MOORLACH UPDATE — KABC — July 12, 2010

First things first.  Yes, I’m in mourning over the Netherlands’ loss in yesterday’s World Cup Soccer Finals.

Second, the “OC $100,000 Club” continues to receive media attention.  It was also discussed at length on Friday’s “John and Ken Show” on KFI.

If you want to see me being interviewed by KABC’s Eileen Frere, the hit this link:  http://abclocal.go.com/kabc/story?section=news/local/orange_county&id=7546891.

The transcript of the segment is provided below.

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Orange County News

Ex-OC sheriff Carona receives $200K/yr pension

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Eileen Frere

Former Orange County Sheriff Michael Carona is receiving a pension of more than $200,000 per year. He is just one of hundreds of former Orange County employees who are collecting six-figure pensions.

Former Orange County Sheriff Michael Carona, a felon convicted of witness tampering, is free on bail pending his appeal. He received more than $200,000 in pension checks last year, according to county records.

"I roll my eyes," said Orange County resident Debi Win’e. "I think it’s a little over the top when there’s so many people that are just struggling to keep their house payments, keep up on their bills."

Carona is among more than 500 former Orange County employees who took in six-figure pensions in 2009. That percentage is nearly three times that in the statewide public employees retirement system.

Healthy pension plans encourage employees to retire earlier with a larger chunk of their salaries, pushing the county’s retirement system’s long-term debt to nearly $4 billion. The pension list was released after the California Foundation for Fiscal Responsibility filed a lawsuit.

"We talk about how egregious these pension benefits are, until you really see it and you put numbers to faces and you start saying, ‘Wait a second, what is really going on, how do we pay for this?’" said Orange County Supervisor John Moorlach.

Another pensioner listed is former county treasurer Robert Citron, who led Orange County into bankruptcy in 1994. He grossed more than $12,000 per month last year, totaling more than $140,000 per year.

"Pretty bitter pill to swallow when somebody like me is on fixed income and they expect me to be supporting them," said Long Beach resident John Deats.

The average county retiree receives less than $40,000 a year. The release of the pension numbers are raising the issue of the pension plan for public safety workers, among the most lucrative retirement plans approved when Carona was sheriff.

"In 2001, as a county, we approved a retroactive, from 2 percent at 50 to 3 percent at 50," said Moorlach. "And that, in a sense, increased their retirement by 50 percent overnight."

Moorlach, who was not on the board when the benefit was approved, is fighting to get it repealed.

A lawsuit that pushed to have the benefit put before voters was rejected in L.A. County Superior Court last year. It’s now under appeal.

Governor Arnold Schwarzenegger released a statement Friday: "As the Governor continues to win pension reforms for the people of California he encourages local jurisdictions to do the same," wrote Aaron McLear, the governor’s press secretary.

FIVE-YEAR LOOK BACKS

2005

July 11

Rick Reiff, in his “OC Insider” column for the Orange County Business Journal, made the following observations on the political front:

Marilyn Brewer isn’t the only GOP moderate finding an endorsement from the New Majority hard to come by.  Assemblyman Tom Harman, past darling of the socially moderate PAC, is unlikely to get the group’s backing for either a congressional or OC supervisor run, the Insider hears.  The NM would be expected to remain neutral in a county supervisors’ race between Harman and OC Treasurer John Moorlach; but some NM members, impressed with Moorlach’s performance in county government, likely would forgive his social conservatism and lend individual support. 

July 12

The Foothills Sentry had two opinion pieces by Bob Fauteux that kept with the recent pension theme, this one is titled “The County pension plan mess – is it time for some Recall accountability?”  Here is a portion of the concluding paragraphs.

                Now, according to [Treasurer John] Moorlach and an Orange County Grand Jury Report, the county’s financial problems make the bankruptcy of a decade ago look modest by comparison.  We told you so, a Register editorial said Thursday in a tone of deep chagrin.

Orange County won’t go out of business, but it can’t count on a rescue from taxpayers.  What’s left?  Layoff, reductions in services, and, if the supervisors have any wits about them whatever, an imposition of fees on employees who are entitled to the fat pensions, together with scaled back benefits for future employees.

The second opinion piece was titled “And the retiring County employees go dancing out the doors!”  Here are selected portions of Bob Fauteux’ piece, which reflects the results provided in yesterday’s front-page OC Register story that was in Friday’s Update.

A competent and highly placed employee, well below the 65 year old Social Security retirement threshold, told me that the increased retirement benefit was unearned but he would take it anyway.  Let the county and the remaining employees pick up the pieces to pay the guaranteed pension benefits.

Treasurer John Moorlach commented about retirement qualified employees remaining with the county essentially working for free when they can double dip with another job.  Why stick around for a reduced paycheck when you got the big retirement pay boost without putting a cent more into the retirement fund.

Picking up the pieces from the pension plan fiasco is now the big challenge for county government.

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