Costs — July 17, 2014 july 17, 2014 john moorlach.

BONUS: We are hosting a briefing on the legislation that I will be proposing for the 2016 Session. We have reviewed many ideas and have narrowed it down to the allotted amount. Then we narrowed it to the effective amount. Come and provide your input on the various issues that I will focus on in the new year. The invitation is at the conclusion of this e-mail.


Guillory prosecution ‘overkill for a clerical error,’ says ‍Moorlach.


Rejecting the claim that signing wrong election papers was an honest mistake, a jury Wednesday found former Orange County Assessor Webster Guillory guilty of two misdemeanor counts of filing false nomination documents in his failed 2014 reelection bid.

Guillory, 71, faces a maximum of two years in jail and a $2,000 fine at his Jan. 8 sentencing hearing. Guillory’s attorney said he will first file a motion for a new hearing.

Some who’ve worked with Guillory lamented the conviction and wondered why the District Attorney’s Office, which originally filed four felony charges against him shortly before his election loss, bothered prosecuting the case.

“It was overkill for a clerical error,” said state Sen. John Moorlach, R-Costa Mesa, a former county supervisor and treasurer who often worked with Guillory. “The amount of time and resources used by the district attorney was out of proportion. It’s very unfortunate to have this occur at the end of an illustrious career."

Susan Schroeder, chief of staff to District Attorney Tony Rackuackas, responded that her office had a responsibility to uphold the law.

“This was never about whether Mr. Guillory was a good man,” Schroeder said. “It was whether he committed a crime. Twelve members of the community heard the evidence – including testimony from the defendant – and determined that he committed a crime.”

Guillory had been planning to retire last year but made a last-minute decision to seek reelection when his preferred successor decided to not to run. Guillory and two of his office’s managers gathered the required voter signatures on the afternoon of March 7, hours before the 5 p.m. filing deadline.

Guillory circulated two of the six nomination forms but signed as the circulator for four of them, indicating that he had witnessed 20 voter signatures that he had not actually watched being signed.

His attorney, John Barnett, argued that Guillory had established a reputation for honesty in his 16 years as the county’s property tax assessor and had signed the forms thinking they were ones he had circulated. The two pages in question had been circulated by assistant Michael Hannah and had been given to him to be signed by assistant Shaw Lin, who’d also helped gather signatures.

“He relied on (Lin) to put in front of him things that he should sign,” Barnett said in Tuesday’s closing statements. “He didn’t intentionally turn in a document that was incorrect.”

But Deputy District Attorney Brock Zimmon prevailed in arguing that it was no accident – that the election forms were the most important documents Guillory would sign that day and that he would have known that he signed four forms even though he only circulated two.

“When he filed that paperwork, he knew it was false,” Zimmon said, telling the jury that Guillory was more careful than portrayed by Barnett. “He’s too smart to be as dumb as he wants you to think.”

Juror Kevin Ford said he was the last holdout vote for acquittal because he worried that 71-year-old would wind up in jail. He noted the Assessor’s Office employees who testified on Guillory’s behalf.

“They had such profound love for this man,” Ford said. “They praised him to the sky. … (All jurors) agreed it’s a pity he decided to run on the last day you had to file. My heart goes out for the guy. He’s a decent person.”

Guillory topped the field of three in the June 2014 primary, finishing 2 percentage points ahead of former Board of Equalization member Claude Parrish. In September, the district attorney filed four felony charges, which were reduced by a judge to two misdemeanors after the November election.

The Parrish campaign used the charges to attack Guillory. On Election Day, Parrish prevailed, 53 percent to 47 percent.

“The felonies were trying to kill a fly with a shotgun,” Moorlach said. “The time (of the filing) was interesting.”

Asked about the common political supporters of Parrish and Rackauckas, Schroeder responded that Webster and Rackauckas also shared supporters.

“Tony has always enjoyed broad support,” she said. “Politics has no place in enforcing the law.”

Guillory declined comment after Wednesday’s verdict.

City News Service contributed to this story.

Contact the writer: mwisckol

Politician from Newport Beach Convicted for Filing False Election Papers

Former Orange County Assessor Webster Guillory, of Newport Beach, could face two years in jail.

By Page Austin

Former Orange County Assessor Webster Guillory was convicted today of a pair of misdemeanors for signing his name on nominating petition forms that he did not circulate during a 2014 re-election bid.

Guillory, 71, faces up to two years in jail and $2,000 in fines for his conviction on two counts of filing false nomination papers. Sentencing was scheduled for Jan. 8.

During the trial, Deputy District Attorney Brock Zimmon argued that Guillory knew he was lying on affidavits declaring that he had circulated the nominating petitions. Guillory’s attorney insisted his client simply made a mistake.

“I’m glad the jury listened to the evidence and followed the law to reach the just result,” Zimmon said.

Juror Kevin Ford told City News Service he was the last holdout vote for acquittal on the jury. Ford said he was having trouble voting guilty because he worried about sending a man in his 70s to jail.

“In my mind, I was trying to predict the outcome for Mr. Guillory,” Ford said.

Orange County Superior Court Judge Thomas Glazier gave jurors an instruction telling them to put aside their “personal feelings” while deliberating, Ford said.

Guillory’s character witnesses in the trial “brought a tear to my eye,” Ford said.

“They had such profound love for this man,” Ford said. “They praised him to the sky, and you think, ‘How can this be happening?”’

Guillory had not initially planned to run for re-election in 2014, but he made a last-minute decision to jump into the race when one of his office managers, Mike Hannah, dropped his bid for the job.

Sen. John Moorlach, R-Cosa Mesa, who slammed prosecutors for bringing the case against Guillory, said he was asked to run for the job when it appeared Claude Parrish would not have any opposition in the election.

“I declined because the time limit was too short,” Moorlach said.

Hannah and another office manager, Shaw Linn, helped collect nominating petition signatures for Guillory as the March 7 filing deadline was approaching. Just 3 1/2 hours before the Registrar of Voters was set to close, the assessor picked up the paperwork to get his name on the ballot, Zimmon said.

Registrar of Voters official Christina Avila gave Guillory the paperwork with instructions on how to obtain signatures legally, Zimmon said. Guillory received a candidates’ handbook that outlined how a circulator of a nominating petition must sign the affidavit that they witnessed the affixing of the signatures, Zimmon said.

Guillory only needed 20 valid signatures, but he filed about twice that number, Zimmon said.

Guillory collected nine signatures, including his own, on two nominating petitions while Hannah and Linn gathered the rest from their co-workers, Zimmon said.

But Guillory broke the law when he signed the affidavit declaring he had witnessed the signature-gathering on the petitions circulated by Hannah and Linn, according to the prosecutor.

Guillory’s attorney, John Barnett, countered that his client was busy running the office while also trying to gather signatures the afternoon of the filing deadline.

“He’s answering phones, he’s conducting business and he’s signing documents, and he’s signing a lot of documents during this time period,” Barnett said.

By about 3:30 p.m., Guillory and Linn were in a conference room of their offices organizing the petitions, Barnett said. In all the confusion, Guillory mistakenly signed nominating petitions Hannah had circulated, the attorney added.

“Did Mr. Guillory sign as a circulator when he knew Hannah was the circulator or did he sign mistakenly believing he was the circulator?” Barnett said. “That’s the issue in this case.”

The defendant has “got no reason, no reason at all to affix his name to Hannah’s petition papers and we know that because of where Mr. Hannah was at the time,” Barnett said.

Hannah was about 150 feet away in the office, Barnett said.

Parrish, a former chairman of the state Board of Equalization, defeated Guillory in the November general election last year.

Moorlach said Guillory was an “outstanding public servant, and this is a tragic occurrence to a fantastic career.”

The senator said the case was “overkill by the DA. This is a clerical issue that should have been reported to the (Fair Political Practices Commission).”

Moorlach, a former Orange County supervisor and worked alongside Guillory as the county’s treasurer, criticized prosecutors for the resources devoted to the case.

“It’s so much to do for two misdemeanors. The proportion is so out of line for a man who has had such a distinguished career at the county,” Moorlach said. “I would say the amount budgeted for this case far outweighs the necessity of going after someone on what I would consider a minor misstep — certainly not one that was diabolical or premeditated. He was just hustling to meet a deadline.”

Susan Kang Schroeder, chief of staff for District Attorney Tony Rackauckas, noted the charges against Guillory were knocked down from felonies to misdemeanors at the preliminary hearing.

Senator Moorlach, with all due respect, was not there for the trial and the evidence that was presented,” Schroeder said. “And 12 members of our community decided it was a crime and they needed to hold Mr. Guillory to the law. They found Mr. Guillory guilty of a crime and we respect their verdict.”

City News Service


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MOORLACH UPDATE — Chutzpah — November 15, 2015

The Free Dictionary, available online, provides the definition of this word:


(also hutz·pah) (KHo͝ot′spə, ho͝ot′-) n. Utter nerve; effrontery: "has the chutzpah to claim a lock on God and morality" (New YorkTimes).

Some have this interpretation for chutzpah: a person who kills his parents and pleads for the court’s mercy on the ground of being an orphan.

The author of the OC Register editorial submission below was a strident proponent and advocate for "3% @ 50" for the Association of Orange County Deputy Sheriffs. I was there at the time, I can name names, and Tom Dominguez has been involved in this fiscal nightmare from inception.

To have him lament about individuals who complain about unsustainable defined benefit pension plans is tragic comedy at its finest.

I’ve already explained about my pension plan involvement several times in past UPDATES.

Here’s a recap of where I stand on public employee pensions:

1. Pension benefits must be sustainable and funded.
2. Pension benefits should not be given retroactively.
3. Pension benefit negotiations should be done in full view of the public, with public oversight and approval.
4. Properly structured, pension benefits are meant to be a part of a meaningful employment package, not to be a perk that’s inflated and abused through closed door negotiations.

Interestingly, the head of the OC Deputy Sheriff’s union is directly opposed to me on each of these core beliefs and has acted to create a pension system that is opposite of these fundamental rules.

Instead of addressing the huge unfunded liability that has become the pension system, union leaders have resorted to delivering personal attacks using half-truths and omitting essential information.

But, what this leader of this public safety union doesn’t tell you are the following:

* Police departments and county sheriff’s departments have been downsizing because of the pension costs.

* New recruits are bitter about the pension, because it makes them the first target of any future layoffs (in public employee union life, the last one hired is the first to be laid off).

* Most pure public safety careerists did not go into this field because of the pension, but for a love of the industry.

* Most honest public safety officials, current and past, will tell you that moving from "2% @ 50" to "3% @ 50," retroactive to the date of hire, was a major fiscal mistake.

* The cost of the unfunded actuarial accrued liability for AOCDS is probably around $1.7 billion. That puts the author in the Citron category in the scope of fiscal calamity to the County of Orange.

* The successful negotiation of the "3% @ 50" benefit with the then Orange County Board of Supervisors was so stealth, reporters were unaware of the coup for months.

Chutzpah. How dare this beneficiary of "3% @ 50" even dare to criticize someone in a similar system? Especially when he, too, is a future recipient of lavish retirement benefits?

I get being a union leader, but really? I don’t see anyone in the private sector defending lavish public employee pension plans. I see them suffering from the lack of other adequate governmental services and the threats of tax increases (pothole tax, et al).

Find me someone with at least a little credibility that says it’s perfectly fine to increase a defined benefit pension formula half way through the game without finding an immediate funding source for the newly created liability.

"The pot calling the kettle black" is getting very wearisome. Instead of the diversionary tactics, why not buck up to the bargaining table and right a wrong?

Officials don’t put money where mouths are on pensions

By TOM DOMINGUEZ / Contributing writer

Some of the loudest critics of the county of Orange’s pension system stand to benefit the most.

Fourth District Supervisor Shawn Nelson stumped his way to a seat on the Board of Supervisors in 2010 by railing against the county’s pension system and its unfunded liabilities.

Then he immediately signed up for the most generous pension plan the county offered.

That move triggered reciprocity with the city of Fullerton, where Nelson served as a councilman, which could potentially boost his pension even more – by as much as 13 times. Instead of being based on an annual salary of $10,919, his 7 1/2 years on the Fullerton council would be calculated at his county supervisor salary – $147,168 plus $13,680 in other pay.

Critics howled hypocrisy. Nelson sent a letter to OCERS on Aug. 26, 2010, explaining he didn’t want a county pension.

Opting out of OCERS two months after being sworn in as county supervisor galvanized Nelson as a champion for pension reform and the taxpayer. Free of the public pension stigma, Nelson preached about the evils of government corruption on his reelection campaign website.

“We can’t afford an out-of-control pension system, and we can’t afford the back-room deals with special interests,” Nelson wrote.

Critics screamed hypocrisy again in February 2014 following revelations that Nelson was zipping around the county in a taxpayer-funded Prius while also collecting a pensionable $9,180 annual county car allowance.

Nelson reasoned he is sacrificing income by serving on the Board of Supervisors, so such perks should be taken in perspective. Also, he noted, he declined a county pension.

“My bonus (as a lawyer) was almost double what my current salary is,” Nelson told the Register. “It’s all part of the big picture. I’m hardly getting away with something here.”

Or so we were led to believe. The few months Nelson spent as a member of OCERS, combined with Measure B, a voter-approved “pension reform” initiative authored by Nelson, conveniently created a loophole to allow Nelson to renege on his 2010 request to be removed from OCERS and force county taxpayers to back pay for his pension – with interest – to the tune of $247,625.

Supervisor Pat Bates remained true to her promise not to accept a pension. Nelson’s current colleagues on the board were forced into the lower pension plan. But Nelson hung on the “2.7%@55” plan for his first term.

Then-county Treasurer John Moorlach vigorously opposed the 2.7%@55 enhancement for county employees. It was an anti-pension platform that handed him victory in his 2006 county supervisor race. Despite his vocal opposition, Moorlach also took the enhanced pension benefit. He could have declined a pension when he was re-elected in 2010, but he signed up for the benefit again.

Moorlach began drawing a taxpayer-funded county pension worth $83,820 a year earlier this year – and, combined with his salary in the state Senate, earned the dubious distinction of one of Sacramento’s profitable double-dippers.

Nelson boasts on his campaign website that his time is spent “demanding accountability and standing up for taxpayers.”

He will “scrutinize every county department and function for cost savings, transparency and effectiveness. That is my promise to you.”

We think Nelson’s scrutiny should start with a long, hard look in the mirror.

Tom Dominguez is president, Association of Orange County Deputy Sheriffs.


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MOORLACH UPDATE — AB 521 — November 12, 2015

On September 10th, I voted for AB 521 (Nazarian), which provides the ability for someone who has consented to having blood drawn at a primary care clinic, to also be offered an HIV test.

This seemed like a reasonable modification, as someone who benefits from regular blood tests.

What made it unique is that I turned out to be the only Republican to vote for this bill. Shortly after my vote, its author, Assemblyman Adrin Nazarian came by and thanked me.

The CALmatters’ photographer caught the moment (see It sparked the topic of better relations between Republicans and Democrats.

I know that I personally purposed to build good working relationships with everyone in the Legislature. Orange County Health Care Agency Director Mark Refowitz, during a visit to Sacramento, caught me having dinner with Sen. Ed Hernandez (D – Azusa). Senator Bob Hertzberg (D – Van Nuys) had me over for a dinner party near the end of the last session with a handful of members of the Legislature from both parties.

When you are there for the long-term, it makes great sense to agree to disagree and still form friendships. CALmatters points this out in the piece below.

In trying to determine why things are improving between the parties, I would like to think that it’s because of our gregarious and fun personalities. But something tells me that there a number of reasons. Perhaps, with the annual budget now being required to be balanced by the end of June, the animosities of dragging this process as far out as October are gone. No longer are Democrats becoming overly irritated with Republicans who were not providing the two-thirds margin necessary to pass this mandatory annual bill. And I’m sure not having spouses complain about cancelling vacation plans has helped improve relations for all.

Overall, I certainly enjoyed good engagements with my colleagues. It is nice to provide a positive perspective on my first Session. I had a ball.

More than friends?


Assemblyman Adrin Nazarian (D-Sherman Oaks) thanks Sen. John Moorlach (R-Costa Mesa) for voting in favor of his bill PHOTOGRAPH BY MAX WHITTAKER FOR CALMATTERS

Compared with the partisan gridlock that gripped Sacramento just a few years ago, dynamics in the statehouse can seem almost cuddly these days.

There are friendly handshakes after lawmakers cross party lines to vote for each others’ bills. Bipartisan banter is visible on social media, where legislators trade funny stories and post selfies with friends across the aisle. A group of young lawmakers recently formed a bipartisan caucus focused on technology, while Democrats and Republicans attend dinner parties together or don red and blue to play baseball.

“There is a renewed emphasis on working together and building relationships. It is a completely different way of thinking,” said Rob Lapsley, who has been close to Capitol politics for decades as a Republican appointee and advocate for business groups.

After several years of partisan gridlock and stalled budgets, angry voters passed a series of political reforms that made important changes in the Legislature. District boundaries are now drawn by a citizens’ panel, the “Top Two” primary was designed to elect more moderates and a supermajority vote is no longer needed to pass the budget.

One of the biggest changes allows lawmakers to serve up to 12 years in one chamber, replacing a six-year term limit in the Assembly and eight years in the Senate. That is one reason Sen. John Moorlach (R-Costa Mesa) said he broke with fellow Republicans this year to support a bill about HIV testing by Assemblyman Adrin Nazarian (D-Sherman Oaks).

“I’m thinking, ‘What’s the bigger picture?’ How do I develop a relationship with the other side?” said Moorlach.

Like Moorlach, who took office this year, most legislators in office today were elected since the new rules passed. With so many signs of friendliness, many wonder whether Sacramento has shed its rigid ideological differences and is now more capable of reaching bipartisan compromise.

That question is being put to the test. Lawmakers are in the midst of two special sessions to find money – most likely new taxes – for long-overdue road repairs and a shortfall in the Medi-Cal health system for the poor.

Democrats hold every statewide office as well as large majorities in both houses of the Legislature, so they can pass almost anything over Republican objections. But Republicans remain critical on a huge issue: taxes.

Raising taxes requires approval from two-thirds of the Legislature, which takes all Democrats plus at least three Republicans – two in the Assembly and one in the Senate. So far, however, the proposals to get at least $3.6 billion for road repairs and another $1 billion for Medi-Cal have stalled over partisan differences on higher taxes.

“Anything is possible but some things are just not probable,” said Senate Republican leader Jean Fuller of Bakersfield.

But a leading GOP voice in the Assembly said, “everything has to be on the table.”

“I’m not convinced that what’s been proposed are the right answers. But we’re not yet done with those conversations,” said Assemblyman Chad Mayes of Yucca Valley, who will take over next year as Republican leader.

The incoming Assembly speaker said he saw bipartisanship at work when he helped negotiate a $7.5 billion water bond last year, another issue that required approval from two-thirds of the Legislature. Assemblyman Anthony Rendon (D-Lakewood) said the plan was informed, in part, by trips he made to Central Valley farming communities at the invitation of Republican colleagues.

“So I have good working relationships with a lot of those folks,” Rendon said.

He was elected in 2012 as part of the first wave of lawmakers allowed to remain in one chamber for 12 years. That class of Assembly members – from both parties – created a tradition of going to dinner together a few times a year.

“We just get together to relax as members of our class in a bipartisan way,” said Assemblyman Ken Cooley (D-Rancho Cordova).

Two members of the class – Assemblywomen Melissa Melendez and Lorena Gonzalez – exemplify the public face of bipartisanship. Melendez, a Republican from Lake Elsinore, is a Navy veteran and an ardent supporter of gun rights. Gonzalez, a Democrat from San Diego, is an attorney and former union leader. They’re political opposites on most issues but have become friends.

“I totally disagree with her but I totally respect her,” Gonzalez said.

Will those kinds of relationships shape the Legislature’s ability to tackle the big issues that loom in the months ahead? It’s too soon to say for sure, Melendez said.

“But I think… there will be more willingness to sit down and talk,” she said. “Instead of immediately putting up the guard.”


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MOORLACH UPDATE — Blame the Unions — November 9, 2015

The Saturday OC Register provides an announcement for a constituent service that my office will be providing to the residents of the city of Laguna Woods the second Monday of each month (but December will be on 7th), and is the first piece below.

The second piece is a Letter to the Editor in the San Diego Union-Tribune. Let it allow me a little review of the landscape, starting with an editorial I did for the OC Register more than a dozen years ago (see MOORLACH UPDATE — Pension Editorials — September 19, 2013 September 19, 2013 John Moorlach). As it is a little difficult to read on my blog, I’ve provided it in full as a bonus at the bottom.

Although twelve years old, the editorial is still relevant today. It even addresses the subject of my last UPDATE (see MOORLACH UPDATE — SB 185 — November 6, 2015 november 6, 2015 john moorlach). One clarification, the city I referred to actually contracted with the Los Angeles County Fire Department.

So the drill is rather humorous. Allow for collective bargaining for government employees. Then have government employee unions get involved in electing members of governing bodies. Financially supported candidates are then asked by the unions’ leadership to support and vote for massive salary and benefit increases when contract negotiations occur. Should these compensation increases put a fiscal strain on the municipality, then the unions can blame the elected officials who voted for the above market enhancements. Brilliant. Blame the politicians. Talk about twisting the strategy of plausible deniability.

Sunday’s OC Register had an enlightening piece by Laurel Rosenhall on the current status of this strategy — see Public employee union pressures are so common place and understood, that candidates are trained on how to deal with them and others at conferences. And there is no shame.

The Orange County Republican Party Central Committee has found a way to respond to this conflict of interest. If you want this organization’s endorsement, then you are asked to "please sign the ‘union-free’ pledge: I WILL NOT ACCEPT CAMPAIGN CONTRIBUTIONS FROM GOVERNMENT UNIONS."

I’m proud to say that I implemented this policy long before the local Republican Party did. And my twelve-year-old editorial below should explain why.

Now you can understand why I totally agree with the San Diego Union-Tribune’s title, "blame politicians, not the bridge builders." I warned you this would happen! For the sad condition of Caltrans, it is the Sacramento politicians, past and present, that took campaign funding from public employee unions that should be blamed.

Let me deal with the public employee union in question. The Professional Engineers in California Government (PECG) spends nearly $2 million per year in political contributions (see MOORLACH UPDATE — Money for Nothing — September 2, 2015 september 2, 2015 john moorlach).

Let’s do some math. If one decided to contribute the maximum amount to each Legislator in a four-year cycle, Assembly members would receive a total of $1,344,000 ($4,200 times 4, for two elections every two years for the primary and general), and Senators would receive $336,000, as they are up for election every four years and have a population half the size of the Assembly.

You would only need $1,680,000 over four years, not $8,000,000, to get the attention of every Legislator. The remaining $6 million is probably spent on independent expenditures on behalf of candidates they support. Those in my District fully appreciate this type of political spending by the number of hit pieces against me that were funded by public employee unions. And I again refer you to Laurel Rosenhall’s piece (see

It is politicians from the majority party in Sacramento that let these same public employee unions run Sacramento. It was not the management of Caltrans that testified against my bill, SBX1-9 (see MOORLACH UPDATE — SBX1-9 — July 18, 2015 july 18, 2015 john moorlach). It was a PECG representative, and he presented false testimony in order to kill the bill (see MOORLACH UPDATE — Cost of Engineers — August 26, 2015 august 26, 2015 john moorlach).

For more on the senate special session transportation committee hearing on sbx1-9, see moorlach caltrans update — senate hearing video clips — august 20, 2015 august 21, 2015 john moorlach.

It is the majority party that refused to address the bureaucratic inefficiencies in Sacramento, allowing Caltrans to employ more than 3,000 engineers and architects too many and failing to streamline this agency (see MOORLACH UPDATE — Pothole — August 19, 2015 august 19, 2015 john moorlach and MOORLACH UPDATE — Caltrans Fairways — August 28, 2015 august 28, 2015 john moorlach).

It is the majority party that has short-changed road funding in their annual budgets (see MOORLACH UPDATE — Transportation Strategies — August 13, 2015 august 13, 2015 john moorlach). All the while, gas tax revenues have been rising (see MOORLACH UPDATE — SB 350 Compromise — September 10, 2015 september 10, 2015 john moorlach).

It is the legislative majority in Sacramento that diverted funds away from road maintenance in their annual budgets in order to make the ever increasing public employee pension plan contributions (see MOORLACH UPDATE — Bay Bridge Bloat — October 29, 2015 october 29, 2015 john moorlach).

It is the majority party that did nothing when either the State Auditor (2011 and 2015) or the State Legislative Analyst’s Office (2014) issued scathing reports about internal control weaknesses, and more, being graphically displayed at Caltrans (see MOORLACH UPDATE — Katy Grimes — September 23, 2015 september 23, 2015 john moorlach).

Have you seen the majority party in the Transportation Committees demand a public account for the findings made in these reports? Have you seen our Governor exert any managerial authority over Caltrans? Isn’t the Governor the Executive that runs Sacramento? I can’t find an appointed executive officer that agency department heads have to report to. Doesn’t anyone run Sacramento? Other than the unions, of course.

It is the legislative majority that let Caltrans run over budget on 62% of their projects (see MOORLACH CALTRANS UPDATE — Cost Overruns — August 12, 2015 august 12, 2015 john moorlach)!

It is the majority party that allows employees in other agencies to go wild, as well (see MOORLACH UPDATE — Pricey Labor — September 7, 2015 september 7, 2015 john moorlach).

It is the majority that, instead of addressing the managerial nonsense, actually reward it with a 7 percent raise by voting for AB 131 (see MOORLACH UPDATE — Winsome Session — September 12, 2015 september 12, 2015 john moorlach)!

It is the majority party that, after approving the largest budget in state history, still want to extract more taxes from its residents (see MOORLACH UPDATE — Pothole Tax — August 30, 2015 august 30, 2015 john moorlach).

It is the majority party that can’t seem to explain why Californians are paying the highest gas taxes but have the worst roads. Even respected pundits are chiming in (see MOORLACH CALTRANS UPDATE — Dan Walters — August 24, 2015 august 24, 2015 john moorlach).

it is the legislative majority that buy the union line that i would propose "no-bid contracts" (see moorlach update — pothole — august 19, 2015 august 19, 2015 john moorlach). but, then again, roy flores has been loose with the facts before (see MOORLACH CALTRANS UPDATE — Facts vs. PECG — August 18, 2015 august 18, 2015 john moorlach and MOORLACH UPDATE — Road to Consensus — August 17, 2015 august 17, 2015 john moorlach).

it is the majority party that allows caltrans to spend 4.7 times the national average on your roads (see MOORLACH UPDATE — Turn Your Radio On — August 14, 2015 august 14, 2015 john moorlach and MOORLACH UPDATE — Reduction Tax — August 8, 2015 august 8, 2015 john moorlach).

it is the legislative majority that seems to be fine with the fact that only 20 percent of the funding dedicated to road repairs and improvements gets to that task (see moorlach update — hitting the brakes — august 11, 2015 august 11, 2015 john moorlach).

Who is this majority party? Of course, they are the Democratic majority (see MOORLACH UPDATE — Caltrans Diet — August 7, 2015 august 7, 2015 john moorlach). They can thank Roy Flores for getting them into their elected positions. And why not? PECG has pillaged Caltrans and Sacramento. And now they come to you with a straight face, tell you everything is fine, and that you need to pay higher taxes.

I warned you this was going to happen.


Casework assistance: State Sen. John ‍Moorlach will host mobile office hours at City Hall, 24264 El Toro Road, on Monday from 3 to 5 p.m. The senator’s staff will assist constituents with casework issues dealing with the DMV, Franchise Tax Board, health care and more. Appointments: 949-223-5037

Jennifer Karmarkar, jkarmarkar

Inline image 2

Blame politicians, not the bridge builders

Steven Greenhut’s column “Does bloated Caltrans need more cash?” (Oct. 28) rightfully laments the delay in replacing the east span of the Bay Bridge after the 1989 earthquake but points the finger of blame in the wrong direction. Not surprisingly, the fault lies with the politicians, not the professional bridge builders.

Two governors changed the design three times, ultimately selecting the most expensive, high-risk alternative. Seven years later, the bridge was delivered on time within 5 percent of the $6.2 billion estimate.

Another politician, state Sen. John Moorlach, has introduced legislation to require outsourcing the state’s engineering work through no-bid contracts at twice the cost. This would waste more taxpayer dollars and delay projects even further.

Roy Flores

Past President

Professional Engineers in California Government


The Orange County Register

The ongoing union takeover

Aggressive tactics cow lawmakers and yield a taxpayers’ nightmare

JOHN M. W. MOORLACH, Orange County Treasurer-Tax Collector

September 21, 2003

You too can have a nice career and make a comfortable income, plus attractive fringe benefits, perquisites and the best retirement benefits imaginable.

The strategy is simple: Take over the government that employs you.

Why struggle for a living in the private sector? Become an employee for a state, county or city municipality. Negotiate your way into high-paying jobs with lucrative retirement packages.

Here’s how to do it:

The first step is to get hired.

Second, form an association of similarly occupied employees ("association" sounds less threatening than "union").

Third, have the association financially support candidates for elected offices that have an impact on its financial well-being, like legislators, county supervisors and city council members.

(Gov. Gray Davis has followed this formula to a T, taking contributions from employee unions and doing their bidding. That’s why you hear the phrase "pay-to-play" so often about our insecure Governor.)

Fourth have the association negotiate generous salary and employee benefit increases as a bargaining unit. If the elected officials don’t vote to approve these good-faith bargaining efforts, then fund their opponents in the next election. (This threat was a satisfactory inducement for Gov. Davis to sign legislation with significant increases in pay and benefits.)

Government employees that participate in a public pension plan are eligible to vote one or more of their co-workers to the retirement board. Why not back a member of the association? Fifth, endorse association members that run for these positions.

Sixth, pursue a controlling majority on the retirement board.

Seventh, let the elected officials know that retirement benefits are not "competitive" enough. If they don’t vote to increase pension benefits, fund their opponents in the next election. And besides, a good number of the retirement board members (wink, wink) believe that increasing benefits is the proper course to pursue.

Eighth, leverage that control over the retirement board to protect association members.

Ninth, when any elected officials question the benefits that have been extracted, indignantly remind them that they were negotiated and approved by their elected governing body. Fund the opponents of those who dare ask in the next election.

Simple enough. Could it work? It already has, right in our own back yard.

Our 2001-02 county Board of Supervisors unanimously approved a 50 percent increase in retirement benefits for one bargaining unit. And supervisors didn’t provide funds for this increase. Accordingly with one vote they created an unfunded actuarial accrued liability about one-fourth the size of the total 1994 bankruptcy loss of $1.6 billion. That’s why you’re reading about the county considering pension obligation bonds.

To the victor go the spoils. Public unions have followed the game plan and they are reaping the rewards. Their elected leaders have done their jobs, perhaps too well.

Just last week, the board of the California Public Employees’ Retirement System agreed to consider restricting investments in companies that take over or privatize government services. This is seen as leverage to protect some 1.4 million municipal union retirement plan participants. Brilliant, yet unbelievable!

The goal of money managers is to search for value. Being constrained in investment selection by personal political agendas is known as social investing, and it has a cost. More often than not, it means lower returns on investments. For a defined benefit pension plan, which guarantees a specific monthly payment at retirement, it means that the taxpayers may have to pay higher taxes to fund the difference.

Using the pension plan’s assets to pursue a political agenda is a tantamount to mutiny. Public employees work for the taxpayers! But they’ve lost sight of their true purpose. They have taken over government employers.

Can taxpayers respond? Where do they start?

First, vote for individuals who aren’t insecure and dependent upon unions to get elected.

Second, stop voting for elected officials with a history of placating unions when they try to run for higher office.

Third, make governments realize that they have no business withholding union dues, via embedded political contributions, from employee paychecks. Why should a government use public funds to further a union’s agenda? The state of Colorado has already implemented this policy.

Fourth, modify the retirement benefits by returning to the previous, already attractive benefits for new employees.

If the financial condition deteriorates further, consider freezing the current defined benefit plan and institute a defined contribution plan, where retirement benefits are determined based on accumulated contributions and earnings, for all new employees.

If the financial hemorrhaging is too severe, then look at another Chapter 9 bankruptcy to possibly renegotiate bargaining unit contracts.

Fifth, ironically, consider privatizing significant public employee sectors. Competition has a way of bringing costs to the appropriate level. For example, due to recent salary and benefit cost increases, some cities may be near the break-even point where a privatized police department, utilizing the same facilities and equipment, may be more cost-effective. One Orange County city is seriously looking at using the Los Angeles County Sheriff’s Department, instead of Orange County’s, for this very reason. You can see why unions want to stop privatization.

The cost of government employer takeovers may become their own undoing. The union members of the board of CalPERS may see the writing on the wall. That’s why they are pursuing a desperate attempt to prevent an unraveling that they have created.

Not to worry: Thanks to their donations, they’ve got their hooks in the only people who could properly correct this mess, their – and our – elected officials.


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MOORLACH UPDATE — SB 185 — November 6, 2015

California attempts to determine the reverberations of the passage of Senate Bill 185 (De Leon), which directs how the state’s pension funds should manage assets with regards to coal. Senate Bill 574 (Pan) was on the Senate Floor just three days prior, which would have required more disclosure on alternative investments for the University of California pension system. Let me provide the drama.

For SB 574, on the Floor, I inquired of the author if the requirements he was imposing on the UC pension system were different than those that were required of CalPERS and CalSTRS. Senator Pan, from Sacramento, stated that his bill would require the UC system to mirror the policies of the state’s largest two systems.

I also asked about particular money managers, like Kleiner Perkins and Sequoia. I was told that they were in the two state systems and were complying (see Consequently, instead of opposing SB 574, I voted to support it. Regretfully, it was under a false premise, which I’ll explain later.

It is a little more daunting to address a bill that is authored by the President pro Tempore of the Senate, like SB 185. But, after he presented his bill, I stood up on the Floor and reminded my colleagues that I had the privilege of sitting on the Board of one of the largest pension systems in the nation for twelve years. I then stated that the primary rule in a pension plan is to invest for value.

I then stated that the two money managers that I inquired about on SB 574 were no longer with CalPERS and CalSTRS. That the answer that I was provided by the Senator from Sacramento was not accurate. The fact that these two money managers were gone proved my point: meddling and requiring more disclosure of private equity investments was a way to scare off astute money managers that did not want to reveal trade secrets.

I told the Senate that alternative money managers did not want Legislative meddling. Regretfully, not having such firms in the pension systems’ stables hurts the taxpayers and the pensioners (see (Fortunately, this bill stalled in the Assembly and looks to be a two-year bill.)

"Leave the management of portfolios to the Chief Investment Officers . . . I encourage a ‘No’ vote (on SB 185)."

SB 185 passed with 24 votes. All of the Republicans voted against, except for Senator Nielsen, who did not vote. Senator Roth voted against the bill and Senator Hertzberg also did not vote (a subtle way of opposing the bill).

I know that I am in the weeds here, but that’s my job. And I’m happy to explain and defend every vote that I make. And, on those occasions when I do lift my microphone, I’m happy to relate my arguments, either for or against, a certain piece of legislation.

Would the public employee unions have heart burn over this bill? My response was, "no." The investment holdings in coal were minimal, only $83 million. What the piece below does not mention is whether this is the cost or the current market value. If it is the cost, and it is sold for $83 million, then there is no loss and no story. If it is the cost basis and it is sold for more, there is a profit. If it is sold for less, in a fire sale, then losses are sustained. It is easy to understand that forcing a sale is imprudent.

The public employee unions are the ATM for the Democrats. That makes them very influential in Sacramento. If they really had a problem with this bill, they would have had it killed long before it reached the Senate Floor.

As one of the few legislators who has served on a pension board (probably the only one – I’m not aware of any other current legislators who have been on a pension board), let’s hope that my counsel will be given more credence in the future. But, when the President pro Tem authors the bill, it has to be very difficult for my colleagues on the other side of the aisle to oppose his efforts.

The second piece is on the website of the LA Times and covers the current intrigue about the re-election efforts of my seatmate, Senator Cathleen Galgiani.

I enjoy sharing a paired desk with her and we have established a healthy relationship. We enjoy good discussions and she has a fantastic sense of humor. The difficult component of building good relationships with those on the other side of the aisle is that I will have to support their opponents in the upcoming election cycle.

The piece provides another perspective on the power base known as the "third house." Lobbyists and businesses contribute to candidates and incumbents who share their interests and if they have a member who will vote with them when they need it, they will generally continue to support that candidate. And they must be communicating that they have built a good relationship with Senator Galgiani. The fun and intrigue never seems to stop. At least you can obtain a glimpse, from another angle, of my new world.

California pension systems stand to lose millions by divesting from coal

By Rob Nikolewski

No coal will likely translate into less money for the nation’s largest pension fund for state employees.

But at least for now, it appears the unions representing members of the California Public Employees’ Retirement System aren’t kicking up a fuss about the potential financial hit from a law calling for CalPERS to sell its holdings in companies that derive at least 50 percent of their revenue from coal mining.

“The CalPERS board has done a good job over the years,” said Carroll Wills, communications director for California Professional Firefighters, the largest firefighters union in the state with 30,000 members. “We trust their judgment on these things.”

Last month, Gov. Jerry Brown signed a bill calling on state pension funds to divest from 24 coal mining companies that have $83 million in holdings.

The law also affects the California State Teachers’ Retirement System.

CalPERS holds more than $300 billion investments, the biggest in the country, while the investments at CalSTRS are worth nearly $191 billion.

Coal is “a nuisance to public health and it’s inconsistent with our values as a state on the forefront of efforts to address global climate change,” said state Sen. Kevin de León, D-Los Angeles, who spearheaded the effort to pass the law. “California’s utilities are phasing out coal and it’s time our pension funds did the same.”

The divestment effort will probably cost the CalPERS fund millions, according to a financial expert.

Andrew Junkin, president of Wilshire Consulting, told the CalPERS investment committee Oct. 19 that previous divestment actions based on political motivations — such as withdrawing from funds in South Africa, Iran and Sudan — cost CalPERS between $4 billion and $8 billion.

The $83 million CalPERS holds in coal investments reportedly include thermal coal mining companies Peabody Energy and Arch Coal.

With coal companies under pressure from new regulations from the U.S. Environmental Protection Agency, the industry is going through its worst slump in decades and coal companies’market values have dropped nearly 90 percent since 2011. That means divestment will almost certainly mean a financial loss for CalPERS and CalSTRS.

“CalPERS has a propensity to get out of markets right at the wrong time,” said Marcia Fritz, a certified public accountant and president of the California Foundation for Fiscal Responsibility, a nonprofit that has developed a reputation as a fiscal watchdog of the California pension system.

“They did that with real estate and I think they’re doing it with energy as well,” Fritz told “And I think they’re getting out of (coal) because it’s a political hot potato to stay in it when the governor is so pro-clean energy.”

Despite the potential losses, the response from some of the largest unions in the state has been muted.

“Those are judgments made by the (CalPERS) board are not things we have generally have gotten involved with,” Wills told “It’s been their call.” contacted some of the other public employees unions in the state, including the 7,000-member California Statewide Law Enforcement Association, the California Association of Highway Patrolmen, the California Correctional Peace Officers Association and the SEIU Local 1000 in Sacramento, but did not receive any responses.

While CalPERS pensioners will likely end up losing money in coal divestment, the $83 million holdings in coal represent just 0.00028 percent of the entire $300 billion in the entire CalPERS fund.

“It’s a pimple,” said state Sen. John Moorlach, R-Costa Mesa.

But Fritz said since California taxpayers pay for state employees and their pension systems, every dollar counts.

“They’re basically making a decision to reduce their returns on their pension assets and taxpayers have to back that,” Fritz said in a telephone interview. “It’s no different than spending money on something that’s not going to give us anything.”

Moorlach doesn’t like the coal divestment idea, either.

“It is not the role of the governor or the the state legislature to say how a pension invests this money, I’ve always said that,” Moorlach told “This is not our role. What are we doing having politicians getting involved in this? They can’t even balance their own budgets.”

Junkin told the CalPERS investment committee the pension can more effectively influence coal companies by staying financially involved with them.

“By divesting you are really giving up your voice, your ability to influence change,”Junkin said, according to Reuters. “And you’ve just sold it to somebody else. Those shares are going to get voted by somebody else now instead of by you, and you don’t get to advance your goals.”

CalPERS and CalSTRS do have an escape hatch: The law Brown signed says the funds should only go through with coal divestment “if the action is consistent with the board’s fiduciary responsibilities.”

Fritz thinks the pensions should pass on divesting from coal.

“That would be the fiduciary thing to do,” Fritz said, noting the boards are political animals. “You’ve got people running for office, people up there because they’re paid by unions, people who are there because they want to win an election, or they want to say, ‘I got my pension fund out of coal.’ ”

In a statement, CalPERS praised Brown and de León but did not commit itself to definitely divest.

“Climate change represents risks and opportunities for a long-term investor like CalPERS,” said Anne Stausboll, chief executive officer for the pension fund and co-chair of the Ceres Board, the nation’s largest coalition of investors, environmental groups and nonprofit organizations advocating for sustainable business practices. “We have a fiduciary duty to protect the pension fund and mitigate the effects of climate change on our investments.”

Environmental groups have cheered the divestment law.

“This is a big win for our movement, and demonstrates the growing strength of divestment campaigners around the world,” said May Boeve, executive director of, after Brown signed the bill, adding that it’s time “to keep building on today’s news, and take every possible step to prevent climate catastrophe — including divesting California from oil and gas, and banning extreme energy extraction techniques like fracking.”

According to the law, a decision on coal divestment has to be made by July 2017.

“Our pension funds are an enormous part of our assets in California and when we lose money, we have to put the money back,” Fritz said. “But it’s hard for people to get that direct relationship. They’re going to see it when you have a loss in your asset base and the actuaries are going to come back and tell the agencies and the state that you’re going to have to put more money in because of asset losses.”

California GOP sitting out Senate race in conservative-leaning swing district

Melanie Mason – Contract Reporter

A state Senate race in the San Joaquin Valley has all the makings of a prime 2016 showdown: a swing district that leans conservative, a Democratic incumbent who notched a narrow win four years ago and a potential challenge from the leader of the Assembly Republicans.

But the California GOP plans to sit this one out.

Assemblywoman Kristin Olsen (R-Modesto) said party officials told her that if she runs against Sen. Cathleen Galgiani (D-Stockton), she’ll be getting no help from them.

"The party has made a commitment to various interests that they will not spend party resources in Senate District 5," Olsen said in an interview.

Neither state GOP chairman Jim Brulte nor Senate Republican leader Jean Fuller of Bakersfield would comment on the unusual decision to lay off a competitive race, especially one that could involve a legislative leader. But it is the latest manifestation of a new political order taking shape in the Capitol.

At a time when GOP power in Sacramento has been on the wane, many business interests — which have traditionally skewed Republican and wield considerable clout in the party — are throwing their weight behind centrist Democrats like Galgiani.

A year from election day, groups such as the California Assn. of Realtors and Chevron have told the candidates and other political players that they’re for Galgiani, a show of support from entities that routinely spend big to back their choices.

State Sen. Cathleen Galgiani (D-Stockton), here conferring with Sen. John Moorlach (R-Costa Mesa), “has consistently been ranked as one of the most business-friendly Democrats” in the Legislature, said Trent Hager, her campaign spokesman. (Rich Pedroncelli / Associated Press)

Jon Fleischman, a conservative Republican activist and former party official, said he believed the party was holding off on the race to appease business interests. The decision, he said, underscored "the party’s dependency on interest groups in Sacramento who do not share the same priorities of the party all of the time."

Business support has helped make moderates the ascendant wing of the Democratic Party, able to flex their muscle in such legislative battles as this year’s heated debate on climate issues.

Galgiani "has consistently been ranked as one of the most business-friendly Democrats" in the Legislature, said Trent Hager, her campaign spokesman.

In the Senate, Galgiani was the only Democrat to vote no in June on an ambitious bill to fight climate change, though she switched sides once a controversial provision opposed by oil companies was dropped.

The alliance between business interests and moderate Democrats has been most apparent since the demise of the party primary in California in 2010. Except in presidential races, the two candidates with the most votes advance to the general election regardless of party.

Business groups have backed centrist Democrats in contests featuring other, more liberal members of the same party, who are often supported by labor unions.

But increasingly, business is also siding with moderate Democrats over customary Republican allies. Some corporate interests were furious last year when the Republican Party tried unsuccessfully to unseat Assemblyman Adam Gray, a moderate Democrat from Merced. A group financed by Chevron, the Dental Assn. and insurance agents sprang to Gray’s defense with radio ads knocking his opponent.

Olsen, who will hold her leadership post until January, acknowledged that she and Galgiani are "political friends" on many issues. But she noted that even though Galgiani is a "mod," the senator still votes with her party on major legislation such as the budget.

Republicans in the Legislature serve as a check on the majority party, she said: "Our quality of life and our economy as a state and as a valley would be better off when there’s more of a balance between the two parties," Olsen said.

Galgiani had around $130,000 in the bank for her 2016 race as of June 30. Olsen had nearly $380,000 for a 2018 Senate run, and she could tap it next year.

The Central Valley Senate district spans all of San Joaquin County, including the city of Stockton and parts of Sacramento and Stanislaus counties. Democrats hold a four-point registration advantage, and Galgiani eked out a win over Republican Assemblyman Bill Berryhill in 2012.

In that race, it was Berryhilll who scooped up most of the business community’s support. One notable exception was the Realtors group, which spent more than $620,000 on Galgiani’s behalf.

The organization said it did not explicitly pressure the GOP to withhold money from the race next year.

"Of course we speak to party leaders about all races," said Laiza Garcia, who directs the group’s political action committee, "and no, we did not urge the [party] not to devote resources to [Senate District 5], should Assemblywoman Kristin Olsen decide to run."

There’s still potential for a costly showdown. GOP mega-donors such as Charles T. Munger and Bill Bloomfield have been willing to pump millions into independent efforts to help Republican candidates.

Olsen said she would make a decision by the end of the year. The lack of party money, she said, won’t be a determining factor.

"Will it be disappointing not having the party with me? Of course," Olsen said. "But will that convince me or discourage me from running? No."



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MOORLACH UPDATE — Bay Bridge Bloat — October 29, 2015

The topic of Caltrans will continue to come up as long as our Governor insists on raising more taxes to fix California’s roads. Why more taxes? Because the Governor’s budgets have diverted the funding dedicated for roads to other purposes, such as funding the ever growing pension plan contributions going into the California Public Employees Retirement System (CalPERS) (see MOORLACH UPDATE — Pothole Tax — August 30, 2015 august 30, 2015 john moorlach).

While gas tax revenues have increased:

The overall spending for caltrans has remained the same:

It is much more difficult to ask the voters to approve a tax increase to fund public employee pension contributions than claiming poor boy on road conditions. This may explain why the state’s public employee unions support the proposed tax increases dedicated to Caltrans.

Steven Greenhut of the San Diego Union Tribune provides his perspectives in the first piece below. He and I had a long chat on what should be done at Caltrans.

We need to find a way to help Caltrans remake itself so it can meet the challenges of the 21st Century. It needs to be more nimble and responsive to the state’s changing needs. Caltrans must be willing to change its corporate culture to reclaim its position as the nation’s #1 transportation agency.

Here are my four recommendations:

1. Do a thorough review of Caltrans’ general ledger. Both the State Auditor and the State’s Legislative Analyst’s Office have publicly complained about the lack of transparency at Caltrans. This is inexcusable.

2. Compare the spending metrics with the other 49 state departments of transportation. How does Caltrans compare? Spending three times the national average on roads is unacceptable (see MOORLACH UPDATE — Money for Nothing — September 2, 2015 september 2, 2015 john moorlach).

3. Change the culture within Caltrans. It is too insulated and, in a period of term limits, this bureaucracy just blows off the elected legislators, as they will be gone in a few years. Address the apparent tone deafness of Caltrans’ leadership and the cavalier arrogance of its communications department. The Bay Bridge illustrates that there is something drastically wrong with the internal management of Caltrans (see our release from yesterday at the bottom) and the track record is intolerable.

4. Unfetter the dominance and influence that the public employee unions have over Caltrans. It was the union that spoke against my bill, SBX1-9, not management (see MOORLACH UPDATE — SBX1-9 — July 18, 2015 july 18, 2015 john moorlach and MOORLACH UPDATE — Cost of Engineers — August 26, 2015 august 26, 2015 john moorlach). The control of the public employee unions is costing the taxpayers too much in overruns and compensation packages, which are nowhere close to competitive with the private sector. This is unaffordable. Caltrans must also outsource more of its work. It’s current low allocation is unexplainable.

The second piece is from the Voice of OC and announces the return of Rick Reiff’s "Inside OC" PBS television show. In my travels around the country, it astounds me that small metropolitan areas have multiple television stations covering the area. Orange County does not have one. We are part of the LA market. Thus, Rick Reiff’s coverage is an excellent resource for those more focused on the OC. I recommend that you set your DVR to capture this weekly program.

Now to the Bay Bridge. We compared it to the Golden Gate Bridge’s construction 78 years ago. With our communications, we receive feedback, which I love. So, let me provide some background for clarity.

1. The 1.7 mile-long Golden Gate Bridge was completed nearly 80 years ago at a cost of $35 million. Adjusted for inflation, that number in 2013 dollars (the year the eastern span of the Bay Bridge was completed) would be $566 million total, or $333 million per mile, according to the Bureau of Labor Statistics. By contrast, the Bay Bridge’s new 2.2 mile-long eastern span cost $6.4 billion to complete, or $2.9 billion per mile!

Length (Miles) Construction Cost2013 Inflation Adjusted Dollars Cost Per Mile
Golden Gate Bridge 1.7 $566,214,930 $333,067,605
East Span Bay Bridge 2.2 $6,400,000,000 $2,909,090,909

The data does not lie. The difference in cost is staggering, and it begs a review of our entire regulatory structure (thank you CEQA and NEPA), as well as a review of the spending and oversight practices at Caltrans. That was my point in releasing this data yesterday.

2. The bridge was first scheduled to open in 2007. It did not open until 2013. Caltrans first estimated the cost at $1.5 billion. It ultimately came in at $6.4 billion. Although it went through several political debates over design changes, those design changes and delays were largely a function of Caltrans’ huge budget overruns to the State’s ongoing Seismic Retrofit Program, as well as poor Caltrans leadership in finalizing decisions.

After much chaos, the self-anchored-suspension (SAS) design, which had been previously abandoned due to its huge cost, was decided upon, since cost estimates for other options were found to be woefully understated. Assembly Bill 144 was signed in 2005 and provided the increased funding for the Toll Bridge Seismic Retrofit Program, under which the Bay Bridge would be finished.

To understand more about this, reference the 2005 LAO Audit of the retrofit program found here:

The purpose of the LAO’s report is outlined here:

This report first provides a brief history of the Department of Transportation’s (Caltrans’) toll bridge seismic retrofit program. It then (1) explains the current status of the program and the administration’s proposal to complete it, (2) discusses several factors the Legislature should consider when deciding whether to redesign the Bay Bridge, and (3) identifies the key options available to the Legislature for funding the program.

3. It’s the most expensive bridge in world history, as the San Jose Mercury News points out here: There has been tremendous scrutiny over the design flaws. Due to the insular nature of Caltrans, I am trying to make some strong points.


Again, and it is worth repeating, we must find a way to help Caltrans remake itself so it can meet the challenges of the 21stcentury. It needs to be more nimble and responsive to the state’s changing needs. Caltrans must be willing to change its corporate culture to again become the nation’s #1 transportation agency.

Does bloated Caltrans need more cash?

Transportation battle sidesteps issues of misspending and reform

Mugshot of Steven Greenhut

Steven Greenhut

The first World Series game this year was reportedly a great one, complete with five hours of extra-inning ball play and an inside-the-park home run. I missed it, but the beginning of every World Series game always reminds me of 1989. Just as the first pitch was about to be thrown to start Game 3, the television screens went blank.

That’s when the Loma Prieta earthquake struck San Francisco, which was hosting the Giants v. Athletics series. The magnitude 6.9 earthquake caused massive damage throughout the Bay Area, killing 63 people and causing more than 3,700 injuries. It was a devastating event – made more harrowing because it was televised nationally.

The temblor destroyed a portion of the upper deck of the San Francisco-Oakland Bay Bridge, which was made functional again within a month. But transportation officials found the bridge to be in need of a long-overdue reconstruction of the west span and the building of a new east span. The Bay Bridge project was begun shortly thereafter and completed 24 years later amid cost overruns and recriminations.

It’s a beautiful, well-functioning bridge – but investigations and news stories about its problems persist to this day. The entire project is an allegory for California’s enduring transportation problems.

“After the 1989 Loma Prieta earthquake that rocked the Bay Area, officials got serious about rebuilding the vulnerable Bay Bridge …,”reported the Atlantic magazine’s Citylab. “The first cost estimates, released in 1995, figured both east and west spans of the bridge could be upgraded for a cuddly $250 million. By the time the new east span opened in September 2013 the price tag for that span alone had reached a reported $6.5 billion, with a B.” That’s a 2,500 percent increase.

And then there are the myriad controversies. State Senate hearings last year focused not so much on the long delays and enormous cost overruns – but on the allegations of substandard work and falsified engineering reports. Former Sen. Mark DeSaulnier, the Concord Democrat who is now a U.S. congressman, even called for criminal investigations.

Californians of all political stripes are in rare agreement the state’s infrastructure of roads, bridges and freeways is woefully underfunded. But the Legislative Analyst’s Office and the state auditor often find misspending, bad priorities and bureaucratic problems at the California Department of Transportation. For instance, auditors found 3,500 unnecessary positions there. That problem was reinforced by the auditor’s report from August spotlighting a Caltrans engineer who played golf on 55 workdays – yet his time sheet was approved by the agency.

Auditors found the agency’s projects to be over budget a whopping 62 percent of the time. Caltrans spends three times the national averageon its per-mile road spending, making California one of the least-efficient users of existing tax dollars. Meanwhile, the state’s infrastructure is crumbling. A recent Contra Costa Times report found that “years before last week’s frightening collapse of an Interstate 880 overpass guardrail and chain-link fence onto evening rush-hour commuters, the state had declared the overcrossing outdated and dangerous.” Scary stuff.

The reaction from the governor and state legislative leaders: a push for new fees on cars and a significantly higher gas tax. Gov. Jerry Brown seemed perturbed that legislators headed home without hiking transportation taxes.

But freshman state Sen. John Moorlach of Orange County, one of the GOP’s leaders on the transportation issue, released an analysis last month showing that gas-tax revenues have increased $1.75 billion in the past six years, yet state spending on infrastructure projects has remained stagnant. The state has spent the money on other priorities, he noted.

“It’s easier to say, I need a tax for roads than I need a tax to fund pensions,” Moorlach told me, arguing the governor is choosing to backfill the state’s underfunded pension system instead. It’s the same sleight-of-hand some cities are doing, as they divert road funds to public-employee compensation – and then ask voters to approve a pothole tax.

And few Sacramento leaders are seriously pushing for an overhaul of the agency charged with managing the state’s road and bridge projects – despite audits that year after year show high pay, overstaffing and bureaucratic bloat. Moorlach says the agency is insulated and immune to reform.

This brings us back to the Bay Bridge. Officials knew for years it wasn’t up to snuff if an earthquake hit. After it hit, it took 24 years and massive cost overruns to fix it. Those rebuilt portions are subject to myriad controversies. Certainly, Californians need to invest more in their crumbling infrastructure, but it might be easier to accept higher taxes if there were a serious attempt to better use existing dollars – rather than put up with this shocking level of inefficiency.

Greenhut is the San Diego Union-Tribune’s California columnist. Write to him at steven.greenhut

Rick Reiff’s Inside OC is Back

By Norberto Santana Jr.

PBS So Cal is bringing back it’s popular public affairs show focused on Orange County politics and government with host, Orange County Business Journal Editor at Large, Rick Reiff.

The new Inside OC is premiering on Tuesday, Nov. 3 at 1 a.m. and will also repeat six times a week on PBS SoCal’s family of channels and available on-line.

Reiff has already produced two “test run” shows that can be seen with afeatured panel discussion including OC Bar Association President Ashleigh Aitken, the OC Register’s Brian Calle‘s Will Swaim discussing the county’s jail informant scandal and other stories.

An interview segment with Voice of OC Publisher Norberto Santana Jr. is also posted online with Santana discussing the Voice of OC model and the future of online non-profit news.

Reiff announced that other top officials who have already agreed to appear on the show are U.S. Rep. Loretta Sanchez, State Sen. John Moorlach, and former Allergan CEO David Pyott.

The effort is being sponsored by Five Point Communities, PBS SoCal and KDOC (as studio host) and Reiff has put together a talented production team – including co-producer Scott Hays, editor Richard Garippo and director David Marquez.


The Tale of Two Bridges:
A good example of what’s WRONG with Caltrans

Golden Gate Bridge:

Build Time: 4.5 years, completed 8 months ahead of schedule

Cost: $35 million, 4% under budget

Lifespan: 78 years old and counting

Declared: “Wonder of the Modern World"

SF/Oakland Bay Bridge – Eastern Span

Build Time: 11 years, completed 6 years behind schedule

Cost: $6.4 billion, at least 300% over budget

Lifespan: 2 yrs old, but design flaws could produce premature failure

Declared: “Most expensive public works project in California history”

This Week’s Bay Bridge News:

Fears of failure grow for rods on Bay Bridge eastern span

“Potentially widespread problems that experts warn could lead to premature failure…The rods are more vulnerable than Caltrans’ test results suggest.”

"It’s a very shoddy job all the way around…Clearly there was no quality assurance on anything…”

Statement from Senator John Moorlach

“The Bay Bridge debacle is the most serious sign that Caltrans is a broken agency. There needs to be an immediate top-to-bottom review of its management and structure, followed by house cleaning and reorganization. It’s a tragedy that Californians pay the highest transportation taxes and have the worst roads to show for it.”


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MOORLACH UPDATE — Keep Public Out — October 19, 2015

The OC Register‘s editorial pages are most inclusive. After the Governor signed SB 331, and we covered it in MOORLACH UPDATE — Closed Doors — October 13, 2015 october 13, 2015 john moorlach, the OC Register printed a column from one of the sources of this unbelievably biased bill, see

Today, the OC Register‘s editorial board weighed in on the subject in their lead editorial below.

I try not to be too repetitive, but the Daily Pilot also recently covered this cynical legislation, see,0,6392522.story.

Public employee unions have spent tens of millions of dollars over the past two decades to elect pro-union lawmakers. The payoff is legislation like SB 331, which has no rhyme or reason, except to explicitly block the general public from knowing how much they’re paying public employee union members.

Union power also showed up with the recent signing of SB 99, which gives Caltrans engineers a 7 percent raise, despite all of the discussion about how we have a serious road-repair budget shortfall. We’ve learned that a typical Caltrans engineer earns a total compensation package of $143,000 per year (per the California Legislative Analyst’s Office, where 3,500 employees cost $500,000,000 per year.) Also see MOORLACH UPDATE — Cost of Engineers — August 26, 2015 august 26, 2015 john moorlach. If 20,000 employees are earning $143,000 per year, a 7 percent increase is another $200,000,0000 per year that taxpayers will have to fork over. And that expense won’t produce one single inch of road repairs.

Is it any wonder that the public employee unions are leading the charge for higher gas taxes and vehicle license fees? It is becoming very obvious that the new taxes won’t be for roads, but instead to make even more room for state employee pay raises and their pension plan contributions (see MOORLACH UPDATE — Pricey Labor — September 7, 2015 september 7, 2015 john moorlach, MOORLACH UPDATE — Pothole Tax — August 30, 2015 august 30, 2015 john moorlach, and MOORLACH UPDATE — Pothole — August 19, 2015 august 19, 2015 john moorlach).

How to keep public out of municipal contract talks

Gov. Jerry Brown signed the “Civic Reporting Openness in Negotiations Efficiency Act” on Oct. 9, a tit-for-tat bill pushed by public employee unions against municipalities that have adopted Civic Openness in Negotiations ordinances.

Under the newly signed law, any municipality operating under a COIN-style ordinance – or just preparing an independent economic analysis of current employee pay and benefit costs – will be forced to comply with costly new rules and will be pressured to return employee contract negotiations to the shadows.

Proponents claimed COIN created an unfair burden with union contracts, but not those with corporations. In reality, the bill imposes largely dubious hurdles to the competitive bidding process.

Contracts with the private sector currently involve a public request for bids, where the desired work is detailed. Bids are then publicly unsealed, publicly debated and a winner publicly selected.

While contractors may hold undue influence over some politicians, it isn’t exercised through the competitive bidding process.

If the law was really about righting a wrong in the competitive bidding process, it would apply to everyone, rather than only to cities that adopt COIN-style ordinances. In that regard, it seems nothing more than an eye for an eye or, at worst, might be characterized as, “Backroom dealings are fine, as long as unions get to use the back room, too.”

“Public employee unions saw COIN as a threat, and the governor was glad to oblige,” state Sen. John Moorlach, R-Costa Mesa, said in a press release. “Many editorial boards advocated for COIN, but unions obviously have our governor’s ear.”

To be sure, when newspaper editorial boards across the state, including those at the Register and the Los Angeles Times, agree that a bill is bad for business, they might be onto something.

Currently, the public’s input is largely a formality in municipal union contract negotiations. The deal is largely already done, and the taxpayer’s money already committed, before it reaches a public hearing. COIN ordinances were intended to change that.


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MOORLACH UPDATE — Collision with Reality — October 16, 2015

Yesterday, I started reading "Fierce Conversations — Achieving Success at Work & Life, One Conversation at a Time," by Susan Scott.

Two thoughts came to mind. The first is that I have been enjoying a conversation with you for a long time through these e-mail UPDATEs. The second is the first of seven principles in Scott’s book is very apropos for the first story below:

"Master the courage to interrogate reality. No plan survives its collision with reality, and reality has a habit of shifting. Markets and economies change, requiring shifts in strategy."

The first story below, from Reuters and Yahoo! Finance, could not capture this theme better. In fact, it’s been a recurring topic of interest in my UPDATEs (see MOORLACH UPDATE — Assumption Rate Impacts — December 12, 2012 december 12, 2012 john moorlach, MOORLACH UPDATE — OCERS Election — October 26, 2012 october 26, 2012 john moorlach, and MOORLACH UPDATE — Pension Overhaul — September 6, 2012 september 6, 2012 john moorlach). I’m the closer for the continuing and tragic financial drama.

In the second piece, the Voice of OC gives a shout out on an initiative that I hoped to see while serving as County Supervisor. Maybe the momentum is finally moving?

Most California cities back new pension strategy despite cost

By Robin Respaut and Rory Carroll

SAN FRANCISCO, Oct 15 (Reuters) – Most California cities support a new strategy by the nation’s largest public pension fund to make its investment portfolio more conservative, even though the move could gradually increase how much employers pay into the fund.

Still, some cities expressed serious reservations about a California Public Employees’ Retirement System plan to incrementally lower the $293 billion fund’s assumed rate of investment returns following periods of strong performance.

The League of California Cities surveyed its members, which have been struggling to shoulder the burden of growing pension costs. The survey found that many cities prefer a more gradual increase in costs, as opposed to spikes following market downturns, said Bruce Channing, Laguna Hills city manager.

"As employers, more predictability and less spiking of rates from one year to the next is preferable," said Channing, who is also chair of the league’s city managers pension reform task force.

Next week, the Calpers board will consider a new policy to gradually reduce the assumed return rate from 7.5 percent to 6.5 percent over a few decades. The average return rate across 126 funds tracked by the National Association of State Retirement Administrators was 7.68 percent as of May.

Calpers intends to reduce portfolio volatility as California’s baby boomers retire and payouts exceed active workers’ contributions. The idea is similar to that of an individual nearing retirement adopting a more conservative investment strategy.

But a lower, albeit less volatile, rate of return will necessitate higher contributions from local governments and public workers.

The league said 77 percent of those surveyed supported Calpers’ strategy to reduce portfolio risk, even though the move would over time raise pension contributions more than currently planned. Ten percent of respondents opposed the strategy, and the rest were unsure, the survey of 115 cities found.

Opponents of higher contributions included Alameda, a city of nearly 76,000 near San Francisco. Its pension costs for safety workers like police and fire consume 48 cents of every dollar paid in salary and are expected to grow to 65 cents in five years.

"It’s devastating on our bottom line," said Alameda Interim City Manager Liz Warmerdam. "We have very little input. Whatever they want to do, local governments have to sit here and deal with it. It’s extremely frustrating."

Massive pension costs contributed to a handful of recent municipal bankruptcies across the country, including in the California cities of Vallejo, Stockton and San Bernardino.

Stockton and Vallejo have emerged from bankruptcy. Vallejo City Manager Daniel Keen said he supports actions to ensure Calpers’ ability to pay benefits, but added it may require sacrifices.

"While this plan does cause us more pain on the part of our budget, it is pain we were anticipating," said Keen. "It is going to require adjustments in our budget and might result in cuts to some services."

"It’s undeniable that we have to deal with the fact that there are significantly fewer active employees paying in," said Leyne Milstein, Sacramento’s finance director. "We need to make sure this system is sustainable."

But like many cities across the state, Sacramento’s budget is not keeping pace with rising pension costs. Next year, the city’s expenses are expected to exceed revenues by $8.8 million, of which $5.8 million is pension growth, Milstein said. In five years, Sacramento expects to pay close to $80 million in pension costs from its general fund, up from $60 million today.

"This will be extremely painful on local government budgets, but it’s the honest approach to address the large unfunded liabilities," said Senator John Moorlach (R-Costa Mesa), a pension reform supporter. "Unfortunately, it’s the taxpayers who are on the hook as pension debt eats up public funds meant for police and fire protection, as well as other services."

(Reporting by Robin Respaut and Rory Carroll; Editing by David Gregorio)

Homeless Advocates Want Action on Long-Delayed Storage Center


A homeless person walks near the Walk of Honor at the Santa Ana Civic Center.

(Photo by: Violeta Vaqueiro)

By Nick Gerda

A broad coalition of advocates met face-to-face Wednesday with Santa Ana and Orange County officials in an effort to get local leaders moving on a number of homeless issues, including the months-long delay in establishing a center in the Santa Ana Civic Center for homeless people to store their belongings.

Those living in the Civic Center have long complained about police confiscating their belongings, which led the Santa Ana City Council to set aside about $200,000 per year last December for a check-in storage center.

Yet, while the money was set aside and the nonprofit Mercy House chosen as the operator, the check-in center still seems far from becoming a reality.

Finding out why was one of the major reasons why the Project Homelessness coalition called for Wednesday’s meeting with officials.

The coalition includes a wide range of representatives, including from downtown businesses groups Downtown, Inc. and the Santa Ana Business Coalition, the homeless advocacy group Civic Center Roundtable, and nonprofit groups Illumination Foundation and Heart of Delight.

City Manager David Cavazos noted the city’s political and financial support for the storage center, but said a viable site hasn’t yet been identified. He said an open-air parking lot next between the county Hall of Administration and the county’s abandoned Building 16 would be “a decent location.”

But Cavazos also said the county, which owns the lot, is concerned about “any kind of long term check-in center there” because it might conflict with a yet-to-be-revealed Civic Center master plan.

Local activist Dylan Thompson, meanwhile, suggested that a site like that could be used temporarily until a more permanent space is found.

Another option is an abandoned bus terminal right next to the Civic Center, which some officials, like former county supervisor and now state Sen. John Moorlach (R-Costa Mesa), have said could be turned into a center for homeless services.

When city staff took that option to council members there was “pretty strong majority” who wanted to use the terminal for the storage center, Cavazos said. But there’s been little progress on that front, with county Community Resources Director Karen Roper noting that it was funded with federal transportation grants that restrict its use.

“It’s a great location and it’s not being used now, but we don’t have the authority to do anything” with it right now," Roper said.

However, asked whether, given the terminal’s abandoned state, OCTA officials could seek a waiver from the federal restrictions, county executive Carolyn McInerney said they could.

Madeleine Spencer, a Santa Ana-based activist who arranged Wednesday’s meeting, said she would contact OCTA officials to find out what needs to be done to use the terminal for a storage center.

The advocates emphasized that officials should be asking whether the services they’re providing, such as the storage center, are humane. Ian Daelucian of Heart of Delight pointed to a storage center in Anaheim run by Mercy House, where homeless people’s belongings were stored in trash cans.

“When we provide a service, let’s put ourselves in that position of being the service recipient,” Daelucian said.

Cavazos said he’s recommending that part of Santa Ana’s newfound $11 million budget surplus go toward combating homelessness. A decision by the City Council is scheduled for Tuesday.

And county officials noted that they recently conducted a survey of homeless people in the Civic Center to get a sense of what the main issues are.

It showed that while many homeless people are connected to certain welfare benefits, the use of housing subsidies is “very low,” Roper said. One reason could be the “very long wait lists” for such subsidies at housing authorities, she added.

Another big barrier is the federal ban on Section 8 housing subsidies for those with felony convictions, which many homeless people have. To address that, county staff members plan on asking their elected bosses, the county supervisors, to fund more accessible housing subsidies that aren’t funded through Section 8.

Roper acknowledged that having mental health outreach workers working with law enforcement to connect people with services is “far cheaper and more cost-effective” than jailing people.

“It’s just better all the way around for homeless folks, as well as the whole community, and so we’re all for getting [homeless] connected to resources,” Roper said.

Cavazos, meanwhile, emphasized that police have to enforce the law.

“If anybody commits a crime, regardless of their situation, they have to face the consequences,” he said. “So things that are criminal offenses, we have to arrest people.”

Spencer encouraged city and county officials to work with people on the ground and bring them into the process, something officials have been criticized as doing too little of in the past.

Roper said the comments from Spencer and Daelucian were “great feedback,” and encouraged them to share those ideas with the county’s health workers who do outreach to Civic Center homeless people.

“While we’re looking to create some bigger systems change," Roper said, "I think it’s important for all of us to come together to work on [interim strategies.]"

You can contact Nick Gerda at ngerda, and follow him on Twitter: @nicholasgerda.


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MOORLACH UPDATE — Closed Doors — October 13, 2015

The Voice of OC, in the first piece below, addresses SB 331, which is one of the best bills to show the voters who really runs Sacramento, and it’s obviously not the voters. I’m honored that the piece quotes from MOORLACH UPDATE — Bill Killer — October 10, 2015 october 10, 2015 john moorlach.

The best way to summarize this legislative travesty is to rephrase a quote from the article:

"What SB 331 says is . . . public employee unions can have it both ways by avoiding transparency while allowing them to contribute to elected officials that vote on their contracts, thus successfully garnering sweetheart deals behind closed doors."

Now that this year’s legislative session has concluded, allow me to share a few thoughts. State Senator Joel Anderson and I selected the twenty worst bills on the Governor’s desk, with a little help from FlashReport publisher Jon Fleischman (see MOORLACH UPDATE — Worst and Vaguest — September 22, 2015 september 22, 2015 john moorlach or Let’s see how it went.

By the end of this last weekend, Governor Brown vetoed 40 percent of the bills we thought were the best candidates for veto.

Bill Summary Status
AB X2-15 Assisted Suicide Signed by Gov
AB 2 Return of Cronyism and Property Rights Abuse Signed by Gov
AB 465 Let Every Employee Sue Their Employer Vetoed
AB 504 The Stop Effective Local Solutions Measure Vetoed
AB 561 Ag Labor Appeal Ransom Vetoed
AB 622 No E-Verify Use for Employers Signed by Gov
AB 692 Buying Low Carbon Fuel (Since No One Else Will) Signed by Gov
AB 768 Stop Pro Baseball Players from Chewing Tobacco Signed by Gov
AB 775 The "You Must Counsel for Abortions" Law Signed by Gov
AB 888 Microbead sale and distribution ban Signed by Gov
AB 1288 Expanding Unelected Air Resources Board Signed by Gov
AB 1293 Saving Gov’t Employees from Economic Downturns Vetoed
AB 1354 Gov’t Intrusion to Your Business Payroll Records Vetoed
AB 1461 Voter Fraud Expansion/Motor Voter Registration Signed by Gov
SB 99 Caltrans Engineers’ Union Pay Spike Signed by Gov
SB 292 Homeowners Pay for Public Employee Pensions Vetoed
SB 331 Protect Union Closed Door Deal Negotiations Signed by Gov
SB 350 California "Economic Cooling" Bill Signed by Gov
SB 376 Stop U.C. from Contracting Out Services to save $$ Vetoed
SB 682 Prohibition on Courts Contracting Out Vetoed

Of the 941 bills that reached Governor Brown’s desk, he signed 808 and vetoed 133. That is an overall 14% veto rate.

There were just over 2,300 bills introduced this year. So, about 41% of introduced bills actually made it to the Governor’s Desk.

As a freshman, I came in with my own strong perspectives. One was the precariousness of the state’s budget and the propensity to grant tax credits without regard for their impact on the net tax revenues generated.

During an interview with the Orange County Register’s editorial board earlier this year, I stated that I was opposed to income tax credits that favored specific industries. The one discussed was the film industry. The State of Louisiana is literally choking on this specific tax credit, as it has had a serious negative impact on their annual budget.

I decided to go after a number of the tax credits that were proposed this year. The big one was the Earned Income Tax Credit (EITC), which gives money to those who earned some $7,000 or less. It is estimated to cost the state $480 million. When the Governor is looking for a managed care organization tax of more than $1 billion, it was disingenuous to build the budget on this kind of political give-away. Opposed for the projected cost, I also don’t know if anyone will really utilize this tax credit as it will be more expensive to adequately comply with the tax credit than it’s likely worth to those it is targeted to help. I was the only vote against the Senate version of the EITC, SB 38 (Liu), on the Floor on June 3rd.

During a private meeting with the Director of Finance, Michael Cohen, I asked him who was monitoring this flurry of proposals and how would they affect the state’s bottom line. It appears that the Governor was, as hevetoed nine of them over the weekend. Here is a chart with these vetoed bills.

Bill Topic Moorlach Committee Moorlach Floor
AB 35 (Chiu) Income taxes: credits: low-income housing: allocation increase. Abstain No (one of only two noes)
AB 88 (Gomez) Sales and use taxes: exemption: energy or water efficient home appliances. No No (five noes)
AB 99 (Perea) Personal income taxes: income exclusion: mortgage debt forgiveness. Aye Aye
AB 428 (Nazarian) Income tax credit for seismic retrofits. No No (Only no)
AB 437 (Atkins) Research and Development: Small Business Grant Program. Abstain Abstain
AB 515 (Eggman) Income taxes: credits: food bank donations. Aye Aye
AB 931 (Irwin) Taxation: credit: hiring Aye Aye
SB 251 (Roth) Disability access: civil rights: income tax credit. Abstain (Judiciary)

Aye (Gov & Finance)

SB 377 (Beall) Income taxes: insurance taxes: credits: low-income housing: sale of credit. Aye Aye

AB 99 was a conformity bill between Federal and State Income Tax Law. This one should not have been vetoed as conformity is a form of simplification and no legislators opposed this bill. For AB 437, for as much as I support small businesses, I decided to abstain because of budget concerns. AB 515 falls in line with my concerns for assisting the homeless population and my concerns about overall tax equity and avoiding double deductions were addressed in committee.

SB 251 found me debating Sen. Roth in Judiciary Committee on the size of the credit that was intended to help business owners comply with onerous costs of complying with vague and often conflicting accommodations for the Americans with Disabilities Act (ADA). I supported the ADA resolution to reduce frivolous law suits. After a lively discussion with Sen. Roth directly before the Governance and Finance Committee, I became supportive of his measure. It’s a shame that this bill had to be vetoed due to the concern over the credit component. At least I can say that I tried to make this a more palatable bill.

SB 377 (Beall) was not an added burden to the budget, but a sale of existing credits. As Sen. Beall is carrying the Governor’s proposals on additional taxes to supposedly improve our roads and highways, it’s surprising that he would turn against the good Senator on this bill.

There are even more ironies with many of the bills that the Governor signed and vetoed. The mixed messages provide enough material for columnists up and down the state. Overall, let’s not forget that it’s a blue state, run by a Governor who is trying, albeit in an odd way, to provide some balance. Which brings to mind the old mid-west phrase, "It could have been worse."

The next question is, "How much worse?" This concern is answered by Katy Grimes in the second piece below. To summarize: If you can’t fix what you are supposed to, try to fix something that isn’t within your jurisdiction, something akin to catching a moonbeam in your hand, like global warming.

Governor Signs CRONEY Bill Into Law

By Nick Gerda

Gov. Jerry Brown signed a union-backed bill Friday requiring local governments that have passed laws mandating additional disclosures during labor negotiations to also disclose more about their contract negotiations with private companies.

The Civic Reporting Openness in Negotiations Efficiency Act, or CRONEY, is organized labor’s response to a trend among local governments, particularly in conservative jurisdictions like Orange County, to pass Civic Openness in Negotiations, or COIN, laws focused on labor negotiations.

CRONEY will apply to all contracts with private companies worth more than $250,000. The provisions would no longer apply if the local agency suspends or repeals its COIN ordinance.

A key supporter hailed Brown’s signature of the law, also known as SB 331, as a win against one-sided targeting of workers.

“It’s a huge victory for working people against discriminatory tactics by politicians who have put the interests of corporations who support their campaigns above good governing,” said Jennifer Muir, general manager of the Orange County Employees Association (OCEA), which was the driving force behind CRONEY.

“What SB 331 says is…politicians can’t have it both ways and target employees for transparency while allowing corporations who are competing for the same work negotiate for sweetheart deals behind closed doors.”

Meanwhile, state Sen. John Moorlach, a leading proponent of the county’s COIN law who has long clashed with OCEA, depicted CRONEY as a law focused on a problem that doesn’t exist.

“I was not amused, but I was also not surprised,” wrote Moorlach (R-Costa Mesa), in his daily Moorlach Update.

“There have been no arrests or indictments of any County Supervisors, any contractors, or lobbyists in Orange County for contracting conflicts of interest. How can you state there is a problem, when it is purely speculative and not validated by actual legal processes?” he wrote of the law the day before Brown’s announcement.

The county’s COIN law requires, among other things, public disclosure of offers and counter-offers during negotiations, a more detailed financial analysis of proposed agreements and the posting of proposed contracts 30 days before voting on their approval.

The Orange County Board of Supervisors recently suspended it, so CRONEY wouldn’t take effect unless they re-instate COIN in the future.

In addition to the county, four other local governments in California have adopted COIN laws: the cities of Costa Mesa, Fullerton, and Beverly Hills, as well as the East Bay Municipal Utility District.

Among CRONEY’s provisions is a requirement that an independent auditor produce a public report on the cost of proposed contracts at least 60 days before their approval. That also applies to changes to contracts.

Agencies would also have to disclose negotiation offers and counteroffers on their websites within 24 hours, details about negotiation sessions, and verbal and written communications with company representatives within 24 hours. Contracts would also have to be heard at two public meetings before being approved.

The original bill applied to contracts worth $50,000 or more. But the final bill increased the threshold to $250,000 and exempts contracts that are in response to a state of emergency.

(Click here to read CRONEY’s official legislative analysis)

You can contact Nick Gerda at ngerda, and follow him on Twitter: @nicholasgerda.

Katy Grimes

Gov. Jerry Brown’s Non-Profit State

Posted by Katy Grimes

Talking incessantly about climate change as “the most important issue of our time,” has allowed politicians to avoid focusing on serious failures and incompetent leadership. With California Gov. Jerry Brown lobbying for and signing the controversial Senate Bill 350 – even with the gas reductions amended out – he has thrown up a huge diversion, while simultaneously helping to sink our economy even further.

“This law should be called the California Economic Cooling Act, because SB 350 puts California’s economic recovery on ice,” said Sen. John Moorlach, R-Costa Mesa. “By almost every measure, California is already the most expensive state in which to build a business and raise a family. SB 350 is projected to double California’s electricity costs, which are already among the nation’s highest.”

“What business wants to come to California, where we’re making it economically impossible to survive?” Moorlach asked. ”While California lawmakers are busy trying to save the world, they’re simultaneously bringing extinction to California’s economic competitiveness.”

Jerry Brown inherited the Golden State, the land of opportunity. Now everything he touches turns Brown.

California Governor Jerry Brown’s Reign of Ruin

While the U.S. has President Obama touting climate change diversions, in California we have our own failure: Gov. Jerry Brown. Illegal immigrants are taking over California, and now they’ll be registered to vote, thanks to a bill Brown just signed. Unemployment is high, we pay the highest taxes in the nation, and the public school system is terrible, ranking third to last in the nation. In the Los Angeles Unified School District – the largest in the state – minority drop out rates exceed 60 percent.

And all Jerry Brown does is proselytize about climate change.

In 2010, Brown won election by promising to be a pragmatic, no-nonsense problem-solver, and not ideological. He has done the exact opposite, with the assistance of California’s liberal media.

Brown has never balanced the state budget, despite his claims. The state economy is a disaster, despite his claim, “California is back.”

Each of his budgets has carved out the debt he doesn’t like – specifically $600 billion in unfunded pension and retiree health care debt.

Brown’s 2015 budget carved out transportation spending, despite very high transportation taxes. Brown tried to get the Democratically-dominated Legislature to pass a bill to increase taxes to spend on transportation maintenance, repairs and infrastructure. But he failed at even that.

Governor Green – Brown’s Eco-Terrorists

The U.S. Environmental Protection Agency terrorizes the country, imposing impossible regulations on natural gas fracking, its perpetual war on coal, and regulating every body of water in the country, including streams, ponds, and even standing water in privately owned parking lots.

The EPA writes the rules with minimal guidance from Congress. Even worse, the courts commonly defer to “experts” in Obama’s executive-branch agencies in interpreting these rules.

Steve Moors illustration, Jerry brown

In California, Gov. Jerry Brown’s Air Resources Board is the environmentalist terrorist. The ARB receives no legislative oversight under Brown. But they implement the state’s bottomless climate change agenda, and have gone as far as imposing illegal taxes against California businesses. Under Brown, the ARB implemented a cap and trade scheme, extorting excessive amounts of money from businesses they deem polluters, for the privilege of continuing to do business in the state.

The Democratic Party and Brown’s decades of ignoring important water policy and infrastructure have made California’s latest drought worse. Brown announced in April that private citizens and small businesses will have their water usage restricted, monitored, and subject to heavy fines if state water police determine that too much water is being used.

California farmers have been denied water for years to save the non-indigenous Delta Smelt fish, and environmentalists have blocked needed increased water storage at every opportunity.

The Emperor Has No Clothes

Most recently, Brown took a big blow when he came away empty handed from his legislative special sessions to pass taxes on transportation and the state’s Medicaid welfare financing.

And, Brown’s signature climate change legislation failed. SB 350, authored by Sen. President Kevin de Leon, D-Los Angeles, would have mandated the reduction of 50 percent in the use of petroleum-based fuels, 50 percent reduction in energy use by existing buildings and increases the Renewable Portfolio Standard to 50 percent from 33 percent. Ironically, upon assuming the role of Senate President, De Leon purchased his own fleet of brand new, gigantic black SUVs, so he and his entourage can be driven in a style becoming a President…

SB 350 would have ground California’s economy to a halt, faster than the previous climate change mandates are. Some legislative Democrats recognized this and amended the bill to remove the 50 percent reduction of gas. But Brown got even and signed the remainder of the bill into law, which will force all buildings in the state to adhere to California’s absurd and impossible clean energy policies through outlandishly expensive retrofits, performed by the crony special interests cashing in on climate change mandates that they lobbied for. And increasing the mandate of 33 percent renewables used in electricity production to 50 percent when the state can’t even meet the current 33 percent, is going to kill the few remaining industries left in California. But that’s okay because Jerry Brown and Kevin de Leon say new industries are being created in this new, “green” economy.

The transportation mess in the state is getting dangerous, with roads and bridges crumbling. But Gov. Brown waited until three weeks before the end of the special session to spring his devious plan on the Legislature.

The 10-year, $37 billion proposal would have raised gas taxes by six cents a gallon, and increased vehicle fees by $65. The claim was the tax revenue would have funded the state’s $60 billion backlog of highway and bridge maintenance and repairs, as well as the unpopular high-speed rail and mass transit scheme. Interestingly, Brown needed Republican support and was confident he could garner the votes at the last minute.

Epic Failure.

“…crumbling roads and broken health care promises will define his legacy far more than any train or tunnel,” several newspaper editorials reported. Instead of fixing what exists, Brown Jr. is committing untold tens of billions to a high-speed rail system that almost nobody outside a public employee union wants.

The transportation taxes would have ended up feeding the pension debt monster, just as Brown’s Proposition 30 has. Prop 30 was supposed to go to schools – remember?

California is Back – Not

If “California is back,” as Brown loves to say, how can 1.5 million Californians be unemployed? And one-fifth of the state’s labor force is underemployed.

But even the official unemployment number does not fully reflect the state of the California economy, nor the dire conditions of the state’s residents. Rather than creating policies to incentivize businesses, the state’s politicians are focused on increasing the minimum wage for low-paying jobs. That’s like offering an aspirin to treat the headache caused by a brain tumor.

How to create a healthy business environment once again in California is never in the governor’s speeches, nor does he discuss the high poverty rate in California, or California’s highest welfare and food stamp dependency in the nation.

Brown openly mocks people who speak of the exodus of businesses leaving California for healthier states, and those who voluntarily move to Texas in search of a better life.

Toyota, the world’s largest automaker, announced last Spring it would move its headquarters to Texas, and take 3,000 jobs. Brown just said, “Change is inevitable.”

Yet the state of Texas has managed to attract Google, Cisco, Intel, IBM, Facebook, Apple, and Oracle, all of which are expanding operations — anywhere but in California. Apparently the beautiful climate in California doesn’t extend to the bottom line, as Brown likes to say.

“The list of state and locally based companies that either fled California or subtracted jobs in recent years includes Occidental Petroleum, Raytheon, Legalzoom, Waste Connections, Daegis, Revionics and Toyota,” the Sacramento Bee reported Sunday. “Waste Connections, the multibillion-dollar trash-hauling company that was once headquartered in Folsom, was the largest publicly traded firm in the Sacramento area in August 2011…”

Even electric car company Tesla, which receives significant state and federal subsidies, announced in March it would not be building a $5 billion lithium-ion battery factory in California. The battery factory was expected to employ 6,500 workers. This was particularly embarrassing for Brown since California has been trying to set the world speed record to lead the UN-led global warming and climate change jihad, and in legislating policies to lower the state’s carbon emissions.

“Anywhere but California,” is becoming the new state motto for many businesses – even for a supposed “green” company.

Suffocating from the failed policies and beliefs of liberals, California is now a Non-Profit State.


This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District.

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