MOORLACH UPDATE — Supreme Court Petition — March 10, 2011

It happened again.  Not all articles come up in my searches, but this one is very important.

This week the County submitted its petition to the California Supreme Court.  It’s a great and compelling read; please check it out at

The Supreme Court should explain clearly to the state’s taxpayers why the granting of retroactive pension benefits is exempt from two critical areas in our State’s Constitution, the extra-compensation and the debt-limit provisions. 

The Supreme Court’s review of these matters is critical to the current and future fiscal well-being of this county, this state, and its municipalities.

For those new to the UPDATE, the FIVE-YEAR LOOK BACK below will explain why I ran for Supervisor, for an opportunity to right wrongs, even in front of the California Supreme Court.  To summarize the Look Back:  “The election will be a chance to debate how to handle the retirement system deficit.”

County Petitions for State Supreme Court Review of Pension Case

Is a pension liability a debt?

That’s one of the central questions that Orange County Supervisors want the state’s Supreme Court to answer soon.

On Monday, county officials filed their formal petition to the state’s highest court, seeking to reverse two major losses from lower courts that have answered the county’s question by saying, "No."

Supervisors argue that when their former colleagues expanded pension benefits retroactively – worth about $187 million according to actuaries – in 2002, they violated the state constitution because they didn’t seek a vote of the people.

Yet lower courts have consistently ruled that a pension liability doesn’t meet the constitutional requirements for a popular vote.

County officials have now spent just over $2.5 million their lawsuit. The Association of Orange County Deputy Sheriff’s has consistently criticized the supervisors’ action saying it’s a long, long shot and does nothing but waste money and time.

Supervisors, led by John Moorlach, in turn have argued that such legal challenges are critically important if taxpayers are to bring massive unfunded liabilities under control. They expect the Supreme Court will be more comfortable in issuing a decision that could unwind pension deals up and down the state.

The Deputy Sherriff’s union, however, says the only thing that will soon unwind is the supervisors’ legal adventure.

The deputy’s union now has 20 days to respond to the supervisors’ legal arguments. After that, the deputies get another 10 days to respond to that and then that’s it.

The State Supreme Court will have 90 days to issue a decision.

In the meantime, we’ve included the county’s brief for review.



March 10


The Daily Pilot’s Alicia Robinson broke the bad news in “Contender enters what was 1-man race – City councilman from Stanton to run for O.C. supervisor seat against Costa Mesa resident.”  The campaign for Supervisor was on.  The fear that the public employee unions would find a candidate to support against me had become a reality.  It would be a classic race between a reformer and a public employee union-backed status quo supporter.  The story also appeared in the sister publication, the Huntington Beach Independent.

                For nearly two months, Orange County Treasurer John Moorlach thought he’d have an easy campaign for an Orange County supervisor’s seat.  That changed Wednesday – two days before the candidate filing deadline – when his first challenger entered the race.

                Worse yet, his opponent is a fellow Republican.  Stanton City Councilman and high school teacher David John Shawver took out papers Wednesday to run for the 2nd District supervisor’s seat, and he has until 5 p.m. today to file them to get on the June 6 ballot.

                The 2nd District supervisor represents Costa Mesa, Newport Beach, Huntington Beach and all or part of seven other cities.  Incumbent Supervisor Jim Silva is termed out and is seeking an Assembly seat.

                Having an opponent means longtime Costa Mesa resident Moorlach, 50, will actually have to campaign.  But he said Thursday that he can handle that.

                “I think that the process deserves to have a contested race.  I’m certainly not opposed to that,“ he said.  “The optimum strategy is to have no opposition.”

                Moorlach first ran for treasurer in 1994 and lost to incumbent Robert Citron.  Risky investments left the county nearly $1.7 billion in debt and forced Citron’s resignation.  Moorlach, who correctly predicted the financial disaster, was appointed treasurer in 1995.

After more than 11 years as treasurer – Moorlach won three uncontested elections – he wants to help make policy that will keep the county out of a financial hole.  In early 2005, county officials learned their employee retirement system is underfunded by $2.3 billion, though Moorlach expects new figures to show a slight decrease in that liability.

The election will be a chance to debate how to handle the retirement system deficit, he said.

It may also become a showdown between Moorlach’s GOP supporters and employee unions.  Moorlach said he expected the unions to field a candidate to oppose him.

Public employee unions don’t like him because he’s been warning officials that big benefit packages and other county spending are creating big financial obligations, he said.

Shawver, 58, has been a Stanton city councilman for 16 years.  His knowledge of local government and his desire to be a (sic) represent his community at the county level led him to run, he said.

Asked whether he expects union support, he said, “I would take support from whoever offers it to me.”

A teacher at Millikan High School in Long Beach for 36 years, Shawver has taught geology, chairs the school’s physical education department and has coached a variety of sports.

He ranks environmental improvements – renewable energy, protecting coastal waters – high on his list of political goals, and he said he’d also like to improve the relationship between cities and county government.

Though both candidates are Republican, Shawver said he’s undaunted by Moorlach’s considerable party support.  The treasurer earned a rare pre-primary endorsement from the Orange County GOP, and the California Republican Assembly also backs him.

County offices are technically nonpartisan, but political parties and partisan groups usually endorse and donate to candidates.

“To me it’s a nonpartisan office, and that’s the way we need to look at it, and also we need to look at who’s best for what office,” Shawver said.  “John Moorlach is a great banker and a great treasurer.  Maybe that’s where he should stay because he’s doing a good job.”

Moorlach said he and Shawver aren’t acquainted, but they probably would have been eventually.

“He’s on my list to call for an endorsement,” Moorlach said.  “I didn’t get to him, obviously.”