MOORLACH UPDATE — POBs — February 5, 2011

Happy Super Bowl Weekend!  My son-in-law was born and raised in Wisconsin, in a suburb of Milwaukee, directly south of Green Bay.  So you know which team I’ll be rooting for.

Sunday is also the 100th birthday of President Ronald Reagan.  I want to wish all those celebrating the centennial at the Reagan Library a wonderful time of reunion and remembrance.

The Voice of OC has its take on the PA/PG story (see yesterday’s Update).  You can read it at

At last Tuesday’s Board meeting, during the Public Comment segment, about a dozen friends and family of the UCI students that disrupted the Israeli Ambassador’s speech requested that the Board intervene in the District Attorney’s investigation.  The DA is also an elected official and independent.  Chairman Bill Campbell communicated that fact, but somehow I was given credit for it in the 89.3 FM KPCC story on the matter, which can be read at  It was also picked up by the Temecula and Lake Elsinore Valley News.

The OC Register has an update on activities in Rossmoor.  It is the first article below.  I was asked to submit an editorial on this topic to one of the fine media outlets covering this area of the County.  I declined.  But in my response I closed with the following:   If I did do one, however, it would be short and sweet:  No “City-Lite.”  Incorporate, supercity or annex.  The article seems to convey this message quite well.


The OC Register is running an editorial submission of mine on Monday.  It is already on their website, so I’m including the advance copy below for your weekend reading.  It is the second piece below.  The Board of Supervisors will be voting in closed session on Tuesday on whether to appeal the retroactive constitutionality case to the California Supreme Court.

Rossmoor leaders seek help in planning future


Not long after marking its 50th birthday, this bedroom community is going through a suburban version of a mid-life crisis. Rossmoor wants to figure out what it wants to be, and everyone in town is invited to participate in that conversation.

On Tuesday, the Rossmoor Community Services District will hold a workshop on whether it should continue to explore the possibility of acquiring powers for the community to oversee its own police patrols, animal control and trash hauling.

Rossmoor leaders already have voiced their support.

"Latent powers give us local control and give us the ability to take the services we have now and make them better," said Shannon Hough, the district’s first vice president.

Residents, however, do not appear unified and it is unclear how many support it. The Rossmoor district plans to hire a professional pollster to take the pulse of the community, said general manager Henry Taboada.

Meanwhile, LAFCO, the Orange County Local Agency Formation Commission that oversees boundary issues, is set to consider Wednesday the creation of a task force that will facilitate the transition of unincorporated areas into adjacent communities, offering some of them services from their neighboring cities instead of outright annexation.

But Rossmoor residents who spoke at a well-attended workshop last month were clear: they are not interested in having their neighbor, Los Alamitos, provide them with police patrols or other services.

The question Rossmoor leaders now face is: does the community, which rejected cityhood in 2008, want to expand its powers without actually becoming a city?

When the local Rossmoor Community Services District was formed in the 1980s, the division of powers and responsibilities hashed out with Orange County addressed the needs of the time. The county would provide key functions, including police services, building and planning oversight and animal control. The local district would oversee public recreation facilities and services, street sweeping and the trimming of parkway trees, among other things.

But circumstances have changed and some people in this well-groomed community would like to take the rein on some of these issues, so they are seeking "latent powers" — powers acquired after the district was formed.

Specifically, Rossmoor leaders are looking into the possibility of contracting directly with the Orange County Sheriff Department, without Orange County government as a middle man. Rossmoor’s back-up patrol now shared with Sunset Beach is in jeopardy pending that community’s annexation to Huntington Beach.

They also want to oversee their own animal control services, possibly turning to Long Beach to do the job. Many Rossmoor residents are tired of coyotes running amok and killing the neighborhood pets.

Finally, Rossmoor leaders are exploring the possibility of assuming control over their trash collection.

Not everyone in Rossmoor supports the district’s move toward acquiring more powers. Resident Ken Brown, for example, complained at last month’s workshop that it would result in an increase in costs and fewer services.

Orange County Supervisor John Moorlach, whose district includes Rossmoor, has made it clear that the latent powers don’t sit well with him either. In fact, Moorlach would like to see Rossmoor absorbed by its larger neighbor, Los Alamitos.

Or better yet, the supervisor has said, would be the creation of a super-city of Los Alamitos, Rossmoor and Seal Beach.

Contact the writer:

John Moorlach:  Pension appeal needs to be heard by state Supreme Court

Pension reform, at long last, has become the rallying cry for fixing state and local budgets. The Legislature must introduce legitimate measures for the voters to approve. Without it, you may as well label the governor’s proposed tax-extension ballot measure the 2011 Public Employee Extravagant Pension Subsidy Act. The judiciary also has to wake up to pension abuse. The tail can no longer wag the dog when it comes to the courts’ dealings with pension matters.

The California Debt and Investment Advisory Commission, overseen by Treasurer and former Attorney General Bill Lockyer, issued a publication, "California Debt Issuance Primer." Its chapter on "State Constitutional Limits," states the following:

"California’s constitution contains limitations on the authority that may be granted to local governments in the area of public debt and other financial transactions. These limitations were in part intended to curb ‘municipal extravagance’ and in part a response to the temptations local officials of the day faced with respect to expansion of the railroads.

"It is important to remember that this limitation applies not only to traditional bonds, but could apply to many forms of indebtedness or liability.

"In determining whether the arrangement under consideration might pose a problem under the debt limit it is useful to ask the following questions:

·         Does the arrangement provide for payment in future fiscal years that comes out of revenue generated in those years?

·         Does the arrangement call for payments by a city, county, or school district (as opposed to other types of governmental agencies)?"

Defined-benefit pension plans generate two affirmative answers as they provide for annual payments by cities and counties out of future revenue. Let’s quit the word games. An additional unfunded actuarially accrued liability created by the approval of retroactive benefits by the boards that control cities and counties is a debt subject to the debt limitation provisions of the state Constitution.

Why has this been so confusing for our judicial system to understand? There are two reasons. The first was the only argument provided by the Association of Orange County Deputy Sheriffs’ outside legal counsel in last month’s appellate court hearing over the county’s effort to reverse a retroactive pension boost for retired deputies. Miriam A. Vogel, a retired Court of Appeal justice, clearly told her former colleagues that the court’s decision would affect every pension in the state of California: "[I]t would affect yours, it would affect mine."

Then she took a couple of questions and sat down. She gave no legal citations, no elaborate arguments. Nothing.

The second reason is that there are opaque ways to get around the debt limitation. How? By simply stating that a UAAL is not really a debt. Here’s a common citation found in the recent opinion issued in our case by the 2nd District Court of Appeal:

"[T]he … liabilities are not owed by the plan. They are primarily a function of the methods and assumptions used by the actuary to fund the plan."

Simply translated, just because an actuary computes an unfunded liability, that doesn’t necessarily make it a debt. It is just a tool to help the employer calculate the annual payments required to fund the UAAL.

That’s odd. The same CDIAC publication addresses pension obligation bonds. If you want to exchange a UAAL debt for a bonded debt, you need to be sure that:

"The aggregate principal amount of pension obligation bonds should not exceed an amount equal to:

·         The unfunded liability of the pension system (as calculated by an actuary), and;

·         Costs of issuance of the bonds."

California, we have a problem. You can’t have it both ways. You can’t dismiss a UAAL as not being debt, but issue bonds against it as if it actually is debt.

I’m a layman, not an attorney. I am just touching on a small portion of the county’s legal effort to right an egregious wrong. I believe in paying our debts, but masking them or making them disappear in a court opinion like David Copperfield performs a magic trick is a very, very expensive sleight-of-hand to play on the taxpayers of California.

The California Supreme Court must hear our case and clean up the pension weed that will eventually grow and strangle the state into receivership.


February 5


Rosalva Hernandez of the OC Register covered the next step in the post-bankruptcy filing journey with “Charter battle a low-key campaign—POLITICS:  Few government officials have taken a public stand on the proposed charter.”  Measure T was slated for the March 26 presidential primary election.  As I was appointed to the position of Treasurer-Tax Collector on March 17, 1995, I would have to run for the position on the same ballot in order to finish the vacant four-year term.  The following month Measure T received 40 percent of the vote and Measure U only received 25 percent.  Here are selected paragraphs to give you a sense of the campaign.

Designed by a citizens committee appointed by the Board of Supervisors, the charter is intended to reform county government by setting term limits and making many elective offices appointive.  Another measure on the ballot, called Measure U, would increase the board from five supervisors to nine.

The pro side has not registered a campaign fund, but several former Charter Commission members are treading the usual circuit of political, business and residents groups to explain the proposal.  And measure co-signers, such as the Orange County Taxpayers Association and the Orange County Business Council, are providing ballot information on the issue to their members.

The con side has registered a recipient committee with the Registrar of Voters Office, but to date has raised less than $1,000.  A corps of volunteers has launched a coordinated campaign with a campaign chairman, a speakers’ bureau and a treasurer.

The quiet, grass-roots battle is in stark contrast to the public wrangling seen last year over Measure R, the tax initiative proposed by county officials and denounced by a majority of residents, who trounced it at the polls.

Supervisors Marian Bergeson and William Steiner laud it as an important first step toward government reform, although they both say they are too busy with county affairs to lend it active support.

Supervisor Donald Saltarelli says he has some reservations on the measure, but still leans toward supporting it.

By contrast, Treasurer John Moorlach and County Clerk Gary Granville say they oppose the measure.  Although both of their positions would be made appointive rather than elective under the new charter, the two say their objections do not stem from personal reasons.

Moorlach, who was appointed to replace Robert Citron after the latter resigned, said he agrees with the Concerned Citizens Charter Committee’s criticisms and has lent his name to its roster of supporters.

“Ninety-five percent of what you can do with a charter can be done with general law,” he said.  “I’d like to think it doesn’t pass because it’s a Band-aid when we were looking for major reform.”

Charter supporters say Moorlach is a walking example of the benefits of appointed officials.  Moorlach ran against Citron on the last election on a platform that criticized the incumbent treasurer’s investment practices, but he lost the race.  Supervisors appointed him to the post later when his warnings came true and it became obvious that he was familiar with the risks involved in investing.

Pensions & Investments covered an interesting chapter in the County’s pension system’s history in “County Fund Board Demotes Hackwood,” by Steve Hemmerick.  As with a number of issues that I have faced in my life, I was a little early.  Not too much later after this article appeared, Ms. Hackwood was terminated.

                Mary-Jean Hackwood was demoted from the top administrative job at the $2.9 billion Orange County Employees Retirement System following an investigation into employee allegations she has a dictatorial and abusive manner.

                At least one board member – John M. W. Moorlach, the county treasurer-tax collector – said he wanted Ms. Hackwood’s employment to be terminated, and he voted against the demotion.

                “I don’t believe this package approach will work.  I think immediate termination (of Ms. Hackwood) would have been the best solution,” said Mr. Moorlach.

                The trustees voted 7-2 to demote Ms. Hackwood.

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