MOORLACH UPDATE — April 15th — April 15, 2013

Tomorrow afternoon the Board will interview Auditor-Controller candidates under agenda item 33, at a time certain of 1:30 p.m. The County’s Chief Deputy Auditor-Controller, Jan Grimes, is currently running the department and has done so with distinction for more than a year. She is one of the five candidates. I make note of this as OC Register-The Current columnist Jack Wu does an analysis of one of the Clerk-Recorder candidates in the Board’s recent interviews. Jack Wu is a fellow Certified Public Accountant and appreciates the significance of today’s date, for which the LOOK BACKS section below includes an editorial devoted to the conclusion of tax season. His piece ran on Friday and is the first one below.

Dan Morain, Senior Editor for The Sacramento Bee, is a sympathizer of the mental health issue. He spent an interesting day in Carson City, Nevada, and recounts it in his Sunday column. In the state of California, it is common for county Health Care Agencies to transfer patients between each other. States usually transfer to state institutions. It is news when a state institution transfers and does not bother to inform the institutions in the destination area. Dumping patients in this manner is immoral and Dan Morain does a great job of explaining this nonsense in his Sunday column, which is the second piece below.

Last evening I received a reporter call from the OC Register regarding the passing of Ernie Schneider, the County Administrative Officer at the time Orange County filed for Chapter 9 bankruptcy protection on December 6, 1994 (a clarification for the article). It is the third piece below. The defining moment between me and Ernie occurred on April 24, 1994 (see MOORLACH UPDATE — Straight Talk TV — April 24, 2009). The reporter, Chris Knap, garnered the lead article for the Metro section of the OC Register with “O.C. treasurer’s race stirs markets – Finance: A political challenger has raised doubts about Robert Citron’s aggressive investment strategies, making some investors nervous.” Ernie was involved in the Citron campaign and it seemed that the reporter believed that Ernie was a more credible source than I was. Here is the segment of the piece that had a big impact on the outcome of my campaign:

Costa Mesa accountant John M. Moorlach’s political challenge to 23-year incumbent Citron has had a side effect that would never occur in a race for sheriff or mayor: As Moorlach and his supporters question the safety of Citron’s investment strategies, doubts reverberate through the financial press and bounce back over the phone lines from New York.

County Administrative Officer Ernie Schneider exploded in anger last week when asked about the effect that the challenge to Citron’s strategies could have on Orange County’s financial reputation.

“In the realm of things that can be done in a political campaign, this is one of the worst,” Schneider said. “These guys are putting the taxpayers of this county in jeopardy of having to pay millions more for bonds (should Orange County’s financial ratings drop).”

Moorlach says he’s just campaigning, not trying to create a run on the investment pool.

With the benefit of hindsight, it was Schneider who was “putting the taxpayers of this county in jeopardy of having to pay” billions in principal and interest to replace a $1.7 billion portfolio loss. At the time, I was infuriated that someone that I was compensating with my property tax dollars would be so loyal to Citron’s imprudent strategy and trash talk a constituent. I scheduled an appointment with Ernie as soon as I could after April 15th, the conclusion of tax season, to discuss the matter. It was a most memorable visit to the third floor of this building. I was even more disconcerted about the County after I left. In subsequent years, Ernie and I developed a relationship. I even tried to assist in his efforts to find another job in the municipal industry, but head hunters just would not permit Ernie to even go to the interview stage of a recruitment effort. The bankruptcy and moving past it would haunt Ernie for the remainder of his life. Please keep his family in your thoughts and prayers at this time of loss.

ADJOURNMENT: As today’s topic seems to be death and taxes, another bankruptcy figure passed away last week. George Jeffries and I had a similar experience as that of Ernie Schneider. I met George during the campaign to discuss Citron’s strategy. Regretfully, George was in the industry and when Chris Knap of the OC Register called him for a quote, George missed the opportunity to be a voice of reason (see MOORLACH UPDATE — OC Register — April 21, 2009). The article was titled “Earnings champ takes heat in treasurer race; Government: Orange County Treasurer Bob Citron says he’s being targeted for helping a Democrat.” Here is the disappointing segment, which was the conclusion of the piece:

But others don’t see a reason to be concerned.

Los Angeles County’s chief investment officer, a Tustin resident named George Jeffries, called Citron’s office well-managed and the question of risk “a judgment call in a ball game.”

“I can’t agree with people crying wolf.”

Had George sounded the alarm, it may have made reporters take my concerns a little more seriously. The lesson may be that we need to be careful to know when we are blinded to the circumstances right in front of us, as denial is a sad way to drive over a cliff (fiscal or otherwise). George would deeply regret the quote and became one of my most important mentors. He served on my Treasurer’s Advisor Committee and played a key role in shaping the County’s Treasurer’s office. He would also serve as an appointed member of the Board of the Orange County Employees Retirement System. George’s memorial service will be this Friday, 11:00 a.m., at Calvary Church of Santa Ana, 1010 N. Tustin Avenue. Please keep the Jeffries family in your thoughts and prayers at this time of loss.

BONUS: As we’re talking about CPAs, John Wayne Airport has completed its June 30, 2012 annual audited financial report and it is available at As well as enjoying the brief introductory video, you may also wish to click on “A Fiscally Smart Business.” The good news: In the last fiscal year, JWA was able to increase its Total Assets by nearly $14 million and reduced its Total Liabilities by $15 million, thus increasing its Unrestricted Net Assets by $29 million. Now that is a positive Balance Sheet story to tell.

Rosansky roils some




I wrote a few weeks back that no Newport Beach City Council member had ever been elected to higher office in the city’s glorious 107-year history.

However, that doesn’t mean some haven’t tried over the years, most recently Leslie Daigle, who ran unsuccessfully for the Assembly in 2012.

Most termed-out council members have kept a relatively low profile post-council.

Enter Steven Rosansky and his desire to stay in the spotlight. Immediately following his nine years on the Newport Beach City Council, he grabbed headlines by being appointed the "volunteer" interim executive director for the Newport Beach Chamber of Commerce.

Now, back in 2010, county Clerk-Recorder Tom Daly briefly toyed with the idea of running for supervisor. Seeing a chance, Rosansky filed the initial paperwork to run for Daly’s potentially open position. However, when Daly abandoned his aspirations, Rosansky backed down, too, saying, "There’s no point now. I’m not looking to run against an incumbent."

So when Daly got elected to the Assembly in November, the clerk-recorder post opened up again. But this time, instead of an election being held to fill the seat, the supervisors would be appointing someone.

Rosansky actually made it to the final group of 11 candidates, although he didn’t make it past the first round of supervisors’ votes after the interviews April 2.

But it wasn’t the fact that he made it that far that was surprising. It was what Rosansky said during the public interview (kudos to Chris Emami of for his phenomenal play-by-play account:

For instance, Supervisor John Moorlach asked a simple question: Had Rosansky had ever been subject to any political investigation? To which Rosansky replied, "Possibly."

OK, I suppose Rosansky’s receiving a Fair Political Practices Commission violation letter after an investigation in 2012 would qualify for a "possibly." Maybe even a "quite possibly." Or even a "yes."

But the most outrageous statement came in his closing statement. He said that since he left the Newport Beach City Council, he now has time to do the job.

I guess the Newport Beach Chamber of Commerce executive director position, albeit volunteer, doesn’t take the entire 40 hours a week that Rosansky’s predecessor in the job, Richard Luehrs, got paid $133,000 a year to put in. So either Luehrs was milking the clock, or Rosansky isn’t taking his volunteer position seriously.

I can’t wait to hear what Rosansky says to the supervisors when they interview him for the other county post up for appointment this year: public administrator.

Jack Wu lives in Newport Beach.

Nevada’s shame: patient dumping

By Dan Morain, Senior editor

dmorainThe Sacramento Bee

CARSON CITY, Nev. – To attract tourist dollars, Nevada Gov. Brian Sandoval unveiled a cheery little ad that displays the Silver State’s sunny side and is set against a toe-tapping version of "Don’t Fence Me In," the sort of tune that can worm its way into your head.

The governor proudly displayed a new slogan: "Nevada: A world within. A state apart."

Funny thing, but Sandoval can’t bring himself to talk about a policy that truly sets Nevada apart: busing patients from Rawson-Neal Psychiatric Hospital in Las Vegas to every state in the continental United States.

"We are going to decline to comment," Sandoval’s press secretary, Mary-Sarah Kinner, said in a recent email, before she stopped bothering to respond to my requests for comment.

The 30-second commercials with the snappy sounds of "Don’t Fence Me In" will start airing Monday in Los Angeles, San Francisco and Phoenix, appropriate given that Nevada draws millions of tourists from those markets.

Also noteworthy, Nevada buses many of its psych patients to those areas, 240 to the Los Angeles-Orange County area, 48 to the Bay Area and 71 to the Phoenix-Mesa-Tucson area since mid-2008.

"We’re not amused by what they’re doing," said Orange County Supervisor John Moorlach, who, like other California officials, had been unaware of Nevada’s practice.

For years, Nevada carried out its policy quietly, failing to inform mental health care professionals on the receiving end of the bus rides.

But in February, Rawson-Neal’s staff stumbled by giving James Flavy Coy Brown a three-day supply of anti-psychotic medication, four bottles of Ensure and what he called "cheesy peanut butter crackers," and sending him on a 15-hour Greyhound bus ride to Sacramento, where he has no family and no connections.

Brown, who has schizophrenia, made his way to the Loaves & Fishes shelter in Sacramento, where a social worker listened to his story and got his permission to call my colleague Cynthia Hubert. She has been writing about Brown ever since.

We also used the Nevada public records act to get receipts of all bus tickets purchased by the Nevada mental health department back to mid-2008 and found that Nevada authorities bused 1,500 human beings from its Las Vegas psychiatric hospital to cities in every corner of the country.

Nevada sent people to Eureka, Chico and El Centro, and to Idaho Falls, Kansas City and Raleigh. Nevada sent 29 people to Chicago and 19 to New York City. It recently bused two people from Rawson-Neal’s inpatient wing 2,200 miles to Miami and three people 2,400 miles to Boston – presumably with no escort, but with 18 bottles of Ensure each, as per its "travel nourishment protocol."

During his two years in office, Sandoval has presided over cuts in mental health funding, as Nevada expanded its out-of-state busing program, from 290 people in 2010, the year before he took office, to 361 people in 2011, his first year in office, to 388 in 2012.

Another 81 patients were bused out of Nevada in the first 10 weeks of this year. At that rate, Nevada will have bused more than 400 people in 2013, though the rate might slow now that it is being exposed.

I don’t know who the individuals are. Nevada authorities were cavalier in their care of James Brown. But they are strict about privacy laws, careful not to release any names. That leaves questions.

How ill were the people who were bused? Did they make it to their destinations, or get lost? Did they take their meds or sell them? Did any of them harm themselves or others en route to where they were headed?

Sandoval, a Republican on the rise, ought to be asking those questions. He portrays himself as solid family man, with three children and a first lady who works "to advance awareness of children’s mental health issues." How nice.

A former Nevada attorney general and federal judge, Sandoval is mentioned as vice presidential timber, or a 2016 candidate for the U.S. Senate seat held by Senate Majority Leader Harry Reid.

After President Barack Obama carried Nevada easily, Sandoval deftly became the first Republican governor to accept Medicaid expansion offered through the Affordable Care Act. Earlier this month, after Hubert wrote about Brown, Sandoval announced he wants to increase mental health funding by $25 million.

I spent a day in Nevada’s Capitol last week to get a sense about what politicians thought of Brown’s story and its implications. Not much, as it happens.

David R. Parks, Nevada’s Senate president pro tem, wasn’t aware of the story, even though a Senate committee held a rather perfunctory hearing on it last month. Parks had no idea about the magnitude of his state’s busing program.

"When a state like Nevada funds its health care programs as poorly as we have, there are going to be problems," Parks said.

Sen. Richard Segerblom, a Las Vegas Democrat who goes by the nickname "Tick," said Brown is "lucky" to have landed in California. At least, California provides some sort of safety net.

"We’re like the Mississippi of the West," Segerblom said. "I think you’ll find that people couldn’t care less."

In a hallway outside a legislative committee room, Mike Willden, longtime director of Nevada Health and Human Services, explained the busing policy. When out-of-towners deteriorate, he said, "We’re using our funds, our resources, to treat that mentally ill patient."

"That said, our policies are pretty clear. We want to get that person back in the community," Willden said. "We’re going to attempt to get you connected with your family, your friends and your resources in your community. So if you look at most of the bus transports we’ve done, that’s what we’ve done. We’ve connected them to their community."

If Nevada authorities truly wanted to reintegrate the individuals, rather than dump them, Nevada’s case workers probably would have picked up the phone and called mental health workers in counties that receive them.

"I have not received any communication from anyone in Nevada," Orange County behavioral health director Mary Hale said, echoed by many other officials outside Nevada.

Willden explained: "I don’t know that the county would know about it. But the family, friends and the treatment program we’re sending them to should know about it."

And he had a justification: "We don’t know when we’re receiving interstate mental health placements. So the street runs both ways."

Could it be that other states place individuals on Greyhound buses to Las Vegas with supplies of Ensure and cheesy peanut butter crackers? Hale could not think of a single instance in which Orange County had bused patients to another locale, certainly not unescorted.

Willden said Sandoval has been reading articles about Brown and "is very concerned."

"He cares about people," Willden said. "You’ll have to ask the governor beyond that what his opinion is."

I tried on the day I was in Carson City. But Sandoval was busy unveiling what he called Nevada’s "awesome" new brand. Nevada: A world within. A state apart. One that has a cold-blooded policy born of lack of compassion for people who cannot care for themselves. Think of it every time you hear the catchy new rendition of "Don’t Fence Me In."

Follow Dan Morain on Twitter @danielmorain.

Ernie Schneider, bankruptcy-era county executive, dies

The 66-year-old worked for county for decades before its bankruptcy.


Former county Chief Administrative Officer Ernie Schneider, who was ousted in 1995 after the county had entered bankruptcy, has died. He was 66.

Schneider died Saturday at his home in San Juan Capistrano from an undisclosed illness, said his former wife Sally.

Ernie Schneider, seen in a 1995, photo was chief administrative officer when Orange County declared bankruptcy in 1994.


According to Sally Schneider, Ernie Schneider was born in Germany on Dec. 25, 1946, and immigrated to New York when he was 6. His family moved to Orange County when he was 12. He graduated from Orange High School and received a master’s degree in business administration from Cal State Fullerton, she said.

Schneider began his career in Orange County government in the early ’70s and worked his way up.

But in June 1994, the county declared bankruptcy as a result of $1.7 billion in losses from investments of county funds made by Treasurer Robert L. Citron. At the time, it was the largest municipal bankruptcy in U.S. history.

Schneider was fired in February 1995.

"He was a huge casualty from the bankruptcy, and I don’t think he ever recovered from it," said former Supervisor William Steiner. "He just felt he paid a big price for Citron’s mistakes."

Nearly 50, Schneider was unable to get a job in the public sector. He really wanted to "get back into the game," but no one would touch him, Steiner said.

His marriage of 29 years to Sally Schneider, his college sweetheart, also started to fall apart and eventually ended.

But Ernie Schneider landed a job at Irvine engineering firm Hunsaker & Associates and had a quiet career there, according to Orange County Register reports. In 2004, he married former Laguna Beach Councilwoman Elizabeth Pearson. Their marriage ended in divorce in 2011, court records show.

Around the 10th anniversary of the bankruptcy, Schneider was asked about the chief lesson from it.

"Follow your instincts," Schneider told the Register.

Schneider said he was on the verge in 1994 of requesting a public audit after John Moorlach, a CPA who was running for treasurer against Citron that year, warned him about a potential bankruptcy. But Schneider said he let Citron talk him out of the audit request. Citron, Schneider said, convinced him that Moorlach was just angling for Citron’s job.

"I was trying to warn Ernie," Moorlach, currently an Orange County supervisor, said Sunday. "He saw me as the gadfly, as someone who was being political and a nuisance."

Moorlach said he and Schneider eventually reconciled and even went on a double date.

"I’m really sorry that he’s passed because his motives and his skill sets were always really good," Moorlach said. "He didn’t do enough digging until it was too late," Moorlach said. "He had to live with that regret for the rest of his life."

According to Sally Schneider, survivors include their son, Nick, 31, of Aliso Viejo, and Ernie’s mother, Christine Parkinson, of Irvine. A memorial service is being planned.

Contact the writer: 714-704-3709 or desalazar


April 12


Dan Weikel of the LA Times provided an update on an interesting chapter in the history of the Orange County Transportation Authority in “O.C. Rail Plan Criticized as ‘Fiscal Black Hole’ – Twenty-one local leaders urge OCTA to renounce the rail plan and put the $1.5 billion into existing needs. Transit officials point to strong support.” I am constantly amazed with the fixation Federal funding, even with strings attached or lack of logic, has on locally elected officials. We’re observing it, again, but on a grander scale with California’s pursuit of high speed rail. This craving for Federal funny money is also having an impact on the County’s currently free car pool lanes; but I digress. Read to the bottom of this section and you’ll see how the story ends.

Calling the proposed CenterLine project a waste of public funds, a group of 21 government leaders from throughout Orange County asked transit officials Friday to withdraw their support for the $1.5-billion light-rail system.

"CenterLine threatens to become a fiscal black hole, draining off funds needed just to maintain and upgrade our current transportation infrastructure," the group wrote in a petition-style letter sent to the Orange County Transportation Authority.

Signing the request were mayors and council members from 10 cities, including Anaheim, Garden Grove, Tustin, Irvine, Mission Viejo, Laguna Niguel and Dana Point.

Orange County Treasurer-Tax Collector John M.W. Moorlach, Assemblyman John Campbell (R-Irvine), and retired state Sen. John Lewis (R-Orange) also signed the demand letter.

"We would like OCTA to cancel the project and start spending money on things that will actually relieve congestion," said Anaheim Councilman Tom Tate, who drafted the opposition letter.

Supporters, however, said many county leaders support the plan to lay 11.4 miles of rail through Irvine, Costa Mesa and Santa Ana with stops at UC Irvine, the Irvine Business Complex, John Wayne Airport, South Coast Plaza and the Santa Ana train station.

The line would have about 22,000 daily passengers during its first year, according to OCTA estimates, growing to roughly 32,000 a day after 15 years.

OCTA directors will decide whether to move forward with the project after an engineering study.

If so, CenterLine rail could be rolling by 2011.

As room for new freeways vanishes, light rail will be needed to meet transportation demands, supporters say.

Although construction costs are high, they contend that light rail is more convenient for riders and less costly to operate than conventional buses.

So far, there has been strong support for CenterLine on the authority’s board of directors and on the councils of the three cities where the line would run. Other cities are interested in acquiring extensions of the system if the first leg is built.

"We have 92 council members in 18 cities who have supported the project," said Cypress City Councilman Tim Keenan, who chairs the OCTA board.

"We have done polling that shows wide community support."

The letter suggests that rail cost estimates may be overly optimistic and it questions whether spending $1.5 billion is appropriate given CenterLine’s projected ridership and the $14-million annual operating cost.

"Since both construction and operational costs of such systems nationwide have been notoriously much higher than originally projected, the true costs could be even more staggering," the letter says.

The money used for CenterLine would drain funds from more effective transportation projects, such as highway improvements and better, more innovative bus service, opponents said.

"A fixed rail system will be a money pit," said Tustin Mayor Tracy Worley, who signed the letter.

"This will never link the county’s 34 cities, it is so darn expensive."

If federal money is not spent on CenterLine, OCTA officials warn that it will be spent on proposed light-rail systems in other cities, denying the county its share of federal support.

They say hundreds of millions of dollars have been earmarked for highway and street improvements as well as expanding bus service by 50% over the next five years.

"The opponents are supporting failed methods. They are just naysayers," said Debbie Cook, a council member in Huntington Beach, which is interested in an extension of CenterLine.

"I don’t want to see Orange County left in the dust."

OCTA officials worry that continued political conflict over CenterLine could jeopardize its chances to obtain federal funds. The Federal Transit Administration, which handles funding applications, generally wants consensus on transit proposals and is aware that CenterLine has been in dispute for at least six years.

Since 2000, political and community opposition has stalled the proposal and triggered several reductions in the line from its original 28 miles.

Despite the downsizing, CenterLine still faces a June 3 vote in Irvine that could determine its fate.

In a political development related to CenterLine, Supervisor Bill Campbell came out against the rail project Wednesday evening at an appearance in Irvine.

Rather than build CenterLine, Campbell said he supports extending the Orange Freeway along the Santa Ana River from the infamous Orange Crush to the San Diego Freeway.


Peggy Lowe of the OC Register provided the next chapter in the 2008 retroactive lawsuit journey in “Deputy pension lawsuit may move to LA – County wants its lawsuit against ‘3 percent at 50’ plan to stay here.”

Orange County’s legal attempt to cut deputies pensions may be moved to a Los Angeles court.

Orange County Superior Court Judge Thierry P. Colaw made the tentative ruling Friday, but said he will issue a written order in a week. He agreed to the delay after an attorney for the county, Robert Gasaway, urged him to once again study the issue.

"I’m not inclined to change my mind," Colaw said, "but I am inclined to take another look."

The lawsuit is aimed at cutting the union’s so-called "3 percent at 50" formula, which allows for 3 percent of final pay times years of service after the age of 50. Deputies say it is a well-earned retirement for people who work in dangerous jobs; critics like Supervisor John Moorlach say it’s an overly-generous pension that’s created a large bill footed by taxpayers.

The lawsuit seeks a "declaration of unconstitutionality" on the deputies’ retroactive pension benefit along with an injunction against the Orange County Employee Retirement System, which manages the benefits. The injunction would bar the retirement system from paying out those benefits that were achieved before June 2002 – the date a former board approved the "3 percent at 50" plan.

The retirement system filed the change of venue motion, citing law that says a court case involving two local public agencies must be moved to another county. The county’s attorneys want the suit to remain in Orange County, arguing that the retirement system is an independent agency and is not considered part of the county government.

Union president Wayne Quint said he’s encouraged by the judge’s ruling but would wait until he sees the final determination. Mario Mainero, Moorlach’s chief of staff, declined comment until he sees the judge’s final ruling.

April 13


The front page of the Sunday OC Register had a section at the bottom, titled “What’s Up This Week: A sample of events here and elsewhere,” that provided this announcement:

GOVERNMENT: Supervisor John Moorlach on Tuesday will call for an emergency declaration so the county can bypass its elaborate contracting process and spend nearly $400,000 on surveillance equipment at Theo Lacy jail. This follows a grand jury report critical of the jail system after the beating death of an inmate by other inmates.

Greg Richter of The Birmingham News mentioned two articles of note (see MOORLACH UPDATE — OC Register — April 14, 2008) in “Outside Looking In – Jefferson County’s financial mess may dwarf that of Bear Stearns.” In his compilation, the reporter got my attempt at humor.

Joe Mysak of Bloomberg News sees Jefferson County’s sewer bond troubles as a possible bellwether for recovery. But that’s not good news here: "The stock-market guys say you have to reach a bottom before you can recover, and that a bottom is often signaled by the collapse of some big entity. Many people thought it was Bear Stearns Cos. In reality, it’s Jefferson County." Yikes. "This is how it ends for the little county that was going to teach America how to use interest-rate swaps."

"Closely monitoring the (sewer bond) situation is Orange County Supervisor John Moorlach, who first gained fame by correctly predicting the largest municipal bankruptcy in the nation’s history while campaigning for county treasurer in 1994," reports the Los Angeles Times. "If bankruptcy is declared, Moorlach said, `I would be pretty upset. We’d be like a small footnote here; I’d be very disappointed to lose the top spot.’" Sure, sure.

April 14


David Parrish of the OC Register provided a finance update with “O.C. set to retire ’94 debt early – FINANCES: Supervisors next month will hear a plan to pay off $38.7 million borrowed after the bankruptcy.”

The county government is poised for the first time since the 1994 bankruptcy to pay off part of the $1 billion it borrowed to get out of the financial disaster.

So far, the county has been making only interest payments – about $78 million annually – on its bankruptcy-recovery debts. But a county plan that will come before the Board of Supervisors next month calls for $38.7 million in principal debt to be wiped clean three years early.

“I think this is more than a gesture; it substantially strengthens our commitment to paying off debt early,” said Supervisor Bill Steiner, the lone holdover member of the board from the $1.6 billion bankruptcy.

The bankruptcy debt will be repaid early by placing $32 million in an untouchable escrow account this spring, and then using the balance and accruing interest to pay off bonds coming due in 2001, 2002 and 2003, said Gary Burton, the county’s chief financial officer. Because the funds will be in an escrow account, the debt will be considered legally repaid, he said.

Current market conditions would make it too expensive for the county to take a more straightforward approach and just repurchase the bonds early, he said. The $31 million for this transaction will come from a pool of about $50 million the county has managed to squirrel away.

“It’s more symbolic than real, but it sends the right message to both residents and Wall Street,” said Mark Baldassare, an author of a book on the bankruptcy.

County Treasurer John Moorlach said the early repayment plan will have a short-lived practical benefit.

“We are really not ahead after 2003; you are back where we stated,” Moorlach said.

The OC Register’s lead editorial was titled “Blocking the tracks of CenterLine.” It discusses the letter sent to OCTA (see April 12, 2003 above). Here are the closing paragraphs:

Yet OCTA is focused – some would say fixated – on building an 11-mile trolley line from Irvine to John Wayne Airport and on to South Coast Plaza. And even that is questionable given that Costa Mesa wants the line to go underground as it approaches South Coast Plaza.

The signatories to the letter include county Treasurer John Moorlach, state Assemblyman John Campbell, Garden Grove Councilman Mark Leyes, Anaheim Councilman Tom Tait and other prominent officials. They know it’s time to pull the plug on this costly toy train.

April 15


My April Daily Pilot “Community Forum” contribution was titled “Confessions of a CPA – If you didn’t like this tax season, just wait ‘til next year.” For the historians, my reference to nanny’s services can be found on Wikipedia, under “Nannygate,” see After you read the piece, you’ll agree that the trends do not seem to change; we just keep “contributing” more with every passing year.

Today is Thursday, April 15, the deadline for filing your personal income tax returns. I will be finishing the busiest season of the year for my industry. My family can hardly wait.

We’ll go out for dinner, probably to Hamburger Hamlet on Adams for a view of the post office. We enjoy watching you mail your returns at the last possible minute. We may even join the Republican Party’s tax protest at the post office on Sunflower – another great place to observe.

Have you taken a good look at your tax returns? Do you believe that you paid enough this year? Could you have honestly paid more? Obviously, yes. That’s the impression you’ve given President Clinton!

Do me a favor – speak for yourself.

Did you feel your returns were easy to prepare? Were the forms and instructions easy to understand? Did it take you more than an hour to prepare or collect the data for your tax preparer? Did you have many forms, schedules, and statements to complete? Did you have to buy extra postage, too?

If you thought preparing your returns was a real headache, wait until next year! You thought that the last 12 years gave us plenty of tax legislation, you haven’t seen anything yet!

When it comes to tax laws, Democrat presidents can pour (or was it “poor”?) it on just as hard and heavy as Republican presidents. Look what happened during President Carter’s four-year term:

· Tax Reform Act of 1976;

· Tax Revenue Act of 1978;

· The Technical Corrections Act of 1979;

· The Crude Oil Windfall Profit Tax of 1980;

· The Installment Sale Revision Act of 1980;

· The Foreign Investments in Real Property Tax Act of 1980; and

· The Bankruptcy Tax Act of 1980.

President Clinton’s proposals make Carter’s legacy look like a cake walk. And Mr. Bill’s new ideas will add to the paper shuffle and to your balance due. With the tax law proposals likely to come out this year, you can put “tax simplification” in the same oxymoron as “easy payments.”

I will be spending my summer reading about these proposed tax laws. It will be cause for grimace and economic relief to learn what will be recommended. The new Internal Revenue Code provisions will be great for my business and household. They will be devastating for yours.

I certainly have to commend President Clinton for his PR job on his tax increase proposals. Making us feel that paying more taxes is a “patriotic” duty may make the pill go down easier, but government is still an inefficient, over-staffed, under-worked bureaucracy.

And while we personally struggle, sacrifice, postpone and wait for important needs and wants in our lives, the government is spending with abandon and flurry on asinine projects. Yet it is the governed that must make the cuts.

The General Accounting Office recently released a study that stated that not one government agency is run well or is up-to-date. It stated that Medicare loses $10 billion a year because of sloppy billing and fraud! The IRS lets $30 billion escape! Yet, you’re rubbing pennies together to make ends meet.

Take a hard look at your Form W-2 and tax return again. Look at how much the IRS is retrieving from your overall budget through federal and Social Security taxes. Then look at California’s share of the taxes and disability insurance. Isn’t this amount already “over pay-triotic?” Or do you enjoy being a slave to government? Don’t worry, it’s a “contribution.”

But if you don’t make your “contribution,” count on severe penalties and interest with almost no relief. Not to mention the great collection departments our government operates. Benevolent charities, right? Wrong! It’s not a contribution, it’s not sacrifice, it’s oppression!

Let’s run a tally. Look at your itemized deductions. Add real estate taxes and your now higher vehicle registration costs together. How about sales tax? Compute and include it, too. Did you stay in a hotel this year? Then add the bed taxes. Did you fly to get there? Include the ticket tax.

And that’s not all. Wait until you find out how much of your gasoline prices per dollar is for taxes. Do you smoke? Drink? Thanks for the contribution. Did you have to buy tires this year? Don’t forget excise taxes. Have you checked your utility bills lately?

And for you attorney general candidates, be sure to include the Social Security you paid for your nanny’s services (I’ll leave British Thermal Units, or BTUs, for another time – don’t remind me about the British while I’m on the topic of high taxes).

Wake up, America! The conservatives and Ross Perot are right. We have to cut government spending. Instead of investing in Clinton’s plethora of new programs we should be investing in ourselves. Don’t buy Mr. Bill’s line – we’re already being taxed to death to fund the highest government largess in history. It is staffed with over 18 million employees! It’s time for a change, please. Mr. Change is only giving us the same old same ol’.

All the same, have a great day at the post office, my patriotic fellow citizens. Maybe I’ll see your generous faces there. Remember to enjoy your half of your earnings. I know the federal, state, and local governments will enjoy the other half.

John Moorlach is a local businessman and resident of Costa Mesa.


Deirdre Newman of the Daily Pilot closes this 2003 LOOK BACK story in “OCTA board turns down CenterLine request – Study of underground rail line in Costa Mesa deemed unwise without federal funding for construction.” Here are a few selected paragraphs:

On Monday, the Orange County Transportation Authority board voted 8 to 1 to reject an in-depth study of an underground alternative based on a lack of confidence about obtaining federal funding for construction. Santa Ana Mayor Miguel Pulido was the only member to support the study.

While the vote killed the undergrounding study for now, the board left alive the opportunity for more dialogue if federal funding materializes.

Also last week, a group of 21 former and current elected officials sent a letter to the authority asking it to reconsider its support for the light rail project, claiming it could become a “fiscal black hole.” County Treasurer John Moorlach, a Costa Mesa resident, and Assemblyman John Campbell were two of the signees.

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