MOORLACH UPDATE — Daily Pilot — December 15, 2009

Our Board voted to approve the MOU at today’s meeting. 

Just to clarify.  We have escrowed funds held for closed landfill mitigation purposes.  These are long-term funds invested in a short-term local government investment pool at the county.  Using some of these funds and paying a higher rate is a viable option that the county has done in another recent incident.

Fair plans go to vote

County and city are voting separately on their next step to jointly own the 150-acre property in Costa Mesa.

By Mona Shadia

The Orange County Board of Supervisors and Costa Mesa City Council are scheduled to vote separately today on placing a joint bid for the Orange County Fairgrounds.

County and city officials declined to say Monday how much money Orange County and Costa Mesa would be willing to invest in buying the 150-acre fairgrounds together. They said revealing such information could tip their hand to rival bidders.

State officials hope to fetch between $80 million and $190 million for the fairgrounds.

If the supervisors approve a memorandum of understanding with Costa Mesa, the county auditor-controller will set aside a required minimum payment to the state of $50,000, to be presented along with the bid, according to county records. The state requires $50,000 from any party bidding for the 150-acre fairgrounds, according to the request for proposal that it issued in October.

The county has funds set aside for investment purposes, of which a portion could be used to buy the fairgrounds, said Supervisor John Moorlach. Costa Mesa does not plan to spend local taxpayers’ money for a purchase, said City Manager Allan Roeder. He wouldn’t disclose how the city plans to pay for it, adding that it’s too early to say.

The supervisors and the City Council oppose the sale, and have been trying to persuade Gov. Arnold Schwarzenegger not to the sell the property. But they are keeping a purchase as an option to maintain local control of the fairgrounds and preserve its use.

However, if a developer succeeds in obtaining the property, the city still would have the final say on how the property can be used.

Moorlach and Roeder defended the city and county’s efforts at a joint purchase, arguing that gaining control would ensure that the fairgrounds stay a fair and exposition center.

The county is representing itself and the city in the bidding process, even though they would be equal partners if they place the winning bid, Moorlach said.

The City Council will discuss the issue at a special meeting after coming out of closed session, set for 5 p.m. at City Hall, 77 Fair Drive. The supervisors will meet to discuss the fairgrounds in open session at 9:30 a.m. They will also talk about the fairgrounds in closed session. The supervisors hold their meetings at 10 Civic Center Plaza, 333 W. Santa Ana Blvd., Santa Ana.


December 15


Kate Berry, Jenifer B. McKim and Kimberly Kindy of the OC Register were back again, with “Refinancing for 91? – Toll-road owner wants to restructure debt after sale attempt fails.”

                Although the toll road has been unprofitable, some local officials are suggesting buying the road:

                Orange County Treasurer John Moorlach has written to Gov. Gray Davis urging him to empower Caltrans to buy back the 91 Express Lanes and discontinue the tolls.  He said a buyback could be justified by the large proportion of state taxes paid by Orange, Riverside and San Bernardino counties.

And the lead editorial in the OC Register’s Opinion section was titled “Next step for 91 Express Lanes.”  It mentioned my request of the Governor, my concern about the noncompete clause forbidding Caltrans from expanding the 91 (something that has occurred since).  It concluded with the following two paragraphs:

During a meeting with the governor this week, Mr. Moorlach told us that he confronted a principal in the failed tollway sale and told him:  “If you screw this up for other privatization opportunities, you really are going to leave a disappointing legacy.”  What’s needed, he said, is for the state Legislature to look at privatization and to “make sure the rules we set up provide for all contingencies, so there is no sense of manipulating the system.”

That’s the soundest advice.  Thankfully, the questionable 91 Express Lanes sale is over.  Now is the time to make privatization work better, not let those opposed to tollroads use this failed deal to set back market-based efforts to fight congestion.

Dana Parsons, columnist for the LA Times, wrote “This Time I’ll Be Listening, Mr. Moorlach.”

                If there’s a patron saint for guilty columnists, it would have to be Orange County treasurer John Moorlach.

                At least, he’d be mine.

            That’s because my biggest regret in nine years at this post was not listening to the lanky Moorlach when he ran for treasurer in 1994 and warned against incumbent Robert Citron’s investment strategies.

What galls me is that I had actually planned a column on the Citron-Moorlach campaign, even though it was just going to be one chastising Citron for being so haughty in answering Moorlach’s challenges. But I put it off and put it off and it never got done.

How was I to know Moorlach really was on to something?

That’s ancient history.

Moorlach has kept kind of a low profile since taking over in 1995, but he’s gotten a lot louder lately.

And I’m all ears.

A Lonely Voice

In fact, his voice has boomed, if only in contrast to the virtual silence of other Orange County governmental officials over the now-dead sale of the 91 Freeway Express lanes to an Irvine nonprofit group. Riverside County officials have carried the ball publicly, but it’s not as though those lanes don’t run In Orange County or the deal didn’t have local implications.

Where’s the noise from local politicos?

Moorlach didn’t lead the cry against the proposed sale, but he jumped in fairly quickly after the press broke the story.

And Moorlach has, by far, been the most vocal local official in the last week.

First, he urged the county to cut its ties to the Irvine-based nonprofit group that had hoped to buy the 10 miles of freeway lanes that were being offered by their original private owners.

And this week, Moorlach cheered when the proposed sale fell through.

We talked Tuesday evening, and Moorlach confessed to getting back some of that old juice that he had in 1994 and 1995 as the county declared bankruptcy and he took the helm from Citron.

"The tiredness, the exhaustedness of December of ’94, of being on the phone all day–for the last week-and-a-half, that’s what it’s been like again," he says. "Deja vu all over again."

Moorlach was quick in 1995 to blame the press for missing the pre-bankruptcy story, and he’s just as quick now to praise it for breaking the express-lane story.

"In ’94, talking to reporters I felt like I was talking to the wall," he says of his ill-fated treasurer’s campaign. "Here, reporters are doing the heavy lifting."

Some Similarities

He got into the current fray, he says, as details of the proposed sale increasingly bothered him.

"What’s wrong here is that you’ve got a private business benefiting from a government-approved bond financing," he says. "I just have a problem with anyone enriching themselves at the expense of taxpayers."

While the express-lane deal doesn’t approximate the bankruptcy in potential negative impact, Moorlach says, some similarities exist.

"What’s happening here is that you have sort of the same formula. You have outside consultants making considerable amounts of money by doing transactions with government. Because they’re making so much money, they’re not looking up, they’re not standing back and saying, ‘How does this really look?’ "

I ask how he sees the current brouhaha playing out. "Obviously, the current owner wants out, so let’s hope they get a fair price, market value for their investment and that we have a new owner that is extremely concerned about the welfare of the general public."

Such as government?

Why not? Moorlach says. Those express lanes would look pretty inviting as freeway lanes. "What I have said to the governor’s office is, ‘Gov. Davis, tear down those cones.’ "

One final question for him: Why the silence from other Orange County officials over the express-lane controversy?

That’s the one question Moorlach wouldn’t answer. He begged off, suggesting only that it might be a worthwhile avenue for enterprising reporters.

This time, I have a feeling we’ll listen.


CalPERS made it in the news with this Reuters piece, titled “CalPERS to campaign against disability fraud.”

                CalPERS, the biggest U.S. pension fund, said on Wednesday it aims to crack down on disability fraud, and analysts said the effort reflects widespread anxiety about fraud in public retirement systems.

                The CalPERS board voted to sponsor legislation to give the $177 billion fund greater authority to deter and root out disability fraud by any retirees on its rolls.

                The vote came a day after the Los Angeles Times reported that nearly three-quarters of Los Angeles County firefighters and lifeguards who retired in the last three years won enhanced pension benefits by claiming they were disabled at work.

                Rejecting disability pension applications even for minor injuries can be difficult, said John Moorlach, treasurer of Orange County and a trustee of its pension fund.

                “You get a little jaded, but you also realize that somebody has put rules into place that make it difficult for you to say no,” Moorlach said.

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