MOORLACH UPDATE — Pension Tweaks — October 25, 2013

The OC Register opines today on the opportunity to mandate something Ive already been doing on a voluntary basis (see MOORLACH UPDATE — Pension Withholding — October 19, 2013). Its always been better for me if my attitude is that of wanting to do something, versus having to do something. Recently, the Orange County Managers Association agreed to a bargaining unit contract that included paying for their share of the employee portion of the pension contribution, effective July 1st. Many years ago, in lieu of a pay increase, managers accepted an offer to have their employee contribution paid for by the County. Consequently, with the recent compensation change, the managers returned back to the previous strategy, which meant a sizable reduction in net pay. It was the correct modification to agree to, albeit an expensive one, with the general public now understanding the impacts of defined benefit pensions (of which I have been warning about these last dozen years). However, I could not ask fellow managers to do something that I would not agree to do myself. Therefore, I unilaterally moved forward this summer with personal employee pension contribution withholdings in tandem with the managers.

BONUS: For those interested in learning about the Orange County Transportation Authoritys efforts to convert the carpool lanes on the San Diego Freeway to toll (managed) lanes, please feel welcome to attend a town hall forum on the subject next Tuesday evening, October 29, at 6:30 p.m.

Worthy pension tweaks

Supervisors should contribute to their plans.

Pension reform is expected back on the Board of Supervisors agenda Nov. 5, when a proposal from Supervisors Todd Spitzer and Janet Nguyen would make permanent a plan to have the supervisors pay their full employee retirement contributions.

With board approval, the proposal would become effective immediately. The board also will consider a second proposal from the pair, to extend the pension-payment plan to all county elected officials, as a June 2014 ballot measure, enshrining it in the county charter, so future boards could not overturn the decision without the voters.

While the details are as yet unreleased, both proposals sound promising and hopefully dispel the legal concerns that prevented Supervisors Spitzer and Nguyen from contributing under a similar plan in June that authorizes voluntary donations back to the county to pay for their pensions. That proposal was meant to serve as a workaround to a 1980 state Supreme Court ruling that held supervisors benefits could not be changed during their terms.

Supervisor John Moorlach, a leading voice on the board for pension reform and who has voluntarily had his pension contribution taken out of his paycheck since July, told us that he hadnt looked into the proposal in detail yet, but so far didnt see a reason to oppose it.

I shouldnt ask someone to do something I wasnt willing to do, Mr. Moorlach told us. Im just staying consistent.

The policy does not apply to Supervisors Pat Bates and Shawn Nelson, as they have declined a county pension.

Orange County General Employees Association General Manager Nick Berardino, long at odds with the board, told the Register that he supports the plan, believing it long overdue.

Its about time the elected officials and department heads start paying their employees share, the Register quoted him as saying. It has been like 40 years in the desert and screaming at the top of our lungs, to get them to do it.

And with the Orange County Employees Retirement Systems unfunded liability standing at $5.7 billion as of Dec. 31, as reported by the Register, any move to reduce that liability should be applauded. The board hopefully will approve the Spitzer-Nguyen proposal for their own pensions and send the companion measure along to the voters.


October 25


Joseph Serna of the Daily Pilot provided a Banning Ranch update in Price of land is debated Activist says developers inflated cost of ranch property to discourage buyers. City says figures look accurate so far. The Banning Ranch is an unincorporated area in the County. The owners are still in the process of pursuing the entitlements in order to develop their land. I would presume those who would like to keep the entire area as open space are working feverishly to raise enough funding to acquire it. A compromise position might be to develop half of the land and mitigate and keep the other half open. The city of Newport Beach is overseeing the process and the environmental impact report has been submitted. Here is a little history of the tensions for this property:

Environmentalists say Banning Ranch developers are inflating the cost of cleaning up miles of pipeline, dilapidated structures and land to scare off competitors.

Newport Banning Ranch LLC, the company proposing to develop on 400-acre Banning Ranch, estimate it would cost between $30 million and $60 million to remediate to the point where it can be developed, officials said. The companys proposal was submitted to the city in August and estimates that it would take up to three years to bring the land, which borders Costa Mesa, Newport Beach and Huntington Beach, up to par.

Once again the developers want to keep everyone off the land, said Chris Bunyan, a Costa Mesa City Council candidate and member of the Save the Banning Ranch Task Force who wants to preserve all of the land as park and open space.

Once again theyre floating this high number as a strategy to demonstrate that the whole area is oil-soaked and degraded, which is not the truth, he said.

City and county officials said the estimated cost appears accurate, but said once you look beneath the ground, all bets are off.

It could be intimidating in this way: If some agency were to buy that land before it was cleaned up, theyd have to assume the risk that it could cost more, Newport Beach Mayor Ed Selich said. Until you get out there and really do it, I dont think you know how much its really going to cost.

The developers proposal calls for 270 acres to remain park or open space, well more than local land-use policies require. Company officials said there is more than 40 miles of oil pipeline to be removed and 100,000 cubic yards of soil to be cleaned before the land could be developed.

Orange County Supervisor John Moorlach said whoever wants to develop the property can clean up the rest of it, too.

Theres got to be some happy medium ground where those who want to develop and those who dont can meet, Moorlach said. Its called compromise.

Banning Ranch Task Force members call for all of the land to remain open space and are trying to raise their own funds to buy the land, which reportedly has been estimated to cost more than $200 million. The city formed a committee earlier this year to work on appraising the land, a first step toward possibly purchasing it.

I dont think we have a formal policy, but I wouldnt support buying contaminated land, Selich said. I think it would be irresponsible for anyone in the public agency to buy a piece of contaminated land without knowing exactly how much its going to cost to clean it up. When its stuff underground you cant see, theres always an element of risk of what youll find down there.

I think theyre floating a higher number [to remediate] on purpose. Thats even more money the conservancy is going to have to come up with, Bunyan said. He said for his group, The first step is procurement of the land and paying a fair value for it. The second would be remediation and rehab of the land. A lot of that comes out naturally.

Newport Banning Ranch LLC submitted plans to develop 1,375 homes, a resort and shops on the ocean-front property.

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.