MOORLACH UPDATE — Steve Kight — May 1, 2012

The Voice of OC article below notes the resignation of the Orange County Commission to End Homelessness Executive Director, Steve Kight.  Steve has been invaluable to the efforts of the Commission, implementing Orange County’s Ten-Year Plan to End Homelessness.  I was very saddened when informed of his resignation.  I have appointed an ad hoc committee to initiate recruitment efforts to fill this future vacancy.  The ad hoc committee will be refining the job specifications in light of lessons learned and organizational acceleration.  In the meantime, Steve has agreed to stay on in a part-time capacity after his departure at the end of June in order to keep the momentum going and facilitate a smooth transition.

With that being said, the Commission to End Homelessness did not change its name (formerly known as Ending Homelessness 2020 Board) because it was backing away from its Ten-Year Plan with a date of 2020.  Rather, the name change occurred in order to be consistent with the efforts throughout the County and to assist in the transition of the structure of homeless service providers under the Continuum of Care (see  Although Orange County certainly has much work left to do on the Ten-Year Plan, when compared to other counties and regions, Orange County has made marked progress.  Regardless, the Commission remains committed to the timeline defined in the Ten-Year Plan and has been meeting its targeted goals and objectives.  I highly recommend that you attend an Implementing Group or Commission meeting to view first-hand the great strides that are being made. 

Our Board of Supervisors meeting concluded early this afternoon, and in my Board Remarks I mentioned that Karen Roper, the County’s Director of OC Community Services, received a glowing report from Angie Baur of the Kansas Statewide Homeless Coalition Summit Planning Committee.  Ms. Roper is very involved with Orange County’s Commission to End Homelessness and had the privilege of being the keynote speaker for the Kansas 2012 Summit.  Ms. Baur noted that, “It is with much gratitude I wish to thank you and other key leaders in Orange County for your visionary guidance and support on the national issue of homelessness.  The expertise of Karen Roper is extraordinary.  Not only are you fortunate in Orange County for the magnitude of leadership she possesses for this challenging issue, we in Kansas now have been touched by the collective years of energy and effort Orange County has put forward on this important social issue.”  Onward and forward.

Director of County Partnership to End Homelessness Resigns

Steve Kight, executive director of Orange County Partnership to End Homelessness, has tendered his resignation after serving less than a year, potentially adding more delays to a project that already is years behind schedule.

Kight said in a telephone interview that his wife, Stephanie, was offered a job in Columbus, Ohio, which also is close to where their grandchildren live.

“That’s the only reason I resigned,” he said. “I’m pretty passionate about what’s going on in Orange County.”

“I hate to see him go,” said Supervisor John Moorlach in a telephone interview. He said Kight has done a “great job” building relationships among the hundreds of often-competitive nonprofits that work in the county to serve the thousands of adults who are actually homeless or facing the serious threat of having nowhere to live.

“My only real concern is to make sure that keeps going,” said Kight, whose resignation is effective June 30.

Moorlach said the executive committee of the Commission to End Homelessness has established a search committee to find a replacement for Kight.

Kight became executive director of the OC Partnership last August after a months-long search. The county set up the commission with the condition that it only would provide money for the executive director’s salary for a year, and after that he or she would have to get donations from outside county government.

The idea to end homelessness nationwide by 2020 was proposed in 2008 by then-Pres. George W. Bush and expanded by Pres. Barack Obama.

But by the time Kight was hired, Orange County was so far behind in its work that last year it dropped “by 2020” from the commission’s name.



April 29


The Orange County Business Journal allowed me to opine on the financial fiasco of the day, the Enron meltdown, in “Viewpoint:  Comparing Enron, Citron.”

Fortune magazine recently announced that Enron was the fifth-largest corporation in sales volume. That’s an interesting statistic for an entity that filed for bankruptcy protection. But wait, wasn’t Orange County the fifth most populated county at the time of its filing for bankruptcy protection?

Enron is still in the headlines and this trend will continue as more revelations are provided to the public. The OC financial debacle, caused by former County Treasurer Bob Citron’s improper investment strategies, generated headlines for so many consecutive days that the last topic to do so for the local papers was World War II!

The familiarities continue:

·         Both Enron and Citron happened suddenly.

·         Both had possible criminality, with deceit by key officers.

·         Both misstated actual earnings.

·         Both used derivatives.

·         Both had boards that were ineffective and useless.

·         Both lulled investors into believing they were the epitome of perpetual money-making machines.

·         Both were able to bamboozle the rating agencies. At least this time the Securities and Exchange Commission is weighing curbs on credit-rating firms.

·         Both had audit committees that were left wanting (OC didn’t have one at all).

·         Both had incompetent outside auditors. KPMG Peat Marwick endured a suit pursued by the California Board of Consumer Affairs. Arthur Andersen is imploding due to the criminal pursuit by the Justice Department.

·         Both auditing firms publicly touted their clients’ credibility and financial soundness to the marketplace. The audit manager from KPMG was recorded on tape attesting to the virtues of Citron’s investment pool literally weeks before its implosion. Arthur Andersen sang the praises of their innovative "integrated audit" pioneered at Enron.

·         Both had more red flags than a May Day parade.

·         Both had men at the top who would later admit that they didn’t know what was going on.

·         Both had whistle blowers who were summarily ridiculed and abused by employers and the press.

·         And the media, oh, the media missed both of the stories-in-coming, too.

·         Immediately after the announcement of OC’s financial predicament, the then-chair of the SEC was publicly outraged with the county and municipal finance, in general. The current chair of the SEC has inserted himself in the Enron meltdown as well.

·         Both generated state and federal hearings and investigations.

·         Both increased the amount of disclosure required.

·         Prior to OC’s bankruptcy filing, employee unqualified deferred compensation arrangements were forfeitable under Internal Revenue Code Section 457. After the filing, Congress changed the law to make these retirement funds non-forfeitable. We’re seeing that Enron’s 401(k) plan has triggered pension plan discussions in Congress, too.

·         Both resulted in numerous innocent people losing their jobs.

·         Both lost funds of large magnitudes. OC at $1.64 billion and counting.

·         Both called into question the integrity of the nation’s financial reporting system. OC can claim credit for Government Accounting Standard Board Statement No. 31.

·         Both have numerous financial advising firms being sued for damages.

Doesn’t that sound familiar? Which is where a critical emphasis of the blame needs to be directed.

Many firms made a lot of money knowing that they were building a house of cards. Everything was fine until the economic winds changed. Overnight, geniuses turned into crooks. But they made money while the sun shined at the expense of others. Analysts were bought off. Lawyers lied. Accountants choked on their arrogance.

The patterns that appear are very unsettling. I suggest that there are three.

The first is that liars do have their day of reckoning.

The second is that the consequences of their actions hurt many more people than just themselves.

And, finally, the suffering is a necessary part of "business nature."

The lesson provided in the "Sermon on the Mount" about the wisdom of building one’s house on a solid foundation is appropriate to this situation. Corporate America will deal with the winds of economic cycles and the floods of market changes and weather them. But those built on sand will not withstand the pressures. Their sins will be revealed. And many innocent and unsuspecting participants will be hurt.

We live in an environment based on trust. Sometimes we are made to look gullible by the liars among us. Regretfully, when money talks the truth is silent.

The answer? Let the perpetrators be punished. And punished severely. Arthur Andersen is paying the ultimate price. I would guess that partners in every CPA firm are drilling ethics, integrity and verification into their staff members. They have everything to lose now: their money and their reputations.

This brings me to my disturbing third point. It may be good to go through a Citron/Enron debacle from time to time. It is painful, but it provides an opportunity to remove old growth. It cleans out the liars, cheats and incompetents. It is a shame that the innocent inhabitants of the forest are singed in the process. However, after a fire, new growth comes in and a fresh start occurs. Let’s hope everyone learns their lessons, builds stronger foundations and operates in a more truthful and transparent manner.

Moorlach is the Orange County treasurer-tax collector.



Betty Larson

Robin Hinch of the OC Register covered the passing of a dear friend in “Newport Beach woman was a mentor to many – Betty Larson, 66, helped others who were fighting cancer.” 

Betty Larson has been a long-time friend and is the mother of Gary Larson and brother Lance Larson.  Many of my former Treasurer-Tax Collector staff members will remember Gary as our Department’s first Public Information Officer, a job he administered very successfully, including organizing what would be th annual Treasurer’s Conferences.  My hiring Gary came about when I went to a then-Congressman Chris Cox fund raising breakfast that featured Congressman Henry Hyde.  When I walked into the room and looked for a place to sit, there was a seat available next to Betty Larson—bingo!  At that event Betty told me that Gary wanted to move back to California from his job on the East Coast.

Gary’s older brother, Lance, worked for Congressman Cox and gave us a wonderful tour of the Capitol when I took the family to Washington, D.C. in 1999.  He is now working for the Orange County Transportation Authority as their Legislative Analyst.

Gary and Lance, my condolences on this fifth anniversary of the loss of your mother.  Here are the closing paragraphs of the article:

The Republican Party also benefited from her extraordinary energy and organizational skills. Willing to help in any way she could, she worked on campaigns, distributed fliers and organized telephone trees at election time. She was also a strong supporter of the Richard Nixon Library, regularly recruiting groups of friends to attend lectures there.

A longtime member of Mariners Church in Irvine, she began to share her religious faith with others by teaching Bible classes throughout Orange County.

When you ask others about Betty, the first word they use is "positive." The second word is "strong."

She was a woman you could count on – to listen, to advise, to stuff envelopes or make phone calls. A woman to encourage and to comfort.

"She was a comfort person," said longtime friend John Moorlach. "Betty always had a smile and a compliment. A nice, steady, relaxed person. You just wanted to sit next to her."

April 30


Dennis Foley of the OC Register gave a “recapture” update in “Arguments made in property-tax case.”  Here is the key item, saving you a repeat of the background of the case:

                Watson now must rule on an effort by county Treasurer-Tax Collector John Moorlach to remove the judge from the case.

For the background on this case, you’ll find it in “Taxpayers May Be Getting Bad Advice – Court:  Judge in Prop. 13 case is concerned that property owners are told it’s futile to challenge their assessment bills,” by Jean O. Pasco of the LA Times.  In retrospect, Judge Watson was not only wrong, but he became very active in his interpretations.  It provided for some awkward drama.

An Orange County Superior Court judge who ruled last year that a common method for assessing property taxes is unconstitutional indicated Monday that he is worried government workers have been wrongly advising taxpayers against filing for refunds.

In a hearing, Judge John M. Watson agreed with attorneys representing several county officials that, by law, the only remedy for challenging a property assessment is to file for a refund. But if people were told by government workers that doing so would be futile, it would rob them of the only way to fight their tax bill, he said.

The judge said he has seen no evidence of that happening but has heard of taxpayers either calling government offices or logging onto Web sites and being told, despite Watson’s ruling, that the county’s assessment method is legal.

"If these local officials being protective of their revenue flow are giving or alleged to be giving false information [about refunds], I would hardly find that an adequate remedy at law," Watson said. "In fact, I find that no remedy at all."

Watson found in December that an assessment method used by Orange County Assessor Webster J. Guillory violated Proposition 13, the landmark tax reform measure passed by California voters in 1978. He ruled that Guillory illegally raised the assessed value of attorney Robert Pool’s Seal Beach home by more than the 2%-a-year limit set by Proposition 13.

County attorneys defended the practice, which has been used across the state on properties that dropped in value and had their assessments lowered. When the values rebound, the new assessments routinely exceed the 2% limit–a method called recapturing.

If Watson’s ruling ultimately is upheld by a state appellate court, it would affect every county in California. In Orange County, taxing agencies would have to refund $285 million in excess property taxes paid from 1998 to 2001, Orange County Auditor-Controller David E. Sundstrom estimated. Statewide, the loss could go as high as $4 billion, he said.

So far, the ruling applies only to Pool and his wife, Renee Bezaire, who sued over their 1998-99 tax bill. The value of the couple’s $330,000 home had stayed the same for a year, thanks to a flat real estate market. But in 1998, the assessor decided that the market had recovered and raised the home’s taxable value to $343,332–a 4% increase.

The issue about what government workers might have told taxpayers questioning their assessments is key in the ongoing case. If Watson finds that the government interfered with the only way for taxpayers to fight their assessments, he might be inclined to make his ruling more sweeping.

Pool wants Watson to issue an identical judgment on behalf of everyone in Orange County whose assessments rose more than 2% a year. Doing so would trigger a separate legal requirement that the county tax collector notify those who overpaid property taxes by at least $10 that they are due a refund. Those who filed for the refund would then be sent a check.

Orange County supervisors already have asked Guillory, Sundstrom and Treasurer-Tax Collector John M.W. Moorlach–all elected officials–to do just that. The three have declined, citing the ongoing court case.

Sundstrom said it could cost as much as $2 million to identify and notify everyone in Orange County who overpaid their taxes under Watson’s ruling. Some 1,768 claims for refunds have been filed since December, citing Watson’s ruling, Pool said Monday. He estimated that as many as 400,000 taxpayers may be affected.

Watson also agreed Monday to reconsider a motion by Moorlach that he hand the case to another judge, a motion he denied this month. Moorlach wants another judge to rule on the case as a way of vetting Watson’s interpretation of the law before it is applied countywide.

May 1


I made it into the May-June edition of the CRA News, in a front-page article titled “Dannemeyer, Herschensohn endorsed, Buchanan wins straw poll at convention—CRA officers elected, $14 dues set.”  The article mentioned those officers that still had one-year remaining on their two-year terms.  Since a few of the names are Orange County residents, I’ll provide the paragraph:

Also with one year remaining on their 2-year terms are President Mike Schroeder, Recording Secretary Allison Turner (who had indicated she would not be able to serve out her term, but will now be able to server the full term), Corresponding Secretary Kelly Krug, Membership Secretary Donna Schmidt, Assistant Secretary Bill Cardoza, Treasurer Jim Smith, Assistant Treasurer John Moorlach, and Sergeant-at-Arms Jon Fleishman.  Rick Staats remains as the Immediate Past President.

With one year under my belt, this issue of the CRA News also included two articles that I authored:  “Reporting your unit’s taxes” and “How to contribute to political candidates.”  I also had a an article in the May/June edition of the Christian Management Report, titled “Outplacement Assistance,” which covered Internal Revenue Code Section 132.


The Brea Historical Society Historical Happenings newsletter’s lead article was titled “2002 Spring Fling Recap.”  I was the dinner speaker.  I’m providing the following paragraph from the article, as one of the individuals for whom we adjourned today’s Board of Supervisors’ meeting in memory of was Esther Cramer.  Her book is one of my treasured gifts.

                Before the evening was over, Steve Vargas and Edna Makins came up with a copy of Esther Cramer’s book, Brea:  City of Oil, Oranges and Opportunity and then got almost every guest to sign it before presenting the book to Mr. Moorlach as a gift before he left.

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). 

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These pages are for reference, not comment. Thank you.

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