MOORLACH UPDATE — OC’s Newest Landmark Plaque — September 20, 2017

Visiting California Historical Landmarks has been one of my hobbies since graduating from college. I obtained a book from State Parks back in 1978 and I’ve been taking photographs of them ever since. It started with trips to landmark plaques within driving distance on my birthdays (see MOORLACH UPDATE — Numbers 1050 and 49 — January 2, 2016 january 2, 2016 john moorlach).

I’ve mentioned this unique hobby before. The best of the selection is MOORLACH UPDATE — Los Al-Seal Beach Patch . Other samplings include:

MOORLACH UPDATE — Another Alternative — June 28, 2013

MOORLACH UPDATE — Loose Interview — February 2, 2013

MOORLACH UPDATE — Swearing-In — January 7, 2013

MOORLACH UPDATE — trestles — January 4, 2012

MOORLACH UPDATE — OC Register — July 14, 2012

MOORLACH UPDATE — Western States Jewish HistoryMay 25, 2012  

MOORLACH UPDATE — Super City Stir — August 20, 2011

Well, on Monday I had the opportunity to participate in an unveiling of a recently installed plaque on its new pedestal. It’s located at the shuttle station at Crystal Cove. This place is so special, it serves as the backdrop to my State Senate website (see and below).

The next time you eat at the Beachcomber, please take a look (and a photograph) of the California State Historical Landmark Number 1050 plaque. Start the hobby. The OC Register covers the event in the first piece below. I was so excited about cutting the ribbon, I failed to look at the camera. And, thanks to all who were able to attend.

The second piece is from CalPensions and it provides the details of yesterday’s CalPERS Finance and Administration Committee meeting. It discussed two letters that I submitted requesting assistance.

Since CalPERS is less than 70 percent funded, perhaps the actual cost of cost-of-living-adjustments (COLA) should be reviewed? The data on their impact to CalPERS’s growing unfunded actuarial accrued liability is limited, but intuition suggests that they are a significant cost in the whole scheme of things.

If you were to have watched the committee hearing, you would have seen representatives from several cities talk about the challenges they are having with their finances and the limits they have in negotiating with their bargaining units, who don’t understand the word “compromise”. Further, I wasn’t asking for CalPERS to make a single policy change — I just wanted data.

Changing COLAs can only be done prospectively, and most likely for new retirees after any change is approved. Tragically, many of the CalPERS board members did not understand this constitutional concern and determined it would affect every retiree.

Aside from only a few of the board members who actually read the request and understood what I was looking for, it’s too bad when the largest pension system in the U.S. has a board of unqualified, union-backed members. But, I digress.

The second request was to allow current “classic” CalPERS members to migrate to the lower “PEPRA” formula. Prospective changes are constitutional. Many new employees would prefer the lower formula, as it means a lower withholding from their paychecks. It is more important to them to receive a higher net paycheck in order to make their mortgage payments and to pay for child care costs, allowing them to work.

If enough “classic” employees selected this option, they may save their own job or that of a co-worker or two. It would also prevent other potential draconian alternatives, like salary and/or benefit reductions. Consequently, a lower pension formula makes sense. I participated in successfully negotiating such a proposal back in 2009, while serving as a County Supervisor.

Even after receiving reality reports from the trenches, listening to more than a dozen plan sponsors sharing what the rising costs of pension contributions are doing to their municipalities, the board members went ad hominem and attacked the perceived intentions of the writer of the letter. Unbelievable. Talk about projection (a common union ploy).

We’re asking to consider solutions and the diplomatic way is to ask in a letter first. If this polite approach does not succeed– going to the CalPERS board directly and asking them for the information rather than jamming a bill down their throat–then I can pursue other means of obtaining “public information.” But, good grief.

Folks, the pension crisis is here. And this piece lays it all out. Let’s hope that the CalPERS Board takes a deep breath and comes to the conclusion that it needs to be a part of the solution. Being tone deaf will not cut it with the plan sponsors.
The Sacramento Bee also covers the fun in the third piece below.


Crystal Cove touts its unique historic past

Two plaques were unveiled that honor cottages’ status as a state historic landmark.

State Senator John Moorlach was one of the officials on hand to re-dedicate Crystal Cove as a State Historical Preserve. The park had a plaque commemorating the designation in an out of the way corner which was moved to a new more visible location at the entrance in Newport Beach on Monday, September 18, 2017. (Photo by Sam Gangwer, Orange County Register/SCNG)

State Sen. John Moorlach, left, cuts the ribbon on a newly placed State Historical Landmark plaque at Crystal Cove on Monday. Eric Dymmel, State Parks superintendent, holds the ribbon. SAM GANGWER — STAFF PHOTOGRAPHER


State Senator John Moorlach, left, and State Park Superintendent Eric Dymmel, right, with the newly placed State Historical Preserve marker at the entrance to Crystal Cove Historical District in Newport Beach. The original plaque commemorating the designation was in an out of the way corner and was moved to a new more visible location at the entrance in Newport Beach on Monday, September 18, 2017. (Photo by Sam Gangwer, Orange County Register/SCNG)

Cottage area touts its unique historic past as it prepares for the future


Crystal Cove Conservancy and the state plan to restore 17 of the remaining structures

By Laylan Connelly

lconnelly @ocbeaches on Twitter

Step onto the sand at Crystal Cove, and you’ll be transported back in time.

It’s a snapshot of what ocean towns up and down the California coastline looked like in the ’20s and ’30s, some of the cottages built by vacationers with whatever materials washed up on the beach so they could create permanent homes.

Now, visitors entering the area will know the Crystal Cove cottages’ historic significance with two plaques that greet beach visitors walking into the park. Officials held a ribbon-cutting ceremony this week to unveil the plaques that tout the cottages’ status as a state historic landmark — designated in 2013 — and its standing on the National Register of Historic Places, established in 1979.

“We’re proud of this being a historic district and we’re proud it’s been recognized on the national and state level,” said Eric Dymmel, sector superintendent of State Parks. “It’s only appropriate it be prominently displayed so people are aware they are entering into a historic district, and it really is a special place. Not only for us now, but it has been for decades in the past and for decades in the future.”

Crystal Cove’s story started out like a Hollywood movie, literally. It was in 1918 that the area was first used for movie sets, huts with palm fronds creating a tropical, away-from-everything feel.

Film crews would sometimes leave their sets behind, and families started staying in them.

In the ’30s, tents were put up and slowly, a community formed. Some people built homes with whatever they could find that washed ashore. There was no master plan, no architect to guide them, and they each had personality and character, a style dubbed “early vernacular architecture” once seen along the coast.

“Those are now all gone,” said Crystal Cove Conservancy founder and vice president Laura Davick, who was once a resident in the cottages. “So this is the last remaining examples of what this was like.”

Through the decades, while a small community made Crystal Cove home and lived a laid-back beach lifestyle, orange groves around the county were converted into big cities, skyscrapers went up, freeways were built.

“When you think about Crystal Cove, it’s kind of landlocked in a sea of urbanization, with all of the pressures around the park now,” Davick said. “I think this will hopefully educate folks of why this is important, why we have to protect Crystal Cove.”

In 1979, the state purchased the 3,000-acre Crystal Cove area from the Irvine Co. for $32.6 million. That same year, Crystal Cove residents Martha Padve and Christine Shirley lobbied to get the cottages put on the National Register of Historic Places.

The cottages were occupied by families — referred to as “coveites” — until 2001, when the state evicted them to make way for planned public lodging.

In 2006, Crystal Cove started its next chapter as a place for vacationers to have a unique get-away on the sand after 22 of the cottages were restored, with several more rehabbed through the years. Seven years later, Crystal Cove joined more than 1,000 other locations on the list of State Historic Landmarks.

State Sen. John Moorloch, R-Costa Mesa, joined the ribbon-cutting ceremony this week and talked about how, as a child, he scouted out areas in the state with historic significance. It was an interest that continued into adulthood and one he passed down to his own children.

“That started a crazy hobby,” he said. “This is a bucket list checked off kind of thing,” he said.

Officials didn’t just talk about Crystal Cove’s past, but what’s to come.

Crystal Cove Conservancy and the state plan to restore 17 of the remaining cottages on the north end of the site, currently gated off and run down as years and weather add to the wear. The California Coastal Commission green-lighted the project earlier this year.

The 17 cottages will be turned into 22 overnight units, and once restored they will add about 48,000 rental opportunities annually – about doubling the current available occupancy. A new “open bed” dorm lodge, with 11 beds, will be added at $35 a night per bed. The most expensive cottage, sleeping up to 10 people, will be $245 a night.

This is the first step in gaining approval for the final phase of renovation – it could take five years before the cottages are restored and ready for public use. Each cottage needs to be evaluated for historic significance to determine what stays and what goes, and one cottage is so dilapidated it needs an almost complete makeover.

Then, there’s raising the funds to restore the cottages.

An estimated $17 million is needed for site work and infrastructure, and another $16 million for cottage restoration. The conservancy has raised some and has obtained grants and other financial promises; an estimated $23 million more is needed to finish the project.

“This will shine the light on why Crystal Cove is so important, its significance,” Davick said of the historic designation monument. “It is something that we must preserve for future generations.”

Crystal Cove timeline

1918: “Treasure Island” is shot at Crystal Cove; the film crew leaves behind a palm-frond set.

1920s: Pacific Coast Highway is built, and tourists make the beach a destination for day trips and camping. Visitors start setting up tents at Crystal Cove; cottages are built.

1927: A lumber ship capsizes off the coast, providing more building materials for cottages. The area is named Crystal Cove by Beth Wood because the water is always crystal-clear.

1946: Postwar-era families come to the cove to pitch live-in tents and spend summer days swimming, enjoying cocktails, barbecuing, and singing around bonfires.

1962: The Orange County Board of Supervisors outlaws tent camping on local beaches.

1979: The National Register of Historic Places considers Crystal Cove the last remnant of the 1920s-era California beach life, giving it a historic designation.

Early 2001: More than 600 people pack a public meeting, opposing state plans for a $35 million resort. The state drops a resort contract with the developer. The public California Coastal Conservancy gives the state $2 million to buy out the contract.

April 2001: The first of several community workshops gives residents a chance to say what they’d like to see at Crystal Cove.

July 2001: Cottage residents start moving out after dodging three eviction notices in 22 years.

October 2001: State unveils a preliminary proposal for Crystal Cove based on recommendations from the workshops.

October 2002: State releases its final plan and environmental impact report.

February 2003: The preservation and public-use plan is approved by the State Park and Recreation Commission.

February 2004: State awards an $8 million contract for the Crystal Cove project to Newport Beach-based Metro Builders and Engineers Group.

March 2004: Work begins on the first phase of the project.

Did you know?

· During prohibition, rum smugglers used the cove to smuggle their booty ashore. For years, bottles could still be found buried in the sand. Historic artifacts — including bottles — will be on display.

· The Crystal Cove Historic District is a 12.3-acre coastal portion of the 2,791-acre Crystal Cove State Park.

· The cottages are considered historic because of the “vernacular architecture” — which means they were built without design or plan, in an eclectic style.

Cities urge CalPERS to help ease staff, pay cuts

The city manager of once-bankrupt Vallejo expects soaring police pension costs to reach 98 percent of pay in a decade. Lodi employees dropped from 490 to 390 in the last decade. And Oroville, after cutting a third of its staff, recently cut police pay 10 percent.

Eight cities struggling with rising pension costs urged the CalPERS board yesterday to analyze two ways to reduce the cost of pensions, even though the proposals were said by the CalPERS attorney to be unconstitutional under current law.

State Sen. John Moorlach, R-Costa Mesa, asked the CalPERS board to analyze the cost of suspending cost-of-living adjustments and giving current employees, for work done in the future, the lower pension for employees hired after Jan. 1, 2013, under reform legislation.

The chairman of the League of California Cities pension committee, Bruce Channing, Laguna Hills city manager, told the CalPERS board that cities throughout the state are “gravely concerned” about “unsustainable” pension costs and all options should be considered.

“Cutting staff, as we have done in my city, is becoming a recurring pattern,” Channing said.

Five unions and retiree groups urged rejection of Moorlach’s request, saying a COLA cut would harm retirees with small pensions. They said Moorlach wants to do away with pensions and should do his own analysis, rather than pass the cost to CalPERS.

The CalPERS board president, Rob Feckner, said he won’t repeat what he said on first seeing the Moorlach letter. He said the request did not come from the entire Legislature, and if Moorlach really believes in his “pet project” he should find another way to fund it.

Vallejo filed for bankruptcy in 2008 and did not cut pensions, a trend followed by the Stockton and San Bernardino bankruptcies in 2012. Vallejo said CalPERS threatened a long legal battle. The other two cities said they needed to be job competitive, particularly for police.

There was speculation several years ago that Vallejo, which had higher costs than the other two cities, may be headed for a second bankruptcy. The Vallejo city manager, Daniel Keen, said he took office three months after Vallejo exited bankruptcy in 2011.

Keen told the CalPERS board yesterday that Vallejo has the same gradual erosion of services that the other seven cities talked about, despite an increase in the sales tax and a tax on medical marijuana.

“We are facing dramatic increases in our pension rates, as are many cities,” Keen said. “We will be looking at 98 percent rates for public safety by ’27-28 and 55 percent rates for our miscellaneous employees in that time frame.”

The Lodi city manager, Steve Schwabaurer, thanked the board for its courage in acknowledging there is a “crisis’ and taking some steps. But he said he has not seen a discussion of options other than asking the cities for more money.


He gave examples of Lodi’s reduced services and employees: “In 2008 we had 490, today we have 390. In 2008 we had 78 police officers, today we have 71. In 2008 we had five active fire stations, today we have four and a quarter.”

Schwabaurer said CalPERS is projecting that Lodi’s pension rates will increase to 38 percent of pay and 78 percent of pay. He said the projected rates will burn up the general fund reserve and the pension stabilization fund.

To give union representatives in the board audience a sense of what that means, he said: “That is one of my police officers 24 hours a day. It’s a fire station. It’s all of my parks and rec, and all of my library. It’s not a choice we can make.”

The Oroville finance director, Ruth Wright, said the city’s workforce was cut by a third two years ago to balance the budget. A recent 10 percent pay cut negotiated for police was “very hard, very sad,” she said, and now pension rates are projected to double in seven years.

“In three to four years our cash flow is going to be gone,” Wright said. “We don’t even know how we are going to operate past four years. We have been saying the bankruptcy word, which is not very popular.”

West Sacramento’s assistant city manager, Phil Wright, said the city was able to successfully bargain with unions to get through the financial difficulty after the recession began in 2008.


“Now I’m sitting at the table telling them there is no money after they have taken 5 percent cuts, paid all of their PERS, and it’s because we can’t afford any money,” Wright said. “Every penny that has been returned to our general fund in property tax and sales tax is going to pay for our PERS benefit.”

Others urging CalPERS to do the cost analysis requested by Moorlach were Concord, Santa Rosa, Chico, Yuba City, and the California Special Districts Association.

Opponents said the Moorlach proposals would violate the “California rule,” a series of state court decisions widely believed to mean that the pension offered at hire becomes a vested right, protected by contract law, that can’t be cut unless offset by a comparable new benefit.

Al Darby of the Retired Public Employees Association said the Moorlach request is an “anti-pension proposal” that the CalPERS actuary extimates would cost 80 hours of work time, not counting followup questions.

He said CalPERS was being asked to do opposition on itself, which is absurd. He said cities should explore other methods of relief, such as better use of technology, innovative contracting, and taxing power.

Neal Johnson of SEIU Local 1000 said the fact that the request comes from one legislator, not a committee, seems to have a “certain aim.” He said the advocates say all options should be considered but the request is for just two.

“It is self-serving,” he said. “It is not in the benefit of the 1.5 million members of the system, and I hope you will reject it. As I said, the data is there. They can do the analysis.”

Board member J.J. Jelincic said “a big problem is that what we are being asked to do is a bullet point for an initiative that will pick out the most extreme number and will ignore all the conditions that went into the assumptions.”

Board member Henry Jones said he appreciates the fiscal responsibility of cities to balance the budget and maintain services. But, he said, the fiduciary responsibility of the CalPERS board is to the members of the pension system.

“Our primary responsibility is to have a sustainable fund to pay retirement benefits for years to come,” he said, “and I think we have exercised some of those responsibilities.”

Jones said CalPERS lowered the earnings forecast used to discount future pension obligations, raising employer rates, and adopted other risk mitigation strategies to maintain the pension system in the long run.

Board member Richard Gillihan said he probably would not support the reforms Moorlach wants analyzed, particularly the COLA cut. But he said the request is being “twisted” by some of his colleagues.

Because the CalPERS staff often responds to stakeholder requests without going to the board, he said, the fact that the Moorlach request is before the board suggests that the board is politicizing it.

He said the Moorlach request comes from not just one legislator but also the cities that urged that CalPERS provide the data. He said it’s difficult to negotiate with the unions, as some members suggested, without the data.

“We are just going to disregard their interest in the data,” Gillihan said. “I find that somewhat insulting.”

Given the comments of most board members, the committee chairman, Richard Costigan, said he would not call for a vote. He instructed the CalPERS chief executive, Marcie Frost, to tell Moorlach where to get information to answer his request.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at

California pensioners: Your COLAs are safe, for now



The state’s largest pension fund on Tuesday shot down a pitch from a Republican lawmaker who wants it to study how much money it could save by cutting benefits for retired public workers.

Sen. John Moorlach of Orange County in July wrote letters to CalPERS board members – Richard Costigan and Dana Hollinger – making two touchy requests for the pension fund.

In one, Moorlach wanted CalPERS to estimate how much money it could save by temporarily suspending cost-of-living adjustments for retirees. CalPERS has different retirement plans that allow cost-of-living adjustments of 2 to 5 percent for its pensioners.

In the other, Moorlach asked CalPERS to look at reducing benefits for current workers and retirees by moving them into the less generous plans public agencies began offering in 2013, after Gov. Jerry Brown signed a pension reform law.

Moorlach submitted bills this year that would have carried out those ideas, but they died in the Democratic-controlled Legislature. A dozen local government leaders attended this week’s CalPERS meeting and implored the fund to study Moorlach’s requests.

They say they’re struggling with fast-rising pension costs, which could double over the next five years in some communities, and they want the information so they can negotiate contract changes with their unions.

“None of us are interested in negotiating with our bargaining units for something that takes away from them and doesn’t solve the problem,” said Phil Wright, West Sacramento’s human resources director.

City governments have drawn attention to their pension costs since CalPERS last year voted to lower its expected investment return rate, compelling government agencies to kick in more money for their employee retirement plans.

“It’s a fire station. It’s all of my parks and recreation and all of my library,” said Lodi City Manager Steve Schwabauer, who expects his city’s pension costs to rise from today’s $6.5 million to $13 million by 2022.

A group of state union leaders countered that both of Moorlach’s requests contemplate changes that would undo pension benefits that were promised to current workers and retirees. That means the proposals violate the so-called “California rule,” the legal precedent that makes pension promises virtually untouchable.

“You should not be doing research on things that are just plain illegal,” Jai Sookprasert, a lobbyist for the California State Employees Association, told the board.

CalPERS in the past has looked at how suspending cost-of-living adjustments would affect the pension fund. Freezing them would improve pension plans for public safety employees by up to 18 percent, and for other employees by up to 15 percent, according to CalPERS.

Today, CalPERS is considered underfunded because it has about 68 percent of the assets it would need to pay all of the benefits it owes immediately. That number sets off alarms for Moorlach and others who worry public agencies won’t be able to make good on their debts.

“We’re 32 percent off,” said Hollinger, who has asked CalPERS actuaries to study how cost-of-living adjustments affect the fund. “I’m worried about the future of all our hard-working constituents who earned a pension. I want to make sure the money is there for them.”

The CalPERS board did not vote on responding to Moorlach. Instead, a majority of members criticized the requests, making clear that a motion to respond to Moorlach would fail. Several CalPERS members and union advocates suggested the data would be used one day in a political campaign targeting public employee pensions.

“I love data, but I’m not sure I want to help write the bullet point for the initiative,” said J.J. Jelincic, member of the California Public Employees’ Retirement System Board of Administration.

Added CalPERS President Rob Feckner: “We’re being asked to fund somebody else’s pet project.”

Adam Ashton: 916-321-1063, @Adam_Ashton. Sign up for state worker news alerts at

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