MOORLACH UPDATE — OCTA Vote — September 24, 2013

If I’ve said it once, I’ve said it a thousand times, when money talks, the truth is silent. As predicted, the Orange County Transportation Authority (OCTA) Board acquiesced to the presumption that if they create the toll road first, then OCTA will keep the net revenues. It sounds logical. All I have to say is, good luck with that.

The push has been for Alternative 3, to build two toll lanes in both directions on the 405 San Diego Freeway between the 73 San Joaquin Toll Road and the 605 San Gabriel Freeway, providing one as a general purpose lane and adding one to the carpool lane and convert the carpool lanes (high occupancy vehicle, or HOV) to toll lanes (high occupancy toll, or HOT). The impacted cities preferred Alternative 2, which added two general purpose lanes. The OCTA Board majority voted for Alternative 1, add one new lane on each side, as provided for in Measure M2. The environmental impact report was deficient and had to be amended for impacts to the city of Long Beach. This provided time to review two additional alternatives: Concept A would add two general purpose lanes and convert the HOV to an HOT lane and Concept B would add two general purpose lanes, but modify down to one northbound lane north of the 22 Garden Grove Freeway to accommodate space concerns for the College Park East residents of the city of Seal Beach.

Concept A was rejected because the one lane could not generate enough toll revenues to service the related debt. Why it takes some $254 million to restripe the carpool lanes and install transponder detecting devices is still unclear to me. Concept B was compared to Alternative 2. Alternative 2 was not approved by the OCTA Board. Therefore, comparing it to Alternative 2, versus Alternative 1, was intellectually dishonest. But, modifying the second lane would obviously require the merging of traffic in Seal Beach, which was an argument against Concept B. As opposed to how many more vehicles could move through the corridor with the second lane over the one lane Alternative 1. The other reason for rejecting Concept B was “Caltrans is not supportive of concept,” which tells the bulk of the story. I’m just back from a nearly three-hour discussion at OCTA with the members of the 405 San Diego Freeway Improvement Project Policy Working Group where Ryan Chamberlain, the Caltrans District 12 Director, flatly stated that OCTA had to add one lane as opposed to waiting and not doing anything. In fact, it really needs to build six lanes in each direction to have enough capacity to meet demand, but Caltrans opposes building two lanes? How disingenuous does it get?

Let’s recap. OCTA has been using Measure M funds for the last two decades to address the traffic at the El Toro Y, the 22, and the 5. Now it turns its eyes on the 405. In the middle of the process, Congress approves MAP-21 last July, which requires a study of carpool lanes because California allows solo drivers in low emission vehicles (LEV) to use the lanes. If the study finds degradation, that traffic speeds in HOV lanes during peak periods is 45 mph or slower, then a remedy for all HOV degradation in California has to be presented by Caltrans to the Federal Highway Administration within 180 days. Instead of removing the LEVs from the carpool lanes, the preference is to convert the HOVs to HOTs, thus addressing the MAP-21 requirement and generating a revenue source for future transportation improvement projects (charging more than actual costs drifts into the category of new taxation by many observers). So we lose carpool lanes but gain managed lanes, whose profits would be available to the state or the county, depending on how optimistic you are, and traffic throughput will, theoretically, improve. Let’s ignore the fact that 95% of current carpool users are vehicles with only two passengers, and they may just drop the idea of utilizing the HOT lanes, thus adding more congestion to the general purpose lanes and local streets. But, money is talking.

OCTA Rejects 405 Widening, Studies Tolls

Over the next two months, OCTA, Caltrans and Transportation Corridor Agency officials will look at a variety of tolling policies and how the revenue could be spent in the corridor cities to improve traffic flow.

Posted by Chris Jennewein (Editor)

By Paul Anderson

City News Service

The Orange County Transportation Authority board Monday rejected a proposal to widen the San Diego (405) Freeway at Brookhurst Street by one lane, while approving further study of toll lanes on the freeway from the Los Angeles County border to the San Joaquin Hills (73) Freeway.

It appears that Caltrans, which has final say over toll lanes on the 405 Freeway, is aiming to make motorists pay, so a majority of the OCTA board members want to make sure they’re not left out of the revenue stream.

"The state is going to start converting (high occupancy vehicle) lanes to toll lanes," said Orange County Board of Supervisors Chairman Shawn Nelson, who also serves on the OCTA board. "And whether we think it’s fair or not, Orange County is the target."

That’s largely because Orange County already has a plan to add free lanes in each direction as part of an existing project through Measure M, and Caltrans wants the county to address congestion in the carpool lanes, Nelson said.

"Sacramento, generally speaking, has a strong dislike for Orange County and would love to tune us up by implementing paid lanes and taking the cash," Nelson said, adding that it’s important OCTA has a plan for county- managed toll lanes.

Over the next two months, OCTA, Caltrans and Transportation Corridor Agency officials will look at a variety of tolling policies and how the revenue could be spent in the corridor cities to improve traffic in places such as Huntington Beach and Seal Beach where officials object to the toll lanes.

One proposal is to keep the carpool lanes free for vehicles with three or more occupants.

Nelson sympathized with fellow OCTA board members Matthew Harper, Gary Miller, John Moorlach and Janet Nguyen, who today voiced opposition to a toll lane.

"Of course we don’t want to toll anything," Nelson said.

But even though those representatives lost the argument, Nelson said it will be important to get their feedback on the tolling policies and how to spend the revenue.

"The money’s got to be spent in the corridor," Nelson said. "And, at the end of the day, the most important people in the room talking about how to spend the money are the people who were the ‘no’ votes."

If OCTA doesn’t work with Caltrans, the county agency risks letting the state take the toll revenue earned locally and spending it elsewhere, Nelson said.

"The board majority thinks if it’s coming anyway, let’s try to get in front of it," Moorlach said. "But I’m of the mindset that if it’s coming anyway, then why not fight it?"

Moorlach, Miller, Harper and Nguyen favored a plan to add one lane in each direction on top of the already planned ones on the 405 north from Brookhurst to Valley View streets and southbound from the Seal Beach Boulevard on-ramp to Brookhurst Street.

Caltrans officials say that plan would bottleneck traffic at the West County connector at the Garden Grove (22) Freeway and have rejected that proposal.

"It’s no longer a collaboration," Moorlach said of working with Caltrans. "It’s bureaucrats in Sacramento telling (the county) what to do. It’s a shame, but it seems to be the paradigm of late. Sacramento’s grabbing everything they can."

County officials have six months to come up with a plan to address the congestion in the carpool lanes, because federal officials are threatening to withdraw funding in any state where the average speed in those lanes dips below 45 mph at least 90 percent of the time.

Some OCTA board members doubt a study that shows Orange County falls below the federal standard, contending the traffic counts are based calculations in 2011 with systems that are unreliable.

Estimates on tolls could be about $5 southbound and $6 northbound from the 73 in Costa Mesa to the San Gabriel (605) Freeway, which includes the busiest stretch of freeway in the country with more than 370,000 cars a day, said Joel Zlotnik of OCTA.

The project could cost between $1.25 billion to $1.47 billion, Zlotnik said. Officials estimate that high-occupancy toll lanes could generate $1.5 billion, after paying for operations and maintenance, over the next 30 years that could be spent on improving traffic around the freeway in the corridor cities.

Nelson said some of those improvements could include more rail or intersection upgrades.

OCTA officials will return to the board in November with a variety of tolling scenarios. Caltrans officials will make a final decision by year’s end with an environmental impact report due in May of next year.

Construction could begin in 2015 and finish by 2019 or 2020, Zlotnik said.


September 24


The OC Register’s Letter to the Editor section, “Talk Show,” had a letter with an appropriate title for today’s UPDATE, “Do civic leaders care about the average citizen?”

The water tank that broke and flooded a Westminster neighborhood Monday, Sept. 21 reminds me of one of my favorite phrases. People have tried to get the attention of their leaders but they have evidently been “tapping on a window with a wet sponge.” Why were they unable to garner proper attention?

Was it clothes; were only the best dressed allowed to be heard? Was it station in life; were power, money and social standing missing from the simple people whose only claim to fame is that they are aware, know their job and see facts? Was it politics; had they failed to network the proper assembly?

“I told you so” does not matter much after 5 million gallons of water wreak devastation. Alas, the poor people who failed at communicating about the aging Westminster water system are in good company:

· John Moorlach and his pre-bankruptcy Orange County financial warnings.

· Mommies and daddies in Anaheim and their more than 30-year-old public elementary school concerns.

· Judge Jim Gray calling for discussions on a failed War On Drugs.

People are tapping on windows at neighborhood meetings, police department and churches but the elected leaders cannot hear them. Must citizens break the window with a hammer, stand quietly before a bankrupted county or clean up after a 5-million-gallon flood before our leaders will listen to us?

Roberta Webb


Wade Mansur, in his regular “View From The Hill” column in the Brea Progress, addressed “Council members blinding us with vision of indebtedness.” Here is the opening and middle paragraphs of his column:

Breans owe $641,990,603, according to California State Controller Kathleen Connell. Brea’s Redevelopment debt for 1996-97 is nearly two-thirds of a BILLION dollars!

A few years ago, a young CPA, John Moorlach, on several occasions spoke to Breans, forewarning us of the imminent financial disaster in Orange County. Treasurer Citron, the county manager, supervisors, council members, hooted at Moorlach’s predictions.

VOILA! Overnight, the bankruptcy touched many lives, caused many business failures and should serve as a clear reminder of what transpires when democratic principles are flagrantly disregarded.

John Moorlach was right. No doubt his correct prediction was one of the reasons he was appointed treasurer by the supervisors and then elected by the people. Moorlach told me the voters want supervisors to supervise. Breans want council members who supervise.

John said, “The excuses of ‘trusting staff’ and being caught up in the ‘hear mentality’ do not cut it anymore. You are respected for your willingness to be a public servant, but be a ‘wanna-do’ and not a ‘wannabe,’ please. Understand your job and its responsibilities and do it,” John said. “Those holding public offices work for you. Get involved in the electoral process and vote intelligently.”

History repeats itself.


Norberto Santana, Jr., of the OC Register addressed an obscure Board agenda item in “Supervisors vote to revive first-time homebuyer help – Certificates can be used when buyers are refinancing.” I did not hold the view that the county’s involvement in a first-time homebuyer program really primed the pump, so the quote below is humorous, as it seems to have been lost in translation.

Soaring home prices of the last decade – and the availability of cheap financing – annihilated the effectiveness of most local government programs that helped working class people get home mortgages.

But in light of the chaotic events gripping the mortgage industry and dipping home prices, some local governments are beginning to look at reviving the assistance programs aimed at getting first-time buyers into homes.

On Tuesday, county supervisors unanimously voted to revive a county program that offered mortgage credit certificates – essentially a federal tax offset – to first-time homebuyers. Under the revived program, those who got the credits in past years can now use them when they seek to refinance their home loans.

"First-time buyer programs haven’t been very active in the last five years due to creative financing by lenders," said Anita McCarty, a vice president with Urban Futures Inc., who will administer the county program. "But now, many public agencies are committing their resources to helping first-time homebuyers again."

Orange County officials said their program was based on a state program that periodically allocated debt limits to each county, which in turn could grant the federal tax credits to qualified home buyers.

Tom Beckett, the county’s public finance manager, said the program wasn’t that effective because of past market conditions.

"The thing that made it not work was the restrictions on income and prices," he said. "People could qualify income-wise but it wasn’t enough to buy a house."

Yet the firestorm torching home prices could make the programs useful again, he said.

"As prices come down again, it may again be something that people can make use of," he said.

County Supervisor Pat Bates said such programs could possibly help "shore up" the mortgage industry and also allow the county to offer valuable help to residents.

While County Supervisors’ Chairman John Moorlach said he was uneasy about government programs that seek to replace market mechanisms, he voted for the proposal and asked staff to keep monitoring markets to see if the programs have usefulness.

“It gets a little more awkward to provide those incentives for the public,” Moorlach said when asked about government-funded down payment or loan assistance. “It doesn’t prime my pump that much,” he said.

Moorlach said he supported only targeted use of such programs, such as in the recruitment of a top manager to Orange County.

Other than that, Moorlach echoed a traditional stance on government intervention.

“We have the private sector to lend money,” he said.

Nick Berardino, head of the county’s largest union, the Orange County Employees Association, said such programs are exactly what government should be doing.

“The fundamental fabric of the American social structure is homeownership,” he said. “Local government at all levels should do what it can to expand these programs so that working families can enjoy the benefits of homeownership.”

Beckett told supervisors county officials would indeed keep monitoring home prices and the loan industry to see if there’s a point where such programs become more feasible. At that point, staff would return to supervisors with options.

The mortgage credit program was initiated in 1990 and Beckett said several hundred homeowners were assisted by the credit, which can total up to 20 percent of the total mortgage interest paid in one year. The program doesn’t cost county coffers anything because normal loan fees.

In the last six months, McCarty said lots of cities and counties are jumping back in to offer such programs.

"The first-time buyer market is always very critical to the stability of neighborhoods," she said.

And, "It’s a buyers’ market."

Disclaimer: You have been added to my MOORLACH UPDATE communication e-mail tree. In lieu of a weekly newsletter, you will receive occasional media updates, some with commentary to explain the situation, whenever I appear in the media (unless it is a duplication of a previous story).

I have two thoughts for you to consider: (1) my office does not usually issue press releases to get into the newspapers (only in rare cases); and (2) I do not write the articles, opinions or letters to the editor.

This message should appear at the bottom of every e-mail you receive. If these e-mails should stop arriving in your mail box, it will be because your address has changed and you did not provide a new one. If you do not wish to receive these e-mails, then please e-mail back and request to unsubscribe.