MOORLACH UPDATE — Newport Beach Patch — March 21,2011

Today the Newport Beach Patch provides a thorough review of the upcoming airport settlement agreement renegotiations.  Because it does a great job of laying out the history and the facts, I’m also forwarding this UPDATE to those on my John Wayne Airport E-Mail Tree.  (Those on my John Wayne Airport E-Mail Tree receive e-mails from me when JWA is on the Board of Supervisors’ Agenda and is soliciting input.)

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Next Round of Airport Talks Approaching

A settlement restricting JWA operations expires in 2015, and discussions on an extension are expected to begin this spring.

Residents, city leaders and county officials are gearing up for the next battle over restrictions on John Wayne Airport.

A landmark 1985 federal court settlement restricting operations at the airport expires in 2015, and discussions on an extension are expected to begin this spring.

While most parties involved say they don’t expect the negotiations to be as contentious as those in the past, officials know it will be a closely watched issue.

“I want you to know working on the new airport agreement will be my top priority,” County Supervisor John Moorlach said to members of the  Airport Working Group, a citizens group that monitors John Wayne Airport’s adherence to use and noise restrictions, during its annual meeting earlier this month.

“Solvency is somewhere below that,” he added to laughs.

A Rare Victory

The restrictions on John Wayne Airport are among the most stringent in the country. Other cities have tried and failed to achieve even modest concessions.

Almost immediately after the modern terminal was built in 1967, John Wayne Airport faced neighborhood opposition. The county had to add acoustical insulation in 400 homes and purchase 40 buildings and convert them to business use.

When county supervisors approved an airport expansion in 1985, the legal battle between the county and residents escalated. Late that year, a lawsuit against the county by the city of Newport Beach and two community groups was settled in federal court.

The settlement agreement limited flight noise, capped passenger volume and restricted the airport’s size. The agreement allowed operations from 7 a.m. to 11 p.m.; capped the number of flights at 73 daily departures; and capped passenger volume at 8.4 million.

Federal legislation soon ended the legality of such strong local control. In 1990, Congress passed the Airport Noise and Capacity Act, a bill prohibiting cities from reducing or limiting aircraft operations without approval from the Federal Aviation Administration.

The FAA approved an extension of the agreement in 2003 because John Wayne’s 1985 court settlement predated the 1990 law.

In 2003, the original parties to the court settlement—Newport Beach, the county, the Airport Working Group and Stop Polluting Our Newport—agreed to extend the settlement until 2015.

The extension allowed for the number of gates at the airport to increase from 14 to 20; the maximum number of commercial flights to increase from 73 to 85 per day; and the number of cargo flights to double to four a day.

In addition, the extension maintained restrictions on noise levels; paved the way for the construction of a third terminal wing (expected to open late this year); and allowed a nearly 30 percent increase in annual passengers to 10.8 million.

The FAA concluded that plans for expanding John Wayne while maintaining local noise controls were consistent with federal law because they would not limit airport operations or affect aircraft safety.

Into the Future

John Wayne is not expected to handle 10.8 million passengers until 2022, according to FAA projections. Some officials say this bolsters the case for a simple extension of the agreement for another 15 to 20 years.

A survey of the Airport Working Group’s approximately 8,000 members revealed that their primary concerns remain the same: maintaining the curfew, a cap on flights and restricting noise levels.

The curfew is already in place through 2020. But Tony Khoury, president of the Airport Working Group, says he and other members hope it can be extended further in the upcoming discussions.

In 2001, about 7.2 million passengers flew from the Orange County airport. The number rose to 10 million in 2007, before coming back down to 8.7 million in 2010.

Despite the downturn, a recent FAA report says U.S. airlines will double their business in the next 20 years, putting greater pressure on all airports.

Referring to a local citizens group’s slogan, “10.8 and Shut the Gate,” Moorlach said, “That would be a nice goal, but we also need to be realistic.”

He added that it is critical that residents and officials are “careful not to irritate the FAA,” which is a major stakeholder.

Airport director Alan Murphy said “the FAA really will look to the carriers,” which are “the true enemy” to those seeking to extend the restrictions.

The city, county and citizens groups are aligned in their expectations, said Murphy, but the airlines have a different point of view and may look to loosen the current limits.

He pointed to the passenger cap as an example. Local residents suggest lowering the annual passenger limit to reflect the downturn in airline traffic from John Wayne. An airline official looked at the same figures, Murphy said, and suggested, “Well, maybe we don’t need a cap anymore.”

The airport is currently negotiating airline carrier leases and expects to have those completed before discussions on extending the settlement agreement begin.

“We do have a good relationship with the carriers,” Murphy said. “And I hope that continues.”

As a whole, officials said they are optimistic about extending the agreement favorably, if for no other reason than the size and location of the airport.

“It is very small,” Murphy said. “At some point, you just cannot do anymore.”

FIVE-YEAR LOOK BACKS

2006

March 20

In the middle of the City of San Diego’s pension meltdown, the voters elected a new City Attorney.  They elected a firebrand by the name of Mike Aguirre.  He was a blast to observe from afar.  But, the more you watched, the you realized he was a bona fide megalomaniac.  He is bright, but extremely sensitive to any type of advice or counsel.  He pursued a number of critical pension-related matters through the legal system, most to no avail.  Near the end of his term, he even contacted me to team up on our retroactive law suit.  I politely left the offer alone.  He was not re-elected and was defeated by Jan Goldsmith in 2008.  Jan Goldsmith and I became acquainted when we both were mentioned as possible candidates for California State Treasurer in 1998; more on this in the Look Backs two years from now.

For fun, I decided to provide Mike Aguirre some advice, based on personal experience, on a matter he was struggling with.  I did it by submitting a Letter to the Editor to the Voice of San Diego, titled “Separation Needed.”  Sure as night follows day, the very next day there was a response biting my head off.  Too funny.

Last month the esteemed, and duly elected city attorney, the Honorable Mike Aguirre, clarified his reasons for pursuing the role of “The Duly Elected Pension Lawyer” for the city’s retirement system.

Far be it from me to disagree with the good attorney, as I know he is sensitive to opposing viewpoints.  However, there are very good reasons not to have the legal counsel for the plan sponsor be the same as the legal counsel for the plan.  The differing goals and priorities of both entities, which make for inherent conflicts, would make it easy to argue against the Hon. Aguirre’s serving both of these fine institutions.

Perhaps the Hon. Mike Aguirre should redirect his efforts?  Instead of trying to control both positions, he should be trying to modify the city’s charter.  As the new Mayor is proposing to add two charter reform measures to the ballot, the city attorney should advance one of his own.  He should request that the Charter exempt the retirement system as a department of the city.

The Orange County Employees Retirement System made such a separation from the County Counsel years ago.  Although I had certain misgivings about this decision at the time, it has become most obvious over the years that this was the most appropriate course to take.  The employer is not always the best provider of legal advice because of its numerous biases.  I would strongly encourage the Hon. Mike Aguirre to refocus his efforts.  As the City Attorney, he still has input as a professional advisor and member of the system when issues of a legal nature come before the retirement board. 

If he is resolutely opposed to their actions, then he has legal remedies to assist him in accomplishing his goals.  I would speculate that after the raw emotions have been soothed in the near future, that he will find that the retirement board will act in an appropriate manner to his liking most of the time.

John M. W. Moorlach, C.P.A., CFP®

Orange County of Orange Treasurer-Tax Collector

Board Member, Orange County Employees Retirement System

March 21

This letter to the editor appeared in the Voice of San Diego the day after I submitted my recommendation concerning San Diego City Attorney Mike Aguirre (see above).  To this day, I believe that Salvatore D’Anna was a pseudonym that Mike Aguirre used to respond to my submittal.  You’ve got to love the banter in this response, titled Go Back to the OC,which seems to indicate that Mr. Aguirre is so wonderful that, if he had been here in the OC, our Board of Supervisors certainly would not have approved the pension enhancement in 2004.

By SALVATORE D’ANNA, SAN DIEGO

Re: Separation Needed, Mr. Moorlach, shouldn’t you be worried about Orange County’s problems instead of butting into ours?

I find it absurd that you have the audacity to promote the separation of the city attorney from the pension system by using Orange County as an example.

From the newspaper on September 11, 2005 Orange County:

"More than a decade after filing for municipal bankruptcy, another financial crisis is unfolding. County supervisors recently learned that their employee pension fund is $2.3 billion short of what officials say is needed to pay future retirement benefits. Some supervisors were stunned by the news, but critics say they shouldn’t have been. They say the Board of Supervisors triggered the pension crunch by approving overly generous benefit increases twice in recent years.

Orange County Treasurer-Tax Collector John Moorlach opposed the pension increases, largely because they applied to current employees as well as future workers. "Overnight, for example, the public safety workers here got a 50 percent increase in their pensions," Moorlach said. "It was very frustrating."

Maybe if you had a city attorney like our Duly Elected Mr. Aguirre, you would not have been so frustrated.

One other thing, have you ever read the California Constitution? If not, maybe you should familiarize yourself with Cal Const, Art XVI § 17 (b) which says the following

"The members of the retirement board of a public pension or retirement system shall discharge their duties with respect to the system solely in the interest of, and for the exclusive purposes of providing benefits to, participants and their beneficiaries, minimizing employer contributions thereto and defraying reasonable expenses of administering the system. A retirement board’s duty to its participants and their beneficiaries shall take precedence over any other duty."

That is why the city attorney has a dual role as the attorney for both the employer and the retiree. It is the city attorney’s duty to make sure both sides uphold our State Constitution.

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