MOORLACH UPDATE — PA to DA — January 29, 2014

Yesterday was a full day. The Board of Supervisors meeting filled the entire working day and the State of the Union Address occupied the afterhours. The OC Register inquired about my observations of the annual speech from the Republican perspective in the first piece below. I was struck by the number of platitudes that were used like “hard work,” “not easy,” and “citizenship means standing up for everyone’s right to vote.” It’s all fun, motivational stuff, but it’s not very deep. I found it ironic that the President would lament about how many college graduates were trapped by student loan debt, yet only mentioned the nation’s record high debt in two minor references. Stressing the creation of new jobs may meet the focus group requirement, but making no mention of how to address the nation’s record-breaking debt, while recommending new programs, was disturbing.

The Daily Pilot provides its perspective on the vote for the 2014 Board Chair and Vice Chair (see MOORLACH UPDATE — Old Chair Is New Chair — January 28, 2014) in the second article below. A small correction: Supervisor Spitzer represents the Third District. But the piece concludes with a major policy decision on the office of the Public Administrator. The majority of the Board decided to merge this elected position with the District Attorney’s office. The county with the highest population that has done this is less than one-tenth the size of Orange County. That is one of the reasons that I opposed the merger. It may work in a small county for efficiency’s sake, but in a county with 3.1 million people, the District Attorney will not have the time to give this task the attention it needs. Assuming this task means that the DA will receive a $32,000 raise and will have to hire someone or assign existing, limited and already overextended, staff to directly oversee this department, hardly a cost saving maneuver. As an alternative, I proposed one of the job applicant candidates who had previously served in the office of Public Administrator-Public Guardian, to serve as the Interim Department Head. The Public Guardian function will be assumed by another large department, the Health Care Agency.

The OC Register provides its take on the Public Administrator decision in the third piece. Followed by the San Clemente Patch in the fourth piece below.

The fifth and final article is from the Voice of OC and provides the background on negotiations with another bargaining unit. For more on this topic, see MOORLACH UPDATE — Super Bowl of Negotiations — January 21, 2014.


Party leaders call speech short on solutions and slam threat to bypass Congress.

Local and state GOP leaders called the president’s speech Tuesday the same ole’.

“He’s had five years. And he’s still giving the same speech. That’s a credibility killer,” said Michael D. Capaldi, past president and chairman emeritus of the conservative Lincoln Club of Orange County.

Scott Baugh, chairman of the Orange County Republican Party, summed up his reaction with one adjective: “uninspiring.”

Orange County Supervisor John ‍Moorlach thought President Barack Obama’s State of the Union was a “good motivational speech” –but one full of platitudes and ironies. ‍Moorlach said the president failed to adequately address “the fiscal dilemmas the country is facing .”

Republican leaders accused Obama, who called for unity but also said he’s willing to use his executive authority to enact his agenda, of attempting to use his powers to bypass Congress.

“By asserting that he will impose many of his policies without the consent of Congress, it is also apparent that President Obama does not believe in our nation’s system of checks and balances that protects us from any single branch becoming too powerful, a system that has served us well for over two centuries and that is the model for the world,” wrote state Sen. Mimi Walters, RLaguna Niguel, in an email.

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Supervisors opt for continuity

Nelson and Bates will continue as chairman and vice chairwoman, respectively.

By Jill Cowan

The Orange County Board of Supervisors was facing a changing of the guard Tuesday, with the body expected to choose a new chair and vice chair for the year.

Instead, citing a need for continuity in contract negotiations with the county’s biggest labor unions, Supervisor Patricia Bates asked to hang on to her place as the board’s vice chairwoman, allowing Supervisor Shawn Nelson to serve another year as chairman.

Bates, who represents the board’s District 5, said that in this "unique year," the board would benefit from the stability afforded by Nelson.

So rather than accept a nomination to become chairwoman, as would have been customary, Bates refused and supported keeping the status quo. Typically, whoever serves as vice chair one year assumes the role of chair the following year.

But District 1 Supervisor Todd Spitzer said a new person leading the board might help the county overcome deep-rooted impasses in labor negotiations.

"I think [Nelson] did a really excellent job of getting us here," he said.

However, he added, addressing Bates, "I welcome a voice, a chair, with your personality that can help potentially maneuver a new direction."

Spitzer added that with Bates and Supervisor John Moorlach running up against term limits, and Supervisor Janet Nguyen running for state Senate this year, 2015 could see as many as three new supervisors.

"We use a system where the vice chair is supposed to learn the ropes," he said.

Moorlach, who represents District 2, agreed.

Nelson said that while it was a bit of an "awkward" situation, "I want to serve, and commit to doing the best I can."

Nelson and Bates kept their posts with a 3-2 vote. Spitzer and Moorlach dissented.

Action on administrator

Also at Tuesday’s meeting, the board took a step toward cleaning up a department whose elected leader was pushed out following blistering reports of "egregious" financial mismanagement.

In 2011, the county stripped Public Administrator John Williams of most of his duties, which included managing the estates of people who have died but have no known heirs or other people willing to take care of their assets. He was locked out of his office in 2012.

The position, which Nelson described as a part-time job that pays about $30,000 per year, has been vacant and those duties performed by other departments.

But because voters have decided that the public administrator should be elected, county staff gave the supervisors the option of tacking on the title to another elected position.

"This county elected office has very limited responsibility and can easily be combined under the oversight of a competent department head," Nelson said. "To combine that with [the district attorney’s office], I think that’s a transition that can be easily done."

On Tuesday, Dist. Atty. Tony Rackauckas accepted the added responsibility.

Although he said he wasn’t "chomping at the bit" when approached last week about absorbing the public administrator’s duties, "the public would be well-served" under the arrangement.

"There’s good supervision in the [district attorney’s] office who could well handle it," he told the board.

He added that because the public administrator’s term was "parallel" with the district attorney’s, "it doesn’t create any issues."

Moorlach and Bates disagreed.

Moorlach said that with the right public administrator, the job could be an important one.

Public administrator job to be merged

The supervisors’ vote is 3-2. The D.A.’s Office will take over duties.


County supervisors Tuesday voted to consolidate the elected position of public administrator, which oversees estates of the deceased, with the position of district attorney.

The public administrator position is vacant, so when voters choose a district attorney this fall, they will be electing the public administrator as well.

Supervisor Shawn Nelson said the administrator position’s $32,000 annual salary is “such a de-minimis payment, we’re not going to get a serious candidate.” Instead, Nelson said, it attracts political aspirants and people who want a full-time county job.

The public administrator also makes funeral arrangements, coordinates indigent burials and conducts will searches.

In 2012, voters rejected a measure that would have made the public administrator an appointed position, instead of elected. That followed the resignation of John Williams, who faced accusations he had mismanaged his department and the estates of some deceased people.

Supervisors John ‍Moor‍‍lach and Pat Bates were skeptical. “I am reluctant to combine it with any other office,” Bates said. “We need to look at how this best serves the people.”

The motion passed 3-2.


Supes Kill Public Administrator Role, Dash Locals’ Hopes

John Alpay’s and Ken Lopez-Maddox’s race for countywide office was over before it started.

Posted by Penny Arévalo (Editor)

It was over before it started.

Two South Orange County men – both with ties to Capistrano Unified School District – had thrown their hat in the race to be the next Orange County Public Administrator.

But the O.C. Orange County Board of Supervisors signed off today on a plan to shift the vacant Public Administrator job to the Orange County District Attorney’s Office.

Orange County District Attorney Tony Rackauckas will also be the Public Administrator. The change was approved 3-2, with Supervisors John Moorlach and Patricia Bates dissenting.

Current CUSD Trustee John Alpay and ousted Trustee Ken Lopez-Maddox had filed the paperwork to run for the office.

The Public Administrator, a part-time job that pays about $32,000 annually, was joined with the Public Guardian’s office until March 2011, when the supervisors split the posts. The move came in the wake of controversy involving the way John Williams, who has since retired, ran the offices.

Williams came under fire for taking control of the estate of TapouT co-founder Charles “Mask” Lewis, who was killed in a drunken driving crash in 2009. He lacked a will, but he had two children who were apparent heirs.

Grand jurors in 2009 also criticized swelling management salaries in Williams’ office, questionable promotions and redundant jobs.

The Public Administrator helps the coroner, hospitals and mortuaries following a death in the county. In the case there’s no immediate family, the administrator can take control of and manage assets.

The Board of Supervisors asked voters in 2011 to make the Public Administrator an appointed position instead of an elected post, but the electorate rejected the county’s proposal.

“I think this would be a department better served as a stand-alone,” Moorlach said in explaining his dissenting vote.

Rackauckas said the Public Administrator duties “fit fine with the District Attorney’s Office.”

Current staff at the District Attorney’s office could handle the extra work without expanding, Rackauckas said.

–City News Service, Patch Editor Penny Arévalo contributed to this report

The Story Behind Orange County’s Hard Line Against Deputy Sheriffs


What a difference a county line makes.

In San Diego, a majority Republican Board of Supervisors is handing out big salary raises to sheriff’s deputies. Meanwhile, Orange County’s all-Republican Board of Supervisors is not only holding the line on salaries but demanding that deputies pay significantly more toward their pensions.

While San Diego deputies are set to receive an 8-percent salary hike and graduated payments to their pensions, Orange County deputies are looking at no raises and a demand that they pay the full employee pension share, estimated to be as much as 16 percent of their paychecks.

This hard line is, of course, drawing heavy return fire, with deputies arguing that supervisors are playing politics and in the process jeopardizing the quality of law enforcement in Orange County.

“It is unconscionable for the Board of Supervisors to propose what amounts to between a 15 percent and 18 percent pay cut to deputy sheriffs and district attorney investigators,” said Tom Dominguez, president of the Association of Orange County Deputy Sheriffs.

Yet supervisors say, don’t look at us, look at Gov. Jerry Brown. Then look in the mirror.

Supervisors’ Chairman Shawn Nelson has been publicly critical of county unions for their inability to sell their allies in Sacramento on a deal that would have won back for the county $73 million in disputed annual property tax revenues.

Supervisor Todd Spitzer on Tuesday also criticized unions from the dais for their inability to influence Brown.

“They told us they had it locked up,” Nelson said about the deputies publicly flexing their lobbying muscle in Sacramento back in the spring.

Nelson said, that given the incredible clout of law enforcement at all levels of government, the supervisors delayed cuts while that union attempted to lobby Sacramento.

“They just wasted a lot of our time making us believe they were going to be able to move the needle,” Nelson said. “We knew Orange County, based on the label, wasn’t going to win anything.”

Had the county gotten back the disputed property taxes, it all would have gone to fund raises, Nelson said.

The issue stretches back to 2006 when supervisors decided to refinance the 1994 bankruptcy debt of nearly $1 billion. With interest rates at a historic low, supervisors were elated to cut nearly a decade of payments and $100 million off the debt.

But they took a risk. They knowingly disconnected an important legislative authorization from Sacramento that automatically delivered the county’s share of vehicle license fees directly to Wall Street bondholders.

So in essence, if Sacramento wanted to harm Orange County, they’d have to walk through Wall Street first.

That protective umbrella disappeared when supervisors refinanced the debt in 2006 to much public celebration about the savings.

But the vulnerability remained, and Gov. Brown’s staff seized upon it during the massive budget crisis in 2010. They found the extra money going to Orange County and demanded it back.

The supervisors responded by convincing then-Auditor-Controller David Sundstrom to ignore Sacramento’s allocations and keep the millions.

Litigation from the state, and local community colleges, ensued.

The county lost and now owes nearly $150 million to the state to cover the two years without collections plus this year’s take. And the reduction in tax revenue will be ongoing.

That’s in addition to the one of the weakest bangs-for-buck on property tax revenue in the state.

Which is why supervisors say they essentially have no choice but to play hardball.

“When you have an increasing cost for pensions but you don’t have a strong increasing revenue base… it doesn’t give you a lot of wiggle room,” said Supervisor John Moorlach. “That’s just the new reality we all have to work with. I know not giving raises is a source of burnout. But I also know that giving raises exacerbates the pension problem.”

Moorlach says deputies themselves created this situation.

“A decade ago, they decided that pension was more important than raises. Now we have to live with that paradigm," Moorlach said.

As she awaited joining a closed session at the Hall of Administration Tuesday to talk with supervisors about the labor negotiations, Sheriff Sandra Hutchens said she supported the concept of having her deputies pay the full employee share of their pensions.

Hutchens refused to elaborate on whether salary raises should be granted to cover them, as done in San Diego and other jurisdictions recently.

Dominguez notes numerous reasons why the current labor deal is a horrible idea. He points mainly to retention issues – especially when other jurisdictions are handing out raises to cover extra pension costs.

Orange County may see hundreds of deputies retire if the current approach is followed and be faced with filling slots, which brings its own challenges such as the problems in background checks at Los Angeles County, Dominguez said.

Moorlach said he understands but insists the county is locked in.

“We just have different circumstances. If it’s about going somewhere else to get a pay raise, I can’t counter at this time and I understand. That’s an opportunity everyone has the ability to pursue," he said.

Nelson said deputies have been delaying the inevitable for years and only have themselves and the previous board of supervisors to blame.

“Had we done this four years ago, all they’d be getting now is a raise,” Nelson said.

Nelson is referring to the fact that during the last labor negotiation with Sheriff’s deputy union in 2009, supervisors delayed asking the deputies to pay their full employee share of their pensions.

Supervisors instead instituted an approach whereby deputy pension payments for their employee share scaled up from one percent to three percent to the current 6.6 percent over the course of several years.

This was while the county’s unfunded pension obligation soared past the $5 billion mark.

As it stands, county coffers pick up about 64 percent of each deputy’s salary in pension payments. Another 16 percent is supposed to be picked up by the employee.

That means that a Sheriff’s deputy’s pension costs each year equals about 80 percent of their paycheck.

While other labor groups – such as the Orange County Employees Association – have been paying their full employee share since at least 2004, supervisors have largely spared deputies from that obligation.

Until now.

“They should have paid the employee share all the time,” Nelson said. “We paid it…apparently, no good deed goes unpunished.”

“They are getting a raise,” Nelson added. “We are paying more for their services next year. It’s just going to pensions.”

Nelson said deputies have boxed themselves into large pension obligations and should rethink that negotiation strategy. “We are strapped to this incredibly expensive benefit. It’s the most expensive benefit anybody has ever heard of,” he said.

“If all that matters is the paycheck, then lets get rid of 3 (a pension enhancement that allows a deputy to retire at age 50 with three percent of pay for each year worked), change to 2.7 going forward and we can drop a boatload on pay,” Nelson said. “They could all get a 30 percent raise.”

“I didn’t create 3. They are the ones that wanted it. That’s causing all these retirements,” Nelson said.

“What am I supposed to do, print money?”

Again, Nelson points to Gov. Brown and Sacramento saying they have to begin to address the incredible shortage of return on property tax dollars provided by the state to Orange County.

“We do an incredible job with 6 cents on the dollar. Show me anybody that does what we do?” Los Angeles gets 4.5 times what we get,” Nelson said.

Yet one of Nelson’s colleagues on Tuesday openly doubted that approach.

In an interview just after the supervisors’ regular session, Supervisor Todd Spitzer questioned whether the aggressive style of Nelson is the best approach moving forward.

“He got us to this discussion,” Spitzer said of the ongoing labor talks with all the county’s major unions and the demand that all employees pay the full employee share of their pensions without being compensated in salary, like many other jurisdictions are doing.

It’s been ugly.

Both managers and attorneys have faced imposed terms. Managers agreed after mediation. The attorneys are suing.

More than 10,000 members from OCEA recently voted by a 99 percent margin to reject the last, best and final offer from the county.

Now, the deputies and district attorney investigators are looking at a last, best and final offer without raises and with a 10 percent take, on average, being diverted from their paychecks and into their pensions.

All that has Spitzer, who says he is very pro-law enforcement, troubled by the approach to the deputy sheriffs.

Spitzer, who voted for the original 3 vote in 2001 that significantly enhanced law enforcement pensions, acknowledges that times have changed and law enforcement have to pay the employee share of their pensions like other employee groups.

That will not change, Spitzer said.

Yet Spitzer also said he is very concerned about deputy retention, citing concerns about retirements, or transfers to counties like San Diego or Riverside that are hiring.

He seemed to be more open to upcoming mediated salary talks this week indicating that there might be a more creative way of approaching the “total compensation” approach touted by Nelson.

“I don’t want to have a nuclear meltdown with our employees,” Spitzer warned, “and we’re headed in that direction.”

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