MOORLACH UPDATE — Laura’s Law — March 19, 2012

On Friday of this week, I was ready to make the following recommendation to the Commission to End Homelessness:

Orange County’s Health Care Agency provides excellent services, similar to those recommended in Laura’s Law, with current funding sources.  Adopting AB 1421 would be financially infeasible.  Also, since Laura’s Law is a few months from expiration, implementation at this late stage appears imprudent.  In addition, should the proposed extension of Laura’s Law (AB 1569) be enacted, without clearly delineating the ability to use Mental Health Services Act (MHSA) (Proposition 63) funding and without a cap to manage costs, the County of Orange should still not adopt Laura’s Law.

MHSA funding is available to those programs for which individuals voluntarily request services.  Laura’s Law is applied on an involuntary basis.  County Counsel has opined that Prop. 63 funds cannot be used to administer Laura’s Law, and the County does not have alternate funding.  I personally discussed this concern last month with Assemblyman Michael Allen’s Chief of Staff during a visit while in Sacramento.

This has been a very long and arduous journey for me.  The mentally ill are a component of our homeless population.  And, as a result of their mental illness, some are capable of unexplainable actions, like killing an innocent relative or bystander.  Regretfully, at this time the County’s Comprehensive Annual Financial Report (CAFR) reveals a $75 million net unrestricted deficit for governmental activities.  This means we have no money for new programs, as we’re struggling to pay for current ones.  And, if the extension of Laura’s Law does not provide any fiscal relief (i.e., the ability to use MHSA funding), then the best I can advise is for the County to defer implementing this program until the law provides the necessary funding or the County finally has sufficiently rebounded and has the financial wherewithal to do so.

The OC Register provides the status of my journey.  Supporters of Laura’s Law have asked me to continue the item on this matter that is on the March 23, 2012 Commission to End Homelessness agenda until the May meeting.  I have concurred with this request, as we continue to wrangle over an interpretation of the legal opinions on the funding issue.

New life for Laura’s Law? Bill might expand funding

by BRIAN JOSEPH

Implementing Laura’s Law in Orange County has become a movement du jour  following the July beating death of Kelly Thomas, a schizophrenic homeless man.

But while residents and county leaders have debated the merits of the little-used statute, which permits court-ordered treatment of the mentally ill, they have largely neglected a practical sticking point: State legislation authorizing Laura’s Law is set to expire at the end of this year.

What’s the point in changing county policy if it’s only going to be legal for a few months?

There is hope for Laura’s Law supporters, however. At the end of January, Assemblyman Michael Allen, a Democrat from Santa Rosa, introduced legislation that would extend the life of Laura’s Law through the end of 2018.

If his Assembly Bill 1569 is passed by the Legislature and signed into law by Gov. Jerry Brown, Laura’s Law would be legal for at least six more years — plenty of time to justify a change in county policy.

In fact, Supervisor John Moorlach, who chairs the Ending Homeless 2020 commission looking into Laura’s Law, said his continued interest in the law is contingent on Allen’s bill. Otherwise, Moorlach said it makes no sense for the county to even consider the policy change.

But don’t count Moorlach as a supporter of AB 1569 just yet. Moorlach told The Watchdog that he doesn’t think the bill goes far enough. He wants the bill to include language about funding as well as patient caps.

Since Laura’s Law was enacted by the Legislature in 2002, only one county has elected to implement the law — Nevada County, where Laura Wilcox, the law’s namesake, was shot and killed by a mental patient who refused treatment. (Los Angeles County has also implemented a pilot program.) Moorlach says the reason other counties have not embraced Laura’s Law is because it lacks funding.

While Nevada County uses Proposition 63 funds to pay for its Laura’s Law patients, Moorlach said county counsel in Orange County has explicitly said that Prop. 63 funds can’t be used for that. That leaves the county facing the prospect of paying for Laura’s Law out of its existing coffers and that’s not going to happen, Moorlach said.

“I cannot afford any more costs to the county of Orange,” he said.

It would be a big help if Allen’s bill included language saying that Prop. 63 funds could go toward implementation of Laura’s Law, Moorlach said. At the same time, the supervisor said, county staff members are concerned that they could be overwhelmed by the number of patients in Orange County eligible under Laura’s Law. Moorlach said he’d like Allen’s bill to include language capping the number of patients treated under the law.

Without a cap and a funding source, Moorlach said Allen’s bill “is just an extension.” And what’s the point of that?

Told of the supervisor’s thoughts on Thursday, Allen said he was intrigued about the idea of including language that explicitly says Prop. 63 funds may be used for Laura’s Law patients, but added that given the state’s budget problems there’s no way he could include any other funding mechanism. As for concerns about the county being overwhelmed by the number of eligible patients, Allen said “it’s very unlikely there will be a flood” of patients.

“I will look into the suggestion about putting in some language” about Prop. 63, Allen said.

We’ll keep you updated on where this goes.

FIVE-YEAR LOOK BACKS

March 17

1997

Talk about having a project, but never having time to attack it.  Maybe I’ll have the opportunity in a few years.  Rick Reiff, in his “OC Insider” column for the Orange County Business Journal made the following observation:

OC Treasurer John Moorlach is going to write a book on the county bankruptcy.  “I’m already dictating and working on stuff,” Moorlach said, promising the definitive story.  But he said the book won’t be published until after the county resolves its lawsuits against Wall Street.  John, forget the book and do a screenplay.

The California Public Finance newsletter, a Bond Buyer publication, edited by Liz Enochs, had the following headline:  “Orange County Mulls Refunding Options.”  The County used legislation to convert an annual note program into a long-term one that would spin off income to retire the bankruptcy-related debt.  The discussion would make it to a technical journal.

Orange County officials, looking for ways to trim financial fat and begin paying off the county’s massive debt as soon as possible, say they may be able to save $10 million at the outset and increase revenues by another $5 million per year by refunding $155 million in bonds issued under the state’s Teeter program.

Under the Teeter plan, counties purchase delinquent tax liens from participating cities and local agencies.  The county governments pay 100 cents on the dollar up front, and in exchange get to collect the hefty interest and penalty payments when delinquent taxpayers pony up what they owe.

In June 1995, as part of its recovery plan, Orange County issued $155 million in bonds secured by its Teeter Plan-generated revenue stream.  The deal, subject to numerous conditions designed to reassure investors, “wasn’t well received, but it sold,” said county treasurer and tax collector John Moorlach.

2007

The road to convincing Tom Mauk to stay as the County’s Executive Officer found the Supervisors violating a portion of the Brown Act.  It was covered by Norberto Santana, Jr., of the OC Register, in “Meeting violated law – Supervisors admit error in negotiating CEO contract, settle suit with activist,” which also made it to the Associated Press.  Here is the beginning of the piece:

The Orange County supervisors admitted this week that they "unintentionally" violated the state’s open meeting laws earlier this year while trying to persuade county CEO Tom Mauk not to take a job in Los Angeles County.

The supervisors agreed earlier this week – in another closed meeting – to settle with First Amendment activist Richard McKee, who had sued over the violation of the state’s open meeting law. On Friday, McKee signed off on the settlement and praised the board for admitting their error.

"We all screw up," McKee said. "The measure of you personally is how you try to mitigate that screw-up.

"The response from the board was absolutely appropriate and welcome and should give Orange County a good feeling about how their officials view open government."

The law in question is the Ralph M. Brown Act, which generally requires public agencies to conduct their business out in the open. There are certain exceptions, but the Jan. 30 meeting did not qualify as one.

At the time, Mauk appeared headed to Los Angeles County to become its chief executive officer. Orange County supervisors scrambled to offer Mauk a raise and a salary extension in an emergency closed-door meeting.

While the speed of the counteroffer kept Mauk in Orange County, McKee quickly sued, noting that the law prohibits a public agency from negotiating salary terms in secret with non-union employees. Under the law, supervisors should have appointed a negotiator – such as the board chairman – to conduct talks with Mauk.

County officials at first denied they had broken the law. After further study, they conceded this week they had made an error and agreed to settle the lawsuit. Under the settlement, supervisors must attend a public briefing outlining the state’s meeting laws. They must also pay $2,500 to cover McKee’s legal costs.

Supervisor John Moorlach on Friday called the violation "an honest mistake" prompted by the speed of the Mauk offer from Los Angeles. He called the training session a good idea and praised McKee for holding supervisors accountable.

March 19

2007

Government Executive provided a perspective by Tom Shoop on federal employee defined benefit pension plans and an ever growing trend in “Retirement Envy – Private sector workers cast a covetous eye on federal retirement benefits.”  Here it is in full:

For decades, federal employees have enviously glanced over at their counterparts in the private sector: the salaries, the stock options, the perks. Life looked so much better on the capitalistic side of the fence.

Now, as baby boomers head into retirement — in droves, as we keep being reminded — some private sector employees are peeking over the fence themselves, and turning a distinct shade of green. What they’re seeing is the benefits government workers receive when they decide to leave the working life behind.

USA Today waded into this issue in February with a huge cover story on how retirement packages for government workers are much more generous than those in the private sector — and the gap is growing. Some high points of the article:

·              At the federal level, the unfunded liability for military and civil servant retirement benefits is bigger, at $4.7 trillion, than the one for Social Security, which weighs in at $4.6 trillion.

·              With a supplemental annuity waiting for him, Johnnie Nichols, a civilian Defense Department employee, told the paper he’s itching to get out. "The sweet spot for me is about age 56," he said. "When I run the numbers, the system almost forces me to retire" early, he added.

·              John Moorlach, an Orange County, Calif., supervisor who’s trying to cut benefits for civil servants, says politicians "love to give generous retirement benefits because they don’t cost anything today, and they’ll be out of office when the payments come due."

The story magnified the distinctions between public and private benefits by lumping all levels of government — state, local and federal — together. Many of the most generous retirement packages in the public sector are now being offered at the state and local levels.

But federal retirement benefits still are attractive. In many private companies, pensions are becoming a thing of the past, in lieu of 401(k) retirement plans based on employee contributions. But pensions remain a staple of the civil service — even for workers in the newer Federal Employees Retirement System, who are expected to finance much of their own retirement through contributions to the 401(k)-style Thrift Savings Plan. And federal retirees also get another coveted benefit: lifetime health insurance coverage.

Many civil servants view such benefits as a reward for the salary sacrifices they made by dedicating their careers to public service. Besides, the real issue, they say, is not that federal retirement benefits are too rich, but that those in the private sector are increasingly miserly.

"One disturbing trend in the private sector, which will harm millions of Americans, is a move by some companies to cut back — or eliminate entirely — such critical forms of compensation as health insurance and pensions," says Colleen Kelley, president of the National Treasury Employees Union. "Let us hope the public sector never follows suit."

It probably won’t — at least not in the foreseeable future. And that means private sector envy is likely to increase, while sympathy for the plight of the beleaguered civil servant declines. Of course, support for bureaucrats hasn’t been high for at least a couple of decades. But backers of the civil service have at least been able to drum up some support for the notion that federal workers are chronically underpaid.

Even that concern appears to be, at the very least, on the wane. For example: Late last year, Supreme Court Chief Justice John Roberts devoted his annual report on the state of the federal judicial system to a single issue: that the lingering problem of low pay for federal judges had "now reached the level of a constitutional crisis."

But when Paul Volcker, a longtime advocate for pay comparability in the federal sector, wrote a piece in The Wall Street Journal about how federal judges’ salaries pale in comparison to the compensation for first-year lawyers at many large firms, it prompted the following response from a reader: "It’s a little hard to get singularly worked up about this one among many such disconnects in the American work economy, which often appears unsure whether occupational intangibles such as honor, prestige, fame, influence, intellectual challenge and public service justly call for remuneration, or are themselves forms of it."

Maybe so. But what is already getting many Americans "singularly worked up" is the kind of disconnect in the economy that provides federal employees with better retirement benefits than the average private sector worker receives.

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