MOORLACH UPDATE — Blame the Unions — November 9, 2015

The Saturday OC Register provides an announcement for a constituent service that my office will be providing to the residents of the city of Laguna Woods the second Monday of each month (but December will be on 7th), and is the first piece below.

The second piece is a Letter to the Editor in the San Diego Union-Tribune. Let it allow me a little review of the landscape, starting with an editorial I did for the OC Register more than a dozen years ago (see MOORLACH UPDATE — Pension Editorials — September 19, 2013 September 19, 2013 John Moorlach). As it is a little difficult to read on my blog, I’ve provided it in full as a bonus at the bottom.

Although twelve years old, the editorial is still relevant today. It even addresses the subject of my last UPDATE (see MOORLACH UPDATE — SB 185 — November 6, 2015 november 6, 2015 john moorlach). One clarification, the city I referred to actually contracted with the Los Angeles County Fire Department.

So the drill is rather humorous. Allow for collective bargaining for government employees. Then have government employee unions get involved in electing members of governing bodies. Financially supported candidates are then asked by the unions’ leadership to support and vote for massive salary and benefit increases when contract negotiations occur. Should these compensation increases put a fiscal strain on the municipality, then the unions can blame the elected officials who voted for the above market enhancements. Brilliant. Blame the politicians. Talk about twisting the strategy of plausible deniability.

Sunday’s OC Register had an enlightening piece by Laurel Rosenhall on the current status of this strategy — see Public employee union pressures are so common place and understood, that candidates are trained on how to deal with them and others at conferences. And there is no shame.

The Orange County Republican Party Central Committee has found a way to respond to this conflict of interest. If you want this organization’s endorsement, then you are asked to "please sign the ‘union-free’ pledge: I WILL NOT ACCEPT CAMPAIGN CONTRIBUTIONS FROM GOVERNMENT UNIONS."

I’m proud to say that I implemented this policy long before the local Republican Party did. And my twelve-year-old editorial below should explain why.

Now you can understand why I totally agree with the San Diego Union-Tribune’s title, "blame politicians, not the bridge builders." I warned you this would happen! For the sad condition of Caltrans, it is the Sacramento politicians, past and present, that took campaign funding from public employee unions that should be blamed.

Let me deal with the public employee union in question. The Professional Engineers in California Government (PECG) spends nearly $2 million per year in political contributions (see MOORLACH UPDATE — Money for Nothing — September 2, 2015 september 2, 2015 john moorlach).

Let’s do some math. If one decided to contribute the maximum amount to each Legislator in a four-year cycle, Assembly members would receive a total of $1,344,000 ($4,200 times 4, for two elections every two years for the primary and general), and Senators would receive $336,000, as they are up for election every four years and have a population half the size of the Assembly.

You would only need $1,680,000 over four years, not $8,000,000, to get the attention of every Legislator. The remaining $6 million is probably spent on independent expenditures on behalf of candidates they support. Those in my District fully appreciate this type of political spending by the number of hit pieces against me that were funded by public employee unions. And I again refer you to Laurel Rosenhall’s piece (see

It is politicians from the majority party in Sacramento that let these same public employee unions run Sacramento. It was not the management of Caltrans that testified against my bill, SBX1-9 (see MOORLACH UPDATE — SBX1-9 — July 18, 2015 july 18, 2015 john moorlach). It was a PECG representative, and he presented false testimony in order to kill the bill (see MOORLACH UPDATE — Cost of Engineers — August 26, 2015 august 26, 2015 john moorlach).

For more on the senate special session transportation committee hearing on sbx1-9, see moorlach caltrans update — senate hearing video clips — august 20, 2015 august 21, 2015 john moorlach.

It is the majority party that refused to address the bureaucratic inefficiencies in Sacramento, allowing Caltrans to employ more than 3,000 engineers and architects too many and failing to streamline this agency (see MOORLACH UPDATE — Pothole — August 19, 2015 august 19, 2015 john moorlach and MOORLACH UPDATE — Caltrans Fairways — August 28, 2015 august 28, 2015 john moorlach).

It is the majority party that has short-changed road funding in their annual budgets (see MOORLACH UPDATE — Transportation Strategies — August 13, 2015 august 13, 2015 john moorlach). All the while, gas tax revenues have been rising (see MOORLACH UPDATE — SB 350 Compromise — September 10, 2015 september 10, 2015 john moorlach).

It is the legislative majority in Sacramento that diverted funds away from road maintenance in their annual budgets in order to make the ever increasing public employee pension plan contributions (see MOORLACH UPDATE — Bay Bridge Bloat — October 29, 2015 october 29, 2015 john moorlach).

It is the majority party that did nothing when either the State Auditor (2011 and 2015) or the State Legislative Analyst’s Office (2014) issued scathing reports about internal control weaknesses, and more, being graphically displayed at Caltrans (see MOORLACH UPDATE — Katy Grimes — September 23, 2015 september 23, 2015 john moorlach).

Have you seen the majority party in the Transportation Committees demand a public account for the findings made in these reports? Have you seen our Governor exert any managerial authority over Caltrans? Isn’t the Governor the Executive that runs Sacramento? I can’t find an appointed executive officer that agency department heads have to report to. Doesn’t anyone run Sacramento? Other than the unions, of course.

It is the legislative majority that let Caltrans run over budget on 62% of their projects (see MOORLACH CALTRANS UPDATE — Cost Overruns — August 12, 2015 august 12, 2015 john moorlach)!

It is the majority party that allows employees in other agencies to go wild, as well (see MOORLACH UPDATE — Pricey Labor — September 7, 2015 september 7, 2015 john moorlach).

It is the majority that, instead of addressing the managerial nonsense, actually reward it with a 7 percent raise by voting for AB 131 (see MOORLACH UPDATE — Winsome Session — September 12, 2015 september 12, 2015 john moorlach)!

It is the majority party that, after approving the largest budget in state history, still want to extract more taxes from its residents (see MOORLACH UPDATE — Pothole Tax — August 30, 2015 august 30, 2015 john moorlach).

It is the majority party that can’t seem to explain why Californians are paying the highest gas taxes but have the worst roads. Even respected pundits are chiming in (see MOORLACH CALTRANS UPDATE — Dan Walters — August 24, 2015 august 24, 2015 john moorlach).

it is the legislative majority that buy the union line that i would propose "no-bid contracts" (see moorlach update — pothole — august 19, 2015 august 19, 2015 john moorlach). but, then again, roy flores has been loose with the facts before (see MOORLACH CALTRANS UPDATE — Facts vs. PECG — August 18, 2015 august 18, 2015 john moorlach and MOORLACH UPDATE — Road to Consensus — August 17, 2015 august 17, 2015 john moorlach).

it is the majority party that allows caltrans to spend 4.7 times the national average on your roads (see MOORLACH UPDATE — Turn Your Radio On — August 14, 2015 august 14, 2015 john moorlach and MOORLACH UPDATE — Reduction Tax — August 8, 2015 august 8, 2015 john moorlach).

it is the legislative majority that seems to be fine with the fact that only 20 percent of the funding dedicated to road repairs and improvements gets to that task (see moorlach update — hitting the brakes — august 11, 2015 august 11, 2015 john moorlach).

Who is this majority party? Of course, they are the Democratic majority (see MOORLACH UPDATE — Caltrans Diet — August 7, 2015 august 7, 2015 john moorlach). They can thank Roy Flores for getting them into their elected positions. And why not? PECG has pillaged Caltrans and Sacramento. And now they come to you with a straight face, tell you everything is fine, and that you need to pay higher taxes.

I warned you this was going to happen.


Casework assistance: State Sen. John ‍Moorlach will host mobile office hours at City Hall, 24264 El Toro Road, on Monday from 3 to 5 p.m. The senator’s staff will assist constituents with casework issues dealing with the DMV, Franchise Tax Board, health care and more. Appointments: 949-223-5037

Jennifer Karmarkar, jkarmarkar

Inline image 2

Blame politicians, not the bridge builders

Steven Greenhut’s column “Does bloated Caltrans need more cash?” (Oct. 28) rightfully laments the delay in replacing the east span of the Bay Bridge after the 1989 earthquake but points the finger of blame in the wrong direction. Not surprisingly, the fault lies with the politicians, not the professional bridge builders.

Two governors changed the design three times, ultimately selecting the most expensive, high-risk alternative. Seven years later, the bridge was delivered on time within 5 percent of the $6.2 billion estimate.

Another politician, state Sen. John Moorlach, has introduced legislation to require outsourcing the state’s engineering work through no-bid contracts at twice the cost. This would waste more taxpayer dollars and delay projects even further.

Roy Flores

Past President

Professional Engineers in California Government


The Orange County Register

The ongoing union takeover

Aggressive tactics cow lawmakers and yield a taxpayers’ nightmare

JOHN M. W. MOORLACH, Orange County Treasurer-Tax Collector

September 21, 2003

You too can have a nice career and make a comfortable income, plus attractive fringe benefits, perquisites and the best retirement benefits imaginable.

The strategy is simple: Take over the government that employs you.

Why struggle for a living in the private sector? Become an employee for a state, county or city municipality. Negotiate your way into high-paying jobs with lucrative retirement packages.

Here’s how to do it:

The first step is to get hired.

Second, form an association of similarly occupied employees ("association" sounds less threatening than "union").

Third, have the association financially support candidates for elected offices that have an impact on its financial well-being, like legislators, county supervisors and city council members.

(Gov. Gray Davis has followed this formula to a T, taking contributions from employee unions and doing their bidding. That’s why you hear the phrase "pay-to-play" so often about our insecure Governor.)

Fourth have the association negotiate generous salary and employee benefit increases as a bargaining unit. If the elected officials don’t vote to approve these good-faith bargaining efforts, then fund their opponents in the next election. (This threat was a satisfactory inducement for Gov. Davis to sign legislation with significant increases in pay and benefits.)

Government employees that participate in a public pension plan are eligible to vote one or more of their co-workers to the retirement board. Why not back a member of the association? Fifth, endorse association members that run for these positions.

Sixth, pursue a controlling majority on the retirement board.

Seventh, let the elected officials know that retirement benefits are not "competitive" enough. If they don’t vote to increase pension benefits, fund their opponents in the next election. And besides, a good number of the retirement board members (wink, wink) believe that increasing benefits is the proper course to pursue.

Eighth, leverage that control over the retirement board to protect association members.

Ninth, when any elected officials question the benefits that have been extracted, indignantly remind them that they were negotiated and approved by their elected governing body. Fund the opponents of those who dare ask in the next election.

Simple enough. Could it work? It already has, right in our own back yard.

Our 2001-02 county Board of Supervisors unanimously approved a 50 percent increase in retirement benefits for one bargaining unit. And supervisors didn’t provide funds for this increase. Accordingly with one vote they created an unfunded actuarial accrued liability about one-fourth the size of the total 1994 bankruptcy loss of $1.6 billion. That’s why you’re reading about the county considering pension obligation bonds.

To the victor go the spoils. Public unions have followed the game plan and they are reaping the rewards. Their elected leaders have done their jobs, perhaps too well.

Just last week, the board of the California Public Employees’ Retirement System agreed to consider restricting investments in companies that take over or privatize government services. This is seen as leverage to protect some 1.4 million municipal union retirement plan participants. Brilliant, yet unbelievable!

The goal of money managers is to search for value. Being constrained in investment selection by personal political agendas is known as social investing, and it has a cost. More often than not, it means lower returns on investments. For a defined benefit pension plan, which guarantees a specific monthly payment at retirement, it means that the taxpayers may have to pay higher taxes to fund the difference.

Using the pension plan’s assets to pursue a political agenda is a tantamount to mutiny. Public employees work for the taxpayers! But they’ve lost sight of their true purpose. They have taken over government employers.

Can taxpayers respond? Where do they start?

First, vote for individuals who aren’t insecure and dependent upon unions to get elected.

Second, stop voting for elected officials with a history of placating unions when they try to run for higher office.

Third, make governments realize that they have no business withholding union dues, via embedded political contributions, from employee paychecks. Why should a government use public funds to further a union’s agenda? The state of Colorado has already implemented this policy.

Fourth, modify the retirement benefits by returning to the previous, already attractive benefits for new employees.

If the financial condition deteriorates further, consider freezing the current defined benefit plan and institute a defined contribution plan, where retirement benefits are determined based on accumulated contributions and earnings, for all new employees.

If the financial hemorrhaging is too severe, then look at another Chapter 9 bankruptcy to possibly renegotiate bargaining unit contracts.

Fifth, ironically, consider privatizing significant public employee sectors. Competition has a way of bringing costs to the appropriate level. For example, due to recent salary and benefit cost increases, some cities may be near the break-even point where a privatized police department, utilizing the same facilities and equipment, may be more cost-effective. One Orange County city is seriously looking at using the Los Angeles County Sheriff’s Department, instead of Orange County’s, for this very reason. You can see why unions want to stop privatization.

The cost of government employer takeovers may become their own undoing. The union members of the board of CalPERS may see the writing on the wall. That’s why they are pursuing a desperate attempt to prevent an unraveling that they have created.

Not to worry: Thanks to their donations, they’ve got their hooks in the only people who could properly correct this mess, their – and our – elected officials.


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