MOORLACH UPDATE — The Pits — July 12, 2013

The AQMD Board voted 7-6 to move the fire pits 700 feet away from the nearest residence at its special meeting today. My office was represented by my Policy Advisor David Mansdoerfer. Regretfully, one neighboring county supervisor, Josie Gonzales of San Bernardino, may have been the swing vote. The Voice of OC provided a pre-AQMD meeting article below.

Developer’s Meeting on Beach Bonfires Still Unexplained


A proposed ban on beach bonfires in Southern California was apparently influenced by a private meeting between a powerful air quality official and a Newport Beach property developer, a document obtained by Voice of OC shows.

Bill Burke, chairman of the South Coast Air Quality Management District, discussed the issue with developer John Hamilton and three unspecified “associates” at a luxury hotel in Los Angeles on Feb. 26, Burke wrote in a mandatory disclosure to the California Coastal Commission.

Hamilton “ask [sic] me that if in my roles as AQMD member and Coastal Commissioner if I would look into the districts [sic] position on the particulant [sic] matter and over regulating same. I agreed to do that,” Burke wrote.

After the meeting at the Luxe Hotel, Burke publicly announced that AQMD would take up the issue and that he was “100 percent certain” that beach bonfires would be banned.

The document provides a window into how AQMD came to take on the issue of bonfires just as Southern Californians flock to Diamond Bar Friday morning to speak before the AQMD board votes on banning many of the bonfires.

Efforts at understanding that process have proved exceeding difficult, with the agency refusing to disclose internal emails regarding any kind of policymaking.

Key questions about the Luxe Hotel meeting also remain unanswered. The participants don’t want to reveal who Hamilton’s three “associates” were or exactly what was discussed.

Burke didn’t return a message seeking comment, and Hamilton declined to identify the other attendees.

“I do not want to get into it,” said Hamilton, citing the nasty tone of the bonfire debate and a recent case of "Keep Your Mitts Off Our Pits" stickers being plastered on a neighbor’s home.

He also declined to detail what was discussed, other than “it was nothing but asking information about the AQMD" after he learned about harmful health effects from bonfires.

The proposed ban has sparked a backlash from local residents. This morning’s hearing was expected to draw a massive crowd.

Supporters said the proposal is based on scientific evidence of health effects, such as chronic bronchitis, from breathing wood smoke.

Hamilton compared the fire rings to second-hand tobacco smoke.

“You have no right to blow cigarette smoke into my face,” he said. “Just put [fire pits] in a safe area.”

Opponents, meanwhile, claim Burke pressured AQMD staff to pursue the ban on behalf of wealthy Corona del Mar residents.

What is known is that Newport Beach’s efforts to rid itself of bonfire pits were in trouble heading into a March 6 Coastal Commission meeting.

Staff at the Coastal Commission, which protects public access to beaches among other tasks, were set to recommend that the rings stay in place.

But following the Luxe Hotel meeting, Burke pursued bringing the matter over to AQMD.

"Don’t come to me and say I need fire rings to have a good time,” Burke said at the March 6 Coastal Commission meeting.

Burke, an appointee of Assembly Speaker John Perez, has served on the AQMD board for more than 20 years.

He ultimately revealed the Luxe Hotel meeting as part of mandatory disclosure but didn’t specify who Hamilton’s three “aquaintances” were.

State law requires Costal Commission members to publicly report outside conversations with an “interested person,” also known as ex parte communications.

The dueling camps on this issue geared up for battle Thursday, with shuttle service planned to take residents to the meeting.

And a poll released Thursday by an activist group, Friends of the Fire Rings, indicates Newport Beach residents overwhelmingly oppose removing the rings.

The poll was overseen by political consultant John Lewis.

A host of agencies have filed resolutions opposing the ban, and politicans such as Orange County Supervisors John Moorlach and Todd Spitzer have made an issue of it.

Orange County’s two representatives on the 13-member AQMD board — Board of Supervisors Chairman Shawn Nelson and Santa Ana Mayor Miguel Puldio — have indicated they don’t support a ban.

Also on Thursday, AQMD officials notified Voice of OC they would turn over more emails under a records request that has dragged on for three months.

The announcement came hours after Voice of OC reported that officials were illegally withholding records.

The new documents, however, were inaccessible after multiple attempts to load them using the correct computer software.

AQMD is also still violating the law by neither explaining in writing the specific reasons for withholding records nor stating when it would finish complying with the records request.

You can reach Nick Gerda at ngerda, and follow him on Twitter: @nicholasgerda.


July 14


The Nevada Policy Research Institute (NPRI), in an Issue Brief by Doug French, titled “Here a Tax, There a Tax, Everywhere a Tax, Tax,” quoted from the recent issue of Grant’s Interest Rate Observer. Here is the quote and the subsequent paragraph, providing a Nevadan’s perspective.

Since the deflating of the NASDAQ bubble, California’s revenue stream has slowed to a trickle. Nevertheless, the state’s spending charges on and the state is instituting more programs that will stifle economic development. John Moorlach, treasurer and tax collector for Orange County, told Grant’s “that the state is virtually forcing businesses into the arms of neighboring capitalist states through such pioneering public initiatives as the Family Temporary Disability Insurance program, which was signed into law by Davis in September.” FTDI calls for employees to receive partial wage compensation from the state “while caring for family members who are ill, or for bonding with a child new to the family.”

The lesson our legislators should learn from our neighbor’s financial predicament is not, “Hey—taxes and regulation are much worse in California, so we can afford to jack up our taxes!” That would make it only a matter of time before Nevada is in the same kind of mess as California.

John Howard of the OC Register provided a foretaste of things to come in “Davis could halt O.C. bond payments – With the governor’s plan, money that Orange County uses to pay off debt from its 1994 bankruptcy would be withheld.” During the interview I emphasized that the idea of a temporary sales tax increase was not going to happen, in light of the loss of Measure R in 1995, but this was not included in the narrative. I never inferred that I supported a tax increase, but with the half-quote, one would get the impression that I did. I was publicly opposed to the Measure R sales tax ballot measure.

Gov. Gray Davis is threatening to divert $7 million from Orange County’s budget, stripping away unique protections that helped the county climb out of bankruptcy eight years ago.

The money has been used every year to pay off bond debt stemming from the bankruptcy. If the governor’s plan is approved by the Democratic-controlled Legislature, it could jeopardize the county’s credit rating.

Some lawmakers think it could even violate state law, setting up a potential legal challenge.

Davis, grappling with a $38.2 billion budget shortage, wants a three-month halt to payments the state gives local governments to make up for money they lost when vehicle license fees were reduced five years ago. The move would save the state $825 million.

Orange County has been shielded for years from having its vehicle license fee money raided by the state – at the demand of investors.

“If there is a violation of that in any way, eliminating the fees or eliminating the payments, that would be a violation of the bond covenants,” said Anaheim Mayor Curt Pringle, who served as Assembly speaker in 1996.

Coincidentally, the state is in a predicament similar to Orange County’s during bankruptcy, Pringle added.

“It’s the exact same concept. Investors are asked to loan the state $10.7 billion in a credit card-like payment scheme with the debtors protected by a dedicated stream of revenue. Short of declaring a formal bankruptcy, the state is in a very similar situation to Orange County,” he said.

The county’s special safeguard, a sort of “Do Not Disturb” sign, was written into the law – twice – to assure jittery investors that the bonds they bought in 1995 to help Orange County emerge from bankruptcy would be paid in part by money collected from the license fees.

The county gets about $161 million a year in license fee money and related payments. The state diverts a portion of that money directly to investors who bought bankruptcy bonds in 1995.

But Davis’ budget proposal would remove that protection for the first time during a three-month window from July through Sept. 30.

It would hold back about a fourth of the vehicle license fee money from all local governments. In Orange County’s case, that would include roughly $7 million of the $28.3 million set aside to pay off the bonds.

After Oct. 1, when the license fees triple, there would be sufficient money, and the bond payments would not be threatened under the Davis plan.

But it is the loss of money during the summer that has county officials worried.

“We’ve already reduced services,” said county health care spokeswoman Pat Markley, adding that more cuts “would be deeply painful.”

Davis’ budget plan is not the only one being considered. There are a half-dozen other proposals on the table, as the state enters its third week of the 2003-04 fiscal year without a spending plan.

If the money is blocked, the county is still on the hook to pay back the bondholders and would have to come up with the money on its own.

“We don’t really have anywhere else to go for the money,” county Treasurer John Moorlach said. “The bondholders are under the impression that the (vehicle license fee) money is being diverted to them.” If not, Moorlach added, “the county would have to make up the difference.” Options, all unpleasant, include dipping into the county’s reserve or a temporary tax increase, Moorlach said.

Thus far, Orange County has been able to avoid layoffs but has cut services. The loss of $7 million would be a significant hit, even in a county with 18,000 employees and a $4.2 billion budget, because the county has already cut to the bone, county spokeswoman Diane Thomas said.

The likeliest targets for cuts are in social service or health programs. Already, eight satellite community health clinics were closed, preventive health-care services for older adults were reduced and clinical services for pregnant teens were hit, among other reductions, Markley said.

An interruption of the flow of bond payback also could affect the county’s credit rating, “so Orange County will do whatever it takes to get the bonds paid. It would be surprising if anything stands in its way. It is a wealthy county and prudent in its finances,” said Robin Rappaport, a municipal credit expert with Payden

& Rygel in Los Angeles.

The county has $90 million in reserve, but tapping it would be painful, because it is committed to programs over five years, Thomas said.

Davis’ Finance Director Steve Peace and his aides declined to discuss the issue, citing pending litigation prompted by a lawsuit filed last week by the Howard Jarvis Taxpayers Association, which challenges the administration’s order to triple the vehicle license fees Oct. 1.

But some believe Peace and others in the administration are reconsidering and hope to protect the funds.

Sen. Dick Ackerman, R- Irvine, said he asked Peace about the problem and got a favorable reply. “They recognize the situation, and he said he will act,” Ackerman said.

Others aren’t so sure. “If it becomes something he insists upon, then it could be something that the Legislature has to concede in order to get a budget,” said Assemblyman John Campbell, R-Irvine.

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