I requested that one item be pulled from the consent calendar during last weeks Board meeting. It concerned the seemingly simple matter of requesting that the Auditor-Controller accept another optional withholding from employee paychecks. After spending a good portion of this year trying to get the Auditor-Controller to accommodate my pension withholdings, I knew that this was a major administrative request. It was also a large policy issue that needed some Board discussion. On the way in to Tuesdays Board meeting, I contacted Max Gardner, the CEO of Orange Countys United Way, to discuss the matter. To my surprise, he was unaware that the item was on the Boards agenda and he was unable to attend due to his appointment calendar for that morning. So I requested that the item be continued in order to provide an opportunity for United Way to weigh in on this matter. Discussion ensued anyway, but the Board eventually voted to continue the matter until January 14th.
I have sense dedicated some time to this matter and, as with most issues, there is more to the story. First of all, Max Gardner has been a breath of fresh air since accepting the position at United Way (see the OC METRO interview at http://www.ocmetro.com/t-CoverStory_nonprofits_surviving_during_recession1011_777.aspx). Secondly, Max has been a major force for a number of positive initiatives involving the Commission to End Homelessness and I am most appreciative of his leadership. Thirdly, he and United Way have stepped up to the plate in remedying a major concern that he inherited and allowing him to provide his perspectives is the only fair approach to take. Certain policies were in place before he accepted the position and Max did a dramatic job of addressing the Sheriffs Advisory Council withholding after it became known. I still have to do more research on the Advisory Councils end of the transaction. Why did nearly a quarter of the workforce contribute? Was it mandated or was it the joy of a successful mission? Why didnt the leadership of the Advisory Council notice the decline in revenues and its cause much earlier? And, if we open the door to voluntary contributions to more than just United Way, will that be manageable? Or, instead of encumbering taxpayer dollars, why not ask employees to have donations automatically withdrawn from their personal checking accounts? The Voice of OC covers the topic below.
The OC Register provides an update on the pension reform front in a piece from Sundays edition in the second piece below.
Sheriff’s Employees Upset Over United Way Donation Policy
By TRACY WOOD
Orange County Sheriff’s Department employees continue to be upset over a United Way payroll deduction policy that diverted donations meant for the Sheriff’s Advisory Council to the United Way’s general donation pool, Sheriff Sandra Hutchens told the Board of Supervisors this week.
I dont want to make this about United Way, Hutchens said while seeking board permission for payroll deductions to go directly to the Sheriffs Advisory Council. But, she said, workers in her department feel very strongly about the way their charitable donations were handled, and I dont see how we get them back to a position where they trust United Way.
Hutchens was before the supervisors Tuesday to ask that they approve a policy that would allow employees to bypass United Way and send their donation directly to the advisory council, which supports a variety of Sheriff’s Department causes that arent covered in the regular department budget. They include a memorial to deputies and help with expenses for the families of injured deputies.
Hutchens’ request stems from a United Way policy that required all county workers who wanted their payroll deductions to go to a specific charity to fill out a form each year specifically naming the charity.
Hutchens told the supervisors that 1,100 of the Sheriffs Departments 4,000 workers have signed up to make automatic donations to the advisory council through automatic payroll deductions that they thought went to the United Way and then to the council.
But the employees weren’t aware of a United Way policy that required them to fill out a form each year to designate the money for the Sheriff’s Council. Without the annual designation, payroll deductions continued, but the money went to United Ways general pool for all the charities it supports in Orange County.
Hutchens said the number of employees making donations dropped to 43 after workers learned their donations were going to other causes if they had failed to fill out the annual form, even though the payroll deductions continued.
According to United Way, it began correcting the issue last year.
But Supervisor John Moorlach put the problem succinctly. United Way frustrated the snot out of our employees and thats why were here discussing the issue, he said.
Added Supervisor Pat Bates, Its real simple. The Sheriffs Advisory Council lost 1,000 members. Its United Ways problem, and they have a lot of splaining to do before we have that next meeting.
Supervisors postponed voting on the Sheriffs Department payroll withholding issue until their Jan. 14 meeting, partly because no one at the county told officials at United Way the issue was on Tuesdays agenda.
The same issue could apply to charities supported by county workers in other departments, supervisors said.
The roots of the controversy go back more than a decade and involve the methods used by United Way to conduct its annual fundraising campaign among all county departments.
Orange County United Way has net assets of about $17 million, according to its 2011 tax return, and supports dozens of local charities, including many that help children, education and homeless causes.
According to the discussion at the supervisors meeting, there are two issues. One is the 9-percent fee United Way collects on each Sheriffs Department employees donation that is designated for the Advisory Council.
Moorlach said the fee is too high, and Supervisor Shawn Nelson, the board chairman, questioned why county employees were making their contributions to the Advisory Council through United Way and not just giving the money directly through automatic bank checks or deductions.
Max Gardner, Orange County United Way president and CEO, said in a telephone interview that since he took over management of the organization in 2011, policies have changed.
Last year, county employees in all departments that participate in United Way campaigns were asked to fill out new forms and designate a preferred charity, if they had one.
Starting this year, the donations continue going to those designated organizations even without an annual earmark by the donor, he said.
In addition, Gardner said he wasnt sure why county workers didnt know they had to file a form each year if they had a specific charity they wanted to support.
The county knew this, he said, although its not clear who knew. I know the information was at the county.
In any case, he said, We solved that problem.
Please contact Tracy Wood directly at twood and follow her on Twitter: twitter.com/tracyVOC.
O.C. PENSION REQUEST FACES UPHILL BATTLE
Even with big-time legislative help, the IRS may not yield, analysts say.
By DAVID HOOD
REGISTER WASHINGTON BUREAU
An attempt by Orange County leaders in Santa Ana and Washington to open up a popular pension plan to existing public employees will face a big hurdle in gaining Internal Revenue Service approval, analysts said.
The hybrid plan, which is already offered to new county employees, provides a choice of pension formulas for the worker, and for the county allows more control over future pension costs. Existing public employees want the same choice, but current IRS rules stand in the way.
Early in the month, there seemed to be a breakthrough when influential Rep. Dave Camp, R-Mich., who is chairman of the tax-writing House Ways and Means Committee, pledged to help the county get an exclusive waiver on the rule.
The meeting with Camp and Orange
County leaders was convened in Washington by Rep. Loretta Sanchez, D-Santa Ana, who has spearheaded efforts to get this pension fix for more than three years by appealing directly to the IRS and by introducing legislation.
But a renewed effort for a waiver, despite the heft of the participants, is likely to confront a resistant IRS.
Given the pressure mounting on Democrats and the (Obama) administration following the announced bipartisan Murray/Ryan (budget) agreement pushed by public employee unions, I think the likelihood of a waiver from this administration at this time is also unlikely, said William Hoagland, senior vice president of the
Bipartisan Policy Center, in an email.
He saw asking for a waiver as an opportunity that should be addressed quickly.
According to Hoagland and others, the IRS has three major sticking points: that the waiver will set an unstable precedent for other municipalities that might seek a similar provision; existing employees will jump from plan to plan to maximize their benefits and avoid taxes; and national union groups will object, saying the countys hybrid plan doesnt do enough to protect pension plans.
Camp told the Register recently that he would work with Sanchez on the waivers language to ease the tax agencys concerns, and that it would affect only Orange County. The Treasury department, which oversees the IRS, declined to comment.
Sanchez said Thursday that although she was unaware of any new objections the Treasury might have that the road to resolving the issue wouldnt be an easy one.
If it were easy, it would have been done a long time ago, she said.
Steve Malanga, a senior fellow of the Manhattan Institute who follows the pension issue, said the IRS could issue a ruling tomorrow if it wanted to, but is holding back because the waiver isnt a priority. The point is that they havent done it because they havent wanted to, he said. There is no urgent timeline.
County Supervisor John Moorlach believes a return trip to Washington is needed for a meeting with the IRS; Sanchez; Rep. Ed Royce, R-Fullerton; Rep. John Campbell, R-Irvine; and other supporters to show a unified force. Sanchez has said she will take action early in the new year.
FIVE-YEAR LOOK BACKS
Jean O. Pasco of the LA Times provided a potential candidate for the following years election cycle in Democratic Supervisor May Be in O.C.s Future. The candidate highlighted was an author of SB 400, which granted dramatic pension formula increases, retroactive to the date of hire. Here are the opening paragraphs and a few selected paragraphs:
A four-way race next year to replace Chuck Smith as central Orange County’s supervisor could put the first Democrat on the Board of Supervisors in 16 years.
Assemblyman Lou Correa of Anaheim and Garden Grove Mayor Bruce Broadwater, both Democrats, are running against two Republican city council members — Brett Franklin of Santa Ana and Kermit Marsh of Westminster. If none wins a majority in the March primary, a runoff will be held in November.
Correa’s voting record has been an equal-opportunity target. He was criticized by the left for being hostile on some gay-rights bills; he has been faulted by the right for, among other things, sponsoring a bill in 1999 that doubled generous retirement benefits for California Highway Patrol officers and allowed local governments to do the same for their police and firefighters.
That benefit, adopted by most local counties and cities, including the Orange County Sheriff’s Department and many Orange County municipalities, is draining hundreds of millions of dollars from general revenues as once-fat investment accounts seen as the source for future payments shrank with stock losses.
If Correa wins, he "is going to walk into a budget problem that he created," said county Treasurer-Tax Collector John M.W. Moorlach, a Republican. "It might even be poetic justice if he wins."
Correa pointed out that the Orange County board — all Republicans — unanimously adopted the retirement perk in 2002. "We gave local governments the option and they chose to exercise it," he said. "What am I missing here?"
Jason Felch and Maura Dolan of the LA Times provided their perspectives on two DNA labs, a topic that was once again addressed at last Tuesdays Board meeting. The piece was titled: DNA: Genes as evidence Showdown over DNA lab reflects national debate Orange County’s D.A. tried to take over the sheriff’s facility. Many experts say any law enforcement control of such operations makes the science vulnerable to undue influence and lax oversight. Here is an anecdotal story concerning James Ochoa and the closing paragraphs:
Some of the deepest concerns about the Orange County D.A.’s influence over forensic science come from analysts in the sheriff’s DNA unit.
In interviews, several said they were shaken by a 2005 carjacking case in Buena Park.
Evidence against 20-year-old James Ochoa was conflicting: Two victims identified him as the culprit, based on a photograph police showed them. But half a dozen family members said Ochoa was home eating at the time of the crime.
Buena Park investigators hoped DNA from a baseball cap and shirt left in the stolen car would nail the case.
"If it doesn’t match . . . we’re not proceeding," the detective told DNA analyst Danielle Weiland, according to Weiland’s deposition last January in a lawsuit by Ochoa.
Both the cap and shirt contained a mixture of DNA from multiple sources. Complex cases like this can be subject to different interpretations, experts say, requiring an experienced and impartial eye to decipher accurately.
Weiland, who had been a DNA examiner since 2001, found a distinct DNA profile from an unidentified person, but it did not belong to Ochoa. Convinced that the profile belonged to the perpetrator, she submitted it for comparison to those of known offenders in the national database system, hoping for a "match."
Meanwhile, her lab report ruled Ochoa out after determining that three of his genetic markers were not present in the mixture — a finding confirmed by two other lab workers. Weiland then got a call from Camille Hill, a member of Rackauckas’ DNA unit.
Hill "asked me to change the conclusion that Mr. Ochoa was excluded," Weiland said in the deposition.
In a meeting at the crime lab later that day, Hill suggested that Ochoa’s missing genetic markers might not have been detected, Weiland said. Generally speaking, a match means all markers in a genetic profile are present, but Hill was arguing that markers might have been missing because of degradation of the sample or extremely low quantities of DNA.
In an interview with The Times, Hill said she was not applying pressure, just asking for an explanation. Despite the three missing markers, the mixture contained a substantial number of markers that did match Ochoa’s profile. Hill said that left open the possibility that Ochoa’s DNA was present.
For 25 minutes, the two sides had a "hostile" exchange about the evidence, Weiland testified. In the end, Hill accepted that the lab would not change its conclusion.
Prosecutors decided to go to trial anyway. After both witnesses identified him in court on the third day of testimony, Ochoa accepted a plea deal, over the objection of his attorney. He was sentenced to two years.
Eight months later, the genetic profile that Weiland had submitted to the national database was matched to a convicted offender in California. Jaymes McCollum bore a passing resemblance to Ochoa and had numerous carjackings on his record. When questioned, he confessed to the crime.
Ochoa was released from Centinela State Prison in the Imperial Valley, where he had been knifed while serving his sentence. He received a $550,000 settlement for his wrongful conviction.
While the matter was under review, board Chairman John Moorlach suggested that the entire crime lab be taken out of the hands of elected officials and put under a new independent agency. "We want to end the rancor and the turf battles," said Mario Mainero, Moorlach’s chief of staff. "The science sure seemed to be caught up in all the politics."
Instead, in October, the board created a joint authority composed of the new sheriff, the county chief executive and Rackauckas to run what had been the sheriff’s crime lab, including overseeing scientific policy.
In approving the set-up, the supervisors ignored the advice of James Ochoa, who, in a letter from his new home in Texas, urged them to keep forensic science out of the hands of law enforcement entirely.
"If you allow this proposal to go through," he warned, "you can expect future injustices like what happened to me."
Norberto Santana, Jr., of the OC Register addressed an obvious perception problem in Supervisors’ remodeling project during layoffs comes under fire Supervisors fifth floor lobby gets a near $400,000 facelift while 800 workers are given notice. It was most frustrating to have the Santa Ana Fire Department require floor plan changes, when the previous infrastructure was approved without their opposition.
"We had a lot of unique people who came to board meetings and there was concern about security on the fifth floor," said Board Chairman John Moorlach, who was appointed Treasurer/Tax Collector in the wake of the bankruptcy and was elected as a county supervisor in 2006.
The barriers on the fifth floor – which were reinforced following the terrorist attacks of 9/11 – create an outer lobby that insulates each county supervisor from direct public access. The outer lobby is in addition to individual secretaries and reception areas in supervisor’s district office.
Moorlach said the construction project was begun to correct a design flaw that created a fire hazard because access to emergency doors was blocked. Santa Ana Fire Department officials cited the county in January 2007, county officials said.
The remodel, approved on Nov. 18 at a cost of $326,000, would replace the barriers with a more modern look and comply with fire codes, county officials said.
Other recent improvements to the supervisors’ work floor include more than $72,000 to remodel two conference rooms as well as a new break room.
The two conference rooms were redone in late 2007 with new chairs and tables for a total cost of $57,443.
The nearby lunch break room was remodeled in March 2008 with a stainless steel refrigerator, granite countertops and new cabinets for a cost of $14,978, county officials said.
Moorlach echoed the arguments of county staff for the lobby improvements, saying it’s important to have heightened security in a post 9-11 world. Moorlach received death threats earlier this year.
"Since I’ve had my life threatened, there are a lot of people who are concerned about the safety of people on the fifth floor," he said. "There is not a metal detector at the first floor."
Jim Christie of Reuters provided an economic update in States worry about slumping retail sales revenues, with assistance from David Schwartz, Michael Peltier, and Dan Grebler. The Great Recession would last three years and sales tax revenues would decline by 19 percent during that period. I picked the most incredible time in U.S. history to serve in the capacity of Supervisor.
Todd Gerardo’s layoff means work for someone else in Arizona, where state officials this month will have more than doubled their staff with new employees for processing unemployment benefits.
Gerardo, of Gilbert, Arizona, said he knew his days were numbered as a car salesman when he managed to make only minimum wage last month. His dealership let him go on December 3.
"The economy is just so bad that for the first time in my life I just wasn’t selling any cars," Gerardo, 42, told Reuters while waiting for a skills assessment at a state office that helps job seekers. "The business is just not there anymore."
Some 37,000 others in Arizona who filed first-time claims for jobless benefits last month would agree business is bad and state officials say hard times are spreading quickly from the state’s battered homes market.
"It’s no longer related to housing woes but has become a broad-based decline," said a Dennis Doby, a labor market specialist at the Arizona Department of Commerce.
In October, Arizona shed 70,900 jobs from a year earlier, marking a steep 2.6 percent fall in its nonfarm payrolls and eighth consecutive month of job losses. Only one other state, Rhode Island, has lost a greater percentage of its nonfarm jobs over that 12-month span, Doby said.
State revenues are shrinking fast too. Arizona now faces a state budget gap of $1.2 billion from the remainder of its fiscal year, which points to "draconian" spending cuts, said Marshall Vest, an economist with of the University of Arizona’s Eller College of Management.
He noted that other states whose once-hot homes markets have come dramatically undone also will slash spending. "Arizona’s economy is leading the rest of the country into this recession, just like Nevada, California and Florida — all states with housing bubbles."
RETAIL DOWN, COMPOUNDS HOUSING WOES
The National Conference of State Legislatures says states face a collective budget gap of at least $97 billion over the next 18 to 24 months.
California’s budget troubles are responsible for a large share of that estimate, underscoring how, just as in Arizona, housing woes are bleeding into the state’s broader economy.
Gov. Arnold Schwarzenegger has said the state’s government is only weeks away from running out of cash if lawmakers fail to close a current state budget shortfall of nearly $15 billion. "If we don’t put aside our ideological differences and negotiate and solve this problem we are heading toward a financial Armageddon," he said.
Orange County Supervisor John Moorlach said local government budgets across California likewise are buckling as revenues shrink amid sagging retail sales and properties are reassessed at lower values as the housing slump presses on.
"Everything is hitting at the same time," Moorlach said.
Declining automobile sales are of special concern to both cities and the state, which derives license fees from the sales, said Mayor Alan Autry of Fresno, California’s sixth-largest city. "It’s a big hit," he said.
Nevadans are also steering clear of vehicle dealerships, the state’s third-largest source of retail sales revenue.
"We’ve had double-digit declines in our taxable sales related to automobiles for over a year," said Andrew Clinger, Nevada’s budget director. He noted he expect the state to be more than $1 billion short of its expected revenues for its next two-year budget cycle starting in July.
In Florida, state economists forecast about $2.3 billion less in current fiscal year revenue as sales tax collections sink due to falling automobile sales and lackluster tourism, a decline compounded by the state’s housing slump.
Lawmakers say Florida is facing its greatest financial challenge since the Great Depression. "There has been a tectonic shift in the structural underpinnings of our economy," state Senate President Jeff Atwater told colleagues last week.
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