MOORLACH UPDATE — Last Day of Session — September 15, 2019

We had a last day of Session on Friday that will not be forgotten anytime soon.

Senator Stone had his fill of being lectured to. I was interrupted a couple of times on supposed points of order during one of my Floor speeches. A protester in the Senate gallery threw blood on several of my colleagues on the Democrat side of the Floor. This caused an immediate lockdown, making the Floor a crime scene, and, eventually, having the final bills of Session heard in the Senate’s largest committee room. The agenda was concluded at just about 3 a.m.

Session would have gone on a little longer were it not for the fact that the Assembly killed a bill that would allow certain bars to stay open until, ironically, 3 a.m.

I flew home Saturday afternoon and enjoyed the Orange County Historical Society’s Centennial 1919 — 2019 Gala Dinner.

Senator Stone Hits His Limit

For all the Trump-bashing that goes on in the Legislature, it is amazing how many Trump detractors end up displaying similar traits they claim to despise. They act like they’re the smartest people in the room and don’t hesitate to admonish colleagues on the other side ofthe aisle. The condescension and arrogance are amazing. The California Globe captures Friday morning’s first dust up in the first piece below.

American Independent Party

Senate Bill 696 enjoyed the gut-and-amend treatment on the Assembly side of the chambers. And the end result was not pretty. If it were not so real, I’d say it would make a great Saturday Night Live skit.

“You registered with the American Independent Party, you silly. That’s a conservative party and you’re not right-wing.”

“Really? Well, maybe they should change their name so uninformed and inept individuals like me who don’t read or do any civics research won’t make that mistake again.”

Instead of using humor, I decided to recount a few of the bills that were recently approved:

“SB 696 is a blatantly oppressive and tyrannical maneuver. But, what’s new about strong arming in this Chamber?

“Colleagues, this Legislature has gone after

“(1) physicians who are trying to protect infants against vaccines they may be severely allergic to;

(2) those who hunt bobcats;

(3) spiritual counselors who are perceived to be addressing the topic of conversion therapy;

(4) the fur industry in California; and

(5) the Gig economy.

“It only makes sense to go after an entire political party.

“This legislature is bold in its bullying. Go bold or go home — I guess.

“The definition of ‘bully:’ ‘seek to harm, intimidate, or coerce (someone perceived as vulnerable).

“You can decimate the AIP’s name because you can. But the optics smack of political bullying.

“And we make laws to stop bullying. Oh, the ironies.”

In doing so, I received a couple of interruptions, requesting me to address the bill and the amendments.

What amendments? There were no stinking amendments. It was a gut-and-amend. Oh, the joys of long days and nights voting on some 800 bills in less than two weeks. Tempers are bound to flare.

What a Friday. The Associated Press provides the details in the second piece below.


I had five bills make it to the Governor’s desk this first year of Session. SB 598 was a recommendation from Marc Joffe and he extolled the bill to The Bond Buyer in the third piece below (see MOORLACH UPDATE — SB 598 Moves On — May 16, 2019). For my 25-year relationship with The Bond Buyer, also see the 25th Anniversary Look Back below.

Medical Marijuana

I did a considerable amount of research while I was a County Supervisor on the issue of Medical Identification Cards. Many parents found that cannabis provided assistance to their children. So, why wouldn’t I support their taking a bona fide prescription while attending school? The Epoch Times covers SB 223 in the fourth piece below. Both Senator Stone and I were coauthors of the bill. I apologize that I was unavailable for the reporter, but it is next to impossible to leave the Floor during the last two weeks of Session.

Satisfied Constituent

The Voice of OC provides a surprise editorial submission from a happy constituent. As hard as my staff and I work, it is great to receive a note of appreciation on occasion. It is the fifth and final piece below.

25th Anniversary Look Back

In a unique foretaste of things to come, The Bond Buyer had a small innocuous article in its September 14, 1994 edition, titled “Auditor Examining Ohio County Fund To Ensure Legality of Its Investments” by Karen Pierog.

Cuyahoga County, Ohio is where Cleveland is located. The similarities to the Orange County Investment Pool are eerie. Here are a few selected paragraphs:

John Conley, spokesman for Ohio auditor Thomas Ferguson, said a soon-to-be-released audit of Cuyahoga County will include a review of its Secured Assets Fund Earnings Fund, which has sustained $97 million in losses since the beginning of the year.

Francis Gaul, who oversees the fund as Cuyahoga County’s treasurer . . . said the paper losses representing about 8% of the SAFE Fund were due to the bear market in fixed-income securities. Still, the fund is offering governments a return of 6.6% on their investments, according to Tim Simmerly, the fund’s chief investment officer. He said the fund has been able to make money through investment techniques such as repurchase agreements with dealers and through the arbitrage of proceeds from a taxable note issue sold last year by the county.

Critics of the fund have expressed concern that the county, whose funds make up 35% to 40% of the money invested in the SAFE Fund, could be exposed to large losses if the market continues its slide and other local governments decide to pull out of the fund.

A few weeks later, SAFE would implode. It made national news. I again tried to warn people in Orange County about the fate that lies ahead.

Where Orange County differed is that the reporters in the Cleveland area started doing some serious snooping around to see if there really was a problem. Their work gave them a major dilemma. If they revealed the facts that they had obtained and verified, it would probably cost Cuyahoga County $125 million if SAFE were to be liquidated. The reporters and their editor had to answer one simple question: Do we print the truth? They decided to print. SAFE would be the largest investment pool loss in U.S. history and their record held for about two months.

I was so impressed with the work of Joel Rutchick and Timothy Heider of the Cleveland Plain Dealer, I even paid them a personal visit a few years later while traveling through Ohio. They did what the Orange County market reporters failed to do. And, the journalism industry noticed (see MOORLACH UPDATE — OC METRO — March 1, 2010).

For my last LOOK BACK, see MOORLACH UPDATE — Governor Signs SB 496 — September 9, 2019.

Republican Sen. Jeff Stone: Mad as Hell and Not Going to be Lectured Anymore by Democrat Colleague

California Senate’s dust up on last day of session

By Katy Grimes

During debate in the California Senate Friday, Republican Sen. Jeff Stone had enough, and called out a colleague. Senators were debating AB 1290, a bill to require contractors for the Pure Water San Diego program to enter into a project labor agreement as a condition of receiving specified state funds, despite that San Diego voters already decided to prohibit requiring PLAs as part of construction projects in Proposition A in 2012.

Sen. Toni Atkins (D-San Diego) introduced the bill by Assemblyman Todd Gloria (D-San Diego) as necessary “at a time of climate change and cycles of droughts which threaten water supply.” Atkins explained Proposition A prevents the City of San Diego from mandating project labor agreements on construction projects except when required by state or federal law. AB 1290 would remedy the legal dispute of the Pure Water program, as a condition of receiving state funds. According to the City of San Diego’s court filings, costs are projected to increase $4 million for each month of delay beyond August 2019. Additionally, without legal certainty, the City could lose $646.6 million from the State Water Resources Control Board and could receive significant fines if it does not meet key milestones set by regulators.

“AB 1290 is sponsored by the union caucus,” said Sen. Stone. “It will force the city into a project labor agreement in order to finalize this water project.”

Stone said “I’m curious about why we are stopping water from being delivered to our second largest city in the state.” Stone said the Pure Water San Diego Program has run into legal challenges centered around the San Diego City Council’s November 2018 decision to require contractors to use union apprentices on major parts of the Program.

“You know who unions are – they control this Legislature,” Stone said. “How many bills are we going to see by the union caucus? Big labor lost in San Diego when they lost Proposition A. You are thwarting the will of the voters in San Diego.”

“If you are really a believer in local control… if it passes, it shows this body is really at the will of union bosses,” Stone said, ending his floor debate.

Sen. John Moorlach (R-Costa Mesa) noted that project labor agreements do not have a positive record, and only 10 percent of building contractors in San Diego are union shops. “Why shut out 90 percent? Especially when voters did not approve project labor agreements. This is an end-run by special interest groups taking advantage of this body.”

Next, like a scene out of “Mean Girls,” Sen. Holly Mitchell (D-Los Angeles) refuted Stone’s comments and said, “actually Senator Stone yesterday said how much he enjoyed the debate yesterday,” saying today he’s “uncivil and name-calling.” She said Sen. Stone’s comments “lack civility.”

And that’s when Sen. Stone began a “I’m mad as hell and I’m not going to take it anymore” retort.

“I’ve been tame in my comments this last year,” he said, noting “two to three members of this Legislature talking to me like I’m one of their kids.” He said he’s been called ‘racist’ in addition to being accused of incivility when he debates opposition points of view. “I’m not going to put up with it anymore,” Stone said. He added that only his Jewish mother and a few college professors had ever spoken to him this way.

Senate President Steven Bradford (D-Los Angeles) continued to demand order, but directed his comments at Sen. Stone, and not at Sen. Mitchell.

Sen. Republican Leader Shannon Grove (R-Bakersfield) called for a Republican caucus recess, as Sen. Stone continued to say he would not put up with the condescending treatment any longer.

As the Senate was recessed for the caucus break, Sen. Holly Mitchell walked across the Senate floor over to Sen. Stone’s desk to speak to him again.

This was not taken well.

The Senate was recessed while Republicans caucused privately.

When they returned, Senator Grove invoked a point of personal privilege as the Republican Leader: “The decorum in this house gets thrown out of whack by mainly one group, one person,” she said gesturing to several Democrats. “And my colleagues are done. And I’m here to tell you that decency and respect goes both ways. And when they have points on a bill that are valid, and that are not out of order, for you to bully them into a place of… with your rolling eyes, your smirk smiles, your hostile looks to my members, it is unacceptable. For you to come on this side of the floor and come over to the desk of one of my members when the Chair or President is calling the House back to order is unacceptable. And I am asking you personally, to refrain from your conduct.”

She was halted by Bradford who said, “We’re asking everyone to have decorum today. So let’s not single out any individuals.”

“With all due respect Mr. President, I think it’s just one individual that is causing that conflict on this floor,” Sen Grove said.

“No calling out individual members Senator Grove,” Bradford said.

“I didn’t name a person. I did the same thing that she does to us when she looks across the floor…” Grove said.

“Senator Grove, we’re going to ask you to refrain from those…” Bradford said.

“Okay, again I would just like to call decorum in this house and I would like the bullying to stop,” Grove said. “Thank you.”

Someone in the background clapped.

The Dynamic and Power Structure

Sen. Holly Mitchell, first elected to the State Assembly in 2010, is a prominent member of the African American caucus, and is also the very powerful Senate Budget Committee chairwoman, who is seen by many as lording her position over a Jewish Republican in the minority party. This isn’t the first time this session, this year, or since Stone was first elected to the Senate he was called names, or was on the receiving end of the behavior Sen. Grove described. Yet no one in the Democratic caucus has corrected the behavior on the record, or defended Stone.

Stone was elected to the Senate in 2014. Notably, Stone resigned his membership in the Legislative Jewish Caucus in 2017. “When I was invited to join the Jewish Caucus, I was expressly told that it was a non-partisan Caucus, and the issues we were going to be involved with would focus on promoting the interests of the Jewish people in California and around the world,” Stone said. “Since the election of President Trump, it seems that there has been a divergence from the Caucus’ original mission. It has clearly become a vehicle for a Legislative Caucus that receives state resources to merely criticize our duly elected President.” Senator Stone was the sole Republican member of the Legislative Jewish Caucus.

Despite additional objections to requiring project labor agreements for the Pure Water San Diego program, AB 1290 passed 28-9.

California could ban ‘misleading’ political party names

A staunchly conservative political party in California could have to change its name because some state lawmakers say it confuses voters into believing they are registering to vote as an independent


SACRAMENTO, Calif. (AP) — A staunchly conservative political party in California could have to change its name because some state lawmakers say it confuses voters into believing they are registering to vote as an independent.

The state Senate voted 29-11 on Friday to ban political parties from using “no party preference,” ”decline to state” or “independent” in their official names. Democratic Gov. Gavin Newsom has 30 days to review the bill and either sign it into law, veto it or let it become law without his signature.

The bill would apply to all political parties, but it is aimed at the American Independent Party. The party has been an option for California voters since 1968. Its members make up 2.59% of the state’s registered voters, making it the third-largest political party behind Democrats at 43% and Republicans at 23%.

But critics say the party’s membership is inflated because its name confuses voters into believing they are registering as independent or “no party preference.” In 2016, the Los Angeles Times surveyed the party’s registered members and found a majority did not know they had registered to vote with the party. Statewide, “no party preference” voters account for 28.6% of registered voters.

Representatives of the American Independent Party did not respond to an email seeking comment. According to its website, the party nominated Donald Trump for president in 2016 and “God willing, 2020.”

Democratic state Sen. Tom Umberg, the author of the bill, said voters who mistakenly register with the American Independent Party can’t vote in the state’s Democratic presidential primary next year.

“It goes to our interest, our collective interest, that voters are not misled,” Umberg said. “They can’t confuse voters by choosing a name that many people associate with being independent when in fact they are not.”

Republican Sen. John Moorlach opposed the bill, saying “the optics smack of political bullying.”

“The American Independent Party has been around longer than many of us have been alive,” Moorlach said. “I think it’s a shame.”

The law would take effect immediately if the governor signs it. It would require political parties to change their name by Oct. 29 or be disqualified.

Bill requiring issuers to use XBRL clears California Legislature

By Keeley Webster

More in XBRL, Municipal disclosure, Data transparency, State of California, California The California Legislature has approved a bill that would require its governments and agencies to provide financial documents to the State Controller’s Office in a more readily searchable format than the PDF.

State Sen. John Moorlach, R-Costa Mesa, sponsored Senate Bill 598, the Open Financial Statement Act, with the aim of making state and local government financial data more accessible

“I am pleased that California legislators are supporting the modernization of municipal market continuing disclosure,” said Marc Joffe of the Reason Foundation.

The bill would require that the state, counties, cities, school districts, special districts and pension funds submit financial statements in Extensible Business Reporting Language. The machine-readable computer language, known as XBRL, would standardize issuers’ financial documents making it easier to compare data, because computers could read and search the financial documents, which would also add transparency, said Marc Joffe, a proponent of XRBL, and a senior policy analyst at the Reason Foundation.

The bill did not receive a single nay vote in either house and no one filed a statement of opposition, Joffe said. It cleared its final vote Wednesday.

“I am pleased that California legislators are supporting the modernization of municipal market continuing disclosure,” Joffe said.

The concept, contemplated on the federal level, has received mixed reviews from municipal market participants, some of whom say the changeover would be onerous and costly.

XBRL is an open international standard for digital business reporting managed by XBRL International, a global non-profit consortium of 450 major companies, organizations and government agencies, according to the Financial Accounting Standards Board website. It is an open standard, provided free of license fees, and is already being used in some countries.

XBRL technology has been around for about 15 years and the SEC has been requiring private companies to use it for about 10 years with the EDGAR system. The SEC has the authority to establish a set of standards on the corporate side, but not in the municipal market.

Matt Fabian, partner at Municipal Markets Analytics, has argued that the cost and difficulty of implementing a new standard could result in worse disclosure among small governments and small issuers.

“The CA bill shouldn’t be a problem for the market, which is unlikely to use any CA-specific data in a meaningful, yield-reducing way,” Fabian said. “To the extent a state wants to require all local governments to raise their financial reporting costs, that’s their business. The problem comes with proposals that lay XBRL mandates only on bond issuers and so reduce the efficiency of the municipal market, send borrowers away from the market, and add little to the credit analysis of investors buying more than one state or sector.”

Fabian called the bill a limitation of the idea, because in putting only the finances of California issuers into XBRL, it will be California-only buyers who could make meaningful use of the information

“So it’s very hard to expect that California issuers will see enough of a related reduction in their cost of capital to offset their cost of XBRL,” he said. “But if California wants to force them anyway, maybe the state or its agencies can use the data for monitoring or regulatory programs away from the municipal bond market, that’s up to California.”

Joffe thinks it will lower costs for issuers in the long run.

“Over the long term technical standards like XBRL will save state and local governments time and money because they will be able to satisfy multiple disclosure obligations simultaneously,” he said. “Over 1500 California government entities are required to produce both CAFRs and state financial reports with overlapping information: these should be handled through a single software tool.”

Just as individuals can use Turbo Tax to file both their federal and California tax returns, local governments should expect a similar level of convenience, Joffe said.

Bill Allowing K-12 Administration of Medicinal Cannabis at California Governor’s Desk


A bill legalizing the ability for medicinal cannabis to be administered to children on K-12 campuses by parents was presented to the California governor on Sept. 6.

Current law prohibits marijuana in any form to be within 1,000 feet of school campuses. Proponents of the bill say this restriction endangers children who rely on medicinal cannabis, such as those who use the drug to control seizures. Opponents of the bill question whether the restrictions on medical cannabis for minors are tough enough, while expressing concern about allowing the drug on campuses.

The bill, SB-223, received support and opposition from both major parties. It was introduced by Senator Jerry Hill (D-San Mateo) and co-authored by Senators John Moorlach (R-Costa Mesa), Jeff Stone (R-Temecula), and Scott Wiener (D-San Francisco), Assembly Members Rob Bonta (D-Alameda), Monique Limon (D-Santa Barbara), Bill Quirk (D-Hayward), and Christy Smith (D-Santa Clarita).

The text of the bill reads: “This bill would enact Jojo’s Act, which would authorize the governing board of a school district, a county board of education, or the governing body of a charter school maintaining kindergarten or any of grades 1 to 12, inclusive, to adopt, at a regularly scheduled meeting of the governing board or body, a policy, as provided, that allows a parent or guardian of a pupil to possess and administer medicinal cannabis, as defined, at a schoolsite to the pupil who is a qualified patient entitled to the protections of the Compassionate Use Act of 1996, excluding cannabis, as defined, in a smokeable or vapeable form.”

The Epoch Times attempted to reach out to the bill’s co-author Senator Moorlach (R-Costa Mesa), but he was unavailable for comment.

The bill received 43 votes in favor in the State Assembly, with 22 against, and 14 not voting. In the State Senate, the bill received 28 votes in favor, seven against and five not voting.

One Democrat who expressed vocal opposition was Al Muratsuchi (D-Rolling Hills Estates).

“As a parent, I feel like this is crossing what should be a bright line in keeping marijuana, cannabis products out of our schools,” he told ABC 7.

Assemblyman Jay Obernolte (R-Big Bear Lake) also opposed the bill. He admitted that there were some compelling testimonies from proponents of the bill in committee. However, his concerns over the bill outweighed that of the testimonies.

“Attempting to maintain our schools as drug free zones is a worthwhile goal,” he told The Epoch Times. “[I] think we have to recognize the serious risks of recreational use of marijuana and the serious consequences of allowing more marijuana onto school campuses.”

Obernolte further pointed out the legal liability that school staff face, since the substance is still recognized as a Schedule 1 Drug by the federal Drug Enforcement Agency (DEA).

“Another [topic] that was never talked about enough in the committee presentation was the legal liability that taking an action like this would have to schools in California. We all know [marijuana] is illegal under federal law. If we are forcing a school to allow parents to bring marijuana on campus, what kind of liability are we exposing them to and are we prepared to defend them from the legal consequences of that should there arise a legal problem with the difference between federal and state law?”

The bill is now at Governor Newsom’s desk pending approval. A similar bill was vetoed by former Governor Jerry Brown last year.


Lieberman: DMV Headache Solved by State Sen. Moorlach Constituency Casework

By JODI LIEBERMAN September 13, 2019

My first quarter at university I had a seizure.

This was the first time and according to my doctors––the last time.

Having any sort of lapse of consciousness in California requires that one’s license be suspended for 3 months, regardless of one’s Doctor’s recommendations.

This was news I was not prepared for since my ER nurse told me my license would be suspended for about 2 weeks. My doctor informed me that because of this law, I would not be allowed to drive. This presented a huge problem for me, as I had an internship and job in Orange County that I had been commuting to. I could not longer work my job since it required that I have a car. I didn’t want to let this setback deter me from pursuing opportunities so I decided to use my savings to commute to my internship from UCLA to OC which is a 3-hour commute using the subway, trains and Lyft. I happened to have just enough to sustain this for about 3 months, but absolutely no more than that.

Over the next few months I diligently sent the DMV all the questionnaires and documentation that they required exactly on time, so that the entire process could be over as quickly as possible.

The three months ended and I was preparing for my spring quarter, under the assumption that I would be able to drive. However, I received a letter from the DMV stating that now they wanted to re-examine me. And that they wanted to conduct an interview with me. And also that they would not even be able to see me until April 26th. All this after they had already pushed it back because they wanted more paperwork. This all made no sense because I had a perfect record and my doctor did not recommend that I be re-tested. I had jumped through all their hoops and they kept moving the goal post. I needed my license back as soon as possible so I could get my life back together.

I called the DMV asking if it was possible to move up my appointment or take a test at my local DMV. Anything to speed up the process. The response, “no.” I was devastated. I had done everything I could do. I was going to lose everything I had worked for and there was nothing I could do. I felt powerless.

A friend recommended that I reach out to State Senator Moorlach’s office to see if they could do some “constituent casework” to work with the DMV on my behalf. I had never heard of this “constituent casework” before but I called anyway. I briefly explained my conundrum to the woman who answered the phone, who was the exact person who handled cases like mine. She assured me she would start working immediately! She opened a case for me later that day March 28th.

On April 4th I received a call from a woman from Sacramento. She explained that after reviewing my case she was confused. Everything in my file seemed normal and it made no sense for the DMV to give me a date that was so far out or for them to re-test me. She said she would see what she could do and would stay in contact with me. I was expecting, that, if she was going to be able to do anything for me, it would probably end up being an appointment for another two weeks out. My phone rang, displaying the same Sacramento number exactly two hours later, the second I walked out of my Econometrics class. She informed me that effective immediately I could drive again. I was in disbelief. I had my independence back. I could get my life back. I drove home through two hours of bumper to bumper traffic on the 405 that night, and I had never been happier.

The entire process of trying to return to normalcy was more gruesome and exhausting than actually having a seizure in front of an entire college dining hall, busting my mouth open and and then trying to finish finals week. Instead of being able to just focus on my health, I now had the DMV coming in and encroaching on my very livelihood. Then even though I kept doing exactly what they wanted they kept moving the goal post. If I hadn’t contacted Senator Moorlach and his team, who knows how far they would have moved it.

It is for this exact reason that having offices like Senator Moorlach’s are so important. Within five business days, Senator Moorlach and his team was able to cut through over a month’s worth of bureaucracy. A month that did not matter at all to the DMV but meant everything to me. Words can not describe how grateful I am to Senator Moorlach and his team, if it wasn’t for them I wouldn’t be able to attend my internship and I would not be able to work. I had the opportunity to meet Senator Moorlach at a community event later, and he expressed to me how happy he was that his office could help me out and that it was his top priority to help the residents of the 37th District in any way he could. They have done me the biggest service and I will be eternally grateful to them. If anyone else is having a similar problem with a local form of government and lives in the 37th Senate District, reach out to his local office (714) 662-6050. They will be more than glad to help.

Jodi Lieberman is a first year college student at UCLA.


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MOORLACH UPDATE — AB 44 Fur Banning — September 12, 2019

If you want to see how absurd things are getting up here in Sacramento, go no further than AB 44.

Purchasing a fur coat for my wonderful wife is not on the list of affectionate essentials she wants as a surprise, so I doubt I will ever purchase one for her as a gift. Certain fashion trends go in and out of style. Who wears beaver skin top hats, like Charles Dickens’ Scrooge? But, a ban on certain clothing items? Really?

The Desert Sun and the California Globe provide the details of yesterday’s vote in their pieces below.

It amazes me how the other side of the aisle is so concerned about animal cruelty, but will not come to the full aid of infants who may be allergic to certain vaccines or their ingredients (see But, I digress.

And, as a historian who loves reading about mountain men, I wonder how long it will be until the name of the Jedediah Smith Redwoods State Park will be changed. But, once again, I digress.

Landmark legislation could make California the first state to outlaw fur industry

Rebecca Plevin

Landmark legislation that would make California the first to outlaw the fur industry is now on its way to the governor’s desk and is expected to become law.

AB 44, which passed the California Legislature on Wednesday, will ban the sale and manufacture of fur products across the state.

Another bill signed by Gov. Gavin Newsom last week, AB 273, prohibits trapping of animals for their pelts and puts an end to fur licensing in the state. AB 44, sponsored by The Animal Hope and Wellness Foundation and The Humane Society, goes further, affecting fur farmers, producers and those who sell fur products. Similar bans have already been put in place in some California cities, including San Francisco and Los Angeles.

“California is one of the most progressive states in the country and a world leader in animal welfare,” Assemblymember Laura Friedman, a Democrat from Glendale who wrote the legislation, said in a statement. “Given the overwhelming evidence of inhumane practices in the fur industry and the availability of so many different options for warm and fashionable fabrics, we will not continue to be complicit in unnecessary cruelty towards animals solely for the sake of fur.”

Together, the new laws would make California the first state to completely crack down on an industry, which advocates say has been responsible for the abuse of thousands of animals each year.

AB 44 passed the Senate on Tuesday afternoon by a vote of 27-8. It returned to the Assembly on Wednesday for concurrence, where it passed 43-12.

Sen. John Moorlach, a Republican who represents portions of Orange County, said on Tuesday that he opposed the legislation because it “sends a chilling message to our business community.”

“I didn’t come to Sacramento to shut down legitimate businesses or industries,” he said.

Jeanne Akin Hillis, who owns Hillis Furs in California’s Coachella Valley, said approval of the bills would force her to shutter her decades-old business.

“If this passes, I am leaving California,” said Hillis, who said she has designed and created furs for actors like Elizabeth Taylor, as well as governors and presidents. “This is my pride and joy. I’m the best of the best and my people will follow me wherever I go.”

Fur sales have been on the rise in the US in recent years, and demand is booming. The market is valued at over $40 billion, according to The Fur Information Council of America (FICA), a trade organization that opposed the bill, and increasing numbers of clothes and furniture designers use fur products in their work.

California Legislature Passes Bill to Ban Fur Industry, but will Governor Newsom Sign It?

Animal extremists behind California fur ban legislation

By Katy Grimes

The California Legislature Wednesday passed legislation to outlaw new fur products sold to consumers, including mink, rabbit and coyote, knowing after months of testimony, they are putting many retailers, fur farmers and ranchers out of business. Should Gov. Gavin Newsom sign AB 44, California would be the first state to ban the sale of new fur products.

Sen. Brian Jones (R-Santee) said that after hearing from different cultural groups, what wasn’t acknowledged was the push to ban fur discriminates against Native American and African American communities whose cultures value fur products. “There’s no reason for this bill other than one class of society telling another class of society what they can and cannot wear,” Jones said.

“I didn’t come to Sacramento to shut down legitimate business or industry – the free market does that,” Sen. John Moorlach said.

Sen. Hannah Beth Jackson, who was the Senate representative for AB 44, was caught on a hot mic Tuesday with an uncomfortable comment. During Senate debate, Sen. Brian Jones (R-Santee) told a sweet story of how his hard working class great-grandfather saved up to buy his great grandmother a fur shall, which was one of her prized possessions. Sen. Jackson said, “Have him send her flowers,” into the hot mic.

Sen. Jackson even said “there is no way to humanely source fur,” and called Furmark “a codification of abusive practices.” FurMark is the certification program that provides consumers with the reassurance they need to confidently buy fur. Furmark operates to ensure the highest welfare and environmental standards. It is a guarantee of good animal welfare and improved sustainability of the sector.

Rather than enforcing the many safety laws from violent animal activists who have been arrested for splashing flesh-eating acid and other chemicals on the outside of a San Diego fur store, and gluing the locks and spray-painting anti-fur screeds on the store’s exterior, the Legislature voted to ban the sale of fur.

Assemblywoman Laura Friedman (D-Glendale) called fur a “fashion statement and statement of wealth. There is no need for warmth” from fur, she said in a recent hearing, mentioning the many faux fur products available.

The fur trade ranks as one of America’s oldest, continuously operating industries, with more than 400 years of history. The fur industry in the United States comprises more than 1,000 fur retailers, 100 manufacturers, more than 200 small family farmers, and tens of thousands of trappers, all of whose businesses, jobs and livelihoods depend on the industry. Retail fur sales in California alone exceed $300 million, and is an important source of employment and tax revenues to the State.

For the fur activists who claim to care about animal welfare, fur farming is among the most sustainable forms of animal agriculture. As explained to the California Globe, in the U.S., animals raised on fur farms are typically fed leftover proteins from food processing plants that humans do not eat, thereby diverting 390 million pounds of waste that would otherwise go to landfills. The manure generated by animals raised on fur farms is used as a rich fertilizer on local agricultural crops. The by-products from the animal are used in many ways, e.g., the meat of the animal is used as bait for the crab fishing industry and as a biofuel and the oil from the animal is used in the cosmetics industry or as a leather conditioner. Virtually no part of a farmed fur animal goes to waste. Fur farming is consistent with the policy objectives of California to promote environmentally sound and sustainable agriculture and industry.

In June the Center for Consumer Freedom filed a complaint with the IRS and FBI regarding PETA and two California-based groups called Direct Action Everywhere (DxE) and Animal Hope and Wellness Foundation. “These are radical groups lobbying to dictate lifestyle decisions on Californians–and we believe these organizations have abused the nonprofit tax code,” Will Coggin with The Center for Consumer Freedom explained.

“One of the bill’s sponsors, Animal Hope in Legislation, is run by a fellow named Marc Ching. Ching spent nearly a decade in prison for kidnapping, according to court records,” The Center for Consumer Freedom reports. “Post-prison Ching started an animal rescue organization that was the subject of a shocking exposé for its conduct in Asia. Ching’s operation allegedly left hundreds of dogs to die in the hands of Buddhist sanctuaries that did not believe sick animals should be treated. According to a volunteer who went on the rescue attempt, it was a disaster from the beginning.”

“Harassing people, and breaking into people’s farms isn’t what a charity does,” Coggin said. “Banning fur is an unacceptable use of the government as morality police for special interests.”

Assemblywoman Friedman claimed she had not heard from fur industry retailers, however this is not true. “The first casualty in this legislation was the truth,” Kaplan said.

Fur industry representatives have offered amendments to Friedman four different times, “which she failed to accept or even discuss,” Keith Kaplan, Fur Information Council of America, said.

Teli Spyropoulos, President of BC International Group, Inc., one of the largest fur retailers, sent a letter to Friedman sharing his opposition to her bill, challenging her claim that she has not heard from any retailers:

“Many people (myself included), within our organization have been submitting letters since the bill was originally introduced to Assembly Members, Senators and to each of the committees who have heard AB 44 to date,” Spyropoulos said.

The legislation received strong support from animal rights advocates, including the Humane Society of the United States.

“If you really want to get [new] fur that bad, go to Vegas,” said Marc Ching, founder and president of Animal Hope in Legislation, the animal rights group behind AB 44 and the Los Angeles ban. “We’re residents and we know a lot of people here who are against fur,” the Los Angeles Times reported.

Furriers located in California say their businesses will never survive if AB 44 is signed into law.


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MOORLACH UPDATE — AB 1482 and AB 5 — September 11, 2019

Rent Control

We had two major bills yesterday on pressing issues facing California. Last November, the voters resoundingly defeated Proposition 10, an effort to institute rent control, but the campaign victory came at a very high cost, somewhere above $76 million for the No side. The proponents of rent control announced that they want a rematch for November 2020.

If a form of statewide rent control is on the books, then another ballot measure shouldn’t be necessary, right? Therefore, another $76 million campaign could be avoided. After watching what happened recently in New York State, the parties became proactive, hijacked AB 1482, and focused on a negotiating opportunity with the Governor.

The Sacramento Bee covers some of my Floor remarks in the first piece below. And the LA Daily News and OC Register cover my vote in the second piece.

I will abstain from voting for a bill when there are strong free market arguments on both sides. I disdain rent control. I also disdain expensive coercion by well financed and powerful special interest forces.

Balancing an anathema to rent control with a compromise of 5 percent annual increases (at what may be the top of this recent economic cycle), plus the cost of living, seems like a tolerable approach. Respecting both sides of the debate, I shared my concerns and abstained. At the end of the day, the free market will resolve the housing crisis by population downturns, overbuilding, and/or long-term recessions. It’s a shame that Sacramento makes overbuilding an unachievable possibility.


The San Francisco Chronicle covers the other big statewide debate on determining if one is a common law employee or an independent contractor. The unions proffered AB 5 as a result of the management incompetency of Dynamex.

One of my first published articles some 35 years ago was on this very topic. AB 5 is a sad mess in responding to the Dynamex California State Supreme Court decision.

I defended the transportation network companies (TNCs) by claiming that most drivers were part-timers earning spare income to pay the rent and, therefore, independent contractors. If they wished to transition into full-time taxi drivers, working 8-hour shifts, then they could negotiate the appropriate arrangement with Uber or Lyft. Accordingly, I presented an amendment to delay the implementation of AB 5 for TNCs for one year. It was procedurally “laid on the table” and not voted on.

AB 5 is disappointing legislation that picked winners and losers. It will be extremely detrimental to many industries and fails to provide a framework for determining the boundaries of whether one is an employee or an independent contractor. The business unfriendly climate emanating from Sacramento continues.


Capitol Alert

Sheriff oversight bill held + Rent cap moves to Assembly + Governors urge gun control



“(Assembly Bill 1482) is very different,” said Senate President Pro Tem Toni Atkins, D-San Diego, following the vote on a two-for-one bill that would cap rent increases at 5 percent plus inflation and prohibit landlords from throwing out tenants in certain situations.

Atkins’ defense of the bill comes after the Senate passed the measure on a 25-10 vote yesterday. It now heads to the Assembly for final approval before heading to the governor’s desk.

“There is a big distinction in difference,” Atkins continued. “We’ve been very clear what this cap is, how it will be used and when there is a sunset. This is not rent control.”

Republicans speaking against the measure were not so convinced.

“The two words ‘rent control’ to me is like fingernails scratching on a chalkboard,” said state Sen. John Moorlach, R-Costa Mesa.

Moorlach and his conservative colleagues argued during the floor debate that the AB 1482 would add hurdles to housing production in a state already bleeding for more units, and that it would harm landlords who own a few units to rake in a little extra cash.

“If it disincentivizes the production of new housing, we’re toast,” Moorlach continued.

Newsom, however, appears ready with pen poised.

“California is at the doorstep of enacting strong, statewide renter protections – safeguards that are critical to combating our state’s housing and cost-of-living crisis,” Newsom said in a statement following the vote. “I thank the Senate for their decisive action today as the bill moves on to the Assembly.”

California Senate advances AB 1482, a statewide cap on rent hikes

The bill would limit rent hikes on units that are at least 15 years old to 5% plus inflation, up to a maximum of 10% a year.


California moved closer to enacting statewide rent caps on apartments and some rental houses after the state Senate voted 25-10 on Tuesday, Sept. 10 to pass the so-called “anti-gouging” rent bill.

Assembly Bill 1482 would limit rent increases to 5% a year plus inflation, up to a maximum of 10%.

The Assembly could take the measure up again Wednesday to vote on Senate amendments, with Friday the last day to pass state legislation. Gov. Gavin Newsom’s approval is likely since he was a key player in the compromise that led to the current version of the bill.

The California Apartment Association, which represents large corporate apartment owners, agreed not to oppose the bill during last-minute talks. But amendments adopted in the past 1½ weeks alienated another ally, the California Association of Realtors, which ended up opposing the legislation.

Ten out of 11 Senate Republicans voted against the measure with Orange County Republican John Moorlach abstaining. Four Democrats also abstained.

Senate President Pro-Tem Toni Atkins, D-San Diego, praised Assembly Housing Committee Chair David Chiu for working with various stakeholders “to thread a very, very thin needle” leading to the bill’s survival.

California follows in the footsteps of Oregon, which passed a similar rent cap earlier this year. If AB 1482 passes and is signed into law, Atkins said, “it will be the strongest renter protection law in the country.”

If approved, the measure would affect all apartments in the state that are at least 15 years old. Houses and condos owned by corporations and real estate investment trusts, or REITs, that are 15 years old or older would also be subject to the rent caps.

The measure also provides “just cause eviction” protections for tenants who have lived in their rental for at least a year, meaning a landlord can’t order renters following terms of their lease to move out unless the owner plans to move in, demolish or renovate the unit or stop renting it out.

The law would expire automatically in 2030.

The measure would not affect rent limits in local jurisdictions with existing rent control laws.

Owners who share a home with their tenants or owner-occupied duplexes would be exempt from the caps. Landlords would be allowed to increase rents to market rates after a tenant moves out, with the 5% caps kicking in after a new tenant moves in.

The state Senate debated the measure for more than two hours as the Los Angeles County Board of Supervisors voted to reinstate rent control permanently in unincorporated parts of the county. The L.A. County plan calls for rent to be capped at the rate of inflation, up to a maximum of 8% a year. Lower maximums would be imposed if inflation falls below 3% a year. The county has had a temporary 3% rent cap on apartments at least 24 years old or older for the past year.

In both Sacramento and Los Angeles, rent-cap advocates argued tenant protections are needed to stem the rising tide of homelessness in the state.

“A question that keeps many of our constituents up at night is how will I stay in my home after the next big rent increase,” Atkins said. “And many of these renters are faced with the impossible choice between a roof over their families’ head or paying for basic necessities like food and medicine. Unless you live in one of 15 cities with rent control, there’s absolutely no protection afforded to you if your landlord wants to raise your rent by 50, 100% or kick you out altogether. Those stories are real.”

All it takes is a large, unexpected expense to put regular working people on the brink of homelessness, added Sen. Nancy Skinner, D-Berkeley. “They are now in their cars, or on couches or on the streets,” she said.

Senate Democrats likened the state’s housing crisis to an emergency or natural disaster, saying provisions akin to existing anti-gouging laws that take effect following fires or floods are warranted.

“This housing crisis that we are in should also trigger that kind of cap to protect millions of renters,” Atkins said. “AB 1482 is not rent control.”

Republican lawmakers, however, argued AB 1482 will make the housing crisis worse by discouraging developers from increasing the supply of housing in the state, creating competition between landlords. The measure will devalue rental properties, forcing most developers to invest in other states, while leading to more homelessness and renters leaving the state, argued Sen. Jeff Stone, R-Temecula.

AB 1482 “will enact the most severe rent control measure our state has ever seen,” Stone said, noting the rent caps come as Los Angeles rental property owners are struggling to pay for earthquake retrofitting.

“There are other places they can go and not have their investment hamstrung,” said Stone. “We must pass legislation that encourages housing development. … There’s a right way to do it and a wrong way to do it. Limiting the supply of housing is the wrong way to do it.”

Senate Democrats agreed that increased homebuilding is an essential part of the solution. But that alone is insufficient when tenants are facing displacement because of rent hikes as high as 100-200%. Democrats, and even one Republican, argued that caps at 5% plus inflation should give landlords sufficient leeway to cover their expenses, while the ban on caps for buildings newer than 15 years should provide enough inducement for developers to build new housing.

“Job Number One is keeping people stable in the housing they have right now,” argued Sen. Scott Wiener, a San Francisco Democrat who chairs the Senate Housing Committee. “That’s how we protect them from homelessness. … Renters are getting dramatic rent increases. Doubling and tripling. That is not how you keep people stable in their housing.”

“It’s true,” added Bob Hertzberg, D-Van Nuys, “when they say the rent is too damn high.”

Senate passes AB 5 gig-work bill, which could turn contractors into employees

Carolyn Said and Dustin Gardiner

The California Senate on Tuesday passed gig-work legislation that could transform the state’s employment landscape, turning many independent contractors into employees. The vote was 29-11, along party lines.

The bill now heads to the state Assembly, where lawmakers approved an earlier version but must agree to amendments. If it passes a final vote there, AB 5 goes to the desk of Gov. Gavin Newsom, who wrote a Labor Day op-ed supporting the measure.

Hundreds of thousands of independent contractors, including Uber and Lyft drivers; DoorDash, Uber Eats, Instacart and Postmates couriers; Amazon Flex drivers; taxi drivers; translators; medical professionals; franchise owners and more, could become employees after the law takes effect in 2020. Unions, which pushed passage of AB 5, hope to organize newly minted employees, especially those at gig companies.

State Sen. Maria Elena Durazo, D-Los Angeles, who co-authored the bill, began Tuesday’s debate by blasting tech companies and some traditional employers, saying they have, for decades, exploited workers with false contractor labels.

AB 5 codifies and expands a groundbreaking California Supreme Court decision from last year known as Dynamex, which uses a simple three-part criteria, the ABC test, to determine employment status. It says a worker is an employee if the worker’s tasks are performed under a company’s control; those tasks are central to that company’s business; and the worker does not have an independent enterprise in that trade.

Proponents say that companies call workers independent contractors to avoid paying minimum wage, overtime, workers’ compensation, unemployment insurance and a range of other benefits that can add 30% to labor costs. Misclassification costs California some $8 billion a year because of lost wages, taxes and expenses, as well as subsidizing social safety-net assistance for the workers, said the bill’s author, Assembly member Lorena Gonzalez, D-San Diego.

But opponents, who include both companies and workers, say they value the flexibility of independent contractors. Businesses in several industries, including ride-hailing, gig deliveries, hospitals, newspapers and truck owner-operators, warned that adding the costs of employment could be devastating and result in higher charges to consumers and curtailed service.

On Tuesday evening, Gonzalez announced she had agreed to delay the bill’s implementation by one year for newspaper delivery drivers, following demands in the Senate.

“While I personally disagree with this delay, I’m willing to allow the newspaper industry the additional year to comply if it means those delivery drivers and nearly a million other misclassified workers are provided the minimum wage, benefits and workplace rights of Assembly Bill 5,” Gonzalez said in a statement.

Senators rejected 12 sets of Republican-sponsored amendments, which largely would have added carve-outs for more professions. During a debate that stretched into the night, GOP senators said the bill failed to add clarity to the Dynamex decision.

“It picks winners and losers when it should be providing a framework on how you are determined to be a common-law employee or an independent contractor,” said Sen. John Moorlach, R-Costa Mesa.

A lengthy list of professions won exemptions from AB 5, largely because they typically set their own prices and negotiate directly with their customers. They include doctors, dentists, psychologists, insurance agents, stockbrokers, lawyers, accountants, engineers, direct sellers, real estate agents, hairstylists, commercial fishermen, travel agents and graphic designers.

Uber, Lyft and other gig companies negotiated unsuccessfully to be exempted. They now plan to take their case directly to voters with a ballot initiative in November 2020 seeking to create a new category of workers who would be independent but could receive some benefits and a guaranteed wage floor. Uber, Lyft and DoorDash have ponied up $90 million to support the measure.

Carolyn Said and Dustin Gardiner are San Francisco Chronicle staff writers. Email: csaid, dustin.gardiner Twitter: @csaid, @dustingardiner


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MOORLACH UPDATE — SB 714 Cramdown — September 10, 2019

Watching SB 276 and then its companion measure SB 714 pass the Senate this past week was difficult (see MOORLACH UPDATE — Anaphylactic Shock — September 5, 2019). Dragging out the process with shallow amendments only to rush them through, waiving every legislative protocol, in SB 714, was a sad and disheartening exercise to observe. I have never seen a bill gutted and amended and three days later voted out of the Assembly and Senate without a single policy committee and then signed by the Governor a half-hour later. Capitol veterans who have been around the legislature for decades have also commented that this was an unprecedented action.

What made this cramdown all the more troubling is that taxpayers from all over the state intuitively knew something was up and literally surrounded the State Capitol yesterday morning. Seeing people in fear for their children’s lives was moving. I know that fear. Having a child who is autistic, developmentally disabled, seriously mentally ill, with Down syndrome or any other disability making the child nearly or totally dependent on their parents for life, is a very difficult life circumstance to endure. These parents will love and care for their children, regardless of their condition. The fact that it could be caused by an allergic reaction to a chemical in a vaccine is unconscionable. That’s the argument I tried to make on the Floor.

Recounting the memory of my cousin, Robert, or Robbie as he was affectionately referred to, hit me emotionally, a little harder than I thought it would. Watching my aunt and uncle care for a wonderful young child who would be disabled his entire life had a big impact on me. I empathize with the protesters. I understood their fears, spoke of their validity, and voted against SB 714.

The Associated Press provides the details in the piece below, from the Greater New Milford Spectrum.

California governor signs vaccine bills he demanded

Don Thompson, Associated Press

State Senate John Moorlach, R-Costa Mesa, wipes his eyes after giving an emotional speech where he recalled his developmentally disabled cousin who died at a young age, as he urged lawmakers to reject a companion measure to recently passed legislation to tighten the rules on giving exemptions for vaccinations, at the Capitol in Sacramento, Calif., Monday, Sept. 9, 2019. The measure was approved by both houses of the Legislature and signed by Gov.Gavin Newsom.
Photo: Rich Pedroncelli, AP

California Gov. Gavin Newsom signed bills Monday to crack down on doctors who write fraudulent medical exemptions for school children’s vaccinations.

The Democratic governor quietly acted less than an hour after lawmakers sent him changes he demanded as a condition of approving the bills, even as protesters outside his office chanted for him to veto the measures.

Legislators approved the changes as protests by hundreds of emotional opponents boiled over, with dissenters delaying Senate debate for nearly two hours by shouting and pounding on walls and doors.

Others were detained by police earlier while blocking entrances to the Capitol as lawmakers scrambled to act on bills before their scheduled adjournment on Friday.

"This legislation provides new tools to better protect public health, and does so in a way that ensures parents, doctors, public health officials and school administrators all know the rules of the road moving forward," Newsom said in a statement.

Lawmakers sent Newsom the initial bill last week aimed at doctors who sell fraudulent medical exemptions. Democratic Sen. Richard Pan of San Francisco agreed to also carry follow-up legislation that, among other things, would give school children grace periods that could last several years on existing medical exemptions.

The two bills are needed to "keep children safe from preventable diseases," Pan said.

The effort was co-sponsored by the American Academy of Pediatrics, the California Medical Association and the advocacy group Vaccinate California, all of which hailed their final approval.

Protesters forced delays in both the Assembly and Senate. They unfurled an upside-down American flag from the Senate’s public gallery in a traditional signal of distress and chanted "My kids, my choice" and "We will not comply."

They later returned to the Assembly, where they continued shouting "Kill the bill" and "Protect our children" as lawmakers considered other legislation.

Republicans in both chambers objected that there were no public committee hearings before the Assembly approved the measure with a 43-14 vote and the Senate followed on a 27-11 roll call.

"This goes past vaccines and is again a major government overreach," said Republican Assemblyman Devon Mathis of Visalia, adding that, "Our medically fragile children are what are at stake."

Newsom demanded a phase-out period for medical exemptions similar to one allowed when California eliminated personal belief vaccine exemptions in 2015. A kindergartener with an exemption could retain it through sixth grade, for instance, while a seventh grader could be exempted through high school.

The companion bill also would allow officials to revoke any medical exemptions written by a doctor who has faced disciplinary action.

The bill would make it clear that enforcement will start next year, meaning doctors who previously granted a high number of medical exemptions won’t face scrutiny.

Republican Sen. John Moorlach of Costa Mesa grew emotional as he recalled a developmentally disabled cousin who died at a young age.

"That’s what these people fear," Moorlach said of protesters. "We’ve got to hit the pause button."

Republican Sen. Jeff Stone of Temecula asked protesters to "watch your democratic process with respect" after a shouting opponent was removed from the gallery by officers.

He also said it is unfair to label dissenters as "extremists" and "antivaxers" when they are concerned about the health and welfare of their children.

Several opponents of the bill were detained before the legislative session as they blocked entrances to the Capitol, including two women who briefly chained themselves to outside doorways.

About 200 opponents earlier filled the hallway in front of the governor’s office, asking Newsom to veto both vaccine bills. They later chanted "Where is Newsom?" and "Veto the bill" from the Senate gallery before leaving when they were threatened with being arrested for an unlawful protest.


Associated Press Writer Adam Beam contributed to this story.


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MOORLACH UPDATE — Governor Signs SB 496 — September 9, 2019

Admission Day

Happy California Admission Day! It’s the Golden State’s 169th birthday as the 31st state to be admitted into the Union.

Protecting Seniors

That’s not the only thing to celebrate today. On Friday, Gov. Newsom signed my bill, SB 496 — Protections Against Financial Abuse of Elder and Dependent Adults (see

I want to thank the Financial Planning Association of Orange County for recommending the legislation and my staff for seeing it through to completion.

The Banning-Beaumont Patch provides the contents of the Governor’s press release in the piece below.

25th Anniversary Look Back

On September 9th, 1994, the OC Register’s Chris Knap authored one of the most frustrating articles of the post-election cycle, claiming that all my warnings were for naught. His piece, “O.C.’s SKY DIDN’T FALL—Government: Critics of the tactics of Treasurer Robert L. Citron had predicted financial doom,” should explain my car’s personalized license plates, SKY FELL.

It was an amazing article, recounting all of the warnings published in various publications during the campaign and still concluding that everything was fine. It claimed interest rates had leveled off—very, very wrong. (And tell me again that reporters are supposed to be objective.)

I can recall receiving calls from clients that day. This article was top-of-the-fold for the Business Section. They called to ask questions like, “Are you as stupid as the Register claims you are?” It was not pleasant. In fact, it motivated me to write a letter to then-publisher David Threshie about how sadly off the mark his paper was.

I would bump into then-editorial page editor Ken Grubbs a few weeks later and, when I asked about my letter and the lack of a response, all he could say was they were “bemused.” What a profoundly appropriate response. Many years later, the Register’s holding company would find itself in Chapter 11 bankruptcy protection – twice. What a very strange twist of fate.

Here are some segments to give you a flavor of the fun summer I had 25 years ago. Talk about watching the band playing on the deck of the sinking Titanic.

Costa Mesa accountant John Moorlach, whose campaign against Citron fueled stories in the financial press, declared, “Regardless of who is elected on June 7, Orange County has a bleak future for its fiscal assets.”

Well, the campaign is over, interest rates are leveling out, and to tweak a line from Mark Twain, reports of Bob Citron’s death spiral appear to have been greatly exaggerated.

“All those dire predictions never came true,” Assistant Treasurer Matthew R. Raabe said. “It would appear that our investments were pretty well on target.”

In fact, county government’s budget managers say they relied on Citron’s arbitrage strategy to dig them out of a hole last year: The county issued $200 million in taxable notes – in effect borrowing at 3.95 percent interest – and Citron invested it in a series of higher-paying investments. Those secondary investments, known as reverse repurchases, returned 7 percent. After costs, the county earned $20 million.

“That’s what is helping us survive,” county budget manager Steve Franks said.

This year, Citron has been asked to invest $600 million the county has borrowed; arbitrage earnings are expected to be at least $40 million.

In total, according to figures provided by Franks and Auditor Steve Lewis, Citron’s investments will bring the county general fund $120 million this fiscal year, more than the county’s share of local property taxes.

“He has gone out and done a heck of a job as far as I’m concerned,” said Lewis, an independent elected official. “To (earn this interest) the county has taken some risks, but in my opinion the risks appear to be very well managed.”

Moorlach, who lost in the June election, was unrepentant in an interview this week, noting that leveraged private investment funds have continued to collapse, despite the leveling off of interest rates.

“I had predicted a pretty steep price to pay,” Moorlach said. “I think it’s too early to say that Citron has escaped that.”

During the campaign, Moorlach was accused by county officials of scaring jittery bond buyers, driving up the cost of Orange County’s borrowing.

Again, Moorlach defended his actions. He volunteered that he went to city officials in Costa Mesa after the June election and tried to convince them to pull out of the county pool. They refused.

“I was overly cautious (in the campaign). I was too conservative in my remarks. I had people tell me, ‘Make it (the investment pool) crash,’” Moorlach said. “I didn’t want to do that.”

“As far as rubbing Moorlach’s nose in what he said, I’m not interested in doing that,” said Citron, 69. “I’m not interested in creating another controversy.

“Sixty-one percent is not a landslide, but it’s certainly a strong election by the people of their faith in me. People just didn’t believe what (critics) were saying.”

My previous three LOOK BACKS can be seen at MOORLACH UPDATE — Homeowners Insurance Crisis — September 6, 2019, MOORLACH UPDATE — Hart, Handy and OPEBs — August 29, 2019, and MOORLACH UPDATE — Additional Pension Contributions — August 26, 2019.

17 New CA Laws Just Signed By Governor Newsom

Gov. Gavin Newsom signed more than a dozen bills into law this week. Read about each one here.

By Renee Schiavone, Patch Staff

Governor Gavin Newsom this week signed more than a dozen bills into law, including one aimed at helping California homeowners who’ve faced unimaginable destruction, one aimed at helping youth find the resources they need when in a bad situation and another that’s supposed to help officials crack down on illegal gambling.

Senator Brian Dahle, R-Bieber, said he introduced Assembly Bill 178 with the goal of helping California fire victims trying to rebuild their homes. Starting in 2020, California law will require those who build in the state to install solar panels; Dahle said he wanted to help these fire victims by making them exempt from this requirement.

“Thousands of Californians who have tragically lost their home due to wildfires are now facing the sad reality that costs have risen due to mandates by the state. These mandates can add upwards of $15,000 to the cost of rebuilding a home,” said Dahle. “Losing a home in a catastrophic fire is traumatic enough and worrying about complying with this new mandate is added, unnecessary stress. This is a small exemption that will allow people to rebuild their home without this additional costly mandate which has nothing to do with structural safety.”

Gov. Newsom said he hopes the solar exemption “hastens” the rebuild process. The exemption is temporary, and ends in 2023.

“Many of our communities in California that have been devastated by catastrophic wildfires and floods, particularly the people of Paradise, are desperate to get their lives back on track and to rebuild their homes,” he said in his signing message.

Another new law, AB 1294, was introduced by Assemblymember Rudy Salas, D-Bakersfield, and is focused on gambling.

“This bill strengthens the ability of the California Department of Justice and other local law enforcement agencies to go after the bank accounts and assets of international gangs and organized criminals who are convicted of operating illegal gambling sites,” his office said in a news release.

Meanwhile, SB 316 is a less complex law. Introduced by Senator Susan Rubio, D-Baldwin Park, will require California schools that issued student identification cards to have printed on them the telephone number for the National Domestic Violence Hotline. Schools are already required to include the National Suicide Prevention Lifeline.

In addition to the above bills, Newsom took action on the following legislation (click on the link to read the full bill text):

· AB 178 by Senator Brian Dahle (R-Bieber) – Energy: building standards: photovoltaic requirements. A signing message can be found here.

· AB 309 by Assemblymember Brian Maienschein (D-San Diego) – Vehicles that appear to be used by law enforcement: ownership or operation by public historical society or museum.

· AB 419 by the Committee on Agriculture – Food and agriculture.

· AB 504 by Assemblymember Marc Berman (D-Palo Alto) – Voter registration: residency confirmation.

· AB 653 by Assemblymember Richard Bloom (D-Santa Monica) – State armories.

· AB 707 by Assemblymember Ash Kalra (D-San Jose) – Santa Clara Valley Water District: contracts.

· AB 809 by Assemblymember Miguel Santiago (D-Los Angeles) – Public postsecondary education: child development programs: priority enrollment: Title IX protection: pregnancy and parental status.

· AB 949 by Assemblymember Jose Medina (D-Riverside) – Unsafe used tires: installation.

· AB 1018 by Assemblymember Jim Frazier (D-Discovery Bay) – Real estate appraisers.

· AB 1294 by Assemblymember Rudy Salas (D-Bakersfield) – Criminal profiteering.

· AB 1515 by Assemblymember Laura Friedman (D-Glendale) – Planning and zoning: community plans: review under the California Environmental Quality Act.

· SB 316 by Senator Susan Rubio (D-Baldwin Park) – Pupil and student safety: identification cards: domestic violence hotline telephone number.

· SB 400 by Senator Thomas Umberg (D-Santa Ana) – Reduction of greenhouse gases emissions: mobility options.

· SB 496 by Senator John Moorlach (R-Costa Mesa) – Financial abuse of elder or dependent adults.

· SB 527 by Senator Anna Caballero (D-Salinas) – Local government: Williamson Act: cultivation of cannabis and hemp.

· SB 570 by Senator Susan Rubio (D-Baldwin Park) – Insurance: low-cost automobile insurance program.

· SB 743 by Senator Robert Hertzberg (D-Van Nuys) – School facilities: design-build projects.


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MOORLACH UPDATE — Homeowners Insurance Crisis — September 6, 2019

As this first year of the 2019-2020 legislative session winds down, it is interesting to reflect on some of the intriguing topics. There were so many critical issues to address, with wildfires and electric utilities being high on the list.

Serving on the Senate’s Energy, Utilities and Communications Committee, Housing Committee, Insurance Committee and Budget and Fiscal Review Committee certainly kept me at the forefront. Add to this, the assignment on the newly created Senate Select Committee on the Governor’s 2019 Report: Wildfires and Climate Change–California’s Energy Future was the icing on the cake.

The culmination of the numerous hearings resulted in AB 1054 (see MOORLACH UPDATE — AB 1054 and Investor-Owned Utilities — July 9, 2019). Sacramento has tried to address the utilities and wildfire victims. It put some funding in the budget for fire suppression efforts, but minimal funding on addressing the root cause of the electrical line causation of the conflagrations (see MOORLACH UPDATE — SB 1463 And The Facts — November 19, 2018 and MOORLACH UPDATE — SB 1463 Epilogue — October 4, 2018).

What is left to resolve? The insurance industry’s reaction was to increase insurance rates, especially after these recent wildfires consumed their reserves, built over the years, to address such major disasters.

The California Globe provides a perspective on the next shoe to drop: the shocking increase of homeowners insurance costs and its impacts on personal budgets and housing values. For an assist on the piece below, WUI stands for Wildland Urban Interface. This means homes near urban centers, but in wildfire zones.

Three decades ago, California’s voters narrowly passed Proposition 103 (see This initiative has provided more transparency in the insurance industry, but it may also have been detrimental in attracting more insurance providers to our state. This will only exacerbate the current frustrations of energy, utilities, housing, insurance, budgets, wildfires and climate change.

25th Anniversary Look Back

Although not directly related to the then-upcoming bankruptcy filing for Orange County, I continued to stay involved in the meetings of my city council after the election.

On September 7, 1994, the Daily Pilot covered a concern I addressed that could be the embryo of a theme that follows me to this day. The piece was titled "Costa Mesa police, firefighters to join state benefits program — Safety personnel were previously covered by city plan. Officials say move will save money." Save money? I don’t think so.

As the Finance & Pension Advisory Committee analyzes why its city, Costa Mesa, is in the worst fiscal shape in Orange County, maybe the vote to drop its independent plan to migrate to the California Public Employees Retirement System (CalPERS) 25 years ago may be a component of the current predicament (see MOORLACH UPDATE — State and OC Cities Finances — August 4, 2019 august 4, 2019 john moorlach and MOORLACH UPDATE — Happy 130th Birthday, Orange County! — August 1, 2019).

Here are a couple of selected paragraphs:

Tom Lightvoet, an investment consultant to the city’s Retirement Committee, objected to the move, saying the city would actually lose money over the years.

Lightvoet said PERS has a deficit of $2.9 billion and that the system assumes investments will earn 8.75% annually. Such an elevated return estimate is unrealistic in this economy he said.

PERS earned only 2% last year and has no surplus to cover this drop, Lightvoet said.

Accountant and political activist John Moorlach, meanwhile, warned the council that going to PERS for police and fire employees would mean relinquishing "control" to the state. Moorlach pointed to problems with pension spiking in Huntington Beach as an example of how cities can lose control.

Why is CA Insurance Commish Ricardo Lara Quiet on Hundreds of Thousands of Homeowners Insurance Cancellations?

Insurance Commish toadies for insurance industry while real estate crisis could be looming

By Katy Grimes

The number of California’s rural homeowners dropped by insurance companies is up to 350,000 in just four years, California Globe recently reported, but that was just through 2018. Since then, homeowners in Riverside and San Bernardino counties have experienced “a surge in insurance companies declining to renew policies, or hiking premiums, in areas with higher risk of wildfire, like Pine Cove in the San Bernardino National Forest, leaving homeowners with few options,” the Press Enterprise reported.

The only communication from California’s troubled Insurance Commissioner came August 20: “I have heard from many local communities about how not being able to obtain insurance can create a domino effect for the local economy, affecting home sales and property taxes,” Insurance Commissioner Ricardo Lara said in a prepared statement on his website. “This data should be a wake-up call for state and local policymakers that without action to reduce the risk from extreme wildfires and preserve the insurance market we could see communities unraveling.”

There is no breakdown on the current rate of cancellations and non-renewals on the Insurance Commissioner website, other than for 2018. This needs to be immediately updated as thousands more homeowners lose their insurance.

Meanwhile, a real estate crisis could be looming because without the ability to properly insure the home, many homeowners say their homes are rendered worthless because they cannot sell them. All mortgage companies require real estate property owners to carry homeowners insurance.

However, the Insurance Commissioner website says, “new data does not measure the full impact of non-renewals of homeowner policies linked to the devastating 2018 wildfires, including the Camp, Carr and Woolsey/Hill fires.”

Why not? They’ve certainly had enough time to update since 2018.

Perhaps because “State Insurance Commissioner, Ricardo Lara, a former Democrat State Senator and Assemblyman, organized a reelection committee that began accepting tens of thousands of dollars in political contributions from people with ties to companies he regulates,” California Globe recently reported. Following “revelations that Lara took oodles of money from the industry prior to making decisions in their favor, gave critics more ammunition to claim that he is an industry shill,” California Insurance Commissioner Ricardo Lara is under fire for his secretive speech to a convention of industry executives where he expressed support for revamping consumer protection laws in their favor.

Additionally, Politico reported, “Lara has charged taxpayers thousands of dollars since his January inauguration for renting a residence in Sacramento, state records show, in an unusual arrangement watchdogs say constitutes an ethical gray area at best — and at worst another political maelstrom for an official already under scrutiny.”

A 2018 report prepared by California Department of Insurance’s Availability and Affordability of Residential Property Insurance Task Force found:

“Since the Valley and Butte wildfires, the California Department of Insurance (CDI) has received increased complaints, evidence, and feedback from consumers, consumer groups, public officials, and other stakeholders that homeowners’ insurance coverage in the WUI is increasingly difficult to obtain and, if available, is unaffordable to many that need it.”


“Many of the currently proposed solutions are based on the expectation that the insurance industry will voluntarily agree to change some of its current business practices and how it uses certain decision-making tools.”

The 2018 report called for a legislative solution:

“The Legislature should create a framework within which insurers will, under certain conditions: (1) offer homeowners’ insurance in the WUI if the insured conducts specific wildfire mitigation, but also permit the insurer to avoid the requirement of offering homeowners’ insurance in the WUI if the insurer instead offers a “difference in conditions” policy or a “premises liability” policy; (2) offer a mitigation premium credit for those property owners that conduct proper mitigation; (3) obtain approval for wildfire-risk models used in rating or underwriting; (4) allow for an appeal process before an adverse decision is finalized; and (5) stabilize the rating structure in order to ensure that homeowners’ insurance rates and premiums are adequate, but not excessive, for the true wildfire risk.”

Gov. Gavin Newsom created a strike force that outlined three major options for handling utilities’ liability costs, but nothing dealing with insurance. The state appeared to be more concerned with its liability, rather than people burned out of their homes. Lawmakers appeared more interested in passing legislation to retrofit homes making for fire safety and prevention.

In July, Sen. John Moorlach (R-Costa Mesa) said in a Sacramento Bee article he was disappointed by what he saw as a limited focus on wildfires in recent budget negotiations. “Where’s the seriousness of it all?” Moorlach said. “I know the governor wants to get something done, but I’m not finding it. … The Democrats aren’t showing a real priority to dealing with wildfires.”

Senate leader Toni Atkins (D-San Diego), told The Sacramento Bee wildfire issues would be “front and center” because “communities are being devastated,” while Assembly Speaker Anthony Rendon cited the state’s housing crisis and wildfires as the two biggest problems lawmakers would focus on going into the legislative session.

Everyone in California is subject to new wildfire underwriting guidelines following the 2018 wildfires under “The Fireline Score.”

The assessment FireLine “is a score from 0-30, and it combines several different risk factors regarding a home, the satellite imagery around the home, and pinpoints it to the property address,” one insurance company explains.

There are three critical factors that affect the risk of wildfire loss:

1. Fuel—Grass, trees, or dense brush can feed a wildfire. FireLine calculates an average of fuels in a 3 radial distance within a mile of the dwelling.

2. Slope—Steeper slopes can increase the speed and intensity of wildfire. They also increase prices of rebuilding if necessary.

3. Access—Identifies whether a dwelling is located where firefighting equipment may have trouble negotiating, such as dead-end roads. FireLine calculates the risk from each of these factors, as well as provides hazard ratings for specific properties. FireLine also identifies properties located in Special Hazard Interface Areas—risks outside fuel areas but exposed to wind-borne embers and high heat from nearby fuels.

According to the Insurance Commissioner: If California residents cannot obtain insurance on the voluntary market, their only options are to find insurance coverage under the FAIR Plan or from surplus lines, often at much higher costs. When looking at the 10 counties with the most homes in high or very high-risk areas, there is a steady rise in new FAIR Plan policies growing 177% between 2015 and 2018. Nearly 57% of the new FAIR Plan policies written are now written in State Responsibility Areas up from 47% in 2015. Between 2015 and 2018, the number of surplus lines policies in the State Responsibility Area increased by 49% (from 10,521 to 15,636).

The 10 counties with the most homes in high or very high-risk areas include Tuolumne, Trinity, Nevada, Mariposa, Plumas, Alpine, Calaveras, Sierra, Amador, and El Dorado. The five counties with the least homes at risk include Yolo, Merced, Sutter, Imperial, and Kings. The 10 counties are being compared to five counties so each set would have roughly the same number of housing units based on Census data. According to the California Department of Finance, in 2018, there were 248,958 housing units in counties with the most high-risk homes and 260,718 housing units in counties with the most low-risk homes.


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MOORLACH UPDATE — Anaphylactic Shock — September 5, 2019

One of the more contentious bills this year has been SB 276, which would complicate the medical exemption process for vaccine-sensitive people (see MOORLACH UPDATE — House of Origin Deadline — May 23, 2019).

After being brought up for surprise debate and a vote on the Assembly Floor on Tuesday evening, yesterday morning it was the first bill the Senate heard because it circumvented normal Senate protocol and jumped to the front of the line. In my floor speech opposing the bill, I explained that I recently added anaphylaxis and anaphylactic shock to my vocabulary. These are the medical terms for a serious, life-threatening allergic reaction. It is why some people carry an EpiPen with them wherever they go.

We are warned in just about every pharmaceutical television ad to not use a promoted drug "if you’re allergic to" it, or to watch for "allergic reactions," and "serious side effects."

I am not opposed to vaccines. As a former Rotarian, I support vaccinations and helped in their campaign to eradicate polio from the planet. Conversely, I am sensitive to allergic reactions.

If an infant is allergic to a vaccine or one of its ingredients, would Sacramento really force the injection? Some toddlers never recover fully from anaphylactic shock. How could we possibly condemn children to live a developmentally disabled life? This is why so many sincere parents, many with more than one child, have been coming up to Sacramento to testify, march and meet with their legislators.

Due to these legitimate concerns, and because California’s Medical Board should be used to weed out the bad actors illegally selling medical exemptions, I voted against SB 276.

Sen. Pan Jamming Gov. Newsom on Vaccine Exemption Bill?

Why did legislative leaders bring SB 276 to vote in Assembly and Senate before Governor’s amendments added?

By Katy Grimes

Not once did Sen. Pan ever acknowledge or address vaccine-injured children.

Is it civil discourse to force people to a lifetime of disability?

The question was posed by a Capitol staffer while Senate Bill 276, to eliminate most physicians vaccine exemptions, was being debated in the Senate Wednesday. It passed 28-11.

SB 276 by Sen. Richard Pan (D-Sacramento), was debated in the Assembly Tuesday. It passed 47-17.

While the importance of civil discourse was discussed along with the merits of the bill, frustrated parents sat in the gallery of both houses of the Legislature. Some booed, some chanted. Floor leaders called for civility in the chambers.

Notably, when protesters are on the side of Democrats, lawmakers often clap and lead them in chants – in chambers.

The primary objection by parents to Senate Bill 276 – it disallows medical exemptions, even for families with previously vaccine-injured children.

Senate Bill 276 would eliminate almost all vaccine medical exemptions, allegedly to crack down on fraud, California Globe reported. “Under this bill, State bureaucrats — not physicians –would be in charge of deciding whether children may receive medical exemptions and thus whether they can attend school.”

Both Tuesday and Wednesday the bill was surprisingly brought to the floor for a vote ahead of amendments Gov. Gavin Newsom wants to add in to the bill. Lawmakers were caught off guard. While they did not break rules to do this, it is disingenuous, and clearly an attempt to jam the Governor. Many are watching to see who stands their ground on this volatile issue.

Recently, in a California Globe op ed, Attorney Mary Holland asked, “When a physician decides that a child is too medically fragile to receive a vaccine, but is not allowed to submit a medical exemption because it is not a listed CDC contraindication, and that child suffers a life-threatening reaction, such as multiple seizures or encephalitis (both listed on vaccine manufacturer inserts), is the doctor liable, or the state official, who denied the exemption?”

Her question was not answered either day in the California Legislature.

Tuesday, Assemblywoman Lorena Gonzalez (D-San Diego) referred to “fake medical exemptions” when presenting SB 276. She said the bill is “based on science.”

In Wednesday’s Senate debate Sen. Scott Wiener (D-San Francisco) also referred to science. “This is about science, and whether we believe it. We’ve seen it around climate change – there are people who deny science.” Wiener said, “this is unacceptable.”

While debating the “science,” and the collective health of the state, the unspoken “collateral damage” of the vaccine-injured children was a constant undercurrent. Not once did Sen. Pan ever acknowledge or address vaccine-injured children.

Tuesday in the Assembly, Assemblyman Adrin Nazarian (D-Van Nuys), who was a co-sponsor of Pan’s SB 277, said SB 276 was an overreach, and wasn’t about the collective health of the state since the herd-immunity level is at 92 percent. “This is an issue of control now,” Nazarian said. With only 1,411 individuals claiming medical exemptions from childhood vaccinations since SB 277 was passed, Nazarian asked, “why aren’t we spending the money in going after that eight percent?” He also noted, “some o our vaccinations haven’t been updated in 52 years.”

Assemblyman Al Muratsuchi (D-Torrance) said SB 276 “is not the right solution. We should focus on the bad actor doctors who may be exploiting the exemptions.”

Each of the legislators who spoke in opposition to SB 276 said they believe in vaccines, and vaccinated their children.

“Sometimes vaccinations have serious complications,” Assemblyman Jay Obernolte (R-Big Bear Lake) said. “It’s rare but it does happen. Parent should be able to make the choice.”

Senator Jeff Stone (R-Temecula), a 30-year practicing pharmacist said, “Immunizations have saved millions of lives.” He noted as an author of Pan’s previous bill, SB 277, “we promised exemptions for children with medical issues.” Stone noted that side effects from vaccines are rare, “but when you see the injuries, they are major. One-size-fits-all doesn’t work.”

A simple solution for doctors abusing exemptions “is to lean on the Medical Board,” Stone said. He questioned why the Department of Health was being given the power to do this instead of the State Medical Board. “It’s an abrogation of responsibility. Now parents will have to appeal to a state bureaucracy and a California Department of Motor Vehicles type of process,” he said.

“Every patient is unique,” Stone said. “The number of exemptions amortized over all vaccinations given… we still have effective herd immunity.”

Senate Republican Leader Shannon Grove brought up the more than 800 doctors offices contacted about medical exemptions.

“Parents say because of this bill, they are already running into doctors offices who won’t touch a valid vaccine exemption request,” California Globe previously reported. “In calling 882 California doctors to ask for a medical exemption for a child who suffered anaphylactic reaction after their 12-month shots, they were told no.”

“Unfortunately at our office we wouldn’t do that for you.”

“Our doctors do not write medical exemptions.”

“We have a strict rule here that all children are immunized without exception.”

Parents put together a Youtube video about this:.

Sen. John Moorlach (R-Costa Mesa) weighed in: “Scaring and limiting medical professionals who are trying to prevent anaphylaxis is, in my opinion, legislative malpractice.”

Sen. Pan doubled down in his close: “We all want freedom… without catching a dangerous disease.”

Many are now waiting for Gov. Gavin Newsom’s amendments, as well as the reaction by Sen. Richard Pan.


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MOORLACH UPDATE — 2018 County Per Capita UNPs — September 4, 2019

My rankings of California’s 58 counties last year have been modified for two counties (see MOORLACH UPDATE — San Francisco County #56/57 — March 20, 2018).

Modoc County has been traditionally late for every county ranking I’ve prepared over the last seven years. We were able to obtain the Unrestricted Net Deficit for Modoc for June 30, 2016, and its unfunded Other Post Employment Benefits (OPEBs) for the years ended June 30, 2017 and 2018 to come up with reasonable estimates.

Imperial County is a mystery. Last year we used their June 30, 2016 Comprehensive Annual Financial Report (CAFR) number. Their June 30, 2017 CAFR reflected a positive Net Unrestricted Assets. It looks like there was a reclassification of what was considered restricted in 2017. Their position reversed for the year ended June 30, 2018. Add to that the OPEB liabilities of $268,150,000 and it had a dramatic drop in the rankings.

The first chart below provides the rankings of all 58 counties by the per capita Unrestricted Net Position (UNP) for the year ended June 30, 2018. The second chart compares the rankings between June 30, 2018 and 2017. The third chart lists and compares the UNPs in order, from largest to lowest, for 2018 and 2017.

The total combined Unrestricted Net Deficit for the 58 counties has grown by $13.5 billion, up by 32.5%, with LA County representing $10.4 billion (77%) of the increase. All the same, the county rankings have not moved dramatically when reviewing the UNPs (other than the anomaly of Imperial County), as can be seen in the third chart. But, the per capita rankings in the second chart saw some volatility for a few of the counties and it would be interesting to learn their individual stories.

County Rankings — Year Ended June 30, 2018

Rank County 2018 Population Estimate 2018 UNP/Cap
1 San Mateo 774,155 $969,478,000 $1,252
2 Alameda 1,660,202 $163,925,000 $99
3 San Benito 57,088 ($2,901,358) ($51)
4 Ventura 859,073 ($167,704,000) ($195)
5 Napa 141,294 ($45,421,748) ($321)
6 San Diego 3,337,456 ($1,250,068,000) ($375)
7 Tulare 475,834 ($193,115,000) ($406)
8 Monterey 443,281 ($180,147,335) ($406)
9 San Bernardino 2,174,938 ($887,566,000) ($408)
10 Stanislaus 555,624 ($308,359,785) ($555)
11 Lake 65,081 ($43,801,385) ($673)
12 Solano 439,793 ($316,265,304) ($719)
13 Fresno 1,007,229 ($735,368,000) ($730)
14 Kings 151,662 ($115,419,194) ($761)
15 San Luis Obispo 280,101 ($217,606,000) ($777)
16 Riverside 2,415,955 ($1,947,282,000) ($806)
17 Amador 38,094 ($30,960,943) ($813)
18 Contra Costa 1,149,363 ($939,047,000) ($817)
19 Calaveras 45,157 ($38,290,054) ($848)
20 Tehama 64,039 ($55,231,805) ($862)
21 Marin 263,886 ($244,489,974) ($926)
22 Yolo 221,270 ($206,494,891) ($933)
23 Placer 389,532 ($383,463,000) ($984)
24 Merced 279,977 ($285,353,575) ($1,019)
25 Orange 3,221,103 ($3,312,306,000) ($1,028)
26 Lassen 30,911 ($32,044,808) ($1,037)
27 San Joaquin 758,744 ($811,650,698) ($1,070)
28 Santa Clara 1,956,598 ($2,277,610,000) ($1,164)
29 Sutter 97,238 ($115,810,680) ($1,191)
30 Butte 227,621 ($279,061,376) ($1,226)
31 Santa Barbara 453,457 ($562,947,000) ($1,241)
32 Sonoma 503,332 ($649,958,000) ($1,291)
33 Nevada 99,155 ($130,832,826) ($1,319)
34 Shasta 178,271 ($250,319,261) ($1,404)
35 El Dorado 188,399 ($276,994,712) ($1,470)
36 Santa Cruz 276,864 ($425,382,137) ($1,536)
37 Humboldt 136,002 ($221,987,842) ($1,632)
38 Sacramento 1,529,501 ($2,531,677,000) ($1,655)
39 Plumas 19,773 ($34,330,857) ($1,736)
40 Modoc 9,612 ($17,378,222) ($1,808)
41 Kern 905,801 ($1,689,857,000) ($1,866)
42 Madera 158,894 ($314,570,478) ($1,980)
43 Mendocino 89,299 ($177,033,033) ($1,982)
44 Imperial 190,624 ($378,258,000) ($1,984)
45 Tuolumne 54,740 ($121,719,478) ($2,224)
46 Yuba 74,727 ($173,947,680) ($2,328)
47 Colusa 22,098 ($56,012,370) ($2,535)
48 Siskiyou 44,612 ($113,592,214) ($2,546)
49 Los Angeles 10,283,729 ($29,158,786,000) ($2,835)
50 Mono 13,822 ($40,825,597) ($2,954)
51 San Francisco 883,963 ($2,950,722,000) ($3,338)
52 Glenn 28,796 ($102,630,299) ($3,564)
53 Inyo 18,577 ($71,371,486) ($3,842)
54 Mariposa 18,129 ($80,099,278) ($4,418)
55 Del Norte 27,221 ($127,409,084) ($4,681)
56 Sierra 3,207 ($20,736,868) ($6,466)
57 Trinity 13,635 ($92,606,153) ($6,792)
58 Alpine 1,154 ($11,678,443) ($10,120)

UNP Per Capitas – YE June 30, 2018 vs June 30, 2017

Rank County UNP/Cap Rank County Per Capita Change
1 San Mateo $1,252 1 San Mateo $1,341 0
2 Alameda $99 2 Imperial $143 -42
3 San Benito ($51) 3 Alameda $70 1
4 Ventura ($195) 4 San Benito ($78) 1
5 Napa ($321) 5 Napa ($142) 0
6 San Diego ($375) 6 Ventura ($231) 2
7 Tulare ($406) 7 Tulare ($321) 0
8 Monterey ($406) 8 San Diego ($347) 2
9 San Bernardino ($408) 9 Monterey ($357) 1
10 Stanislaus ($555) 10 Marin ($385) -11
11 Lake ($673) 11 Stanislaus ($458) 1
12 Solano ($719) 12 San Bernardino ($465) 3
13 Fresno ($730) 13 Lake ($529) 2
14 Kings ($761) 14 Kings ($532) 0
15 San Luis Obispo ($777) 15 Placer ($555) -8
16 Riverside ($806) 16 Solano ($660) 4
17 Amador ($813) 17 Lassen ($687) -9
18 Contra Costa ($817) 18 Riverside ($709) 2
19 Calaveras ($848) 19 Tehama ($724) -1
20 Tehama ($862) 20 Amador ($749) 3
21 Marin ($926) 21 San Luis Obispo ($810) 6
22 Yolo ($933) 22 Santa Clara ($819) -6
23 Placer ($984) 23 Calaveras ($839) 4
24 Merced ($1,019) 24 Sonoma ($906) -8
25 Orange ($1,028) 25 Shasta ($937) -9
26 Lassen ($1,037) 26 Fresno ($943) 13
27 San Joaquin ($1,070) 27 Orange ($963) 2
28 Santa Clara ($1,164) 28 Butte ($999) -2
29 Sutter ($1,191) 29 San Joaquin ($1,045) 2
30 Butte ($1,226) 30 Nevada ($1,081) -3
31 Santa Barbara ($1,241) 31 Contra Costa ($1,093) 13
32 Sonoma ($1,291) 32 Merced ($1,114) 8
33 Nevada ($1,319) 33 Yolo ($1,145) 11
34 Shasta ($1,404) 34 Santa Barbara ($1,183) 3
35 El Dorado ($1,470) 35 Sutter ($1,216) 6
36 Santa Cruz ($1,536) 36 El Dorado ($1,219) 1
37 Humboldt ($1,632) 37 Alpine ($1,228) -21
38 Sacramento ($1,655) 38 Santa Cruz ($1,313) 2
39 Plumas ($1,736) 39 Madera ($1,414) -3
40 Modoc ($1,808) 40 Mono ($1,441) -10
41 Kern ($1,866) 41 Humboldt ($1,465) 4
42 Madera ($1,980) 42 Sacramento ($1,553) 4
43 Mendocino ($1,982) 43 Colusa ($1,561) -4
44 Imperial ($1,984) 44 Plumas ($1,582) 5
45 Tuolumne ($2,224) 45 Modoc ($1,774) 5
46 Yuba ($2,328) 46 Los Angeles ($1,829) -3
47 Colusa ($2,535) 47 Tuolumne ($1,830) 2
48 Siskiyou ($2,546) 48 Mendocino ($1,834) 5
49 Los Angeles ($2,835) 49 Siskiyou ($1,836) 1
50 Mono ($2,954) 50 Kern ($1,914) 9
51 San Francisco ($3,338) 51 Del Norte ($1,917) -4
52 Glenn ($3,564) 52 Mariposa ($2,046) -2
53 Inyo ($3,842) 53 Yuba ($2,053) 7
54 Mariposa ($4,418) 54 Inyo ($2,206) 1
55 Del Norte ($4,681) 55 Glenn ($2,294) 3
56 Sierra ($6,466) 56 San Francisco ($2,929) 5
57 Trinity ($6,792) 57 Trinity ($3,977) 0
58 Alpine ($10,120) 58 Sierra ($5,360) 2

UNP — Year Ended June 30, 2018 versus June 30,2017

Rank County 2018 Rank County 2017 Change
1 San Mateo $969,478,000 1 San Mateo $1,032,917,000 0
2 Alameda $163,925,000 2 Alameda $115,106,000 0
3 San Benito ($2,901,358) 3 Imperial $26,949,000 -39
4 Alpine ($11,678,443) 4 Alpine ($1,413,568) 0
5 Modoc ($17,378,222) 5 San Benito ($4,444,297) 2
6 Sierra ($20,736,868) 6 Modoc ($16,992,162) 1
7 Amador ($30,960,943) 7 Sierra ($17,190,950) 1
8 Lassen ($32,044,808) 8 Mono ($19,765,256) -3
9 Plumas ($34,330,857) 9 Napa ($20,269,000) -4
10 Calaveras ($38,290,054) 10 Lassen ($21,243,147) 2
11 Mono ($40,825,597) 11 Amador ($28,746,924) 4
12 Lake ($43,801,385) 12 Plumas ($31,353,531) 3
13 Napa ($45,421,748) 13 Lake ($34,337,436) 1
14 Tehama ($55,231,805) 14 Colusa ($34,403,557) -1
15 Colusa ($56,012,370) 15 Mariposa ($37,130,513) -2
16 Inyo ($71,371,486) 16 Calaveras ($37,912,384) 6
17 Mariposa ($80,099,278) 17 Inyo ($41,082,055) 1
18 Trinity ($92,606,153) 18 Tehama ($46,360,517) 4
19 Glenn ($102,630,299) 19 Del Norte ($51,993,373) -5
20 Siskiyou ($113,592,214) 20 Trinity ($54,192,327) 2
21 Kings ($115,419,194) 21 Glenn ($65,896,660) 2
22 Sutter ($115,810,680) 22 Kings ($79,544,253) 1
23 Tuolumne ($121,719,478) 23 Siskiyou ($82,058,669) 3
24 Del Norte ($127,409,084) 24 Tuolumne ($100,120,000) 1
25 Nevada ($130,832,826) 25 Marin ($101,488,000) -9
26 Ventura ($167,704,000) 26 Nevada ($106,803,720) 1
27 Yuba ($173,947,680) 27 Sutter ($117,888,830) 5
28 Mendocino ($177,033,033) 28 Tulare ($151,683,000) -2
29 Monterey ($180,147,335) 29 Yuba ($153,077,504) 2
30 Tulare ($193,115,000) 30 Monterey ($157,800,000) 1
31 Yolo ($206,494,891) 31 Mendocino ($163,486,575) 3
32 San Luis Obispo ($217,606,000) 32 Shasta ($167,268,000) -3
33 Humboldt ($221,987,842) 33 Ventura ($198,202,000) 7
34 Marin ($244,489,974) 34 Humboldt ($200,656,339) 1
35 Shasta ($250,319,261) 35 Placer ($212,323,000) -8
36 El Dorado ($276,994,712) 36 Madera ($221,281,000) -4
37 Butte ($279,061,376) 37 El Dorado ($225,513,596) 1
38 Merced ($285,353,575) 38 Butte ($226,249,000) 1
39 Stanislaus ($308,359,785) 39 San Luis Obispo ($226,970,000) 7
40 Madera ($314,570,478) 40 Yolo ($250,552,000) 9
41 Solano ($316,265,304) 41 Stanislaus ($250,775,999) 2
42 Imperial ($378,258,000) 42 Solano ($287,817,986) 1
43 Placer ($383,463,000) 43 Merced ($305,869,526) 5
44 Santa Cruz ($425,382,137) 44 Santa Cruz ($363,117,518) 0
45 Santa Barbara ($562,947,000) 45 Sonoma ($457,536,000) -1
46 Sonoma ($649,958,000) 46 Santa Barbara ($532,968,000) 1
47 Fresno ($735,368,000) 47 San Joaquin ($780,575,000) -1
48 San Joaquin ($811,650,698) 48 Fresno ($939,690,000) 1
49 San Bernardino ($887,566,000) 49 San Bernardino ($1,004,921,000) 0
50 Contra Costa ($939,047,000) 50 San Diego ($1,151,817,000) -1
51 San Diego ($1,250,068,000) 51 Contra Costa ($1,245,474,000) 1
52 Kern ($1,689,857,000) 52 Santa Clara ($1,586,614,000) -2
53 Riverside ($1,947,282,000) 53 Riverside ($1,689,770,000) 0
54 Santa Clara ($2,277,610,000) 54 Kern ($1,713,301,000) 2
55 Sacramento ($2,531,677,000) 55 Sacramento ($2,351,925,000) 0
56 San Francisco ($2,950,722,000) 56 San Francisco ($2,560,735,000) 0
57 Orange ($3,312,306,000) 57 Orange ($3,074,958,000) 0
58 Los Angeles ($29,158,786,000) 58 Los Angeles ($18,728,499,000) 0


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MOORLACH UPDATE — Hart, Handy and OPEBs — August 29, 2019

Protecting Parks

This year, I have been working with the City of Orange to protect Hart Park and Handy Park with Senate Bill 447 (see

Caltrans wants to get out of the land leasing business and wishes to sell certain holdings at fair market value. This becomes an issue when the land in question is in the middle of a public park. The OC Register addresses this conundrum over Hart and Handy Parks in the first piece below.

By coincidence, I met with the Chair of the Senate Transportation Committee, Sen. Jim Beall, this morning to discuss the bill and various alternatives to accomplishing a successful and fair transition to the City of Orange.

Financial Woes

The second piece is from The Reporter and provides a look at one California city dealing with its unfunded retiree medical liabilities, the main part of its Other Post Employment Benefits (OPEBs). It may be a preview of what the Golden State’s other 481 cities will be dealing with in the months and years to come.

Fifty State Update

Speaking of OPEBs, the state of Illinois released its Comprehensive Annual Financial Report this morning. Last week I estimated an Unrestricted Net Deficit of $217.3 billion for the Land of Lincoln. The actual amount is $209.9 billion. This means California has dropped from 48th to 49th place in last week’s rankings based on the Unrestricted Net Positions, with Illinois now in 48th (see MOORLACH UPDATE — 2018 State Per Capita UNPs — August 22, 2019).

Fox and Hounds was also kind enough to publish our report (see

25th Anniversary Look Back

On August 30, 1994, in a “the band played on” scenario, the Orange County Board of Supervisors approved the issuance of Pension Obligation Bonds (POBs) for refinancing its supposed Unfunded Actuarial Accrued Liability, a liability due to the Orange County Employees Retirement System (OCERS).

The truth was, Robert Citron was running out of cash to make the collateral (margin) calls and OCERS put the cash proceeds into his Orange County Investment Pool (also see MOORLACH UPDATE — SB 598 Moves On — May 16, 2019). One of the two issuances provided that the Investment Pool would purchase back any bonds the owners could not sell in the open market through a remarketing agent.

When the Investment Pool also filed for Chapter 9 bankruptcy protection, it could not honor this provision. The default on these particular POBs is what shattered Orange County’s great credit rating for years to follow. It was also a point of malfeasance, as the Board of Supervisors approved the POBs knowing that interest income was a significant component of the County’s annual budget. It was also revealed that there had been collateral calls during the prior months (thanks to my campaign).

The Securities and Exchange Commission conducted an investigation. Its January 26, 1996 report stated that the Orange County “Supervisors testified that they did not understand the investment strategy, the risks of that strategy or the potential risk of loss to the County Pools’ principal” (see Consequently, I read everything as the County Treasurer-Tax Collector and Supervisor, and continue this discipline as a State Senator.

Orange is trying to save Handy and Hart parks before its leases with Caltrans expire


Two of Orange’s most popular parks, Hart and Handy, may get chipped away at in the next few years, and city officials are reaching out to the state leadership to intervene.

Caltrans for nearly 50 years has leased Orange 9 out of 41 acres in Hart Park and 6 out of 7 acres in Handy Park. But in 2017, the agency notified the city it will not renew the leases, which expire in 2023 for Hart Park and 2024 for Handy Park.

Caltrans’ guidelines would require the agency sell the property to the city at fair market value, Orange Community Services Director Bonnie Hagan said. That could be nearly $2.3 million, according to an appraisal commissioned by the city last year.

State Sen. John Moorlach, a Republican who represents most of Orange, has proposed a bill that would let Caltrans to transfer the land to Orange as long as the city agrees to keep it as parks in perpetuity. That could allow the city to buy their parks for much less – possibly even free.

The bill, which has been held over to the 2020 legislative year for more discussion, “would ensure those two crucial public parks continue to be recreational and open space forever,” Hagan said.

“There is no telling what may become of these parks if the city cannot guarantee their future,” Moorlach said in a committee hearing in April, describing the parks as popular to his colleagues.

The Orange City Council is spending $30,000 on lobbying for its passage.

Caltrans also owns the majority of Cascade Park off the 405 Freeway, and Westminster’s lease for the park is also up soon. Westminster Public Works Director Marwan Youssef said he contacted the city’s attorneys to have them get in touch with Orange officials to learn more about the proposed bill.

As the state agency built the 55 and 22 freeways in the 1950s and the 1960s, Caltrans came to own land in Orange for potential improvements. Orange signed a 50-year lease with Caltrans in the mid-1970s to use some of the property for park space.

At Hart Park, the Caltrans-owned property next to the 22 Freeway is used for a softball field, restrooms and the historic orange grove.

In Handy Park, the property next to the 55 Freeway is set aside for two softball fields, two sand volleyball courts and a snack bar building, among other amenities.

Caltrans officials alerted city leaders in 2017 the agency intends to decommission the lands once their leases expire. An agency spokeswoman, citing pending legislation, declined to comment.

Under agency guidelines, the city will be given the first opportunity to buy the property. If the city can buy the land at what Hagan called a “fair and reasonable price,” perhaps based on how much Caltrans paid in the first place, the city could save a lot of money while preserving its park spaces, she said.

“It doesn’t necessarily have to be free,” she said. But, “it’s about ensuring those stay as parks in perpetuity and the taxpayers pay an appropriate amount.”

Vacaville City Council approves grand jury response, suggests looking into creation of citizens advisory committee


The Vacaville City Council approved the city’s response to a Solano County Grand Jury report scrutinizing the city’s retirement benefits package, while suggesting the city look into establishing a citizens advisory committee.

On June 25, the grand jury authored a report warning that the city’s Other Post-Employment Benefit (OPEB) package for city retirees was “not sustainable” and would lead to a loss of employees and services to citizens if not addressed.

Among the report’s recommendations were to establish a citizens oversight committee to study OPEB and make recommendations to the council, placing OPEB-related items on the council’s main agenda rather than the consent calendar and directing staff to include the fiscal impact of changes and methodology used in determining the financial impact of OPEB in simpler language.

The city partially disagreed with several of the report’s findings, including the implementation of a citizens oversight committee. The city noted that it was making “steady progress” to address the city’s unfunded liability and such a committee was “not necessary” at the moment.

The city’s full response can be viewed at

During the public comment portion, several speakers took issue with the city’s response. Resident Danny Wells delivered a presentation, highlighting the city’s financial status. He cited a report by Sen. John Moorlach which ranked Vacaville in the bottom 10 percent among California’s 482 cities and that Vacaville had only 23 percent of the asset reserves to cover an OPEB liability of $106 million, leaving an unfunded liability of $82 million. He also took issue with the City Council approving an 11 percent pay raise for firefighters.

“The benefits of this is $3.7 million that had not been previously budgeted for this purpose, using essentially all of Measure M funds for the firefighters contract alone in 2023,” he said.

Former Councilman Curtis Hunt saw the grand jury report as “a platform to make real change and come up with public policy.” He subsequently expressed three points: lifetime retired medical benefits for employees and their families was not sustainable, that 85 percent of Kaiser continued to expose the city to major fiscal risk and that memorandums of understanding between labor groups should not be placed on the consent calendar as they have in the past.

“The consent calendar is for items that require little or no discussion (and) are not controversial,” he said of the third point. “Yet, the last two council meetings…you have made efforts to approve a 9 percent increase to police salaries, an 11 percent increase to firefighters in the consent calendar.”

Hunt suggested more time was needed for the city to develop, short-term, long-term and medium strategies.

“Your dismissive response to the grand jury is really poking a bear,” he said. “The next six months, you’ll see whether you’ve poked a teddy bear or whether you’ve poked a grizzly bear.”

George Guynn, past president of the Solano County Taxpayers’ Association, suggested the council take the grand jury’s recommendations into consideration.

“They’re gonna help you get in a position where you don’t have a lot of people trying to peck on you all the time,” he said.

Several speakers suggested the city seriously consider the recommendation of a citizens oversight committee.

“Way too often, things happen in here that the community doesn’t know about until it’s actually happening and they can’t do anything about it,” resident Alice Reed said. “Just listening to people that were here tonight shows that there’s a lot of good, smart people out here that can help you solve this problem.”

Vice Mayor Dilenna Harris agreed with the report that all matters concerning OPEB or MOUs should be on the regular agenda rather than the consent calendar.

“I don’t want to discuss that more,” she said. “I want that to happen.”

Councilman Nolan Sullivan agreed that a citizens oversight committee should be established, containing at least one active retiree, employee and the city treasurer.

“We have a duty to educate and engage the public, and I think this is a great opportunity to do that,” he said.

Councilman Mitch Mashburn said that past councils had worked hard to eliminate OPEB.

“We have to do this through a negotiation process with the employees,” he said. “As Vice Mayor Harris pointed out, that ends up being an expensive proposition.”

Mashburn also corrected the citation of an 11 percent raise for firefighters.

“That’s in totality over four years,” he said. “If we were to look back to 2008 and in totality look at the raises that the employees gave up for the money that they gave back, and what they have gained since then. Our firefighters have gained about 1 percent a year, which doesn’t even keep up with inflation.”

Finally, Mashburn took issue with a citizen-based committee being termed an “oversight committee” because it suggested the committee would have some jurisdiction over OPEB policies.

“I would not be in support of the council surrendering any of its responsibilities or its authority with regard to governance of the policy in regard to OPEB,” he said.

However, Mashburn said he would support a citizens advisory committee to provide suggestions to the council.

“I’m always open to solutions,” he said.

Mayor Ron Rowlett asked City Manager Jeremy Craig if the council would have to go over what an advisory committee would entail. Craig said it could come back as an item at a later council meeting.

The council unanimously voted to accept the response with the suggestion of setting aside time to formulating the methodology of establishing a citizens advisory committee and stipulating that OPEB and MOU items always be placed on the main agenda.

In other business, the council unanimously approved an ordinance levying special taxes within the annexed property of the Farmstead at North Orchard property to pay for police and fire services.

The council’s next scheduled meeting on Sept. 10 has been canceled. The next regular meeting will be Sept. 24.


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MOORLACH UPDATE — SCR 21 Honoring Michael Kreza — August 28, 2019

Resolutions are few and special. Senator Pat Bates and I joint-authored Senate Concurrent Resolution 21, which received a unanimous roll call during Monday afternoon’s Senate Floor Session. We have Assemblymembers Brough and Petrie-Norris as Principal Coauthors and Senators Chang and Umberg as Coauthors. It’s an OC bipartisan effort. So you can see, this effort is special in more ways than one.

The effort is to recognize Costa Mesa Fire Captain Michael Kreza, who was killed while riding his bicycle last November by a driver being charged with driving under the influence and second-degree murder. He left behind his wife and three daughters. I have individuals who were close to me and my family who have recently died when struck by moving vehicles where the drivers made mental errors. It’s very traumatic and tragic and the pain lingers. I wish I could find a way to legislate smarter driving to protect innocent pedestrians and bicyclists. Consequently, my heart goes out to the Kreza family for their loss.

Donations can be made to the Kreza Family and the Costa Mesa Widows and Orphans Fund.

Here is the Resolution in full, followed by the pieces in, Patch Newport Beach/Corona del Mar, the Daily Pilot and the OC Register.

WHEREAS, The untimely passing of Costa Mesa Fire & Rescue Captain Michael Kreza, at 44 years of age, on November 5, 2018, has brought a sense of immense sorrow and loss to people throughout California; and
WHEREAS, Fire Captain Michael Kreza was a distinguished California firefighter and much-loved family man, whose character, integrity, and singular commitment earned him the respect and admiration of his fellow firefighters, the members of the greater Costa Mesa community, and the countless other individuals whose lives he touched; and
WHEREAS, Michael Kreza, who was the son of a police officer, grew up in the City of Irvine and chose to follow in his father’s footsteps by engaging his passion in a career protecting the public, and enrolled in fire science classes at Santa Ana College after high school, which inaugurated his commitment to the firefighting profession as a Paid Call Firefighter with the Orange County Fire Authority; and
WHEREAS, Following his graduation from the Crafton Hills Fire Academy in 1993, Michael Kreza sought to further advance his emergency responder skills, and while working in the Hoag Hospital Irvine Emergency Department, he was accepted to the Paramedic Program at Saddleback College, from which he graduated in 1997; and
WHEREAS, Having subsequently gained experience as an Emergency Department Technician in Seattle, Washington, and as a paramedic in Las Vegas, Nevada, Michael Kreza returned to California, where he worked as a firefighter for the Big Bear Fire Department before being hired in 2000 by the Costa Mesa Fire & Rescue Department; and
WHEREAS, Throughout his 18-year tenure with Costa Mesa Fire & Rescue, Fire Captain Kreza brought his tireless dedication and boundless zeal to the force through his participation as a wholly engaged member of the department’s close-knit firefighting community, within which he shared his experience and leadership by, among other things, serving as a member of the Tools and Equipment Committee, managing the charity fund, and participating in the Honor Guard; and
WHEREAS, As Michael Kreza rose to the rank of Fire Captain and took his well-merited position as an esteemed veteran of the Costa Mesa Fire & Rescue Department, Fire Captain Kreza also served as an ever-inspiring role model, pursued his love of being an accomplished Ironman athlete, earned a bachelor’s degree from Columbia Southern University, and continually derived joy from his role as a devoted husband to his wife, Shanna, and a loving father to his three daughters; and
WHEREAS, The people of California have a special and enduring respect for the valiant individuals who daily commit themselves to the often perilous duties performed by firefighters, and the exceptional respect Fire Captain Kreza earned among his fellow firefighters and within the City of Costa Mesa bears testament to the positive impact he had in his community and in the lives of his fellow firefighters by virtue of his estimable character, leadership, and sincere concern for others; and
WHEREAS, Fire Captain Michael Kreza exemplified all the best attributes of a professional firefighter, who was known to be the heart of his family, and who leaves to mourn his passing and celebrate his legacy his devoted wife, Shanna, his daughters, Kaylie, Layla, and Audrey, and the members of the Costa Mesa Fire & Rescue Department, all of whom had the good fortune to share his company during his all too brief time with them; now, therefore, be it
Resolved by the Senate of the State of California, the Assembly thereof concurring, That the Legislature expresses its deepest sympathy at the passing of Fire Captain Michael Kreza of the Costa Mesa Fire & Rescue Department and, by this resolution, memorializes him for his exemplary record of personal, professional, and civic achievements, as well as the love and devotion he shared with his family and friends by designating the portion of State Route 55 from 19th Street (PM 2.021) to MacArthur Boulevard (R6.985) in the County of Orange as the Costa Mesa Fire Captain Michael Kreza Memorial Highway; and be it further
Resolved, That the Department of Transportation is requested to determine the cost of appropriate signs consistent with the signing requirements for the state highway system showing this special designation and, upon receiving donations from nonstate sources sufficient to cover the cost, to erect those signs; and be it further
Resolved, That the Secretary of the Senate transmit copies of this resolution to the Director of Transportation and to the author for appropriate distribution.

Stretch of Costa Mesa Freeway to Be Named in Honor of Late Fire Captain


A stretch of the Costa Mesa (55) Freeway will be designated in honor of a Costa Mesa Fire & Rescue Department captain who was struck and killed while bicycling following unanimous approval of a resolution by the state Senate Monday.

The freeway will be known as the Costa Mesa Fire Captain Michael Kreza Memorial Highway between 19th Street in Costa Mesa to MacArthur Boulevard on the border of Irvine and Santa Ana.

Because Senate Concurrent Resolution 21 was previously approved by the Assembly, it will soon become law as it does not need Gov. Gavin Newsom’s signature.

“No words and no act can ever truly express the gratitude that we have for Capt. Mike Kreza’s life of service,” said Sen. Patricia Bates, R-Laguna Niguel, who co-authored the resolution with Sen. John Moorlach, R-Costa Mesa.

“However, I do hope that the highway naming in his honor will remind people of his commitment to keep Orange County safe. May his memory continue to inspire others as we need more role models like him.”

Kreza, 44, was off duty and training for a triathlon when he was struck by a van driven by Stephen Taylor Scarpa about 8 a.m. Nov. 3 in Mission Viejo and died two days later, according to Carrie Braun of the Orange County Sheriff’s Department.

Scarpa has been charged with second-degree murder and DUI. Sheriff’s investigators found several prescription medications in the van, Braun said.

Costa Mesa Fire Captain’s Memory Honored Through Freeway Renaming

In a unanimous decision, a stretch of the 55 Freeway will bear the name of CM Fire Capt. Mike Kreza, struck and killed in November of 2018.

By Ashley Ludwig, Patch Staff

COSTA MESA, CA — A Costa Mesa Fire and Rescue captain is having a stretch of the 55 Freeway named in his honor. The California state Senate approved the motion on Monday, made by Orange County state Senators John Moorlach and Patricia Bates.

The freeway will now be known as the Costa Mesa Fire Captain Michael Kreza Memorial Highway between 19th Street in Costa Mesa to MacArthur Boulevard on the border of Irvine and Santa Ana.

The Senate Concurrent Resolution 21 was previously approved by the Assembly, and will soon become law, and does not require Gov. Gavin Newsom’s signature to take effect.

Kreza was struck while off duty and training for a triathlon in Mission Viejo in Nov. of 2018. He died two days later, surrounded by loved ones.

The van driver, Stephen Taylor Scarpa, was charged with second-degree murder and DUI. Sheriff’s investigators found several prescription medications in the van, Orange County Sheriff’s Department spokeswoman Carrie Braun said.

Kreza was an 18-year veteran of the department.

“We are eternally grateful for the outpouring of support from our brothers and sisters from fire departments, law enforcement agencies, and the collective communities throughout the state,” the Costa Mesa Fire Department said at the time of his death.

“No words and no action can ever truly express the gratitude that we have for Capt. Mike Kreza’s life of service,” said Sen. Patricia Bates, R- Laguna Niguel, who co-authored the resolution with Sen. John Moorlach, R-Costa Mesa. “However, I do hope that the highway naming in his honor will remind people of his commitment to keeping Orange County safe. May his memory continue to inspire others as we need more role models like him.”

Donations to the Kreza Family, and the Costa Mesa Widows and Orphans fund, are still being accepted.

Capt. Mike Kreza and family.Capt. Mike Kreza and family. (GoFundMe Photo)

Stretch of 55 Freeway will be named for late Costa Mesa fire captain

3065412_tn-dpt-me-kreza-memorial-A floral arrangement sits outside the November memorial service for Costa Mesa fire Capt. Mike Kreza.
(File Photo)


A 5-mile stretch of the 55 Freeway running through Costa Mesa will be named in honor of a city fire captain who died last year after being struck by an allegedly impaired driver.

The newly designated “Costa Mesa Fire Captain Michael Kreza Memorial Highway” will run from 19th Street to MacArthur Boulevard, thanks to a resolution the state Senate and Assembly passed this month.

Kreza, 44, of Rancho Santa Margarita was based at Costa Mesa Fire Station 6 near South Coast Plaza and was an 18-year veteran of the Costa Mesa Fire & Rescue Department. He died Nov. 5, two days after being hit by a van while riding his bicycle off-duty in Mission Viejo. He is survived by his wife and three young daughters.

“The people of California have a special and enduring respect for the valiant individuals who daily commit themselves to the often perilous duties performed by firefighters, and the exceptional respect Fire Captain Kreza earned among his fellow firefighters and within the city of Costa Mesa bears testament to the positive impact he had in his community and in the lives of his fellow firefighters by virtue of his estimable character, leadership and sincere concern for others,” the Legislature-approved resolution states.

State Sens. John Moorlach (R-Costa Mesa) and Pat Bates (R-Laguna Niguel) sponsored the resolution, which passed the Senate without dissent Monday and likewise cleared the Assembly last Thursday. Assemblywoman Cottie Petrie-Norris (D-Laguna Beach) was a co-sponsor.

The Costa Mesa City Council also unanimously backed the resolution in May.

The state Department of Transportation will use donated funds to erect signs showing the special designation. The cost is yet to be determined.

“Family, crew members and visitors to our city will always remember Mike Kreza,” the Costa Mesa Firefighters Assn. wrote in a Facebook post about the resolution.

The man accused of driving the van that struck Kreza — Stephen Taylor Scarpa, 25, of Mission Viejo — is charged with one count of murder. He previously pleaded not guilty.

Sheriff’s deputies and a forensic toxicologist testified at a court hearing last week that Scarpa showed signs of impairment right after the crash, and tests showed he had several substances in his blood, including methamphetamine, painkillers and sedatives.

Stretch of 55 will be named after
Costa Mesa firefighter, fatally
struck by motorist

After unanimous approval by the state Senate on Monday, Aug. 26, a stretch of the 55 Freeway will be dedicated to Costa Mesa Fire & Rescue Captain Michael Kreza who died in November 2018 after being struck by a suspected DUI driver. (File Photo by Mark Rightmire, Orange County Register/SCNG)By ALMA FAUSTO

A Costa Mesa fire captain who authorities say was fatally struck while riding his bicycle by a suspected DUI motorist is set to get a stretch of the 55 Freeway named in his honor.

The proposal, unanimously approved by the state Senate on Monday, Aug. 26, will name the freeway, from 19th Street to MacArthur Boulevard, the Costa Mesa Fire Captain Michael Kreza Memorial Highway. The Assembly had already approved it.

The 18-year veteran of Costa Mesa Fire & Rescue died Nov. 5, 2018, two days after getting hit while he was off-duty and cycling in Mission Viejo, training for his next Ironman competition.

Sen. Patricia Bates, R-Laguna Niguel, co-authored the resolution with Sen. John Moorlach, R-Costa Mesa.

Kreza lived in Rancho Santa Margarita, a city in Bates’ district.

“There’s so much community interest and it’s hard, especially when we lose hometown heroes,” she said on Tuesday. “I reached out to his family and to the Costa Mesa fire department about doing something to honor him.”

That strip of freeway is close to Station No. 3, where Kreza was first stationed.

“It’s something to remember his career of service to this county,” Bates said.

Two signs, covered by donations, will be put up by Caltrans, perhaps sometime next year.

In a memorial Facebook page run by Kreza’s family, his wife, Shanna, wrote: “I envision when the girls are teenagers they will be able to drive that stretch and see their daddy’s sign every time they go to the beach.”

The 44-year-old’s hospitalization and subsequent death prompted an outpouring of support for his wife, three young daughters and colleagues and led to community events in his honor, including fundraisers and bike rides.

Kreza attended Irvine High School and Santa Ana College. He was a paramedic and firefighter in Seattle, Las Vegas and Big Bear before joining Costa Mesa Fire & Rescue.

The fire captain’s passion for triathlons and other athletic activities earned him the nickname “Ironman Mike.”

Stephen Taylor Scarpa, 25, of Mission Viejo is accused of driving the van while under the influence of a controlled substance. He faces a charge of murder. Scarpa told investigators that he was on prescribed medications.

“Captain Kreza served with distinction and it is right to memorialize him with this segment of the Costa Mesa Freeway,” Moorlach said in a statement. “I’m hoping it will also be a reminder that vehicle operators need to be respectful of bicyclists and pedestrians.”


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