MOORLACH UPDATE — Seal Beach Sun — August 12, 2011

Los Al eyes Rossmoor’s business district

By Charles M. Kelly

Image001

Update: On Thursday, Aug. 11, the Los Alamitos City Council issued a notice of a public hearing to discuss the annexation of the Rossmoor Shopping Village.

 

The Los Alamitos City Council recently decided to include Rossmoor’s commercial district, the so-called “fourth corner,” as part of Los Alamitos’ general plan.

Some members of Rossmoor’s Community Services District said they were less than thrilled.

The commercial district generates $300,000 to $450,000 a year in sales revenue, according to a July staff report to the RCSD by General Manager Henry Taboada.

RCSD Director Alfred Collect said Los Alamitos appeared to be bringing the corner into the city’s “sphere of influence.”

“It appears that they’re doing what they intended to do,” Coletta said.

Los Alamitos officials have said on more than one occasion that they have no interest in annexing the unincorporated community of Rossmoor.

Rossmoor Director Ron Casey believes the recent council action, which sends the subject of the commercial district to the Los Alamitos planning commission, provides insight into what Los Alamitos will do next.

“This should, at the very least, mean that the council will not go forward with any annexation attempts for at least a year or two,” Casey said.

“However, since Rossmoor voted against cityhood in 2008, (Supervisor) John Moorlach and his (Local Agency Formation Commission) compatriots will continue to enable Los Alamitos in any decisions involving Rossmoor,” Casey said.

He went on to say that LAFCO has made a goal of eliminating unincorporated communities from Orange County.

“So even though the annexation process may slow down, it will not stop. It seems to me that we, Rossmoor, are in a no-win situation because if LAFCO/Los Alamitos prevail in their endeavors we will get nothing in return,” Casey said.

Rossmoor General Manager Henry Taboada called the decision a foregone conclusion.

Like Casey, Taboada predicted the process would take time. He said the General Plan process would take 18 months. “Whatever happens will happen further down the road,” Taboada said.

He said the Los Alamitos council’s decision to send the issue of adding the commercial district to the city’s Planning Commission gave the Rossmoor Community Services District an opportunity to determine what its options are, if any.

Taboada said that the community had heard from Supervisor Moorlach, but the community had not heard from either the residents of Los Alamitos or the owners of the corner.

However, Supervisor Moorlach said the decision to add the corner to the Los Alamitos General Plan probably wouldn’t have any impact on Rossmoor’s future.

“It hasn’t done anything for their past,” Moorlach said.

He agreed the decision could be a move toward a partial annexation. 

“If Los Alamitos is headed in that direction, then the probability is that that will occur and be consummated is pretty high,” Moorlach said.

Rossmoor officials have been resisting efforts to move the unincorporated community into Los Alamitos for years.

In February, in an e-mail Update to his constituents, Moorlach opposed so-called latent powers for the district.

He said there were three options to consider, the first being a super-city merging Los Alamitos, Seal Beach and Rossmoor into one incorporated community.

“Rossmoor doesn’t want to merge with Los Alamitos.  Seal Beach doesn’t want to merge with Rossmoor.  The ‘latent powers’ proposal doesn’t pencil out,” Moorlach wrote.

Seal Beach officials have already rejected the super-city proposal.

“The second is for me to discontinue holding back the fourth corner (the southwest corner of Los Alamitos Boulevard and Katella Avenue) from the city of Los Alamitos,” he wrote.  “A partial annexation is better than none.”

“The third is to put a utility users tax on a countywide ballot that would require unincorporated islands that are subsidized by the county to make up the difference,” Moorlach wrote.

If the “fourth corner” is annexed into Los Alamitos, Rossmoor residents won’t get a vote. Under state law, a community of less than 150 acres does not get a vote on annexation. As Moorlach pointed out, the small business district would come under the 150 acre threshold.

According to the LAFCO Unincorporated Islands Resource page, Rossmoor has 3,793 housing units, 7,508 registered voters and covers 988.36 acres.

INVITATION:

Experience Bolsa Chica on Saturday, August 13, 2011, from 9 a.m.-11 a.m.

Meet at the Bolsa Chica Interpretive Center, located at 3842 Warner Avenue, Huntington Beach.  Be prepared to:

       Discover wildlife in urban Huntington Beach

       Take a guided tour of the Bolsa Chica Wetlands

       Learn about the history, wildlife, and restoration of the wetlands

       View exciting and interactive exhibits at the Bolsa Chica Interpretive Center

Please bring closed-toe shoes, drinking water, sunscreen/hat, and camera/binoculars.

RSVP:714.834.3220 or by email: District2@ocgov.com

FIVE-YEAR LOOK BACKS

August 13

2001

One of the Orange County Treasurer’s Department vendors was SunGard.  They had a publication, “SunGard World,” that did a feature on the County.  Six years after my appointment to Treasurer-Tax Collector, they wanted to print a testimonial article.  It was titled “Orange County’s infamous bankruptcy is now history – Orange County hit the world’s headlines after a foray into derivatives. New treasurer John Moorlach explains how he picked up the pieces.”   It was also printed in a publication known as “Insurance & Technology.”

John Moorlach was confronted with the challenge of restoring California’s third-largest county to solvency; his predecessor had driven it into bankruptcy by piling up $1.6bn in losses, in what amounted to a bad bet on the direction of interest rates.

Moorlach first called a meeting with representatives from the company that managed Orange County’s portfolio accounting/fund accounting software system, then SunGard Financial Systems. Before the meeting, Moorlach was intent on severing relations with SunGard — largely because the previous treasurer had given Moorlach the impression that the SunGard APS 2 (formerly SERIES 2) system might somehow have contributed to the county’s financial problems.

"My predecessor basically bragged that he had helped created the reports that the SunGard APS 2 system generated,” Moorlach recalled in a recent interview.  “So, when I went to that first meeting with the folks from SunGard, I told them straight out:  “I’m going to fire you unless you can convince me why I shouldn’t.”

It did not take long for the SunGard staff to convince Moorlach that they should be retained.  They did it by taking a bold step to clearly demonstrate how confident they were of their ability to continue meeting Orange County’s needs.  “I actually put the contract for this service out to bid, and received some pretty good competing offers,” says Moorlach.  “But SunGard came in and said they would provide software and services for $1 for the first year.  That showed me they were serious about maintaining this relationship.”

SunGard also agreed to add some specific features to its fund accounting package, and that work was included in its $1 first-year fee.  Orange County has been using SunGard’s APS 2 since 1975.  APS 2’s basic functions are maintaining an inventory of all of the county’s investments; tracking its accrued interest; and apportioning gains or losses to the individual accounts of the various agencies that invest funds with the county.

The office of county treasurer is responsible for investing funds for local governmental bodies, such as school boards.  It also handles investments for outside organizations, such as pension plans and water districts, that choose to invest with the county.  The county’s portfolios, by law, must consist solely of fixed-income securities – such as commercial paper, medium-term notes, certificates of deposit, money market mutual funds, and U.S. Treasury notes.

There are also legal restrictions on the percentages of certain instruments that can be held in the portfolio.

Under Moorlach’s direction, the weighted average maturity (WAM) for the county’s securities is 80 to 90 days.  The previous treasurer maintained an average maturity in excess of 36 months – which is an eternity when the fortunes of your portfolio are directly affected by swings in interest rates.  In addition to changing the office’s investment strategy, Moorlach asked SunGard to modify APS 2 so that it would perform a daily reconciliation between the balances in Orange County’s investment portfolios and the funds of each individual agency that held investments in those portfolios.  Moorlach says that was one report his predecessor should have asked for, but never did.  Another feature he never used was one included in APS 2 that provides regular reports on the market value of all securities in the portfolio.

After considering these facts, Moorlach softened his stance toward SunGard as he continued investigating the operations of his new office.  Another factor that played in SunGard’s favor was the comfort level that Moorlach’s staff had developed with the APS 2 system and the people at SunGard.

“They really didn’t want to change,” says Moorlach of his staff.  “And after I examined all the issues, I got the feeling that this situation was resolved and that it was time to move on to the next fire.”  The next fire was a rash of lawsuits designed to recoup some of the county’s losses.  “We were suing broker/dealers, rating agencies, bond counsels, you name it,” Moorlach says.  The county’s primary argument was that these parties had been negligent in either advising or allowing the previous treasurer to make obviously risky investments.

Most of these suits ultimately were settled in the county’s favor, and SunGard had a hand in that.  The SunGard system had retained a history of all of the transactions that the county’s attorneys needed to make their case in court.

Now, having recently begun his third term as treasurer, Moorlach views his association with SunGard as a steady one.  “The best thing I can say about SunGard is that I haven’t heard a single complaint during the past six years.  The only time SunGard appears on my personal radar screen is when their sales rep calls to say it’s time to renew the contract.  So, I guess you can say it has been a smooth relationship.”

Due to solid established internal control procedures, Moorlach himself is not required to be a hands-on user of the SunGard system.  But his two investment officers, as well as a compliance officer and cash manager, rely on the system constantly.  They use the system to generate reports that Moorlach reviews daily – and he is happy with what he sees.

The reports list for him, among other things, all of the securities that were purchased on the previous day, and provides information about the duration of the contracts and their yields.  Moorlach says these reports “help me keep my finger on the pulse of the portfolio”.

Overall, when it comes to SunGard, Moorlach states:  “They definitely have the depth of knowledge that I like to see.  They also have a good track record and they are not some small operation that is likely to disappear.”  Orange County’s infamous bankruptcy is now history.

Disclaimer:  You have been added to my MOORLACH UPDATE communication e-mail tree.  In lieu of a weekly newsletter, you will receive occasional media updates, some with commentary to explain the situation, whenever I appear in the media (unless it is a duplication of a previous story). 

I have two thoughts for you to consider:  (1) my office does not usually issue press releases to get into the newspapers (only in rare cases); and (2) I do not write the articles, opinions or letters to the editor. 

This message should appear at the bottom of every e-mail you receive.  If these e-mails should stop arriving in your mail box, it will be because your address has changed and you did not provide a new one.  If you do not wish to receive these e-mails, then please e-mail back and request to unsubscribe.

Advertisements