MOORLACH UPDATE — OC Register — August 15, 2011

Thanks to those who were able to join me for the Bolsa Chica tour on Saturday.  I should have photos included in an upcoming Update showing all of the wild animals we encountered.

My two sons and I play in a summer softball league on Sunday afternoons.  The season ended yesterday.  We won the first playoff game of the afternoon.  We watched the 2nd and 3rd place teams duke it out in the second playoff game.  And we finished the afternoon by winning the third and final playoff game and becoming the Newport Mesa 2011 Softball Champions!  Super!  I’m wearing the Championship T-shirt today. 

BONUS:  With the tragic mismanagement of taxpayer dollars at the Federal and state levels, it’s hard to explain it in one minute or less.  For a video that does, check out:  http://www.lewrockwell.com/blog/lewrw/archives/92839.html.  The video is called “The Doorbell” and it creatively brings the severity of the fiscal situation facing taxpayers home in sixty seconds.

One of the OC Register’s two editorials in Sunday’s edition addressed the Orange County Performance Audit Department’s report on the Orange County Human Resources Department.  It is provided below.  My appreciation goes out to Supervisors Nelson and Bates on the initial work they accomplished as an Ad Hoc Committee.  I’m still waiting for a response to my directive to the CEO’s office to determine the viability of outsourcing the department.

Editorial: More O.C. pay reforms needed

Outsourcing the county’s HR functions should be looked at.

The Orange County Board of Supervisors voted unanimously Tuesday to review raises and promotions given six of the county’s top executives, in response to its investigation of the county’s Human Resources practices. This is a good first step but more ought to be done.

A scathing audit of the Human Resources department in May uncovered a slew of new improprieties, including pay raises, promotions and the overlooking of state and local rules for such decisions. Many of the pay raises and promotions benefitted employees in the offices of the county chief executive – top managers at the county. The report uncovered that HR staff did not properly review or question raises proposed by the county CEO’s office, among other things. In one instance, an HR employee reviewed and recommended his own pay raise.

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The auditors asserted that reforming the HR department could save the county $149.3 million.

In the aftermath of the report, Supervisors Shawn Nelson and Pat Bates participated in a subcommittee to further investigate the findings and recommend actions. The actions recommended Tuesday included giving the county 45 days to justify the pay increases and promotions under scrutiny. One manager, Assistant CEO Rob Richardson, had his pay increase 33 percent over a six-month period.

Other recommendations from the subcommittee include requiring supervisor approval of new executive management positions; creating a new policy for raises; requiring Human Resources to provide documentation to the board for some raises, potentially leading to some demotions.

The report should be frustrating to county taxpayers and result in reforms. But while some of the recommended actions are fine, supervisors should take this opportunity to take stronger action – and someone ought to be held accountable.

The county could consider outsourcing HR functions. That way, those individuals processing raises and promotions – those responsible for enforcing the rules – have a degree of separation and independence from county executives. Supervisor John Moorlach said in May that he wanted to consider outsourcing the entire HR department.

As for accountability, from our vantage point it seems like someone at the county was asleep at the wheel. And ultimate responsibility for ensuring a functional county government falls on the supervisors and those executives they oversee.

While the recommendations approved by the board are a good first step, more ought to be done.

FIVE-YEAR LOOK BACKS

August 15

2001

The County no longer held any Edison International paper, but I still continued to receive reporter calls on the state’s “power crisis” (a topic that dominated the news ten years ago).  Jonathan Stempel of Reuters did a piece that was titled “SoCal Edison Rescue Deadline Passes.”  Relying on the State’s Legislature to construct a plan by a certain date is now a running gag, even with this year’s budget.  It was no different a decade ago.  The handling of the state’s energy crisis was a major factor that resulted in Gray Davis being only the second Governor in U.S. history to be recalled.  Here are some selected paragraphs:

                The deadline to enact a state-sponsored rescue plan to keep Southern California Edison out of bankruptcy expired on Wednesday, forcing creditors of California’s second largest utility to wait longer for a fix to the state’s power crisis.

                The legislature adjourns for the year on September 14.

                Any three unsecured creditors can throw SoCal Edison into involuntary bankruptcy.

                Edison’s financial state has improved recently because gas prices have fallen and a 3 cent per kilowatt hour rate hike went into effect in early June.

                “The thinking in many quarters is the ‘do nothing’ option will be best for creditors,” said Peter Navarro, a University of California at Irvine associate professor of economics and public policy who advises consumer groups on energy issues.

                Orange County Treasurer John Moorlach, who invested some of his office’s money in Edison bonds, is looking to the state to clean up the mess.

                “The state has an obligation now to lend money to the utilities at money market rates and allow the utilities to go back to where they were before this nonsense started,” he said.  “The blame game has worn out.”

                [Richard] Cortright, [an analyst for Standard & Poor’s,] isn’t optimistic the state and Edison can piece together a satisfactory solution, seven months after Davis first called a special session to address the power crunch.

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