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County Runs Into Trouble Filling Top Spot

High Paid StrikeThere is only one item on the Planning Commission Agenda and it is barely worth meeting over. Except for timeline requirements, they probably could have postponed and save the taxpayer a few thousand dollars in stipends and staff salaries. That being the case, we are reporting on an item that is truly of some importance to Tustin and particularly the surrounding unincorporated area.

Oh, So Close

The Orange County Board of Supervisors were saved further embarrassment on the hiring of a new CEO candidate at their March 19th meeting. As reported on the Chandra WallarVoice of OC last week, CEO candidate, Chandra Wallar demanded an up or down vote on her taking the top county job. The BoS obliged her by voting unanimously to hire her but public discussions on salary and benefits went sideways. Wallar had earlier demanded a salary that was commensurate with other southern California counties. The BoS was adamant they wouldn’t be blackmailed.

According to the VOC, the real sticking point has been on pensions. While Supervisors have demanded that every employee pay into their own pensions, Wallar demanded she not be held to the same standard. If this is starting to sound like a Tom Mauck rerun, you are right. Except this time 5th District Supervisor, Todd Spitzer, was joined by ultra-conservatives, Moorlach and Nelson in refusing to pay more than what Wallar’s predecessor was paying. “She made it clear to me that if there isn’t interest in moving up from $254,000, she’s not interested,” said Spitzer.

tom maukSupervisors made it clear that a new CEO will not receive anything more than Mauck received and, presumably, will be required to pay into their own retirement as well.

Wallar, who now mus return to her Santa Barbara CEO post and try to mend fences ( I smell a lawsuit coming on), criticized the board for changing the terms originally offered in closed session negotiations. But, as the VOC points out, new state law requires that top officials salaries be discussed in public. They also say that any approvals required the full consent of the board and not just the subcommittee consisting of Janet Nguyen and Pat Bates both of whom rolled over and supported a higher salary and perks.

From the VOC:

Bates and Nguyen initially supported Wallar’s demands. Last week, however, they insisted they were only presenting Wallar’s salary demands.

Supervisor Todd Spitzer, who supported Wallar’s  appointment but not her salary demands, lamented the situation, saying board members had erred by not having a public discussion about salary earlier.

Spitzer said that the board “should have been much clearer and had the discussion about compensation out in open when they designed the recruitment flyer.”

Given the debate in public over her salary, Spitzer acknowledged that “I can’t blame her for being offended.”

The public debate also revealed an important downside to Wallar.[sic] Spitzer said  that, when Wallar wouldn’t agree to a compromise salary of $270,000, it became clear that  “she wouldn’t be a good fit for Orange County.”

We agree, of course. It is fortunate the BoS decided to follow state law and common sense in making salary discussions public. Even if OCEA’s Nick Berardino and other public employee union officials had not said anything, the idea of publicizing the county’s intent forced boardmembers to consider public backlash in hiring new employees at exorbitant salaries. Spitzer, who has championed the cause of reining in employee costs, said the county will not have a separate policy for high ranking officials that differs from the rank and file.

Now, if we could just do something about those pesky supervisors paying their own way in regards to pensions. John Moorlach, who has made a career lamenting the fact that many employees in the county did not pay into their pensions, refuses to discuss his own pension issues. Shawn Nelson and Pat Bates are the only sitting supervisors who have declined pension participation outright. The other three remain in the county pension system known as OCERS. Nelson has also voiced support for a law that would force elected officials to swap social security for pensions. That would take them out of the game and allow a more balanced discussion of pension issues.

For now, the residents of the county will have to be content with the more than adequate job the temp CEO, Bob Franz, has been doing since Tom Mauck’s departure. So, why don’t they hire Bob permanently? We could ask Todd. We suspect Bob’s just not that stupid.

A Place to Call Home

homelessThe Orange County Board of Supervisors unanimously approved the purchase of a building, on Tuesday, to be used as a year round shelter for the county’s homeless. The $3 million dollar purchase is located in a commercial section of Fullerton on State College Boulevard. More than a dozen advocates and opponents spoke before the board to express their support and concern for the project, which will replace the use of the Fullerton Armory.

The new shelter will have police, school, church and social agency presence to assist the homeless who utilize the facility. Supervisor Shawn Nelson, an adamant supporter of the facility, said that wherever a shelter is proposed, the response is the same -not in my backyard. Nelson heads a committee that works on homeless issues and found this particular building through a friend in the business. Yes, that friend is likely to receive some benefit from the purchase via commissions but, as Nelson pointed out, that will be between him and the seller’s broker.

What is important here is the impact a facility like this will have on homeless in the county and, in particular, our town Tustin. We have been blessed with the presence of the Orange County Rescue Mission, headed by former councilmember Jim Palmer. Some years ago, OCRM found a new home on the MCAS Base where it created the Village of Hope. The facility houses the headquarters of the Rescue Mission as well as transitional housing and training operations. In the Tustin 2010-2015 Five Year Consolidated Plan, the city says it does not have a significant population of homeless persons or homeless families with children (we would say that any homeless family living in Tustin is significant) and that those who live here on our streets are assisted on an as-needed basis by “making appropriate referrals to organizations or agencies…”. Those oranizations include the Orange Coast Interfaith, Families Forward and Human Options, none of which are located in Tustin itself. Tustin also tends to lump the homeless issue with domestic violence in its response. The report goes on to say that Tustin does recognize that homelessness is a regional issue.

We agree, of course, and this new facility in Fullerton could help those who want help.

The real significance of the proposed facility is that it will be open year around and, although no numbers have been put out, it is assumed that it will handle a considerably higher number of clients than the armory has in the past. The assumption from an Orange County Register article is that those who use the facility will not necessarilly be kicked out in the early morning as is the practice now at both the Fullerton and the closer Santa Ana Armory. But, is it close enough that it will be utilized by Tustin’s small homeless population?

Certainly, a facility closer to the city would have a better chance. Over the past year, much has been made over the use of the former transportation center in Santa Ana. Discussions for the use of that facility wilted in stiff opposition by the city. John Moorlach, who bristles at the thought of having to view the sea of homeless humanity that inhabits the grounds around the Hall of Administration, championed the use of the transit center, saying it was a safe facility for the local homeless population. Santa Ana officials blew off the proposal and, aside from opening the restroom facilities, have only responded with vague counter-offers to “find” a suitable location for the “homeless problem” in an unnamed building in an industrial area. Again, the NIMBY approach to the issue at hand. To date, other than private charities such as Catholic Worker’s Isaiah House, no other facilities have been proposed to replace or augment the Santa Ana Armory.

Has Tustin done it’s part? Certainly, the Orange County Rescue Mission’s decision to obtain base housing when MCAS Tustin closed was a wise one. They have made excellent use of the property and are a regional center for assisting homeless and at-risk families (we tried, but couldn’t reach Jim Palmer for comment). Many of the homeless that I speak to on our streets tell me they prefer to live on the street although many of them use transitional facilities to clean up and for other services. But, I have to wonder if we couldn’t do just a bit more to help those who live in our community. It would be nice to believe the facility planned for Fullerton is just a start. Perhaps the next one will be a little closer to home.

Orange County Board of Supervisors Move Forward With Hangar Plans

With little fanfare and no discussion, the Orange County Board of Supervisors voted unanimously, Tuesday, to take the next step toward building a regional park at one of the blimp hangars on the old Tustin MCAS base. When the base closed, most of the land, including one of the Hangars, was handed over to the city of Tustin for redevelopment. The cost-free acquisition of the land was a hallmark of then mayor Tracy Worley-Hagen and the city wasted no time getting to work on plans for the eventual development of the property. That development, it turned out, did not include the south hangar retained by the city.

The other hangar was handed over to the County of Orange. Rather than cast it aside, they set about finding ways they could centerpiece the hangar and surrounding land as a venue or park. Earlier this year, OC Parks Department unveiled a concept for a new park using the hangar as a multi-venue facility. The Board of Supervisors voted unanimously to go forward with the plan. Until now, little more has been said about it, although it was clear OC Parks personnel were working on the project.

It was apparent for some time the County wanted to save the north hangar for some type of use. They entered into an agreement previously with another development group that also had plans for multiple uses or tenants for the hangar. That deal expired without any real work being performed on the concept. This latest move by the county to select LPA, Inc. as the primary and MIG, Inc. as the alternate general development companies for the project is a significant step forward. It is unclear how far LPA has gone with plans for the hangar. The only attachments to the agenda item on the county website were scoring sheets for the various companies that showed how well the companies performed in comparison of capabilities.

We have written several times about the reuse of the hangars and even briefly defended the city’s stance based on what we thought was diligent work on their part to find reuse. We have since changed our position and believe the city has erred in not developing a use for the hangar. And, we aren’t the only ones who think the city is making a big mistake. Aside from the residents, who overwhelmingly wish to see the hangars remain intact, the city hired a firm called Management Partners who conducted research on strategic planning for the city. One of their findings was that the city was missing a huge opportunity by not pursuing reuse of the south hangar. The only thing saving the south hangar so far has been the fact that title is retained by the U.S. Navy. We hope they will leave the hangar as is until cooler heads in the city come to the dais, perhaps with a joint plan with the county for reuse as a larger park facility.

Regardless of the final fate of the south hangar, the north hangar, and a signficant piece of history, will be preserved through the actions of the OC Board of Supervisors. Although this is a first step and there is much work to be done, it looks like the hangar is here to stay.

One thing, Supervisor Moorlach, my wife would like you to include a central market. Nothing fancy. You could use LA’s Grand Central Market as an outline. Just a thought.

John Moorlach: Politician, Soothsayer, Storyteller

Courtesy of The Liberal OC

(The story was updated to correct the quote at the end -ed.)
Growing up, my mom always taught me that omission is as bad as commission meaning that, if you fail to say something when you should have, that is just as bad as telling a lie. In Orange County Board of Supervisor John Moorlach’s case, he does not seem to have gotten the same message.

On June 21, 2012, Moorlach took his “message of change” to county employees. In an email sent to all employees entitled, “A new Approach for Labor Negotiations”, he outlined the current financial condition of the county and laid the blame squarely on the backs of the public employees.

This is not an unusual tactic for Moorlach, who still feels that he is the savior of the county after having foretold the coming 1994 bankruptcy. Of course, whenever Republicans like to speak of that, they emphasize the foretold part, as he did absolutely nothing to prevent the bankruptcy. He could have. He could have notified the state of the illegal doings of then county treasurer, Bob Citron. He could have notified the district attorney. Instead, he simply voiced his opinion. And many people agree that, had he not said anything, the crisis would have passed in a week or two and bankruptcy would have been averted. In fact, many say a bankruptcy was not required anyway and that it was engineered by some for personal and political gain. So much for John’s soothsaying. That could be why no one is listening as he screams, “the sky is falling”, again.

But Moorlach, who had already decided to run for office, capitalized for several years on his fortunetelling abilities. When he came to the Board of Supervisors, it seemed as if the other Board members were a bit in awe of him. Like the E.F. Hutton commercials of old, when Moorlach talked, people listened. One of the things Moorlach said from the beginning (and we will hold him to his word) was he would not run for any higher office. We assumed he meant that he was a local politician and not one to go to Sacramento on our dime. We’ll see how that works out now that he is in his final term after his unsuccessful bid to extend Supervisor’s terms to a third limit. Nowadays, we hear the Republican Party locals like what John says more than they like John himself. In any case, his motives on a variety of issues have been called into question on more than one occasion, most notably by one of our newest Supervisors, Shawn Nelson.

Oh, let’s not forget that, when Moorlach left his job as County Treasurer to take the job of Supervisor, he anointed his crony and friend, Chriss Street to take his place. Street, as you know, became mired in  scandal of his own when, as trustee of the bankrupt Freuhauf Corporation, he breached his fiduciary duty “in an effort to serve his own selfish ends.” Almost as quickly as he said hello to his buddy, Moorlach was quoted as saying, “He’s got to go. The taxpayers don’t deserve this nonsense.” Apparently, John made a better politician than a friend.

Now, there is no doubt that John hates public employees. He hates their unions and he hates the fact that he cannot just change their compensation whenever he chooses to balance the budget. He has been know to refuse to shake hands with union officials and refers to them as union thugs. He has his hatchetman and chief bootlicker, County CEO Tom Mauck attempt to deal with them. Tom Mauck is a story unto himself but, suffice it to say, he hates public employees as much as John. It was rumored that, at one time, he even said he deserved the compensation he received, including his lucrative pension, car allowance and other personal benefits, because he worked hard and most public employees were slackers.

So, now that nearly every public employee union is in negotiations this year, it comes as no surprise that Moorlach would be pushing his agenda hard. Although his influence is waning with a public who has come to see him as a typical politician, he continues to put out missives like the one he penned Thursday and backs it up with graphs. From his letter:

These negotiations come at a time when our financial resources have experienced several years of contraction and are projected to see minimal, if any, growth in the future. Moreover, we continue to defend against efforts by the State of California to reach for our current assets and future revenue streams. Juxtaposed with our flagging revenues, the total compensation for County employees has steadily risen. The primary drivers of the increasing total compensation are salary growth (for a number of reasons), pension contributions, and health care benefits. The chart below demonstrates the growth in average total compensation for county employees over the last five years.

A New Approach for Labor Negotiations

This year ranks as one of the most important in recent history in Orange County for labor negotiations. Discussions are already underway with several of our largest bargaining units, and by the end of this calendar year, we hope to have new agreements in place for all the major labor groups in the County. These negotiations come at a time when our financial resources have experienced several years of contraction and are projected to see minimal, if any, growth in the future. Moreover, we continue to defend against efforts by the State of California to reach for our current assets and future revenue streams. Juxtaposed with our flagging revenues, the total compensation for County employees has steadily risen. The primary drivers of the increasing total compensation are salary growth (for a number of reasons), pension contributions, and health care benefits. The chart below demonstrates the growth in average total compensation for county employees over the last five years.

In total, the Average Total Compensation across all of the County’s positions has grown by nearly $15,000 over the last four years, equivalent to a raise in total compensation of 17.2%. During this same timeframe, property tax revenue, which represents the overwhelming majority of our General Purpose Revenue, has grown scarcely more than 3%. In order to address the unsustainable trend in total compensation growth, the County is now faced with either laying off employees and reducing services in order to achieve a more tenable financial position, or finding ways to restrict the growth in total compensation in order to bring it in line with the growth in available resources. The Board of Supervisors has decided to pursue the latter approach, in an effort to retain as many employees as possible and maintain service levels to the public we all serve.

In simple terms, this means that the Board is committed to negotiating agreements with all of our major bargaining units in which the costs of employee compensation do not exceed our expected growth in property taxes. Going into fiscal year 2012-13, property tax revenues are expected to remain flat. Consequently, total compensation must remain flat. In order to achieve this goal, some forms of compensation will need to be reduced in order to counterbalance growth in other areas of compensation. These reductions could come in a variety of different forms, such as greater contributions toward pension costs, health insurance modifications, changes in premium pay, and/or salary reductions.

Our financial advisors and staff estimate that property taxes (which account for more than 90% of our General Purpose Revenue) will not make significant gains in the near future. This sobering projection means that absent a paradigm shift in the County’s pension liability (the second most important driver of total compensation after regular salaries) modest reductions in employee compensation will need to continue in the near future if the County is to maintain its goal of financial prudence. These reductions will not need to be at the levels seen in some of our peer counties or at the State (which is looking at a 5% reduction in 2012/13), but will need to be sufficient to offset the anticipated growth in other forms of compensation, like pension contribution and health benefits. The Board of Supervisors will continue to pursue solutions to the ever-escalating pension costs that are crowding out salary increases for our employees, but it is clear that true solutions can only be found with the assistance of our employees and their labor representatives.

It is vital that each County employee know that this new approach to labor negotiations is born out of financial necessity and a commitment to provide the highest level of service possible to the taxpayers who entrust us with their resources. A commitment to the public is something that binds us together as civil servants, and it is what will see us through these times of austerity and sacrifice. Thank you for your continued service and perseverance.

It is interesting that Moorlach now attempts to appeal directly to the employees in the county. It is also interesting, but not surprising, that he does not tell the honest truth, even to those same employees. But, as we said before, he hates public employees and hates the fact that he has to pay them more than minimum wage or any benefits. In other words, he is a typical Republican politician.

One only has to look at the accompanying graph which he points to as proof. Note that total compensation does, indeed, rise 17%. What he doesn’t tell you is why compensation rose at all. In spite of the fact that no line employee has received a raise since 2007, base compensation has gone up. How could that happen, you ask? I will tell you what Moorlach failed to say. Since 2007, managers, executive managers and others above the rank of supervisor (and there are a lot of them) have all received multiple raises. Most of the executive managers receive a car allowance of nearly $800 per month and all managers down to manager I, receive an optional personal benefit of about $4,000 per year which, if they swing it right, comes to them tax-free over and above their salaries. So, if you spread that $9,000 per year out to just the management staff, rather than all employees, how much did their compensation increase? Moreover, the question is, when the county should be in austerity mode, how could anyone receive an increase in salary? Much of it was caused by unjustified promotions and raises in the management ranks.

Let’s talk healthcare. In his letter to the masses, Moorlach talks about how cost have increased. The graph, once again, shows how costs per employee have risen a modest $2400 since 2007. Healthcare costs are one of the single-most expensive benefits of employees. Moorlach makes it sound like the employees are being unreasonable about healthcare. However, the unions and the county have always been willing to sit down and discuss the issues over healthcare cost. A few years ago, OCEA agreed to split the retiree pool. This resulted in higher costs (and a lawsuit) for retirees, while helping to contain costs for active duty employees. Over the years, the unions have agreed to pay a portion of their dependent healthcare and substantially increase co-pays to doctors and for medications. In fact, it has been the unions who have been at the forefront of  containing healthcare costs while maintaining an important employee benefit. Still, healthcare costs have increased through no fault of the employee or the county. So, why lay the blame on county employees?

The big elephant, of course, is pensions. And here, Moorlach clearly withholds important details, even from his own employees. For example, he likes to expound upon those unreasonable pensions of public employees. It is true that most non-safety public employees (including managers and executives) negotiated an enhance pension that would allow them to retire with more money at an earlier age. Prior to the enhancement, employees received 1.67%@57. In 2004, unions successfully negotiated a new tier. No one can disagree the resulting pensions would cost both the county and the employee more.  What he did not say is that the union agreed employees would pay for both the employee and employer side of the increased costs.

In a recent editorial, OCEA General Manager Nick Berardino stated:

In other words, since OCEA-represented employees agreed to pay the entire cost of improving their retirement benefit – the improvement did not cost the county or its taxpayers anything. Not only that, the employees’ commitment to pay for the new benefit was enforceable into perpetuity. Employees are used to seeing that pension offset being taken from their paychecks regularly.

Then, in 2009, OCEA once again stepped forward, negotiating a one-time option for current employees to elect a hybrid retirement benefit consisting of a 1.62@65 defined benefit formula coupled with a modest defined contribution plan. San Jose’s approach also involves a current employee option component, but OCEA and the county have been attempting to get IRS approval for their plan long before most jurisdictions, including San Jose, even had pension reform on their radar.

Another important piece of the pension shortfall puzzle is the fact that the county, much of it during Moorlach’s term, frequently took “pension holidays” where they did not make any contribution to employee pensions (employees do not have that option). That’s because they did not have to. But, in looking back, don’t you think they should have? Does anyone think that would have made a difference (a show of hands, please). This was clearly shortsighted thinking on the part of the Board. To be clear, the Orange County Retirement System, although below the recommended 80% level due to the depression, is well funded and not in any danger of collapsing.

Oh, did I forget to mention that, until recently, managers, executives and elected officials did not pay into their pensions at all? I guess I am getting like John in my old age.

So, where is it that county employees have not done their part to rein in pension costs and continue to provide quality service to the residents of Orange County? It would seem, with this new information, that Moorlach is only telling the part of the story he wants us all to hear. And, if you thought he did not want you to hear it, this blog is not the only one to mention his letter to the masses.

So, there you have John, the storyteller.

If you look at anyone in this, look at how badly the Board of Supervisors and CEO Tom Mauck have attempted to cover their embarrassing situations and keep their own pensions intact. Oh, did I tell you, John Moorlach, as an elected official and employee of this county, receives the same pension as other employees (we won’t mention that lucrative 457  plan available only to elected officials and managers)? Including his time as Treasurer-tax Collector, Moorlach will have 20 years of service by the time his term ends on the Board of Supervisors. It is interesting to note that he will not even acknowledge this fact. He is one of three members of the Board that gladly keep their pensions intact even while disparaging the good names of union employees. The two that keep a saner head about them are Pat Bates and Shawn Nelson, neither of whom take a pension.

Now you have, as TV commentator Paul Harvey used to say, the rest of the story.