MOORLACH UPDATE — Laura’s Law – Plus — November 22, 2011

Laura’s Law has come to the forefront as a result of the tragic death of Kelly Thomas in the city of Fullerton.  Kelly Thomas was identified as a homeless person suffering from severe mental illness.  In my capacity as Chair of the Commission to End Homelessness, I put a public discussion of Laura’s Law on last Friday’s agenda.  The Voice of OC covered the meeting and asked me a few questions late Friday afternoon.  After personally digesting all of the testimony, I wondered if Orange County could take all of the existing resources available in the county and develop a program that is even better than Laura’s Law.  Subsequent to the meeting, I asked our Superior Court administrator, Alan Carlson, for some assistance.  Alan and I both serve on the Orange County Criminal Justice Coordinating Council, which I also chair.  He agreed that he will return with some guidance after the Thanksgiving holiday.  According to our Health Care Agency, there are three options:  adopt Laura’s Law, do not adopt it, or pursue a different model, referred to as a pilot program (see  The Voice of OC story is the first below.

Now for the Plus.  Jefferson County continues to garner press, as it will for months.  The National Association of Counties covers it in the second piece, from an OC perspective.  The Birmingham Business Journal does the same in the third piece.  And the Orange County Business Journal has fun with a recent MOORLACH UPDATE on the subject in the fourth and final piece.

And that’s not all, regarding MOORLACH UPDATE — Barbara Venezia — November 19, 2011, Barbara Venezia shot me an e-mail and stated that the paragraph reading:

Supervisor John Moorlach has voiced his support of the restaurants against the fees, but many wonder why. Moorlach doesn’t sit on the San Joaquin Hills Transportation Authority board. The airport and the 73 Freeway certainly fall within his district.

Should have read:

Supervisor John Moorlach has voiced his support of the restaurants against the fees.  But many wonder why Moorlach doesn’t sit on the San Joaquin Hills Transportation Authority board. The airport and the 73 Freeway certainly fall within his district.

Thank you, Barbara.


Can Orange County Do Better Than Laura’s Law?

Orange County might adopt a law that is "better" than the state’s Laura’s Law, Supervisor John Moorlach said of efforts to treat the small number of the county’s homeless who are severely mentally ill.

Moorlach offered his comments in an interview Friday after more than three hours of presentations to a special county commission. More than 100 people attended.

At Moorlach’s request, the Board of Supervisors had referred the matter to the Commission on Ending Homelessness by 2020 after Fullerton police officers beat Kelly Thomas, a transient who suffered from severe schizophrenia. Thomas died July 10, five days after the beating.

"Maybe we can do something better than Laura’s Law in Orange County," said Moorlach, who under the normal rotation will become chairman of the Board of Supervisors next year.

The commission will advise the Board of Supervisors on whether it should adopt the state law on outpatient treatment for those with acute mental illness but refuse medical care. Moorlach is chairman of the commission, which will meet again in January to continue discussing the issue.

Laura’s Law creates a system of outpatient treatment for those with severe mental illness who have resisted seeking help or taking prescribed medicines. In the case of those most resistant, courts can order an outpatient treatment program.

Known as the "black robe effect," the court-ordered treatment was included in the law as a way to add clout behind efforts to persuade those most reluctant to seek treatment. The law stops short, however, of allowing forced medication of patients.

Laura’s Law went into effect in 2003, but it was written so each county must individually adopt it. Only Nevada County has fully enacted the law, a requirement of a legal settlement. Los Angeles County is running a pilot program.

The state law is due to expire in 2013. A previous expiration date was extended by the state Legislature.

Whose Rights Are Most Important?

At Friday’s Homeless Commission hearing, supporters and opponents of the law echoed arguments that have been made since the mid-1990s, when the state Legislature first began considering a law to help severely mentally ill people without violating their rights.

County mental health officials emphasized costs at Friday’s meeting, and Ron Thomas, father of Kelly Thomas, reacted: "What I hear a lot is money. It’s always about the money. … Let’s start taking care of some of the people."

Those in favor of the law, primarily parents or siblings of adults with severe mental illness, recounted events in which current law kept them from coming to the aid of their relatives.

"G– dammit, I want people to be mad like I was," said Jennifer Hoff. Her mentally ill son turned 18 in March and now is living on the streets in Santa Ana because he’s not taking prescribed medications, she said. Current law prevents her from getting help for her son, she complained.

Once someone turns 18, they may make their own medical decisions. One of the most challenging effects of schizophrenia and some other illnesses is that those who are seriously ill have no sense there is anything wrong. They frequently refuse to take medications.

Federal privacy laws and existing state laws make it difficult for parents, relatives or friends to work with doctors on behalf of the ailing adult, speakers said.

But advocates for the rights of mentally ill people worry that new laws or local adoption of Laura’s Law could mean mentally ill adults will receive treatment against their will, even if forced medication isn’t allowed.

"My body belongs to me," said Charmaine Asher. Laura’s Law is "a slippery slope of civil rights violations," she said.

In an effort to protect those rights, Laura’s Law requires that the person have a history of not complying with prescribed medical treatment. That failure must have been a factor in the adult being sent to a hospital, prison or jail at least twice within the past 36 months.

The law also stipulates that if the mentally ill person wasn’t in jail or hospitalized, he or she must have threatened or attempted serious violent behavior to themselves or others within the past four years.

The person also must have been offered the chance to voluntarily participate in a local treatment plan but continued to refuse, according to the law. Conditions must also be deteriorating "substantially" and require outpatient treatment to prevent persons becoming a danger to themselves or others or unable to care for themselves.

In addition, they must be found to be likely to benefit from the outpatient treatment.

County mental health officials did not go into much detail about how a locally adopted program might work. Most of the discussion involved costs and whether such a program would qualify for state mental health bond funds. Nevada and Los Angeles counties are using state money for their programs.

Nevada County officials have said Laura’s Law saved taxpayers money, mainly because the costs of housing mentally ill people in jails and treating them in emergency rooms were substantially reduced after the county’s adoption of Laura’s Law.

Despite Nevada County’s experience, Orange County officials made no mention of savings, only potential increased costs and other difficulties.

Supporters of Laura’s Law say Orange County officials are reluctant to implement it because, once a treatment plan is approved by the courts, judges would hold the county accountable for following through and providing the treatment as well as keeping in contact with the patient.

The reliability of Orange County’s estimates is uncertain. In October, Orange County mental health officials estimated Laura’s Law would cost $6.1 million a year to care for about 120 patients.

Officials in San Diego County, which is almost identical to Orange County in population, say they could handle nearly five times as many severely mentally ill adults at about one-third of Orange County’s cost estimate.

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County Official Has Advice for Jefferson County

Finally dethroned as the municipal bankruptcy champ, Orange County, Calif. takes no pleasure in Jefferson County, Ala.’s surpassing its record $1.7 billion bankruptcy of 1994.

John Moorlach, vice chair of Orange County’s Board of Supervisors, warned of impending financial problems when he ran, unsuccessfully, for treasurer in June of 1994. By December, the opponent who beat him would file for municipal bankruptcy — until now, the nation’s largest — resign, and be replaced by a board-appointed Moorlach.

Asked what advice he would give Jefferson County, he outlined four steps, and maybe a fifth.

“The first is how can you increase your revenues?” he said. Jefferson County would be ill-advised to raise taxes. “If you overtax your residents you’re going to start seeing residents leave.” A proposed Orange County half-cent sales tax, Measure R, was defeated 60 percent to 40 percent in 1995.

“The sentiment of the residents of Orange County was you broke it, you fix it,” Moorlach recalled. “Don’t come to us, we’re not dysfunctional. We’re not going to enable you to do it again.”

His other issues and questions include:

Cut expenditures wherever you can — “What can you do without now?”

What can be sold; what is surplus? County assets that can’t be sold could be leased, perhaps for a 60-year period, to generate revenue.

How do you restructure your debt; can you refinance at a lower rate?

A fifth step is not always possible, Moorlach said, but it’s one Orange County took. “That is who can you sue” who has some culpability for the county’s financial problems?

“They brought the county to the dance, and there’s some liability for that,” he said. “Yes, they were mature adults,” he said of Jefferson County’s former commissioners — “just like Orange County, we had adults that approved the investments; they all loved the interest rate that they were getting.

“They should have realized it was a red light, not a green light,” he continued. “But someone was there enabling that kind of behavior through borrowing to invest in Orange County’s case.”

Moorlach, a CPA, added: “A financial advisor that’s more focused on doing what’s right as opposed to generating fees would have provided better counsel.” So, Jefferson County could sue on grounds of malpractice.

Orange County emerged from bankruptcy about 18 months after it filed. He said a survey of residents 10 years after the bankruptcy found that 80 percent of those polled didn’t know the county had been bankrupt.

Passing the mantel to Jefferson County, Moorlach, though not minimizing the seriousness of the situation, said: “This is OK, we’ve had first place for almost 17 years, I’m happy to relinquish it.”



Lessons from Orange County                  
Evan Belanger                  

As Jefferson County moves forward with the largest municipal bankruptcy in U.S. history, the local business community could be tasked with pulling the beleaguered government back from the brink, history shows.

Prior to Jefferson County’s filing last week for Chapter 9 protection on $4.23 billion in debt, Orange County, Calif., held the record for largest municipal bankruptcy at $1.7 billion in 1994.

And 17 years later, the affluent and conservative California community that recovered quickly from its fiscal downfall, boasts a robust economy with unemployment nearly three points below the state average and median income more than $13,000 greater than the rest of the state.

In an interview this week, John Moorlach, a member of the Orange County Board of Supervisors – who famously predicted Orange County’s economic woes six months in advance – said their county government relied heavily on the private sector during the months of recovery after its bankruptcy.

“It’s really important to realize … that in order to have a thriving business community, you have to have a healthy government,” he said. “And in order to have a healthy government, you’ve got to have a thriving business community, so we’re really kind of partners and when one is sick, the other will feel it.”

Moorlach, who left his job as a partner at a large accounting firm in 1995 to replace disgraced County Treasurer Robert Citron, is widely regarded as a leading expert on municipal bankruptcy.

He criticized Citron’s investment strategy as reckless when running against him for the elected treasurer position a year earlier. Since Moorlach’s appointment as treasurer after Citron’s midterm ouster, he was twice re-elected before seeking his current seat on the board of supervisors.

He said this week that county officials turned quickly to the private sector for help in the weeks following the bankruptcy, scooping up banker William Popejoy to serve as the county’s unpaid CEO.

While Popejoy resigned the position after only a year, calling the county government “dysfunctional” when officials resisted his call for a sales tax increase, he did not leave before culling the county’s overall debt by more than $300 million and slashing its annual operating budget by than 41 percent. Popejoy also managed to delay for a year the repayment of more than $800 million in debt created by Citron’s investments.

According to Moorlach, Popejoy also established a cabinet of area business leaders – or “men of significance” – that for months met weekly as a group with the county department heads to help find creative solutions for the county’s challenges. Moorlach said that strategy was both exciting and effective.

“If you have strong leadership inside the county that is secure in who they are and don’t mind a few strong-headed business types, then that’s the fun part of the equation,” he said.

In Jefferson County, the Birmingham Business Alliance, which opposed the county’s bankruptcy, began this week contacting business-location consultants to gauge how the county is viewed by outsiders since the bankruptcy and emphasize the community’s strong, diversified overall economy. They also hope to reassure the experts that governmental services local businesses rely upon are not in jeopardy.

So far, BBA CEO Brian Hilson said, no company has cancelled plans for job-creating projects. But with the county still in an early phase of what promises to be an arduous and protracted legal process, the overall business response to the bankruptcy remains unclear.

“It’s a serious situation for us,” Hilson said. “That’s not lost on us. We know that the potential image impact is something that we have to deal with, meaning that we need to be proactive in our efforts.”

It remains unclear if Jefferson County can follow Orange County’s path to recovery. Not only does Orange County have a much larger population – 3 million people compared to roughly 662,000 in Jefferson County – but its debt was nearly $2.7 billion less than Jefferson County’s.

In addition, when Orange County came out of bankruptcy in 1996, its economy was quickly swept up in the dot-com boom of the late ’90s, allowing it to recover faster than it would have otherwise. It was later bolstered by the real estate explosion of the early 2000s that helped generate additional property tax revenues.

Orange County, which still pay tens of millions annually toward the debt, is expected to pay off the last of it in 2014 or 2015. Despite a short-term economic decline in Orange County following its bankruptcy, Moorlach insisted turnaround recovery can be achieved.

“If you do it right, in five to 10 years, the residents will have forgotten,” he said, recalling a local newspaper survey 10 years after Orange County’s bankruptcy in which roughly 80 percent of respondents were not aware the county had ever been bankrupt.

It remains unclear if Jefferson County can escape bankruptcy as quickly as the 18 months taken by Orange County. Calling those proceedings “lightning fast,” Ronald Campbell, an investigative reporter at the Orange County Register, who covered the county’s 1994 bankruptcy, predicted a longer duration for Jefferson County.

“You will be extremely fortunate if you are out in 18 months,” he said. “Part of the way we got out is that the county is so large.”

Evan Belanger covers health care, technology and more for the Birmingham Business Journal.


Not-So-Fat Lady Will Sing; New Bren Baby

By Rick Reiff


With Jefferson County, Ala.’s recent $4 billion bankruptcy eclipsing Orange County’s $1.7 billion as the largest municipal failure, Supe John Moorlach, famous for warning about OC’s 1994 debacle, quips, “I’ll have to update my bio” …


November 22


The OC Register covered another staff hiring in “City councilman joins supervisor’s staff,” by Susan J. Park.  I’m looking forward to swearing John Collins in as the next Mayor of Fountain Valley on December 6th.

City Councilmember John Collins has announced as part of the staff of John M. W. Moorlach, current Orange County Treasurer-Tax Collector and Orange County Supervisor-elect.

Collins was selected, according to Moorlach’s office, due to his experience as “a successful businessman, a local elected official, and as one who has also served in numerous charitable orgainzations.”

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