MOORLACH UPDATE — Passage — June 17, 2010

It has been a busy week.  The County is trying to pass a budget and I’m trying to pass a stone.  It looks like both were accomplished yesterday.

First, I’ll refer you to an article relating to coyotes in Rossmoor in the OC180News.  It can be found at

Second, the Voice of OC covers the topic of yesterday’s Update.  One correction.  If you read yesterday’s Update and the article, you’ll find a discrepancy.  The article is incorrect.  The net county costs for the D.A. and Sheriff’s Department have gone up 17 and 19 percent, respectively, over last year.

Thirdly, the OC Register has its piece on our budget deliberations.  And, lastly, there has been some fun on the blogs; the OC Register’s Orange Punch Blog has a fun headline.  It’s the “bonus” item below.

County Leaders Seek to Renegotiate Public Employee Pensions

County officials this week are beginning to flesh out financial estimates with their local retirement system with the goal of fully renegotiating employee pensions, asking workers either to pay more for their pensions or accept lowered benefits.

Yet the call to renegotiate is being met with a strong retort from labor groups in Orange County, which have been at the forefront of reforms in recent years.

In addition to giving in on wages, local unions — like the Orange County Employees Association and the Orange County Professional Firefighters — have agreed to reform costly retiree medical benefits and have ushered in lower benefits for new hires.

"In the race to reform pensions, we not only have beaten every other public agency on the track, we’ve lapped them," said OCEA General Manager Nick Berardino.

He noted that others have to step up to the plate before employees are asked to do more. "We’ve taken the lead, and once the county gets everyone to catch up, we can talk some more," Berardino said.

Earlier this week, county supervisors unanimously called on their CEO to work with the Orange County Employees Retirement System to start researching potential adjustments to public sector pension enhancements that were negotiated over the past decade.

The idea is to enter negotiations with a slew of local unions over the next two years with an idea of what kind of adjustments would give the county budget some relief.

The most pressure is expected to fall on public safety unions, which receive the highest pension benefits and require the lowest annual employee contributions.

Spiraling pension costs have become a focal point of budgetary discussions and election campaigns in Orange County ever since the expansion of benefits in 2001 for public safety and in 2004 for general employees. Since those benefits were adopted, the county’s unfunded liability for pensions has risen beyond the $3 billion mark.

The county move comes just as Gov. Arnold Schwarzenegger announced on Wednesday the details of a deal with four unions — including the CHP’s — that would allow for a new tier of retirement benefits and higher contributions from employees.

County Supervisor John Moorlach called for the review this week as officials begin their annual trek toward balancing the county budget. A frustrated Moorlach said spikes in pension costs — especially for public safety workers — are making budget cuts even tougher.

Moorlach noted that pension costs are up by 17 percent at the district attorney’s office and 19 percent at the Sheriff’s Department, adding that payments have doubled since benefits were expanded a decade ago. Current costs for public safety exceed the $100 million mark each year.

"It’s an ever-growing issue," Moorlach said. "Something somewhere has to give."

Comparing pension costs to a kidney stone he’s been trying to pass since election eve, Moorlach said, "We have to find some relief."

However, other supervisors are pushing back a bit as well, noting that a new tier of benefits has already been negotiated with OCEA and is awaiting approval from the U.S. Treasury Department.

Even Moorlach acknowledges that OCEA has negotiated important concessions.

"Nick’s right," Moorlach said in a rare instance of agreement with Berardino. "This kidney stone has to move in the public safety area of our budget."

However, many negotiations have already ended, and reopening clauses are years away. The Association of Orange County Deputy Sheriffs finished it’s most recent negotiation last year, agreeing to a slight increase in officer contributions over the next few years.

Yet Moorlach said those concessions aren’t even close to filling the increasing gap.

"We need to go back to 2 percent at 50," Moorlach said this week, referring to the pension formula that was in place before the expansion in 2001.

Officials from the sheriff’s deputies union did not respond to calls for comment.

However, in Riverside County — in a tacit acknowledgment that such renegotiation calls are in the future — the deputies union got county supervisors to approve a ballot initiative that would restrict any pension changes.

Moorlach warned that if annual pension costs aren’t lowered, service cuts and layoffs will soon be on the horizon for public safety.

He noted that supervisors have tried to work with public safety with little luck. Referring to a lawsuit filed against the local retirement system over deputy pension benefits, Moorlach said it was the only option because of their intransigence.

"Before we filed the litigation, we asked them (the sheriff’s deputies union) to do what OCEA did, pay for it (enhance pensions). And they said forget it."

Referring to public safety, Moorlach said, "this is where our tumor is. It just keeps growing and growing."

Without relief, there’s no future money for raises — and there’s increasing pressure on other departments to make cuts.

When Sheriff Sandra Hutchens was asked by Moorlach publicly about preparing potential layoff notices to deputies if certain budget numbers don’t improve, she replied that such a move would hurt morale.

He shot right back. "Your department is now consuming 50 percent of my general fund," Moorlach said.

"Everyone else is making sacrifices for your two departments," referring to the public safety area of the budget dominated by the sheriff and district attorney.

That kind of dynamic is what’s prompted Moorlach to argue for renegotiation. "Maybe we have to ratchet this up in order to save everybody."

"We’ve done all the incremental, now let’s get dramatic."

Please contact Norberto Santana, Jr., directly at

Sheriff, D.A. to avoid layoffs

However, budget relies on revenue projections and an unresolved contract; if either fails, staff cuts could become necessary

By Jennifer Muir

County supervisors tentatively approved spending plans for the sheriff and district attorney that avoid layoffs – at least for now.

Both budgets rely on increased estimates of sales tax revenue, and the Sheriff’s Department’s spending plan hinges on $12.5 million from a contract with Immigration and Customs Enforcement to house federal inmates, a contract that’s still being negotiated.  If both of those revenue streams don’t materialize, layoffs and service cuts could be next.

Additionally, state budget proposals to ship inmates to counties and cut a host of social service programs could cut even deeper into a county that’s already spent years tightening spending and implementing layoffs and furloughs.

“There’s only so much you can squeeze from this lemon,” Supervisor John Moorlach said.  “We’re running really lean.”

County supervisors tentatively approved the county’s $5.4 billion budget during budget hearings Tuesday and Wednesday.  The final budget will be adopted June 29.

In addition to approving the public safety property tax estimates, supervisors dipped into county reserves and other one-time funding sources to prop up the departments to the tune of $11.8 million for the district attorney and $23 million for the sheriff.  The district attorney’s budget totals more than $127 million; the sheriff’s operating budget hovers at $452 million.

In all, the county will draw down its reserves by $46 million to prop up anemic departments, leaving the rainy day fund at $171 million.

“The responsibility of government is public safety,” Supervisor Pat Bates said. “It has to be first and foremost.”

Still, budget officials warn that the county can’t continue dipping into reserves next year, which will make balancing next year’s spending plan even more difficult in a sustained recession, especially since the county’s employment costs continues to grow.

Meanwhile, Sheriff Sandra Hutchens met with ICE officials Wednesday to hammer out how much the county will be paid per inmate.  The Sheriff’s Department would not release details of the meeting late Wednesday.

And county supervisors asked the sheriff to report back in coming weeks about where she’ll cut if the plan doesn’t materialize.

Both Hutchens and District Attorney Tony Rackauckas have agreed to manage their budgets throughout the year without requesting more help from the county.

Supervisors also proposed other places to trim, such as the county’s Office of Independent Review, which reviews complaints against the jail and Sheriff’s Department.  Newly elected Supervisor Shawn Nelson, who is expected to be sworn in before the final budget is considered, could be the deciding vote.

Moorlach pushed to form the office after an Orange County Register investigation into the 2006 death of inmate John Derek Chamberlain, who was killed by an angry mob at Theo Lacy Facility while a jailer watched television.  Bates said she thinks the office is doing a good job, but that it’s been “more focused on internal than external” issues and that it doesn’t seem like it’s a core county function.  Chairwoman Janet Nguyen expressed concerns and asked for an analysis of how the office reduces the county’s exposure to lawsuits before deciding.  She abstained from the vote.

Moorlach urged them to save the department.

“We had such a poor culture in the Orange County jail that Chamberlain could be murdered in front of two jailers is just unfathomable,” Moorlach said.  “We’ve got someone with credibility who has been independent but embedded, who has got the support of the new sheriff and has worked dilligently . . . to make sure that some of these things do not happen again.”


i Go, John Moorlach, Go !

posted by John Seiler


June 17


There was a time when we used to receive raises here at the County.  And when they came, they came with fanfare.  Jean O. Pasco of the LA Times covered this in “Bigger Paydays Proposed for O.C. Officials – The raises—as high as 19%–for 4,200 employees would total $4.5 million.  Supervisors will discuss the plan on Tuesday.”  Here are the closing paragraphs.

                Chapman University law professor Hugh Hewitt said the real focus should be more on the size of government than executive salary levels.

                “You need to pay [god salaries] or you’ll get incompetence that will squander the public purse,” said Hewitt, former deputy director of the U.S. office of personnel management.  “These salaries seem very reasonable and not out of line at all for managing a complex organization.”

                Others agreed.

                Treasurer-Tax Collector John M. W. Moorlach—who would get a raise of $16,266, bringing his total to $129,147—called the proposed salaries “good crisis prevention.”

                “A lot of us have worked very hard this past five years,” said Moorlach, who joined the county in 1995, just weeks after the county lost more than $1.6 billion in bad investments and declared bankruptcy.

                “If we’d been in the private sector, with the turnaround we’ve had, we would have seen strong bonuses for the hard work,” he said.  “You don’t want to say to your team, ‘You did a great job.  So what.’”

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