MOORLACH UPDATE — Opinions — March 29, 2011

The OC Register has an article covering yesterday’s OCTA Board meeting.  I did not see the article in their dead tree version, but MSNBC.com picked it up.  It’s the first piece below.  I said my piece based on knowing the firm for some thirty years and as a fellow C.P.A.  I was not specifically contacted by the firm or its communications director (if it even has one) on how to handle this matter.  The OCTA Board engaged in a good debate on this topic and the matter of continuing our engagement with Mayer Hoffman McCann is now closed.

The next two articles deal with the Rossmoor survey results.  Perhaps there is a compromise that can be reached?  If Rossmoor assumes an 11 percent utility users tax so that the rest of the county’s taxpayers can stop their subsidizing this enclave, then Rossmoor can have latent powers.  One thing that I can guarantee is that I am not worried about my polling ratings.  Something has to be done and entrenchment is not an option.  The survey is discussed by Patch and OC180News below (I’ll let you guess which reporter lives in Rossmoor).

I’ll provide a brief overview of my initial reactions and may provide more in future UPDATES.  The results seem focused on the messages that Rossmoor wants to hear, and there is emphasis on less strong responses that support the preferred conclusions.  There appears to be a lot of interesting information that is not explored further, some large minority opinions and unsure/refuse responses.  It is easy to “prefer” or “approve” or “oppose” topics when the costs or consequences are not included.

§  The major flaws I observed in this report are 1) omission of fiscal reality in the presentation of cost-related questions, 2) that the selection of “highlighted” reported data is misguided in questions where that data had a significant plurality of “unsure” responses, and 3) alteration in the number of categories from the survey to the report that may lead to skewed conclusions.

§  300 surveys were collected.  I would suggest that most respondents already knew what the survey was about because most people are apt to hang up on phone surveyors.  (Could it have been the negative letters that the Sheriff’s union sent out to the residents before the survey?)  Also the error margin is 5.7%, which could tip the scale on a lot of the questions.   Also, the questions are worded to ask if someone strongly supports/opposes a position I’ve taken and those details are not broken down in the graphs.   

§  Conclusions are written in favor of the Rossmoor Community Service District’s outlook. The ultimate conclusion that the voters polled would want to have things remain status quo and keep Rossmoor unincorporated could have been predicted even without the poll.  If one looks at the demographics of the residents of Rossmoor, age and political views would reveal this result.

The fun continues.  Taking things with a grain of salt sure does make sense in this instance.

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County transit agency votes against hiring Bell’s auditor

By TONY SAAVEDRA AND ALEJANDRA MOLINA THE ORANGE COUNTY REGISTER

The Orange County Transportation Authority board voted against awarding a $1.1 million three-year contract to the same Irvine audit firm that gave the city of Bell a clean bill of fiscal health.

"The public really has to have a very firm confidence on how we’re handling our tax dollars here," said Director Carolyn Cavecche, minutes before voting against awarding Mayer Hoffman McCann the contract.

"(The public) is going to incorrectly, I believe, perceive that we specifically picked an auditor that might not hold us to … what we need to do," Cavecche added.

Cavecche, a member of OCTA’s finance committee, had previously recommended that the board approve the agreement, despite accusations by state controller John Chiang that the firm rubberstamped audits in Bell.

On Monday, the board voted against awarding Mayer Hoffman McCann the contract with some board members referencing a story on The Orange County Register’s website on Friday about the possibility of the board approving the deal. The finance committee will choose one of the three other firms short-listed for the job.

Mayer Hoffman McCann has provided auditing services for the OCTA for four years.

"I need to feel comfortable and know that I don’t have to explain to anyone, let alone a reporter for the Register, or, God forbid, the state attorney general someday how we get involved in certain circumstances," said Director Shawn Nelson, who supervises the county’s 4th District.

Directors John Moorlach and Bill Campbell were the only board members who voted against having the finance committee choose another firm.

Moorlach, who sits on the OCTA’s finance committee, said last week that the firm deserves another chance because it is highly unlikely to make the same mistakes. On Monday, he reiterated that sentiment.

"This firm is literally on the ropes in a public perception standpoint," Moorlach said at Monday’s meeting. "They are going to be an incredible firm going forward."

"We knew we could slam them, but we also felt they made a good presentation," Moorlach said last week. "You’ve got a firm that has … taken a lot of hits. Is that worth destroying them over?"

Moorlach disclosed that his son once worked for the company.

In a prepared statement, the firm said that it was a victim of deception at Bell.

Chiang said in December that Mayer Hoffman McCann failed to follow generally accepted field standards that would have led them to identify some if not all of the problems identified in a state audit.

The state controller said Mayer Hoffman McCann did not adequately look for documentation and evidence to support the city’s records and did not document the reason for deficit balances. Instead, the firm relied primarily on comparisons to prior year financial statements, looking deeper only when things changed considerably from year to year, Chiang said.

Also, he said, the firm only looked at the city’s general fund, although salaries were charged to other funds. Had the firm reviewed the records for key employees, it would have found that the chief administrative officer had salary agreements with five other city funds.

MHM released a statement in response to Chiang, saying that the audit firm was subjected to a massive scheme of collusion that reached every layer of Bell’s government.

"The facts show that while there are areas in which procedures should have been strengthened, the audit was in compliance with the standards that exist today," the statement said. "But under current audit standards, the sort of unprecedented and pervasive collusion to deceive auditors as happened at the city of Bell may not be detected even by a properly planned and performed audit."

Contact the writer: amolina@ocregister.com or 714-704-3795

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It’s Official: Rossmoor Residents Prefer the Status Quo Over a Union with Los Alamitos

A survey of Rossmoor voters says they support push for localized authority.

A Rossmoor voter survey released Monday night may have given community leaders the political capital needed to petition the county for local authority over police, animal control and trash services.

A poll of 300 Rossmoor voters found that most residents would prefer to keep the community operating in exactly the same way it has for the last 40 years. However, if the status quo is not an option because of county pressure to merge with Los Alamitos, the next most popular option among voters is to be annexed by Seal Beach rather than Los Alamitos. But since Seal Beach officials have expressed an unwillingness to take on Rossmoor, the next option favored by Rossmoor voters is to take authority over police and animal control from the county and place it in the hands of the Rossmoor Community Services District.

The district’s board will vote on whether to seek additional powers from the county at its April 12 meeting.

“I do not support anything that would incur additional costs to this community in the short or long term,” said Eric Christensen, a member of the Rossmoor Advisory Committee, which makes recommendations to the Rossmoor Community Services District board of directors. “We have to make sure that whatever we do doesn’t adversely affect the community.”

Rossmoor community leaders have said they feel backed into a corner by Orange County Supervisor John Moorlach’s drive to rid the county of unincorporated islands such as Rossmoor.

Moorlach has advocated a number of options for Rossmoor, including merging with Los Alamitos and Seal Beach to form a “supercity”; being annexed by Los Alamitos; paying a utility tax high enough to cover the county’s costs for providing services to Rossmoor; and accepting police and animal control services from Los Alamitos in exchange for giving the city Rossmoor’s only commercial center.

None of those options resonated with voters, according to the survey.

Only 10 percent of those polled wanted to be annexed by a neighboring city, and only 33 percent of them wanted to be annexed by Los Alamitos over Seal Beach. Only 38 percent of the voters wanted police services from Los Alamitos, and 82 percent opposed letting Los Alamitos take Rossmoor’s commercial center at the corner of Los Alamitos Boulevard and Katella Avenue.

Moorlach’s approval rating among those polled was 23 percent.

When asked if they would support Rossmoor’s grab for latent powers as long as it didn’t cost residents more money, 70 percent of respondents favored the move. Additionally, 47 percent of respondents favored the Orange County Sheriff’s Department for police services as opposed to the 38 percent who preferred the Los Alamitos Police Department.

That support for latent powers is enough for the district to vote on plans to petition the county for the transfer of police, animal control and trash hauling oversight, said Henry Taboada, general manager for the Rossmoor Community Services District.

The wrangling over Rossmoor’s future has elements of a chess match to it.

The county’s efforts to give the commercial property to Los Alamitos in exchange for services paves the way for the city to annex Rossmoor. The county has outlined a strategy of overcoming community resistance to annexation by first familiarizing residents to the services of the annexing city. Similarly, the loss of the sales tax revenue from the commercial corner would make it essentially impossible for Rossmoor to pay for its own services or to one day become a city.

Conversely, Rossmoor’s drive for latent powers isn’t just about acquiring local authority over police, animal control and trash hauling services. Rossmoor officials also see it as a way to stave off pressure to merge with Los Alamitos and to stop the county from giving Rossmoor’s commercial corner to Los Alamitos.

The survey is a key component in the drive for latent powers because the county would require proof of community support before it would agree to expand the community services district’s authority. Last week, Moorlach and Los Alamitos officials called into question the integrity of the survey suggesting the outcome would be biased in favor of the district contracting with the sheriff’s department for services because the poll was funded by the sheriff’s union.

On Monday, Rossmoor officials offered the mixed findings of the survey as proof of its impartiality.

In turn, they questioned Moorlach’s impartiality as a voting member of the Local Agency Formation Commission, which oversees annexation issues.

Moorlach’s public statements indicate that he has already made up his mind about issues that haven’t yet come up for a vote, said Christensen.

“We are going to take the position through council that he is disqualified from voting on anything related to Rossmoor,” Christensen said. “He’ll love it.”

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Survey Says Residents Opposed To County Plans For Rossmoor

Dolores Barr, Editor and Publisher, OC180NEWS.com

The little public opinion survey that could – or couldn’t – depending on your perspective was made public last night in Rossmoor. This is the very same survey which Supervisor John Moorlach and Los Alamitos City Councilman Troy Edgar both condemned before it saw the light of day.

Probably to the surprise of almost nobody, public opinion is not supportive of the direction both the County and specifically Supervisor Moorlach want to go with regard to governance of unincorporated Rossmoor.

The Rossmoor Community Services District commissioned the survey for two reasons: first, the Board of Directors needs to know what their constituents want them to do, and second, if the RCSD decides to apply for authority over additional areas of government services (known as latent powers), the Board must be able to clearly substantiate public support for their proposals.

The survey has been controversial because it was paid for by the Orange County Deputy Sheriff’s union. Some, including Supervisor Moorlach, have claimed this funding would bias the survey in favor of retaining the deputies as the law enforcement provider of choice for Rossmoor.

Everyone knows a survey can be conducted to generate a sought after result, but the pollster claims that was not his job. The poll was taken by a reputable pollster, Probolsky Research out of Newport Beach. The CEO of the firm, Adam Probolsky, presented the results last night.

“Our reputation of being balanced researchers is all we have,” Mr. Probolsky said at the meeting. “Our job in this survey was not to say anything other than factual information and balanced information, and to give a clear picture of what the community thinks.”

So, what do the Rossmoorians want? Not what the county wants to give them, that’s pretty sure.

Survey answer: They want to be left alone, which means keep things as they are. But, the county wants to get rid of them, which means change things.

Survey answer: 69.7% want the RCSD to take on responsibility for law enforcement and animal control, but Supervisor Moorlach has publically stated that “doesn’t pencil out” and is clearly opposed to the idea.

Big caveat: The survey stipulated this question is in the context of no additional cost to residents.

Survey answer: 82.0% reject the idea of carving off Rossmoor’s only sales tax producing land (the southwest corner of Katella and Los Alamitos Blvd where the Fish Company is located) and giving it to Los Alamitos. But, Supervisor Moorlach has said on more than one occasion that the sales tax generated by the corner could be given to Los Alamitos in exchange for that city taking over animal control and land use planning services for Rossmoor.

Survey answer: Only 38% support transferring Rossmoor’s law enforcement to Los Alamitos. While OC180NEWS has not heard with our own ears Supervisor Moorlach call for transferring law enforcement from the sheriff to Los Alamitos, many in the community believe there is a plan to do this. To the extent that is in the county’s plans, the survey indicates the residents of Rossmoor don’t like the idea.

In this article we have not attempted to publish a comprehensive presentation of the survey with all the fine print because we imagine the RCSD will put it on their web site. Nevertheless, the survey results selected above, particularly when considered in whole, do suggest the residents of Rossmoor are not in sync with their county Supervisor and the general county policy toward unincorporated islands.

Last night’s meeting was before the Rossmoor Advisory Committee, which was set up to gather community input for the RCSD Board of Directors. The RCSD board will consider the survey results, along with all the other public opinion information they have been gathering, at their meeting on April 13. The likely outcome of that meeting will be approval to move forward with their application for authority over police services, animal control, and trash contracting.

The survey results will be questioned from every imaginable direction. But even if county officials accept the survey as valid, the long range financial viability of the plan will probably prove to be the biggest hurdle for the RCSD.

The RCSD must demonstrate their financial plan is solid for a ten year projection. This means not only must the county agree on how much cash to give the RCSD for law enforcement, and the Sheriff must agree to take that money back from the RCSD to pay for the services, they all must agree on some kind of inflationary increase over the next ten years.

Achieving such an agreement is not very likely because the county’s goal in this whole thing is to save money. So even if all the parties agree the cost of police services is for example, $1 million, the county has no incentive to give the RCSD that much money. What the county probably would like to do is cut the Sheriff’s budget by the cost of providing services to Rossmoor, say $1 million, and then turn around and offer Los Alamitos something less, say $750,000 to provide law enforcement services.

Los Alamitos would look at this scenario and say with their police station right across the street from Rossmoor, and everything already in place, they could provide the services for even less, say $500,000 of incremental cost and make a nice profit on the arrangement.

The only for sure conclusion which can be made now is there certainly will be more to come on this subject – stay tuned.

FIVE-YEAR LOOK BACKS

March 19

1991

This one almost slipped by.  Jeffrey Miller of the OC Register provided a local budgeting matter with “Group seeks end to Costa Mesa arts grants.”  This private citizen activity, during the long recession occurring at that time, started me on a most unusual road a few years later.

                Last year, conservatives in Costa Mesa sought to restrict the type of art that city-sponsored groups could present.  This year, they’re focusing on a much more basic issue:  Should the city spend money for the arts at all?

John Moorlach, president of the Costa Mesa Republican Assembly, argues that the city’s cultural-arts grants should be scrapped.  The $175,000 that Costa Mesa gave to arts organizations last year seldom directly benefits local residents, Moorlach said, adding that the arts can survive without public assistance.

“I’m not keen on the idea of the government acting as a private foundation,” Moorlach said.  The Republican Assembly, whose membership includes three of the five City Council members, has passed a resolution calling for elimination of the city’s arts-grant program.

All council members except Sandy Genis said they do not believe the city should abandon support for arts organizations.  But with Costa Mesa facing an expected $1.8 million revenue shortfall, most don’t think the Cultural Arts Committee will receive the $300,000 it is requesting for 1991-92 grants, and some doubt the committee will get as much money as last year.

“I think someone would have to be kidding themselves to think there’s a big move on the council to increase support of the arts,” said Councilman Peter Buffa, a consistent supporter of arts funding.  “I think, to be honest about it, the council seems to be in a retreating position.”

The Chamber of Commerce, which dubbed Costa Mesa “The City of the Arts” in 1984, supports continued arts funding.

“We feel that private business and enterprise alone cannot provide the financial foundation (for the arts),” said Lee Heinz, the chamber’s executive director.

The first sign that the city was less willing to financially support arts organizations came in February, when the council voted 3-2 not to spend $75,000 it originally had earmarked to supplement the arts-grant program.  Councilman Ed Glasgow, who previously had voted for the expenditure, said the worsening fiscal picture made him reconsider.

Glasgow said Monday that the city should continue to support the arts, but the amount to be spent this year will hinge on the budget.

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