MOORLACH UPDATE — SB 562 — May 8, 2015

The OC Register has two items of interest. Last evening I took an earlier flight home for the first time in the last seven weeks in order to attend the Henry Segerstrom Courage of Imagination reception. A photo is provided as the first piece below. The individual to the left of the photo is David J. Schramm, a friend that I have looked to as a mentor over the years. For the article, see http://www.ocregister.com/articles/segerstrom-661025-henry-life.html.

It was a wonderful event for an incredible visionary who has left a lasting legacy in Orange County and the 37th Senate District. I would encourage you to visit the exhibit in the Jewel Court of the South Coast Plaza (see http://www.southcoastplaza.com/about/press-releases/south-coast-plaza-to-present-the-exhibition-courage-of-imagination-honoring-the-life-and-legacy-of-henry-t-segerstrom-may-8-31/).

The second piece from the OC Register is about Nick Berardino. It was a long and detailed conversation that I had with the reporter, but a few thoughts made it to the printed page. I would say that Nick’s biggest mistake was negotiating "2.7% @ 55," up from "1.67% @ 57" retroactive to the date of hire. It created an immediate 60% unfunded actuarial accrued liability (UAAL) that the employees and members of his union are paying for in every paycheck. It also hindered the ability to provide pay increases.

To his credit, Nick negotiated a retiree medical UAAL down by 71%. This resulted in a $1 billion debt reduction. Nick and I enjoyed a loud relationship. However, in our private interactions, we were always polite and professional with each other.

A bill specific only to the city of Long Beach, SB 562, is covered in the LB Report. The reporter takes issue with my vote, but in fact this was a local government issue vetted through the process. I am not afraid to include negative pieces in my UPDATES. I now have a chance to respond.

To start, the headline is incorrect. During the committee, I did ask a question on this “Triple-P” matter (public private partnership). Indeed, my comment is mentioned near the conclusion of the piece. Specifically, I asked if the city had entered into a similar arrangement in the past or if this was the first transaction of this nature. The response is that it was done successfully before with the George Deukmejian Courthouse.

Now that I’m in my seventh week as a State Senator, allow me to make three observations concerning this piece and the legislative process in general. The Governance and Finance Committee agenda was provided to me the night before the morning meeting. Consequently, I was reading the materials for a couple of hours before hitting the hay at midnight.

This is not how a transparent government should work. For a comparison, when I received a Board of Supervisors agenda, it was on a Wednesday morning. My staff would review the agenda items and provide their analysis after questioning various related parties on each matter and then provide me a written briefing Friday evening. It was like receiving a paperback book and I would spend Saturdays (and for longer agendas, some Sundays) reading it in preparation for the following Tuesday’s Board meeting. On Monday, I would meet with my staff and the County’s CEO to discuss any matters that were unclear. On Tuesday night, I would research any open items. All to say, my staff and I had nearly a week to prepare and research the Board agenda.

In Sacramento, I have very little time, sometimes none at all, between receiving the agenda and the beginning of the Committee meetings to prepare. Even if I had more time to review the bills, there are dozens of them in every committee, often with little input by stakeholders or impacted parties, leaving me with little context or information. My crack staff is hustling, but there is no time to do the type of research that I’ve grown accustomed to and for which the people of my district and California deserve.

The second concern is addressed in the piece. There was not one individual who spoke against SB 562. I do not recall receiving one communication in opposition to this matter. I mentioned that my father spent most of his career with an office in Long Beach and that I graduated from California State University, Long Beach. But, as far as I know, not one concerned Long Beach resident contacted me.

Thirdly, let’s say someone had contacted me or my staff and convinced us that this deal was flawed. Let’s say I concurred and voted in opposition. As the composition of the Committee is 5 Democrats to 2 Republicans, I can state with a strong degree of confidence that, at best, the vote would have been along party lines, 5 to 2. Such is the joy of the current Legislature.

I’m excited that someone in the media was covering one of my Committee meetings. It would have been nice if they had reached out to me for a comment. It’s unfortunate that the media outlet hasn’t convinced enough readers to participate in the process. Let’s see if someone contacts my office before it comes to the floor of the Senate. This is being done through the LB Report in the final piece below.

In the fourth piece we have someone that never contacted me about this bill. He obviously does not have the juice to get the right individuals elected to the Long Beach City Council. And he doesn’t have the juice to get them to pursue traditional financing methods. All he has left is to lash out. That’s unfortunate. But, maybe he has the same time constraints that I do.

I appreciate his arguments, but they did not seem to resonate in his own city. After doing further research and I concur with his concerns, I could try my best to convince my colleagues that perhaps a sense of caution should be directed to this matter. However, I can state with a strong degree of confidence (if I were a betting man) that the final vote on the Senate floor will probably be about 32 to 8 in support. (No wonder he’s so frustrated.)

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State Sen. John Moorlach, left, Chapman University President Jim Doti, center, and William Lyon, right, attend the debut of the exhibit;Courage of Imagination: A Tribute to Henry T. Segerstrom; at South Coast Plaza on Thursday. PAUL RODRIGUEZ, STAFF PHOTOGRAPHER

UNION BOSS NOT AFRAID OF A FIGHT

As he ends a career battling for O.C. public workers, Nick Berardino remains upright.

By GREG MELLEN / STAFF WRITER

Two photos in Nick Berardino’s office say a lot about Orange County’s most powerful union leader as he prepares to step away from a career spent fighting for workers in a community that unabashedly favors management.

One is Muhammad Ali just after he knocked out Sonny Liston. Berardino, a lifelong boxer who, at 66, still spars three times a week, identifies with Ali’s politics and attitude.

The other shows Winston Churchill holding a tommy gun. Among other things, Churchill once said, “Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.”

Two photos of two guys who could talk tough and back it up.

Berardino isn’t so different.

For nearly 41 years, in different roles representing public workers for the Orange County Employees Association, the pugnacious contrarian has gone toe-to-toe with the county’s power brokers.

He’s won concessions against big odds and preserved those victories against the political tide. He’s made friends and enemies – often the same people. He’s cursed and been cursed at.

Even now, as he prepares to step down from the job in August, Berardino remains blunt.

“This is a union that has never backed up,” Berardino says. “Backing up isn’t in our approach, and it’s not in the way I do business.

“I’m not here to back up.”

THE UNION GUY

During Berardino’s four decades in Orange County, a period when union membership nationally fell from nearly 25 percent to 11 percent, membership at Orange County Employees Association tripled. It now represents about 18,000 county, city, court and special district employees.

Over the decades, as a union guy – often the union guy – Berardino helped get county employees a strong retirement plan, saved hundreds of their jobs (particularly during the county’s bankruptcy in 1994) and helped fight off attempts by Costa Mesa to outsource jobs.

Like most fighters, Berardino suffered losses. Lots of them.

“When you’re in the minority, you’re going to lose,” Berardino says. “I’ve had many, many disappointments.”

The most recent came in 2013, when the county awarded a $132 million contract to upgrade computer and phone systems to Xerox rather than giving the work to county employees. The contract, beset with delays and cost increases, caused 41 union employees to change jobs and untold others to leave.

“That has tugged at me,” Berardino said. “We lost a lot of good people.”

In 1982, Berardino started the Orange County Employees Association’s first political action committee, an attempt to flex some muscle in the electoral arena. Most of the Democratic candidates the union has backed over the years have been defeated by their Republican opponents.

But Berardino doesn’t view this as a total loss. Ideas, he says, matter.

“You have to realize that in a democracy, someone has to take (an opposing) point of view,” he said.

“It doesn’t mean we’re wrong. You still have to push those points of view.”

Jennifer Muir, Berardino’s protege and assistant general manager, officially takes over his job Aug. 1. She’ll have the same responsibilities, including oversight of staff and carrying out the policies of the union’s board of directors.

Though Muir and Berardino differ stylistically, Muir said “our strategy, our intention and our discussions won’t change."

She won’t get a grace period, either. Contract negotiations with the county start this year.

“I’m not a boxer or a Marine,” Muir said. “But will I fight when I need to? Absolutely.”

She’ll follow a mentor who negotiated, at times, by the decibel.

“I was a loud voice,” Berardino says. “I adopted, and continue to use, an extraordinarily confrontational style. Otherwise, your voice is going to be drowned out.”

Despite staking out controversial positions (he once put out fliers saying the Board of Supervisors was guilty of “white collar child abuse”) Berardino insists he only says “what everyone is thinking and wants to say,” conservative politicians and corporate leaders notwithstanding.

John Moorlach, a former Orange County supervisor and current Republican state senator, often negotiated – and sometimes fought – with Berardino. They battled over everything from campaign ethics and oversight to supervisor benefits and financial transparency and, of course, union jobs, union pensions and union benefits.

Moorlach says their debates were never dull.

“He’s a vibrant, caustic little Italian who’s not afraid to scream and yell and tell you how he feels,” Moorlach said.

“I don’t know if that was good for negotiations, but it was fun.”

Whether shouting down politicians or engaging in fierce negotiations, Berardino’s bellicosity belied a shrewd mind.

“I think part of his demeanor is to mask the fact that he’s two chess moves ahead of the opposition,” said Lou Correa, a longtime politician in Orange County who once was Berardino’s supervisor at the union.

Muir says Berardino’s passion is “authentic,” but it also caused people to underestimate his political and bargaining acumen. She said Berardino was always the most prepared person in the room.

“He thinks about (the union) all the time,” Muir said, adding: “I have the texts and phone calls in the middle of the night to prove it.”

Passion has been Berardino’s secret weapon.

Over the years, Berardino has called supervisors and politicians “money launderers.” He once had to be restrained from going after the mayor of Costa Mesa and has a picture to prove it.

“It’s very difficult to get justice from the political establishment in Orange County,” Berardino said. “The political establishment is totally anti-worker. It just is.”

SURPRISE WINNER

Sometimes, Berardino wins.

Moorlach says Berardino “stood head and shoulders” above his contemporaries in the labor movement in his ability to see the larger picture.

In addition to earning favorable pensions in the early 2000s, Berardino negotiated health reforms and tiered pensions before those ideas gained broader support. And while his deals weren’t always popular with the rank and file, he saw them as necessary.

According to Berardino, union members get a little extra when they pay their dues: “The inalienable right to (grouse).”

Berardino grew up in South Los Angeles, the son of Italian immigrants. As a teenager he became involved in the civil rights movement. He said he was – and remains – appalled at the treatment of blacks in America.

Berardino says his parents were so alarmed by his political bent they sent him to a psychiatrist and refused to allow him at large family gatherings.

“I couldn’t go to weddings or funerals,” he said. “I was considered this radical.”

In 1967, Berardino joined the Marines and fought in Vietnam as a machine gunner. Some of his feistiness later, he says, probably came from his war experience. But war, he adds, also taught him about the frailty of life.

“I left Vietnam determined to make a difference,” he said.

Berardino remains committed to veterans, including hiring and training vets. He supported construction of the Heroes Hall veterans museum at the Orange County fairgrounds and founded a Veterans + Labor event, a free celebration for veterans that featured employment, legal and other services.

Clearly one of the most volatile and enduring issues when union contracts come up are pensions and so-called unfunded liabilities, or pension obligations for which money doesn’t currently exist.

The Orange County Employee Retirement System made news in 2010 when it had to open its books and show that more than 500 former union employees collected six-figure pensions. For the record, Berardino’s pension will be about $75,000 plus Social Security.

Berardino said the average annual pension at the OCEA is about $29,000, and the funding is strong, with about 74 percent funded and $12 billion in investments.

Moorlach said pensions not properly funded are engaged in naive “Peter Pan” economics and put both members and taxpayers at risk.

Berardino scoffs at the notion. Even at the depths of the latest recession, he says, “Banks had to be bailed out, (but) not one single pension fund had to be bailed out.”

He’s confident in the union he’s handing off. Younger leaders, he says, can better connect with the workforce, adding that people like Muir will make the union bigger, better and stronger.

As tough as the job has been, Berardino says he has relished every moment.

“I love 4 o’clock on a Sunday” afternoon, he said, because it means he will soon be at work and can “get back and throw punches.”

Contact the writer: gmellen

LBReport.com

State Senate Committee Advances Bill That Could Extend Taxpayer Payments To Civic Center Deal’s Private Developer/Operator To 50 Years; No Committee Member Raises Locally Controversial Aspects of Transaction

Dems (incl. bill author Sen. Lara), city and port reps + trade union rep praise transaction and urge passage; neither of the Committee’s two Repubs, including Sen. Nguyen who reps SE LB, raise issues or oppose

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