MOORLACH UPDATE — Remembrance — June 1, 2012

I’m just back from the California State Association of Counties (CSAC) annual Legislative Conference and Board meeting.  I had another entertaining opportunity to interact with Governor Brown on public employee pension reform during his visit with the CSAC Board.  It’s important to remind everyone that leadership is needed on this critical topic.  Allow me to bring it home for you.

On May 21st I had the privilege of speaking to the Voice of OC Editorial Board.  I provided a PowerPoint presentation on research I had done on counties and cities and how they are faring.  The big news in my presentation was the following slide:

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It was a follow-up to this slide from my State of the County Address:

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If you remember, I warned that the County’s retirement system’s Unfunded Actuarial Accrued Liability (UAAL) may go up by as much as $810 million this year.  The system’s actuary calculated that it only went up $705 million. 

This $700 million increase in our indebtedness is approximately equivalent to one-half of the total loss the County incurred from its investment pool implosion and bankruptcy filing on December 6, 1994.

This is big news.  The UAAL has increased to $4.4 billion from $3.7 billion!  The Voice of OC provided an editorial on my visit this past Wednesday and is the first piece below.  I provided a solution and I am willing to let go and participate in that solution with everyone else.

The second piece is this week’s OC Register column by Barbara Venezia.   As a community leader in Santa Ana Heights, she definitely has her biases on what should take place there.  She continues to express her strong desire to provide a horse trail Mesa Drive east of Cypress.  As coincidence would have it, Newport Beach Councilman Rush Hill and I have had recent discussions on the matter.  This will provide an excellent leadership opportunity for him and I stand available to assist.

The third piece is also in the OC Register, in their Orange City News publication.  It was also picked up by Catholic Online.  I participated in a Holocaust Remembrance March in April at Hart Park in the city of Orange.  The piece provided photos, with one that includes my wife, my youngest son, and my mother.  As my parents, grandparents, and 13 aunts and uncles survived Nazi-occupied Netherlands, the Holocaust comes very close to home.

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Community Editorial: Trying to Let Go in a Special-Interest Era

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Whether it’s jobs, pensions, medical benefits or government services and contracts, letting go in a special-interest society isn’t easy.

And while next week’s primary election doesn’t feature a packed slate of contested races or ballot initiatives, this year’s election cycle is sure to focus more on finances than personalities.

In Orange County, despite the fact that the $5.6-billion budget being unveiled next month for fiscal year 2012-13 was balanced for the first time in recent memory without major cutbacks, Orange County Supervisor’s Chairman John Moorlach sees tough fiscal times ahead.

And tough decisions for every level of government.

Gov. Jerry Brown has already radically reshaped the face of state government by changing how prisons are structured as well as redevelopment agencies. And come November, he’ll be asking voters to make some decisions with vast consequences in terms of how state government is financed.

In Orange County, Moorlach has been unveiling a troubling analysis based on his tinkering with the annual finance reports filed by many local jurisdictions. By comparing unrestricted assets on a per capita basis, his analysis points like a compass toward trouble for many local cities.

He sees revenues like property and sales tax as flat while costs such as pensions and medical care are rising.

This month, he spent some time with the Voice of OC Community Editorial Board to chat about the nature of the challenge facing local elected officials this year. According to his analysis, Moorlach sees many legacy cities in Orange County like Anaheim and Santa Ana facing financial strains that could be crippling.

The county government, he argues, also sits precariously atop a shaky fiscal foundation because of multiple threats, such as lax property tax revenues; fights with the state over vehicle license fees and with retirees over medical coverage; and potential mounting costs, like Brown’s plan to shift state prisoners to the local level and eliminate redevelopment agencies.

And then there’s the county’s mounting pension liability, which now hovers at $4.4 billion, and the rising annual financing costs facing taxpayers.

Moorlach points to a rising tide of ballot measures adjusting pension benefits in places like San Francisco and San Diego in June as an indicator of what’s ahead. He thinks that Los Angeles is looking at a potential bankruptcy given that the gap between responsibilities and resources is hundreds of millions.

“It will interesting to see what happens with this budget cycle,” he said.

What will be interesting for voters and taxpayers is to see what players — elected officials, labor groups, institutions like public safety — step up to the budget plate with solutions as opposed to rhetoric in this year’s election cycle.

Given the serious nature of the fiscal challenges facing residents, it’s important that progress be achieved.

Yet in an interest-group society like ours, giving up anything isn’t easy. Ask Moorlach how difficult it’s been to persuade small, unincorporated islands like the area known as Roosmoor to agree to annex to nearby cities. So far, he hasn’t been able to budge even one, despite trying since he was first elected in 2006.

Voice of OC Community Editorial Board member Gloria Sefton asked Moorlach about a recent grand jury report calling for the elimination of special districts. While Moorlach agreed with the aim of streamlining government, he recalled how tough it’s been to get areas to agree to annex.

“People like things the way they are,” Moorlach said. “Just raising questions, you’re going to get in trouble.”

“All it takes is leadership, where we going to find that?” he said.

Moorlach agreed that some districts should merge, but given what he’s seen, “good luck trying.”

“We got three cities to come this close to merging their police departments,” Moorlach said, declining to identify them. “Then the chiefs got together and everything crumbled. … It all stopped.”

So when asked where are the big game-changers going to come from in Orange County this year, Moorlach looks to labor.

He acknowledges that the Orange County Employees Association stepped up in a major way several years ago when they agreed to restructure the county’s retiree medical benefits, which saved more than $1 billion and is felt every year by saving county coffers nearly $100 million in annual payments.

He also credits the Association of Orange County Deputy Sheriffs for their decision a few years ago to pay more into their pensions, which are the most lucrative in local government. But given that the county has all its major labor contracts reopening this year, he wants them to step up again, especially on pension reform efforts.

“Something has to be done so that employees get a pension but maybe not the pension they get now,” Moorlach said, adding he wants current workers to accept a lower pension benefit. “That’s the game-changer. … That’s what everybody is struggling with,” he said.

At the Voice of OC Community Editorial Board, members from the labor community, who are just beginning negotiations, didn’t have much comment.

Yet what is clear is that getting agreement on any kind of pension plan revisions won’t be easy.

To date, the Orange County Managers Association — the county’s first labor group to start talks — still hasn’t agreed to pay more into their pensions.

And Supervisor Shawn Nelson’s plan to get supervisors off their pensions has languished for more than a year, with many, including Moorlach, resisting efforts to unilaterally lower their own benefits.

What is clear is that time is running out for all sides as the economy forces large-scale change. As Moorlach has said, “The wall is coming.”

— NORBERTO SANTANA JR.

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Barbara Venezia’s column: Mesa Drive trail rides again

Seems Peter Wetzel and I were on the same page and didn’t know it.

Wetzel called in April when my column hit about the controversial Mesa Drive multi-purpose trail. When completed, the trail would allow walkers, joggers, runners and equestrians to safely proceed along Mesa Drive to Upper Newport Bay Regional Park and the expansive regional trail network, he says.

Though the trail’s been on county trail maps for decades, it’s been blocked by a few politically well-connected Newport residents who have built landscaping on public right of way where the trail was supposed to be.

Wetzel said the article’s timing was oddly coincidental since he’d just met with Third District Supervisor Bill Campbell to review his committee’s goals for 2012.

Number two on their list – the completion of the Mesa Drive Trail.

Wetzel is frustrated by years of political jockeying over this trail’s completion. My column prompted him to write to Newport City Manager Dave Kiff.

In a letter dated April 13th, Wetzel asked for completion of the trail.

Wetzel says he understands why the city hasn’t moved ahead.

"The reason for this is because several private landowners had encroached into city road right-of-way where the trail is planned," he wrote in the letter to Kiff.

Which raises a good point: Should Newport give away public land to citizens just because they’ve built on it?

Wetzel told me he hasn’t had an official response from Kiff on this letter, but did run into him at the Irvine Ranch Conservancy Picnic and they talked.

Kiff told him he was exploring several options on how to complete the trail and would be holding "community meetings."

I asked Wetzel if he thought it was a conflict of interest to include those who have built their landscaping and fencing on the public right-of-way in these meetings.

He said yes.

But why more meetings?

As assistant city manager, Kiff attended countless Santa Ana Heights Redevelopment Agency Project Advisory Committee meetings where this trail completion was discussed.

I attended my first one in 1994!

Kiff had no comment by column deadline.

Will things take a new turn because of redistricting?

The area’s gone from Councilwoman Leslie Daigle’s jurisdiction to that of Councilman Rush Hill. Daigle hasn’t been a friend to the equestrian community in this matter, as she has close ties to the two blocking the trail completion, residents Buck Johns and Harry Rinker who also support her election campaigns.

Hill owns a ranch. He also has a good understanding of what’s at stake.

"To me, there are two important issues that should be addressed," he said. "The first is safety for riders/pedestrians and drivers and the second is for proper access to the trails in the Back Bay. Having not lived through the years of struggle and frustration that many have, I might be free of old grudges and previous lines drawn in the sand over the issue by some of the neighborhood residents."

Over the past weeks, Hill has driven the area with Kiff, observing existing trails, crossings and where gaps exist.

"As a result of my site observations I have requested staff review existing right-of-ways on both the north and south sides of Mesa," he said. "I have also asked for the study of a dedicated trail cross walk providing for a much safer crossing of Mesa at the east end of the existing trail on the south side of Mesa."

Hill has asked staff to identify the easements on both sides of Mesa Drive and see what flexibility there might be. He’s also taking into consideration the amount of traffic on the street.

Will Hill be the guy who finally figures out a solution?

Others have tried.

When the area was county property, Supervisor Silva (supported by Johns and Rinker), tried to get the trail deleted all together! The other supervisors didn’t agree.

Then Supervisor Moorlach tried to push city leaders to do the right thing, but at that point he had little to say as Newport had annexed the area.

If Hill can take politics out of the equation and put common sense and safety back in, he might be successful.

"One commitment I will make is that I will continue to stay on top of the issue until it is permanently put to rest," Hill said.

Barbara Venezia can be reached at: bvontv@earthlink.net

Holocaust remembrance march held in Orange

BY JUDY ALEXANDER

Several Orange-based churches sponsored a recent March of Remembrance to honor Holocaust victims, titled "Walk of Solidarity: Tearing Down the Walls, Building up Bridges."

About 200 attendees gathered at Hart Park to listen to Holocaust eye-witness and death-camp survivor Bernie Sayone, a Polish Jew who lost most of his family in death camps.

"As Holocaust survivors age and die, we risk forgetting this terrible tragedy," said Corey Sylvester, leader of Orange-based Temple Aviv Judea Messianic. "If we don’t remember, we risk repeating history."

Joining Sayone and Sylvester on stage were Pastor Rick Rzeszewski, Orange Coast Community Church; Pastor George Saieg, Ministry to the Muslims; Honorable Judge Kevin Brown, Los Angeles Superior Court; and John Moorlach, Orange County Supervisor.

They gave brief talks and lit six candles to represent the six million Jews who lost their lives in the Holocaust.

Attendees marched around the tennis courts seven times as a symbol of uniting against evil.

Completing the program was singing by Israel’s Ellah Gorelik and Joyce Handler from the Shuvah Messianic Congregation.

This first-ever event was a part of a larger worldwide remembrance of the Holocaust, sponsored by March of Remembrance.

FIVE-YEAR LOOK BACKS

May 26

1997

The OC Register’s Monday “The Buzz” column, written by Ricky Young, David Parrish and Daniel M. Weintraub, had the following mention concerning the latest news:

                He’d move here:  Orange County Treasurer John Moorlach lives in Costa Mesa but says it would be no problem for him to be treasurer of a state government based in Sacramento.

                The departing state treasurer, Matt Fong, lives in Hacienda Heights, Moorlach point out.  And he worked out of the treasurer’s Los Angeles office.  Moorlach says he would stay in Costa Mesa and move that Los Angeles office to Orange County.

May 28

1992

It’s campaign season, as it was twenty years ago.  Russ Loar of the Daily Pilot provided a congressional campaign update in “Rohrabacher is top campaign spender – Incumbent outpaces Buffa, Green.  Supporters range from gun lobby to rock star.”  With redistricting, Congressman Rohrabacher had new boundaries, so a couple of city councilmembers jumped in to make things a little more exciting.  For various reasons, this campaign season found me serving as the precinct chair for the city of Costa Mesa.  Here is the opening paragraph and the one that brought me into the story:

                Rep. Dana Rohrabacher has outspent his Republican opponents more than 4 to 1 in the GOP primary campaign for the new 45th Congressional District.

                Personal contributors to Rohrabacher’s campaign range from Doobie Brothers guitar player Jeff “Skunk” Baxter to Costa Mesa Republican Assembly President John Moorlach.

May 30

2002

Peter Larsen and Denis Foley of the OC Register provided a couple of pieces on “Moorlach looking to aid the 73 Toll Road – County:  Treasurer says he’d consider bending rules to buy new TCA bonds that aren’t top-rated.”  I had written to the Transportation Corridor Agencies (TCA) that as County Treasurer, I would consider purchasing their future debt issuances, if they fit within the County’s Investment Policy Statement guidelines.  I also carbon-copied the Board of Supervisors, as their cooperation might be required to assist the TCA.  It was only the extension of a helping hand.   But, with the benefit of ten-years of hindsight, a commercial paper program by the TCA would have provided the expense relief that they so desperately need.  A recently published industry report (Tollroads News) shows that the TCA is once again in very poor fiscal condition (with a 32.8% shortfall in transactions versus forecast), with rising bond payments on the horizon.  At least I have documented proof of trying to provide a solution that would have made a dramatic positive impact on this agency.  (The TCA’s fiscal desperation may explain its misguided efforts to over-charge retail tenants at John Wayne Airport.)  The second OC Register piece was a question-and-answer format on the proposed idea.  The County Line Poll asked the question:  “Should Orange County invest in the troubled 73 Toll Road?”  90 percent opposed the idea.

                County Treasurer John Moorlach is talking to tollway officials about ways the county might invest in the troubled San Joaquin Hills (73) Toll Road – including the possibility of easing the county’s investment rules to allow purchase of future toll-road bonds even if they are not top-rated.

“I’d rather be guilty of trying something than standing back and doing nothing,” Moorlach said.

The Transportation Corridor Agencies would have to issue new bonds – the county would not consider purchasing any of the toll road’s current $1.8 billion in tax-exempt bonds, Moorlach said.  About $800 million of those were downgraded to “junk” status by one ratings agency in February.  The road is running behind traffic projections.

But if the TCA chose to issue new commercial bonds, Moorlach said, he would consider buying them.

“If the Board of Supervisors felt, and if I felt comfortable that  . . . my investment was completely safe and all that was missing was the rating, then perhaps we could make a special circumstance,” Moorlach said.  “It’s called teamwork.  It’s called family.  There are times when you may not want to be so rigid when just a little modification might assist in solving problems.”

A TCA spokeswoman said the agency will consider Moorlach’s ideas.

Initial reactions from supervisors who control the county’s investment policy and sit on the toll-road boards was divided.

“I have a lot of confidence in Moorlach’s advice, so that’s a plus,” said Board of Supervisors Chairwoman Cynthia Coad.

Supervisor Tom Wilson said the tollway boards should solve their own problems.  “I think the county should stay at arm’s length,” he said.

The LA Times provided the news of what was no surprise in “Judge Denies Request to Transfer Tax Case.”

                Judge John M. Watson denied Treasurer-Tax Collector John Moorlach’s request for a second opinion of the case to test Watson’s interpretation of the law before it is applied.

May 31

2002

To close on the remembrance theme, The Log provided a fun story with “Tall Ship Lynx Arrives for Stay at Local Museum” by Laurie Morrison.

                Lynx, a 122-foot replica of an 1812 privateer, was the feature attraction at the [Newport Harbor Nautical] museum’s “Defense of Freedom,” weekend festival.

                John Moorlach, Orange County’s treasurer, Harbormaster Capt. Marty Kasules and Mike Novick, president of the Junior Chamber of Commerce, were among the dignitaries who spoke at the shore-side arrival ceremony.

                California is a tall-ship state, and county officials are delighted to have the ship and its crew here, said Moorlach.

                Late August, Lynx will sail to San Francisco to join other tall ships and to participate in leg three of the American Sail Training Association Tall Ships Challenge Series, a race to Los Angeles.

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.

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