MOORLACH UPDATE — Happy Thanksgiving — November 24, 2010

Here is the recap, via the media, of yesterday’s Board of Supervisors meeting.

The OC Register has an electronic article on my vote regarding the Public Administrator/Public Guardian departmental review, which can be seen at

The Associated Press carried the news of our ongoing efforts to annex Sunset Beach into the city of Huntington Beach.  It hit quite a few media outlets, so I decided to collect their banners (like I used to collect my grandfather’s cigar bands).  Several television stations picked it up, as did the San Jose Mercury News and the San Diego Union Tribune.

The second piece below is on medical marijuana dispensaries in unincorporated areas, which was also distributed by the wire services (probably City News) and was picked up by the Long Beach Press-Telegram, Contra Costa Times, and The Sacramento Bee.  The story does a good job of explaining my vote.

The closing article from the Voice of OC recaps the progress of our lobbyist ordinance formation efforts.  For the sake of providing a little commentary, the 2009-2010 OC Grand Jury’s report, “Lobbying:  The Shadow Government,” would have been better named as “Grand Jury:  Poking in the Dark.”  It reminds me of the Nancy Pelosi quote:  “We have to pass the bill so that you can find out what is in it.”

Finally, one Look Back for your long weekend.

Happy Thanksgiving!!

Huntington Beach annexation of Sunset Beach OK’d

The Associated Press


HUNTINGTON BEACH, Calif.—Surf City USA is swallowing the 85-acre unincorporated community of neighboring Sunset Beach.

The Orange County Board of Supervisors on Tuesday unanimous approved Huntington Beach’s annexation of the coastal burg. In August, the Huntington Beach City Council voted to annex Sunset Beach.

A consultant study shows annexation is financial feasible and will bring in at least $624,000 in property, sales and occupancy taxes.

The Sunset Beach Community Association, a band of residents resisting annexation, had managed to delay what Supervisor John Moorlach called the inevitable.




OC Supervisors ban pot dispensaries on 4-1 vote

From wire service reports

The Orange County Board of Supervisors voted Tuesday to prohibit medical marijuana dispensaries in unincorporated areas of the county.

The supervisors voted 4-1, with Supervisor Shawn Nelson casting the lone no vote. Nelson objected to using zoning regulations to prohibit the dispensing of medical marijuana.

Orange County Supervisor John Moorlach said he voted for the ban, although he did not understand the urgency of the issue.

"There were only two areas in unincorporated Orange County where you could put them anyway — in Midway City and Ladera Ranch — so what’s the point?" Moorlach said. "So I went ahead and voted for the ordinance to not allow them because where my dispensaries are now are in Sunset Beach."

The supervisors today also voted to approve the annexation of Sunset Beach to Huntington Beach.

Moorlach said anyone seeking medical marijuana in the north part of the county could always go to Long Beach.

"Long Beach has (dispensaries) and Sunset Beach is only two miles away from Long Beach," Moorlach said. "Just go over the county line and take care of it there."

The only other place to get medical marijuana in Orange County would be in Laguna Woods, Moorlach said.

The Los Angeles County Board of Supervisors voted 4-1 today to direct its attorneys to write an ordinance banning medical marijuana outlets in unincorporated areas of its county.


Supervisors Punt Lobby Reform to County CEO

Exhausted by their own attempts to craft a lobbyist ordinance that they themselves don’t seem to want but can’t drop either, members of the Orange County Board of Supervisors on Tuesday punted the issue to county Chief Executive Tom Mauk.

Perhaps, supervisors reasoned at their regular meeting Tuesday, Mauk could succeed where they have failed.

With a wry smile, Mauk told supervisors that he and county Counsel Nick Chrissos would come back in two months with a draft ordinance that supervisors could consider for adoption.

Registering lobbyists has been an issue since last summer when Orange County’s grand jury drafted a report, titled "Shadow Government," that criticized county leaders for resisting basic registration requirements that many other counties, including Los Angeles and San Diego, have in place.

That report followed the efforts of former state Sen. Joe Dunn (also chairman of the board for Voice of OC) and the Orange County Employees Association to propose a ballot initiative requiring a much more stringent registration requirement.

County supervisors rejected Dunn’s arguments but responded to his public threat of a potential ballot initiative by trying to draft their own ordinance.

However, the board earlier this month rejected a registry proposal put forth by Supervisor Bill Campbell. Supervisor John Moorlach termed Campbell’s proposal "regulation light," before casting his no vote.

Tuesday, Supervisors Pat Bates and Shawn Nelson gave it a shot. They proposed a law requiring anyone seeking to influence county leaders on behalf of someone else to register with the county.

"The public wants and has a right to know who are those lobbying the board of supervisors," said Bates.

But this time the majority of the board thought the proposal was too overarching. While Bates said she wants to make sure that any registration ordinance is "evenhanded" and doesn’t just make professionals register, other supervisors said they don’t want every community activist to have to fill out a form.

Members of the business community, who said they could live with Campbell’s proposal, were more critical of the Bates-Nelson approach.

"This ordinance troubles us quite significantly," Orange County Business Council CEO Lucy Dunn said. "It expands the definition of lobbyists beyond what any jurisdiction has ever proposed."

Meanwhile, OCEA communications director Jennifer Muir gave supervisors credit for responding to public concerns.

"We just hope that supervisors keep working on this because it’s clear that the public wants some sort of lobby reform," said Muir. "They realize the public wants transparency."

Now it is up to Mauk’s staff to figure out what transparency means to Orange County.

"The devil is in the details," Campbell said.




November 27


Sometimes I just want to let it all out and ask some strong questions.  With the benefit of hindsight, today’s article begs many questions.  Who are you going to trust on the topic of pensions?  Who has really, really been political with this topic?  When is the public going to wake up and realize that they were duped?

Christian Berthelsen of the LA Times wrote “Pension Gap to Force O.C. Budget Cuts—A higher estimated shortfall prompts a search for as much as $84 million in savings in the next fiscal year.  Options include layoffs.”  The piece certainly sets the table for why I really ran for Supervisor.

The biggest topic today is that, at 7.75 percent, the interest rate assumption for public pension systems is too high.  Five years ago, one politician would have you believe that it should have been higher (in order to reduce the annual employer contribution).  People, beware the self-serving voices you listen to.

The good news?  Our Orange County Employees Retirement System has been in the top 5 percentile of public pension plans in the nation.  So much for the claim that the system is “managed in an irresponsible fashion.”  So much for credibility.

A decade after Orange County declared bankruptcy, it is once again confronting a threat to its finances: the swelling cost of its pension system.

County officials are looking to slice as much as $84 million in the next fiscal year — and potentially cut services — so they can use the money to shore up the pension fund.

No cuts have been finalized, but options include layoffs, a hiring freeze and postponing construction and repairs, the county’s executive officer, Thomas G. Mauk, said in an interview this month.

"Obviously, services throughout the county have the potential to be affected, but we have not made those decisions yet," he said.

Every county department has been asked to trim expenses. For example, probation department officials said they may cut as many as 62 of the 1,015 beds in juvenile detention facilities. Other departments declined to comment or didn’t return calls.

Some officials said the increased pension cost was only a fraction of the county’s $4.94-billion budget and would have little effect.

"I don’t think the public is going to see much in the way of degradation of services," said Bill Campbell, chairman of the Board of Supervisors. "I think we are going to be able to manage through this."

The proposed cuts are in response to a consultant’s finding this year that the Orange County Employees’ Retirement System was underfunded by $2.3 billion, about $1 billion more than previously realized.

As a result, beginning with the fiscal year that starts July 1, the county will have to pay an additional $84 million per year into the pension system, bringing its total contribution to about $210 million per year. The additional $84 million is nearly as much as the county spends each year to retire its bankruptcy debt.

The county is examining other ways to cut pension costs. It has asked the statewide California Public Employees’ Retirement System for an estimate of the cost of taking over management of the pension fund. In addition, the county retirement board last month adopted changes that reduced the financial burden in the short term but could be costly in the long run.

For example, one change means the county will contribute less upfront, but that means losing out on the larger investment return the money could generate.

After the county filed bankruptcy 11 years ago, it curtailed services to repay creditors.

The county is on track to repay its bankruptcy debt 10 years early. A new report says nearly $190 million left over from last year’s budget has been placed in reserve.

However, the hard lessons of the bankruptcy are still fresh in the minds of county officials and residents. This year, the Orange County Grand Jury issued a report calling rising pension costs "another county crisis," and noted the county’s cost of funding the plan quadrupled from 2000 to 2004.

Like pension systems throughout the state, Orange County is facing the prospect of lower investment returns, a surge in the retirement-age population and the increasing longevity of retirees. But the county has also contributed to the problem in recent years by offering pension plans considerably more generous than the state average, according to the state controller’s office. One package, for example, would allow Orange County public safety employees with 25 years of service to retire at age 50 with 75% of their pay, compared with 57% in the rest of the state.

As a result, Orange County’s funding level ranks in the bottom third of state pension funds, the controller’s office said in a report.

Any discussion of public pensions is fraught with divisions along political fault lines. Rising pension costs are a rallying point for conservatives, who say government’s overhead costs should be kept to a minimum. Public worker unions, meanwhile, say the issue is a stalking-horse for ideologues who want to cut government spending.

John M.W. Moorlach, the county’s treasurer and a candidate for the Board of Supervisors next year, has been critical of sweetened pension offers to county employees in recent years and said their true costs are now becoming apparent.

"The problem is what it does to the county budget and what it pushes out," he said. "Are we going to push out libraries, parks, welfare? What is going to be sacrificed to pay for this pension plan commitment?"

But Nick Berardino, general manager of the Orange County Employees Assn., said the pension fund shortfall was exaggerated and that the system could make accounting changes that would lower the deficit. He said the fund’s assumption of a 7.5% annual return was the lowest among any public pension fund in the state and that its returns had historically been much higher.

"So much of this deficit, or shortfall, is the result of the retirement board managing the system in an irresponsible fashion," he said.

The expected budget cuts come after a new actuarial consultant that the Orange County Employees’ Retirement System hired issued a report in June concluding the system had $5.2 billion in assets but $7.5 billion in obligations, leaving it just 69% funded. By contrast, public pension funds statewide were 99% funded in 2002-03, the most recent year for which figures are available, according to the state controller’s office.

The Segal Co. said that of the $1 billion in additional unfunded liability, $365 million was due to enhanced benefits. The better benefits are leading to far more retirements than usual. Keith Bozarth, chief executive of the county pension system, said 550 employees had retired this year as of October, the vast majority of them after the new benefits took effect. Half that number retired the previous year.

Initially, the county expected it would have to pay an additional $129 million in the next fiscal year to shore up the fund. But according to a memo Mauk circulated to county supervisors this month, it managed to whittle that number down to $84 million.

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