Happy Birthday to my daughter, Sarah!
My top Orange County LAFCO priority for 2011, believe it or not, was to have the city of Stanton consider annexing one or more of the five unincorporated islands within its city’s boundaries.
My top priority for 2010 was the annexation of Sunset Beach into Huntington Beach. This process has been moving in a positive direction and is close to being concluded. There is one remaining open item, so stay tuned.
It looks like garnering a positive conclusion on the “fourth corner” will be my top LAFCO priority for 2012. The two pieces below from the Seal Beach Sun provide context and commentary on the upcoming process.
RHA opposes Rossmoor Village annexation By Charles M. Kelly
The Rossmoor Homeowners Association came out against the annexation of the Rossmoor Village shopping center area last week.At the neighborhood association’s Tuesday, Sept. 20 meeting, the RHA board passed a resolution opposing Los Alamitos city officials’ plans to annex the 14.5 acre property located on the southwest corner of Katella Avenue and Los Alamitos Boulevard. The area is commonly known as the “fourth corner.” “Now therefore, be it resolved, that the Board of Directors of the Rossmoor Homeowners Association is unequivocally opposed to the action of the city of Los Alamitos and requests that all such action cease,” the resolution said. The Rossmoor Community Services District board, the closest thing the unincorporated community has to a government agency, recently passed a similar resolution. The commercial district generates $300,000 to $450,000 a year in sales revenue, according to a July staff report to the RCSD by General Manager Henry Taboada. On Aug. 1, the Los Alamitos City Council directed the Los Alamitos Planning Commission to “initiate proceedings toward annexation of a portion of Rossmoor,” according to an Aug. 22 city staff report. “The approximate 14.5 acre site consists of 17 parcels including commercial, multi-family apartments and a church,” the staff report said. In late August, the Los Alamitos Planning Commission approved a resolution that amended the city’s General Plan and Zoning Code specifically to facilitate the annexation of the southwest corner. Actual annexation would first require a vote by the Los Alamitos City Council. Under state law, the residents of the 14.5 acre southwest corner would not get a vote. California’s annexation law says that areas of less than 150 acres in size may be annexed without a protest by residents. According to the LAFCO Unincorporated Islands Resource Web page, the entire Rossmoor community covers 988.36 acres. The Orange County Local Agency Formation Commission would have to approve the annexation of the “fourth corner.” The commission chairman is Orange County Supervisor John Moorlach, who has said he would support a partial annexation. Moorlach has said that there are only three options for Rossmoor: become an independent city, merge with Los Alamitos or merge with Los Alamitos and Seal Beach to form a larger city. The Orange County Board of Supervisors has a long-standing policy to move unincorporated “county islands” like Rossmoor into nearby cities. Three members of the board sit on the OC Local Agency Formation Commission. Rossmoor voters rejected cityhood in 2008. Seal Beach city officials have firmly opposed merging with either Rossmoor itself or with the two other communities. In 2009, the Local Agency Formation Commission placed Rossmoor in Los Alamitos’ sphere of influence. This was seen as a first step toward the annexation of Rossmoor into Los Alamitos. According to a survey conducted earlier this year, Rossmoor residents also appear to oppose the southwest corner annexation. “Our research revealed that 82.0 percent of Rossmoor voters disapproved of the county of Orange changing city boundaries so that Rossmoor’s only sales tax-producing properties become part of the city of Los Alamitos,” wrote Adam D. Probolsky of Probolsky Research, LLC, in an Aug. 16 memo to the Rossmoor Community Services District. The Probolsky memo said 300 individuals were surveyed. At the time of the survey, Moorlach criticized the service as biased. He pointed out that the survey was financed in part by the Orange County Sheriff’s Department deputies’ union. The OCSD provides police services to Rossmoor.
Rossmoorgate: RCSD board members represent themselves, not community By Joyce Bloom
Transparency in government is a necessity in a democracy. Your elected representatives are supposed to act in your best interest and be knowledgeable about what they are doing.I submit that our present Rossmoor Community Services District representatives have not in the past acted in our best interest, nor are they upfront about what they are doing now. In the past they spent $100,000 or more on making the bid for cityhood. This failed bid put the RCSD squarely in Supervisor John Moorlach’s radar as a group who did not know what they were doing. It made Moorlach suspect (and probably rightly so) that they were more interested in their own interests than the Rossmoor community. After all, board members of a city stand to gain financially more than the board members of a Community Services District and city managers (Henry Taboada) would probably negotiate a higher salary too. Directors of cities are not held to $600 per month stipends as the Community Services Districts are. (This RCSD Board gave themselves an increase in salary when they voted to pay themselves more money for each extra meeting that they attended that had little to do with the services that they provide Rossmoor.) They have just passed a resolution opposing Los Alamitos’ annexation of the Rossmoor village shopping center. This is a senseless resolution, but Henry Taboada will get $60 per hour for writing this resolution. It is meaningless because if Los Alamitos wants the annexation they will get it if they follow the correct procedures. The Board spent money doing a survey that was done for the purpose of introducing Rossmoor to the "latent powers" that they wanted. They spent money having their attorney prepare a request to the attorney general asking if they could get the latent power of law enforcement. Recently, they dropped the law enforcement and refuse collection from their list of desired latent powers. Now they are preparing to go forward on the latent power of animal care. They are not deterred by the fact that Orange County is actually subsidizing animal control for Rossmoor. What this RCSD Board of Directors has done is put the amount of money that Orange County spends on Rossmoor in the limelight and it may not be in Rossmoor’s best interest to find out they do not generate enough money from property taxes to pay for the full range of services that Orange County provides Rossmoor. Joyce Bloom is a longtime Rossmoor resident and a former member of the RCSD board.
FIVE-YEAR LOOK BACKS
I made it to the Daily Pilot’s “Newport-Mesa’s 103 Most Influential” list this year at number 58.
John Moorlach, 41, Costa Mesa . . . Orange County’s Nostradamus, having predicted county’s bankruptcy . . . Became national media celeb after Citron’s fund went bust . . . Now appointed county treasurer/tax collector . . . Booked for speaking engagements for next year . . . Historical buff, especially California history (hobby: taking photos of state historical markers; he’s got 900 out of 1,000) . . . Married, three children . . . Last year’s ranking: 45
The potential Edison involuntary bankruptcy was really picking up stream. Here at home, Martin Wisckol and Kate Berry of the OC Register did a Business section piece, titled “Stepping into the fray – Utilities: Orange County’s treasurer wants a role in sorting out a possible voluntary Southern California Edison bankruptcy.” Here is the piece in full:
John M.W. Moorlach is at it again.
Moorlach, who foretold the county’s 1994 bankruptcy and was subsequently named county treasurer, is now trying to coordinate an endgame to Southern California Edison’s financial straits.
While the state Legislature may reconvene next week for another attempt at a bail out, and while some Edison creditors want to force bankruptcy proceedings, Moorlach is trying to rally support for a third way: voluntary bankruptcy for the utility. And he wants to be chairman of the subsequent creditors’ committee, a post that would be appointed by a federal bankruptcy trustee.
“I’ve been thinking about this for some time,” said Moorlach. “For a long time, I thought, `Forget it.’ But there are bigger issues. For one thing, my 2.8 million constituents are affected, even if they don’t get power from Edison.”
However, some question whether Moorlach is the appropriate person to head up such an effort — particularly because the county’s financial interest in Edison is relatively small.
As county treasurer, he sits on the board of the Orange County Employees Retirement System, which has $1 million invested in defaulted debt of Southern California Edison. That’s a drop in the bucket compared to other creditors — including power generators — who are owed hundreds of millions of the utility’s $3.9 billion in outstanding debt.
The creditor’s committee chairman “typically turns out to be someone who can spend the time and who has a large enough claim,” said Paul Aronzon, who represents large banks in the bankruptcy proceedings of San Francisco-based Pacific Gas & Electric, and would have a similar role if Edison goes into bankruptcy.
But Moorlach and his supporters say he is the ideal person. He has already been involved in a major bankruptcy recovery — that of Orange County. And last January, he formed an ad hoc committee of creditors owed money by Edison International — which at the time included the county investment pool overseen by Moorlach. Last week, Moorlach expanded the committee to include Southern California Edison creditors.
While Edison is hoping that the Legislature will come up with a plan to help it out of its troubles, Moorlach is among the skeptics who doubt a solution will be reached next week. He hopes to enlist creditors’ cooperation in coming up with a bankruptcy plan that they could present to Edison for approval. If rejected by Edison, the creditors could then take it to bankruptcy court for involuntary bankruptcy proceedings.
“If there wasn’t a special (legislative) session being called, there would be enough creditors to force an involuntary bankruptcy,” said Moorlach, while declining to name the creditors backing him. He thinks a more successful plan could be worked out with Edison’s cooperation.
He is also eager to protect the retirement system’s investment — a move made by the system’s chief investment officer, Farouki Majeed, last January. The defaulted bonds were bought at 58 cents on the dollar.
“Even if they only get 80 cents back, it’s still a great return,” Moorlach said. Majeed also defended the move, adding that the investment was a tiny part of the system’s $4.8 billion in investments.
Moorlach says his ad hoc committee has about 100 member creditors now.
“There’s nobody I know who could take on the job (of chairman) and do a better job,” said Don Beatty, a longtime Moorlach associate and a vice president with State Street Bank and Trust Co., which is the county retirement system’s custodian. “There will be some difficult decisions to be made in terms of management and recovery of the business. The chairman will play a key role in building consensus.”
Moorlach‘s desire to be in the thick of such a proceeding is hardly the first time he’s had the urge to thrust himself into the forefront of a public issue. There was his failed 1994 campaign for county treasurer, during which few heeded his warnings about the county’s precarious investments. After the bankruptcy, he was appointed to the post, then elected.
Two years ago, he began rating school-bond proposals going before voters throughout the county and also made headlines for criticizing the county supervisors’ plans for $750 million of tobacco-settlement money. He has talked about rating cities throughout the county on their budgeting for deferred maintenance on major infrastructure.
“John’s an activist and an iconoclast,” said Edison spokesman Brian Bennett. “And he’s always been doing things like this.”
He clearly enjoys dealing with financial issues of public welfare, even when they fall outside the usual guidelines of his job. It’s those same activities that keep his name on the public’s radar and could help him in a run for state treasurer in 2006, something he’s said he’ll consider.
“Does he have other political aspiration (beyond county treasurer)? Sure,” said Beatty. “But I’ve worked with a lot of people with political ambitions, and I don’t think John is just trying to figure out the biggest thing he can do for attention.”
Bloomberg News provided its update with “Edison Rescue Plan Session Delayed Until Oct. 9,” by Michael B. Marois (whom I finally met in person in May while attending the CSAC Legislative Conference in Sacramento). (Our current Governor, Jerry Brown, is complaining about having to deal with 600 bills.) Here are selected paragraphs:
The delay may be a tactical move by Davis, who would want to distance himself from the failure of state officials to prevent the company from falling into bankruptcy, said Orange County, California, Treasurer John Moorlach. He is chairman of a committee of about 100 note-and-commercial-paper holders and tradesmen owed money by Southern California Edison.
“If they pull the trigger, then Davis will say, ‘Gee, it wasn’t my fault. I tried,’” Moorlach said.
Moorlach said he doesn’t expect creditors will file before the special session. “I know the votes are there with the creditors to pull the trigger, but I think they would probably give it another week,” he said.
Davis aides couldn’t immediately be reached to comment on Moorlach’s statements.
By waiting until Oct. 9, Davis has a week to cajole lawmakers into approving the plan. He must also sign or veto more than 900 bills waiting on his desk for his signature before an Oct. 14 deadline.
Jessica Berthold of The Daily Bankruptcy Review provided a piece titled “Inquiries Into SoCal Edison Involuntary Bankruptcy Rising.” Here is the opening and one selected paragraph:
The number of creditors expressing interest in forcing Southern California Edison into involuntary bankruptcy is increasing, a spokesman for Orange County Treasurer John Moorlach said Tuesday.
The creditors who have contacted Moorlach’s office seem willing to wait and see if state legislators can come up with a rescue deal for Southern California Edison, though not for long, [Brett] Barbre said.
Dennis Walters of Bloomberg News provided his update in “Edison Utility Seeks Delay for Bank Loan Repayment.” The selected portions of the article refer to my memorable conference call with Edison, which would find me barred from future conference calls. Dennis Walters was doing a little genealogy work around this time and found himself in my hometown of Uithuizermeeden (see below), in the Netherlands, where he bumped into my uncle Willem Moorlach (I obtained one of my two middle names from Oom [Uncle] Wim). It is a small world, indeed.
California Governor Gray Davis yesterday called for a special legislative session, starting Oct. 9, on a rescue plan to save Edison’s utility unit from bankruptcy.
“I’m not expecting anything out of that session,” John Moorlach, treasurer of Orange County, California, said. He is chairman of a committee of about 100 note and commercial paper holders and tradesmen owed money by Southern California Edison.
“I just don’t sense from what I’m hearing” that Davis can overcome opposition, Moorlach said, including reluctance expressed by state Senate President Pro Tempore John Burton.
Edison creditors are intrigued by a reorganization plan filed last week by PG&E’s Pacific Gas & Electric. The utility proposes to pay all creditors in full using $13.2 billion in cash and new notes after Pacific Gas and its parent split into two companies.
The plan, which doesn’t include a rate increase, has creditors wondering if Southern California Edison has the financial wherewithal to pull off a similar approach, said Moorlach, who asked questions during Edison’s conference call today to get a sense of “what kind of cash flow there was.”
Uithuizermeeden has a population of 3,200 and is surrounded by farm land and I was baptized as an infant in the church.
This is a photo from Wikipedia.
The LA Times provided its perspective on the Edison energy crisis repercussions with “Firms Push Edison Near Bankruptcy – Energy: Power generators ask firm to spell out how they will be repaid hundreds of millions of dollars for purchases under deregulation plan,” by Nancy Vogel, Jerry Hirsch, and Nancy Rivera Brooks. I’m providing the entire article below because it includes a mention of Enron Corp., a topic that my youngest has been discussing in one of his college business classes.
SACRAMENTO — Five big energy companies owed hundreds of millions of dollars by Southern California Edison pushed the utility a step closer to bankruptcy Friday by asking Edison to sign an agreement spelling out how each will be repaid.
The companies demanded that Edison meet with them within two weeks to work out a repayment plan and implied that otherwise they would drag the Rosemead-based utility into Bankruptcy Court. Under federal law, any three creditors can force a company to file for bankruptcy if they are owed a combined $10,775. The five generating companies collectively are owed hundreds of millions of dollars, although the exact total is not known.
The letter was a significant step in maneuvering over Edison’s fate–a dance that has gone on for months but now appears to be nearing its close.
Edison has been reaching deals with some of its creditors, but has kept others waiting. Some power generators, in turn, have been threatening to push Edison into bankruptcy, although so far only Mirant Corp. and Reliant Energy have publicly embraced that idea. And Gov. Gray Davis and legislative leaders have continued to debate a plan that the governor believes could avoid a bankruptcy.
The letter, sent by William Bates III, a Palo Alto attorney representing the five power generators, expressed frustration that Edison so far has been unwilling to work out a repayment plan with large power producers. Under the Edison rescue plan that the Legislature debated and ultimately adjourned without passing earlier this month, Edison would have settled with its smaller creditors but been left with $1 billion in debt to big power sellers.
"This group of creditors is significant in both number and amount and deserves and requires to be dealt with as such," says the letter to Edison’s private attorney, Thomas B. Walper of Munger, Tolles & Olson in Los Angeles.
"We would be willing to discuss any ideas SCE has" about an agreement to repay its debt, the letter continues, "but we don’t want to waste anybody’s time. Thus, as a first step we want to know whether SCE is interested in negotiating. . . . Please give us a simple ‘yes’ or ‘no’ answer to that question.
"Of course, we reserve all our rights and remedies in the event that SCE does not want to meet on these terms or we cannot reach a mutually satisfactory agreement," Bates wrote.
The five companies are Reliant, Mirant, Dynegy Corp., Enron Corp. and Puget Sound Energy, which is the biggest investor-owned utility in Washington state.
Edison officials refused to comment.
The frustration on the part of the power generators appeared to mount Tuesday, when Edison announced that it had reached an agreement to pay off its $14-million debt to the city of Long Beach, which sold Edison electricity produced at a trash-fueled power plant on Terminal Island.
Edison has also reached repayment plans with many small and renewable power producers who collectively are owed $1.2 billion.
"Edison can take steps to assure that all creditor classes are treated equally," said Richard Wheatley, a spokesman for Reliant Energy in Houston, which is owed $100 million to $200 million by Edison.
A spokesman for Atlanta-based Mirant, which is also owed more than $100 million, sounded a similar note. "It is time SCE made clear when, how much and even if it is going to pay us," Patrick Dorinson said.
So far, other creditors have balked at the idea of pushing Edison into bankruptcy, believing that a judge would probably consider a bankruptcy petition premature until after the Legislature meets Oct. 9 in a special session to deal exclusively with Edison’s plight.
Davis, who insists that Edison should not be allowed to file for bankruptcy, ordered the new session earlier this month after legislators adjourned without passing any legislation that would shrink Edison’s debt.
Other Creditors Take Notice
Senate leader John Burton, (D-San Francisco), has said that any such bill would have to guarantee that the burden of paying off the utility’s $3.9-billion debt does not fall on homeowners and small-business owners.
The letter from the five generators caught the attention of other creditors who have so far played along with SCE’s strategy of winning a legislative rescue.
"From our perspective, the days of luxury for Edison are over," said John Moorlach, Orange County treasurer. The county holds $1 million of defaulted SCE bonds in its retirement plan.
Moorlach said he believes that if SCE does not quickly reach an agreement with the generators, they will push the utility into Bankruptcy Court.
"By doing this, the generators are trying to show that they are making a good-faith effort to reach a settlement first," Moorlach said.
But Jay Lawrence, spokesman for the Renewable Energy Creditors Committee, said his members believe the move by the generators shows they have backed off from an immediate involuntary bankruptcy petition filing, at least while they try to open negotiations with SCE.
"We still want to see a legislative solution, and we are against bankruptcy," Lawrence said.
Edison provides electricity to 11 million people. It racked up the $3.9-billion debt over the past year as it purchased high-priced electricity in the fledgling market California created under a 1996 deregulation plan. The state’s deregulation plan included a rate freeze that barred Edison from passing the full cost of the power it bought on to customers.
By January, Edison’s debt had grown so heavy that power sellers refused to deal with the utility. The state had to step in with taxpayer money to keep electricity flowing. So far, the state has spent $10.7 billion on power purchases.
Edison’s counterpart in Northern California, Pacific Gas & Electric, suffered the same financial squeeze in the state’s dysfunctional market. PG&E took itself into bankruptcy in April.
The generators’ demand came on a day when Edison officials said they were close to winning an agreement from bankers to delay collecting on $200 million in loans until Oct. 19.
Shares of Edison International, the parent company of Southern California Edison, rose almost 5% Friday to close at $13.16 on the New York Stock Exchange.
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