MOORLACH UPDATE — Daily Pilot — October 22, 2010

I have frustrations.  Some of them were expressed in the Daily Pilot (see MOORLACH UPDATE — Waiting — October 7, 2010).  This same commentary submission was also printed in yesterday’s OC Register in its weekly Current section distributed to subscribers in Costa Mesa and Newport Beach.

Today’s Daily Pilot article below finds someone taking exception to one sentence in the commentary.

Let me repeat two lines from the commentary:  “The city’s $50 million unreserved savings has dissipated in less than three years. Capital improvement funds have been reduced by more than 80%.”

The City of the Arts, Costa Mesa, has exhausted its rainy day funds!

What’s going on in Costa Mesa?   From the commentary, employee wages and benefits are consuming more of the budget.

I know it’s been a rough recession, but when public safety salaries and benefits consume such a large portion of the city’s budget, Costa Mesa starts to look like the city of Vallejo.  The city of Vallejo had a firefighters union that was a major cause for the city to file for Chapter 9 protection.  The firefighters union also fought the city of Vallejo for two years in Federal bankruptcy court on whether the city was insolvent.  The Judge concurred, twice, that the city was insolvent.

Federal Bankruptcy Judge Michael McManus then told the leadership of Vallejo that he could modify employee bargaining unit agreements, but recommended that the firefighter’s union and the city council work it out outside of his courtroom.  They did.

Seeing that employee bargaining unit agreements were vulnerable, the firefighters unions around the state encouraged Assemblyman Tony Mendoza (D – 56th A.D.) to carry Assembly Bill 155.  The original bill would require any municipality wishing to pursue Chapter 9 bankruptcy protection go to the California Debt and Investment Advisory Committee first for state approval to file. 

Chapter 9 bankruptcy is a permanent stain.  Every time a municipality in this country considers Chapter 9, I get calls from reporters asking the Dr. Phil question, “How did it work for Orange County?”  Trust me, no municipality wants to file for Chapter 9 bankruptcy, let alone have to go through a committee of a state whose financial situation is a national embarrassment.

Now we see the Costa Mesa firefighters union exercising the reopener clause in their agreement.  They do it conveniently before the election.  They offer up a nice cost cutting proposal.  But it’s not enough for the fiscal hemorrhaging occurring in Costa Mesa.  And now the city council will have to wait until the conclusion of the firefighters’ union contract to negotiate stronger concessions.   The reopener has already been pursued.  Very clever strategy, if you don’t understand what’s really going on.

The righteous indignation displayed by the union president makes for a good show.  But, it doesn’t impress me much.  I’m already getting feedback from residents that the city’s police officers are already making public statements like, “We would like to report your fender-bender, but we’re suffering from budget cuts.” 

The union president should actually be apologizing to the residents of Costa Mesa for his contribution to the city’s fiscal woes.

From my vantage point, it’s the wages and benefits that need a very hard look.  If you don’t see the financial stresses in the city of Costa Mesa, or every other city in California, for what they really are, then the city of Vallejo may have some company.

Bonus:  This video was mentioned in a pension-related clipping service I subscribe to.  It’s a little strong, but someone found a way to make a point.   

Firefighter union president seeks apology

He asserts that City Councilman Eric Bever unfairly called the union ‘tone-deaf’ and ‘greedy.’

By Mona Shadia,

COSTA MESA — Tim Vasin, president of the Costa Mesa Firefighters Assn., has demanded an apology from Councilman Eric Bever for insinuating that the union members are "tone-deaf" when it comes to reforming the city’s ailing budget.

"In the 13 years I have worked for the city of Costa Mesa I have never felt so insulted as a city employee as I have this last week," Vasin told the City Council during Tuesday’s meeting.

The association recently renegotiated its employee contract and was able to find more than $600,000 in savings over 12 months.

Bever and Mayor Allan Mansoor voted against the contract changes.

"On Oct. 7, 2010, Council Member Bever made a conscious decision to unnecessarily attack me and the members of the Costa Mesa Fire Department with childish accusations of being tone-deaf, greedy and ignorant of facts," Vasin said.

The comments were written by Bever and County Supervisor John Moorlach in a Daily Pilot Community Commentary.

Moorlach said Vasin might be forgetting what the city agreed to a year ago.

"I think it’s a little disingenuous for someone from the Fire Department to say they’ve been helping out, especially when they just recently negotiated 3% at 50," he said.

Allen Rieckhof, president of the Costa Mesa Police Assn., said he stands beside Vasin and the firefighters in asking for an apology.

"I don’t think any council member should be degrading any of the employees or union members — that’s totally unprofessional and unnecessary," he said.

Bever also made wrong assumptions regarding Measure L, the proposed hotel tax that the city placed on the November ballot measure to help gather more revenue, when he linked the tax increase to the unions in the commentary, Vasin said.

"So let’s set the record straight," he said. "The truth is, it was actually this City Council’s decision to put the tax increase on the ballot."

Bever also wrote that the union’s "bantering and badgering to conclude negotiations before the election, is a bullying tactic that needs to stop."

Vasin reminded Bever that firefighters were the ones who came to the city under no obligation to negotiate their contract and found $633,400 in savings by suspending a scheduled salary increase and by contributing more to their pension accounts.

"Talk about the pot calling the kettle black, how dare you suggest that I am tone-deaf, greedy or ignorant of the facts?" Vasin asked. "The fact is, you chose, once again, to be derelict in your duties and left another closed session meeting without getting vital information about our proposal.

"I will have you know sir, while you were spending time hanging campaign signs for your endorsed council candidate, and skipping out of your required duties as an elected official, I was spending countless, off-duty and unpaid time away from my family, working with city staff to come up with solutions to this city’s economic problems," Vasin said.

Vasin’s comment drew a round of applause from the audience and Councilwoman Katrina Foley.

Bever did not respond to Vasin’s comments during his council comments portion of the meeting.

"I’m not going to dignify that with a response," Bever said on the phone Friday.

However, later in an e-mail, he said, "It is unfortunate that the speaker did not seem to understand the thrust of our commentary. Supervisor Moorlach and I were attempting to communicate Costa Mesa’s dire financial situation and the need for union cooperation in solving the problem."

Bever’s statements are simply not factual, Rieckhof said.

All city employees and unions have not just been cooperating, but have been more than willing to help the city with its financial difficulties, he said.

"I think all employee groups should get an apology from Mr. Bever for making such inflammatory statements," Rieckhof said.


October 22


Proposition 39 was on the November, 2000 ballot and it asked voters to lower the two-thirds threshold to 55 percent of the votes cast.  I felt this lowering of the bar and a few additional requirements was unnecessary and suggested an “oppose” vote.

Proposition 39 included many of the common sense accountability safeguards that I used to grade school bond measures on here in the OC when I was the Treasurer.  These safeguards included an oversight committee, detailed cost analyses, etc.  The last two school bond measures that I had graded before this particular election had received an “A” grade and passed with over 70 percent of the vote. 

Maria Sacchetti of the OC Register did a piece on the topic titled “Prop. 39:  Weighing cost vs. need – EDUCATION:  The ballot measure to make it easier to pass school bonds spurs debate on capping annual tax increases.”  I’m quoted near the conclusion of the article.

(In a prior UPDATE I had mentioned that Insurance Commissioner Steve Poizner was a big supporter of Prop. 39 and it came back to haunt him in his gubernatorial campaign this past June.)

                Opponents say the bonds penalize homeowners, who repay the debt through property taxes, usually over more than 20 years.  They point out that bonds are already passing under current rules, including seven in Orange County since 1998.

                County Treasurer John Moorlach said he prefers the two-thirds rule.  He has offered districts guidelines to follow when asking voters to pass a bond, such as setting aside money for future repairs, and points out that recent measures in Orange County won overwhelming approval.

                “I don’t see the necessity of a Prop. 39,” Moorlach said.

The LA Times lead editorial in their Sunday Orange County commentary section was titled “Measure H for Health.”  It would not be the first time that the LA Times endorsed against me (they endorsed Citron in 1994).  But, they did have some polite comments to make on my behalf.  Here are the paragraphs in which I am mentioned, along with the closing paragraph.

On the tobacco settlement question, supervisors went to court in an unsuccessful attempt to remove the people’s initiative from the ballot, claiming it was unconstitutional.  But a judge wisely refused to take the vote away from residents.  The supervisors then took the same ballot approach themselves by putting on the November ballot the competing Measure G, offered by John M.W. Moorlach, the county treasurer-tax collector.

Measure G would give 40% of the money each year to retire the bankruptcy debt, 18% to public safety and only 42% to health-care services. Moorlach, an accountant who understandably is most interested in the debt reduction, sees Measure G as a fair alternative for voters.

It should be said that Moorlach at least has presented a much more moderate alternative than the take-it-or-leave-it supervisors did. He brings some credibility to the discussion too, when history has shown the supervisors far too indifferent to health-care considerations. The county board has a history of shortchanging health-care needs. It still, as in other years, allocates fewer general fund dollars for health care per capita than any other major county in the state.

In addition to resolving to spend the funds for health, the county must begin finding ways to lift the blanket of frustration that has been thrown by arrogant supervisors over decision-making on the big county policy questions. Why couldn’t the discussion that the medical community forced, which later was joined voluntarily by Moorlach, have taken place much earlier at the instigation of supervisors?

It is shocking that this county has come to a state of affairs where the only town meeting place for knowledgeable and interested parties on countywide matters of importance is in the voting booth. The public conversation should come first, not after the fact. It ought to take place long before citizens see no alternative but to seek a remedy at the ballot box.


As a result of the Orange County bankruptcy protection filing in 1994 the County established the Public Financing Advisory Committee (PFAC) to review debt related matters for they were brought to the Board of Supervisors.  In October of 2005 PFAC voted on a particular proposal.  The motion that PFAC approved created a dilemma for the Board of Supervisors:  they could not amend the motion.   Consequently, it could not be moved forward by the Board of Supervisors in the manner that they preferred.  What to do?  The Board emasculated PFAC without obtaining any input from its members, including me.

At the next PFAC meeting the members were to receive and file highly modified changes to their “Policies and Procedures” for their roles.  This item was the first one addressed by PFAC.  To a person, all the members present basically said, “Why bother?”  They voted to approve a brief resolution terminating the committee and followed it with a motion to adjourn.

The Board of Supervisors should have changed the ability to amend recommendations.  Simple!  Instead, they decided to make the PFAC irrelevant.  Awkward!  Consequently, every member walked.  Priceless!  Fortunately, things were smoothed over and the County still benefits from the brain power on PFAC, but what an amazing meeting that was.

It was covered in the OC Register by Norberto Santana, Jr., in “Debt panel walks out after role weakened—County advisors react after their advice becomes subject to changes.”  Here are a few selected quotes:

                Led by Supervisors Lou Correa and Chris Norby, they changed the nature of the committee.  From now on, supervisors could tinker with details.

                Supervisors Tom Wilson and Jim Silva opposed the change, saying the panel was a cornerstone of credibility on Wall Street.  But Supervisor Bill Campbell tipped the balance on a 3-2 vote.

                When the public finance committee met Thursday, they took one look at their revised mandate, adopted a resolution admonishing the supervisors and walked out, leaving a host of bond deals without review.

                “Let them read 17 pounds of documents,” said panel member Tom Hammond, 67.

                “It was incredible.  It certainly caught me by surprise,” said Treasurer-Tax Collector John Moorlach, a nonvoting panel member.

For nearly a decade, most county staffers thought that the finance review panel was the product of an agreement with the Securities and Exchange Commission that settled the bankruptcy.  However, a review of the 1996 cease-and-desist order between the SEC and the county includes no mention of such a panel.

“I guess it was an urban myth,” Moorlach said.

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