MOORLACH UPDATE — Union Negotiations — June 28, 2011

This morning, the Board of Supervisors will be voting on whether to approve a contract with the Orange County Manager’s Association, the employee union representing the County’s managers.  (Don’t get me started as to why managers are represented – that’s a story for another day.) 

Neither Supervisor Nelson nor myself are happy with the negotiated contract, as we believe that it does not go far enough in the areas that we have both staked a position.  Supervisor Nelson is focused on total compensation – salary, pension, medical, et al.  I’m focused on a true rollback of pension formulas back to pre-2001 for deputies and pre-August 2004 for the bargaining units that garnered “2.7% @ 55.”

What the Board did achieve in its most recent negotiations is the requirement that managers now pay for their employee contribution to the retirement system in full.  Currently, the County has been paying for this portion of the managers’ benefit.  For many, this could be a decrease in net take home pay of some 13 percent.  That’s a substantial concession.  The County, for its part, will continue the Pay for Performance Program already in place.  It will be interesting to see how the discussion goes.  The Voice of OC covers the topic below.   I’m sure I’ll provide you with the details in tomorrow’s Update.


There were two letters to the editor in yesterday’s OC Register on “Promotora.”  They reflect opposing views on the topic and illustrate the tension involved below the surface.


Bonus Program for County Managers on Supervisors’ Agenda

Last December, Orange County Budget Director Frank Kim offered the Board of Supervisors a power point presentation choc full of items that the county could take back at the negotiating table over the next few years as contracts with the county’s main three unions came up.

The list included: salary reductions; reducing premium pay; limiting step increases; reducing holiday pay accrual rates; eliminating leave payouts and county pickups on pensions.

Yet the manager’s contract, which the Board is scheduled to vote on today, includes only one: eliminating county pickups on pensions. And this giveback by managers comes with an expansion of bonus programs.

The same bonus programs that were highlighted in a scathing report by the Orange County’s Performance Auditor. The report concluded that such merit-based bonuses were being treated like automatic pay raises because they were almost always granted.

Supervisor Shawn Nelson does not like this proposed swap. "We should never be horse trading benefits," Nelson said.

Nelson said he will argue on the dais today that supervisors should not approve a contract for managers that doesn’t significantly cut perks.

Nelson said he will argue today that the supervisors should take a harder line on executive perks, especially given that they are heading into next year’s round of negotiations with the Association of Orange County Deputy Sheriffs and the Orange County Employees Association.

"If this board approves this kind of contract and I ran a union in Orange County, I’d sure use it as leverage," Nelson said, adding "The board is better off not adopting it."

Yet Supervisor John Moorlach says the concessions on pension costs are remarkable.

"I don’t know how that’s not a significant thing to have negotiated. We’re not starting at one percent (as was done with the last round of deputy labor talks), we’re getting it all (full coverage of the employee annual costs)," Moorlach said.

"That’s a serious, serious concession," Moorlach said. "By gosh, I’m surprised they agreed to it."

Moorlach acknowledged that certain executive bonuses were expanded "to sweeten the pot" but said taxpayers are still getting a great deal.

That’s not what Nelson thinks. "It’s a mistake to adopt this contract," Nelson said. "It’s a bad idea."




Mental health checks

ORANGE, Michael J. Ryerson: Congratulations to Supervisors John Moorlach and Shawn Nelson for requiring the non-profit Latino health clinic to include English wording in its name [“Programs’ funding tied to name change,” Local, June 22]. But let’s call it what it is: the funding of a health clinic primarily for illegal immigrants.

The reality is that on any given day it is likely that you would be hard-pressed to find an English-speaking person, legally authorized to be in this country, using this clinic’s services. Why do our tax dollars go to pay for these types of services when so many other things are being cut?


HUNTINGTON BEACH, Tony Barone: Supervisors John Moorlach and Shawn Nelson questioned the Spanish word “Promotora” and why it was being used before they would approve a $1.5 million contract [“Program’s funding tied to name change,” June 23].

Latino Health Access, established in 1993, has been serving the needs of the Latino people since that time. My only question is why these two supervisors were not able to figure out that this outreach program mainly serviced Latino patients and it took them two weeks to do so.


July 1


In 1996 the regular magazine for the California Society of Certified Public Accountants (CSCPA) was known as Outlook.  One of the feature articles in the Summer issue was titled “Serving California – CPAs in Politics.”  It was by Clar Rosso, who now is the Chief Operating Officer of the CSCPA. The subtitle was “Serving the public.  It’s an inherent part of the CPA profession.  All across California CPAs give to their communities and state through public service:  They are mayors, treasurers, and school board and city council members.  They serve on commissions, committees and state boards.  They are men and women, Democrats and Republicans, and are from public practice and industry.  Despite their differences, they have a common cause:  making California a better place to live.  Following are profiles of three California and the Society’s finest.”  The article focused on me, Diane Rubin, and Brad Sherman. 

For your research benefit, the Barron’s article referred to was provided in my MOORLACH UPDATE — LOOK BACKS — December 5, 2009.  I don’t have very many of the early years here at the County in my scrapbooks, but this one will provide newer subscribers a feel for the early days of my political career and transition from the private sector to the public.

If you read it through to the conclusion, I decided to rerun in 1998 as the litigation efforts were still ongoing.  In fact, Merrill Lynch settled on Election Day.  I’m still looking forward to slowing down and taking a few months off.  The piece also has a quote (underlined) that is a great segue to the next article below.

JOHN MOORLACH:  A Light in Orange County’s Time of Darkness

During California’s 1994 primary, John Moorlach, CPA, was regarded more as a prophet of doom than a great soothsayer.  Moorlach, who was trying to unseat Robert Citron, a 24-year incumbent as Orange County treasurer-tax collector, had a message that many voters didn’t want to hear.  “One, it was doom, which doesn’t really go over real big.  The second was complexity.  By talking about reverse repurchase agreements, inverse floating derivatives, structured notes and leveraging.  I lost most of my audiences.”

Moorlach was trying to tell the voters that Citron’s investment strategies were very risky and the investment pool would implode if interest rates continued to rise.  By the time the election rolled around, he estimated that the pool had already lost $1.2 billion.

It wasn’t until almost six months after his defeat that the tides turned and Moorlach was no longer denigrated as a loose cannon but hailed as an omniscient seer.  On Nov. 29, 1994, Moorlach, who had settled back into his position as a senior partner in the Costa Mesa office of Balser, Horowitz, Frank & Wakeling, received a phone call from columnist Andrew Bary at Barron’s.  More than 3,000 miles away, Bary had learned not only of Moorlach’s prophecies, but also that Orange County was headed for bankruptcy.  From then on, says Moorlach, his practice was shot:  “I was on the phone from 8 a.m. until midnight, and film crews were lining up in the parking lot.  It was one of the worst billable months that I’d had since early partner.”

Moorlach’s whirlwind into the limelight culminated March 17, 1995, when the Orange County Board of Supervisors appointed him to the position he’d been unsuccessful in securing from the voters less than a year before.  [Citron had resigned from the treasurer-tax collector position Dec. 4, 1994.]  Although not the ideal timing for a CPA handling mostly tax clients, Moorlach was able to transition his clients over to his partners and dive into his new public service position.

In March 1996, the Orange County community gave Moorlach a vote of confidence and officially elected him as treasurer-tax collector through 1998.  Moorlach says that since the treasurer position is such a massive undertaking, he is very thankful that he ran unopposed in the March primary.  “I have been working day and night here on the county’s financial recovery, and to run a major campaign would have been a killer.”

Moorlach, no stranger to politics—he had been active in the Republican party at the state (he currently serves as the co-chair for the California Republican Party’s Taxation Committee) and local level for years – equates campaigning to starting up a small nonprofit organization.  “It’s amazing,” he says.  “You have to staff an office.  You have to find a place to put it.  You need basic office components like desks, chairs, computers, printers and telephones – all of which are expensive.  You need to put a campaign plan together that details what your goals are, how you’ll reach those goals, how much money you need to raise, how you’re going to raise it, where you’ll spend it . . . it’s a pretty thick document.”

Moorlach adds that his campaign efforts were aided tremendously by his established networks.  “I had a strong volunteer base for my campaign from the county’s Republican Central Committee, Republican club involvements and chairing the Get-Out-the-Vote campaign.  I also had a strong campaign manager and was able to put together a campaign committee of people I trusted who had good backgrounds.”

Now that he finally has reaped the fruits of his labors, what does Moorlach see in his future?  Will he run for re-election or another office in 1998?  He isn’t sure.  Moorlach’s been working virtually nonstop for the past year and a half.  And although Orange County’s bankruptcy is complete, and there is a light at the end of the tunnel, he has spent a lot of time away from his family.  “My children are 13, 11 and 5 years old—these are critical years,” says Moorlach.  “Having a position in a political office is not the goal in life, having a good family is.  I want to be able to spend time at home with them and help my children get going on their journeys in life.”

These strong family ties, and the sense of loss that he feels about his former practice combined with the enjoyment he receives from his elected position will probably result in Moorlach taking several months off when his term is up to recoup, take a much needed breather and consider his next steps.


Staying on the family theme, five years later Steve Smith would do “PORTRAIT – Money Man – O.C. Treasurer John Moorlach finds happy trails” for the last page of the July issue of OC Family.  It provided a family photo taken at California State Historical Landmark Plaque Number 639 in the Anza-Borrego Desert State Park taken in April of 2001.  The landmark is for a different Palm Springs.  It is an oasis in the desert and the plaque reads as follows:  “Here Mexican pioneers coming to California between 1862 and 1866 rested among the palms, here, too, came mountain men, the Army of the West, the Mormon Battalion, a boundary commission, ‘49ers, a railway survey team, the Butterfield Overland Mail stages, and the California Legion.  This was the site of the Butterfield stage station built in 1858 by Warren F. Hall.”  Now there’s plenty of California history in one landmark, but it provided a focal point for the interview.


John Moorlach, 45, wife Trina, 44, of Costa Mesa.  Three children:  Sarah, 18, C.J., 16, and Daniel, 10.  John is the Orange County treasurer, appointed after the county’s bankruptcy and later winning an election to the post.  Trina is an at-home mom.  Sarah and C.J. attend Calvary Chapel High School, Daniel attends Mariners Christian School.  Sarah graduates this year and will attend Orange Coast College in the fall.  Despite the demands of his high-profile position, John, whose family moved to Cypress in 1960, and Trina have made family time a priority.

Q:  How did you meet?

Trina:  We met at a college group Bible study at a church in Buena Park.

John:  By that time, I had already taken the CPA exam.  I was single and had my house and my career going.  Trina was living at home and working.  This was in 1979.  Twelve months later, we were married.  We said we’d never do that and we did!

Q:  How has the county changed?  Do you like it as much?

John:  It’s still a great place to live.  What’s different is that there’s almost no agriculture.  Other than that, a lot of the cities were kind of connected back then so it wasn’t anything super rural.  But we did have large dairies, large chicken ranches, lots of strawberry fields and orchards and we didn’t have these large freeways.  To get to Chino, for example, you had to go through Carbon Canyon.  That was a big trip!  Now there’s a lot of pavement.

Q:  What don’t you like?

Trina:  I think everyone would say ‘traffic.’  And when I moved here we never had beach closures and that bothers me.

John:  And there are no more drive-ins.

Q:  Is Orange County still a good place to raise kids?

Trina:  I think it’s great.  There is so much here for them to do.  There are a lot of positive activities.

Q:  What do you like to do as a family?

John:  We like to get out and go hiking and camping.  We have traveled the state visiting historical landmarks.  Our goal is to photograph them all.  There are about 1,070 and we’re close to 1,000.

Q:  How long have you been visiting the markers?

John:  Since 1978, just a little bit before I met Trina.  In fact, our honeymoon included visits to a few landmarks and we’ve been doing it ever since.  We’ve got six albums and you can see the kids growing up in the pictures.  It’s one of those little hobbies that we plan for. 

Q:  Which landmark was the most memorable?

Trina:  It was in the Mendocino National Forest.  It was a memorable drive.  We took a wrong turn and ended up on a road that should have only been for off-road vehicles and we could not turn around.

John:  We found after we got to the marker that that was the forest Yosemite used to release all their renegade bears in.  The rough road caused the care to bottom out and a couple of times we had to get out and push.  It was incredible.

Trina:  The road eventually led to the marker.  When we got up there we saw all these people who had tent trailers and we asked them how they could possibly get up there.  They started describing a different (better) road than the one we took.

Q:  How many markers do you try to see a year?

John:  Now we’re just abut done so we try to go to dedications.  During Easter week we went to Anza-Borrego because there are still a few there we have to photograph.  We went to a landmark; we couldn’t find the plaque the first time for the Butterfield Stage Coach stop.  It was a nice drive because it was cold, windy and threatening to rain.  We saw lots of butterflies and wildflowers.

Q:  What role does the church play in your family life?

John:  We’re regular attendees, every Sunday.  Our kids are all involved in the youth programs.  No matter how busy I am, I’m still there Sunday morning.  It’s part of our fabric.

Trina:  The youth groups our two older ones are involved in have helped them develop incredible friendships.  And the fact that my daughter is now a leader mentoring others is what it’s all about.

Q:  What pressures do you have being the wife of a very public figure?

Trina:  We always have to have everyone aware when something is happening because people are going to ask questions.  There is stress sometimes but we deal with it when it happens and it’s not something we can’t get through.  Good friends and good family are very important.

John:  I’ve been pretty fortunate in that I haven’t had a lot of negative press.  I’ve had some confrontations where I’ve taken on some big players but the only negative is the recent Edison International investment.  Overall, I’ve enjoyed the journey because of my circumstances.  I’ve actually enjoyed all my contacts with the media.

Q:  But sometimes kids can be brutal even if the press is positive.  Has that affected the kids?

John:  During the campaign, we could have filled pages with how difficult it was with kids questioning our kids.  Now what’s really interesting is that all three kids attend Calvary Chapel and sometimes I’ll get to be the topic of the day in class.  My daughter gets a kick out of that.  The kids have been supportive and if you ask my oldest if her dad should run for another office, like Congress, she’ll say, ‘Yeah, yeah!’

Trina:  When John comes home, he’s home and he doesn’t bring it home unless something is in the news and everyone is talking about it.  But when he’s off, he’s off, we’re family and we talk family stuff.

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