MOORLACH UPDATE — Business, Electricity and Top 48 Cities — November 7, 2019

Voting Record is Pro-Business

The OC Register presented the results of the California Chamber of Commerce’s rankings for legislative votes.  I know how hard it is to not only promote free markets, but also slow down bad legislation that hurts business in this legislature.  The elephant in the room, AB 5, was not included and I’m sure will be back in various forms next year. Hopefully this serves as a wake up call to our business community if it wants to turn this state around and improve the business climate.

Special Session?

I don’t believe I’ve seen an article where all 120 state legislators were contacted and asked to respond to an inquiry, but KRON Channel 4 did it.  Attending a Special Session works for me. I’m just not sure it will be productive.

The majority party doesn’t plan far into the future and has passed shortsighted legislation for decades. It is guilty of triggering the rule of unintended consequences and then reacting.  We tried to harden utility assets in wildfire zones, but the majority party, through Governor Brown, vetoed our well-intentioned effort that could have saved lives (see MOORLACH UPDATE — SB 1463 And The Facts — November 19, 2018 and MOORLACH UPDATE — SB 1463 Epilogue — October 4, 2018).  But, likely in response to this media request, the Senate leadership offered an informational hearing in the Senate Energy, Uitilities and Communications Committee for November 18th, for which I serve as vice chair, and will be attending.

Top 48 California Cities

Since we have not received the Comprehensive Annual Financial Reports (CAFRs) for some 20 cities, I’ve decided to extrapolate their possible Unrestricted Net Positions.  Since they are relatively low populated cities, should they ever complete their annual audits and publish the results, we’ll probably find I was charitably conservative in my calculations.

The top 48 cities found only 6 cities moving up into this group.  The one city that has not provided its CAFR is Etna. It is surprising the city of Emeryville is in the top grouping, as Assemblyman Mark Stone, D – Scotts Valley, authored AB 618 to allow this city to exceed the 2% threshold to increase a city’s sales and use tax.  Asking for a higher sales tax is a way of telegraphing fiscal distress. The Governor vetoed this bill.

It is nice to see four Orange County cities in this group, Tustin (32), Irvine (35), Laguna Beach (39) and Cypress (41).  The first three cities are in my 37th Senate District and, while I served as Orange County Supervisor for the Second Supervisorial District, I was the Cypress Chamber of Commerce’s 2014 Man of the Year.

The key takeaway?  You can be a major city and have a positive Unrestricted Net Position.

Rank City Pop. UNP 2018 (Thou-sands) UNP/ Capita 2017 Rank Rank Change
1 Industry 437 $226,379 $518,030 1 0
2 Sand City 394 $14,935 $37,906 2 0
3 Irwindale 1,450 $31,221 $21,532 3 0
4 Indian Wells 5,574 $61,885 $11,102 4 0
5 Colma 1,501 $12,890 $8,588 5 0
6 Dorris 966 $4,534 $4,694 7 1
7 Coronado 21,683 $99,784 $4,602 10 3
8 Bradbury 1,069 $4,707 $4,403 19 11
9 Trinidad 340 $1,465 $4,309 13 4
10 Rancho Mirage 18,738 $72,154 $3,851 11 1
11 Hidden Hills 1,892 $7,282 $3,849 14 3
12 Beverly Hills 34,504 $121,592 $3,524 6 -6
13 Shafter 19,271 $65,837 $3,416 12 -1
14 La Quinta 41,204 $130,892 $3,177 18 4
15 Emeryville 11,994 $36,360 $3,032 8 -7
16 Malibu 12,957 $35,503 $2,740 30 14
17 Rolling Hills 1,939 $5,072 $2,616 22 5
18 Yountville 2,874 $7,515 $2,615 17 -1
19 San Juan Bautista 1,873 $4,860 $2,595 24 5
20 Truckee 16,681 $43,205 $2,590 16 -4
21 Foster City 33,490 $82,200 $2,454 21 0
22 Pismo Beach 8,233 $19,503 $2,369 51 29
23 West Hollywood 36,723 $86,634 $2,359 23 0
24 Cerritos 50,058 $115,757 $2,312 20 -4
25 Carlsbad 114,622 $262,023 $2,286 26 1
26 Dublin 63,241 $141,009 $2,230 28 2
27 Ross 2,533 $5,558 $2,194 44 17
28 Lathrop 24,268 $52,397 $2,159 27 -1
29 Point Arena 448 $893 $1,993 31 2
30 Needles 5,177 $10,095 $1,950 403 373
31 Etna 744 $1,433 $1,926 9 -22
32 Tustin 82,344 $151,119 $1,835 34 2
33 Agoura Hills 20,878 $36,536 $1,750 35 2
34 Morgan Hill 44,513 $73,638 $1,654 32 -2
35 Irvine 276,176 $442,116 $1,601 41 6
36 Palm Desert 52,769 $83,055 $1,574 36 0
37 Fortuna 12,042 $18,855 $1,566 184 147
38 Solvang 5,771 $9,010 $1,561 42 4
39 Laguna Beach 23,309 $35,893 $1,540 55 16
40 Los Altos Hills 8,568 $13,052 $1,523 43 3
41 Cypress 49,978 $75,804 $1,517 33 -8
42 Moorpark 37,044 $55,571 $1,500 93 51
43 Westlake Village 8,358 $12,456 $1,490 39 -4
44 San Pablo 31,593 $46,422 $1,469 50 6
45 Danville 44,396 $64,907 $1,462 38 -7
46 Montague 1,428 $1,986 $1,391 49 3
47 Half Moon Bay 12,639 $17,011 $1,346 25 -22
48 Monte Sereno 3,630 $4,839 $1,333 45 -3

25th Anniversary Look Back

For the context of the first of ten chapters of my attempt to wake up the OC Register, see MOORLACH UPDATE — Constitutionally Flawed Legislation — November 5, 2019.

INTRODUCTION

As interest rates have continued to rise and further Federal Reserve Board increases are imminent, I must reiterate the concerns I raised in my campaign for Orange County Treasurer-Tax Collector.  Perhaps I protesteth too much, but if you follow the financial markets, you know the shape the bond market is in.  Inflation has been rearing its ugly head and the Fed is reacting.

Fiscal conservatives carefully watch government taxing and spending.  They must also watch its investing.  We have many elected officials that invest our tax dollars like financial maniacs.  Their investments are highly leveraged and heavily invested in super speculative derivatives.  And many are paying the price around the country.  Since it may happen here, you should be forewarned.

Let me diagram Orange County’s recent invested position in very round numbers:

Invested funds . . . . . . . . . . . . . . . . . . . . . . . $  7.4 billion

Borrowed funds . . . . . . . . . . . . . . . . . . . . . .   14.6 billion

     Total portfolio . . . . . . . . . . . . . . . . . . . . . .$22.0 billion

The debt, or margin, is achieved by utilizing reverse repurchase agreements.  The portfolio is invested in bonds and derivatives.  Both markets have taken a bath this year.  Let’s assume the value of the total portfolio has gone down 17 percent.  What do the investors really own?

Value of total portfolio . . . . . . . . . . . . . . . . . .$18.3 billion 

Less:  Borrowed funds . . . . . . . . . . . . . . . . . . 14.6 billion

     Value of invested funds . . . . . . . . . . . . . . $  3.7 billion

Translation:  The investors, which are municipalities (perhaps your school district or your city), have lost half of the value of their invested funds!

Not to fret, says our County Treasurer, Robert L. “Bob” Citron.  Using shallow euphemisms, he calmly informs us that he “holds to maturity” and “does not have to mark to market.”  It sounds like good news.  It’s not.  That’s why they’re sweating bullets at the County Halls of Administration.  And they should be.

OC Political Roundup

By BROOKE STAGGS

https://www.ocregister.com/2019/11/07/political-roundup-vp-mike-pence-to-raise-money-in-orange-county-calchamber-ranks-legislators/

Voting records ranked

The California Chamber of Commerce gave perfect scores for 2019 to three state legislators who represent Orange County, liking the way they voted on issues that the chamber says could help or hurt business.

That included votes against a still-active bill that would ban businesses from printing paper receipts unless requested, and votes in favor of a bill vetoed by Gov. Gavin Newsom that would have OK’d carbon credits for renewable natural gas transported via traditional pipelines.

Notably, the chamber’s scorecard didn’t include Assembly Bill 5, which limits the use of independent contractors, and Assembly Bill 1482, a statewide rent control measure. CalChamber didn’t take a position on the bills as they evolved near the end of the session.

Scores predictably fell along party lines, with Republicans most likely to side with CalChamber in shooting down bills that might increase regulations for businesses, while Democrats favored many of those same bills due to their predicted impacts on the environment or workers rights.

State Sens. John Moorlach, R-Costa Mesa, and Pat Bates, R-Laguna Niguel, were among nine senators — all Republicans — who voted with CalChamber’s position on 18 out of 18 senate bills this year.

“The fight to protect our economy takes place every year in the Legislature,” Bates said. “I look forward to continuing that fight next year.”

State Assemblyman Phillip Chen, R-Brea, also received a perfect score from CalChamber, joining six other assembly members — again, all Republicans — who voted in line with the chamber’s position on 20 out of 20 earmarked assembly bills.

Also in CalChamber’s top category for backing its stance on bills at least 80 percent of the time were Sen. Ling Ling Chang, R-Diamond Bar, (16-2) and Assemblymen Bill Brough, R-Dana Point (19-0); Steven Choi, R-Irvine (19-1); Tyler Diep, R-Westminster (17-2); and Tom Daly, D-Anaheim (16-4). Daly was the only local Democrat and one of just six in the state to make CalChamber’s top category.

In the second tier were Assemblywomen Sharon Quirk-Silva, D-Fullerton, (14-6) and Cottie Petrie-Norris, D-Laguna Beach (12-8), who voted with CalChamber between 60% and 79% of the time.

Sen. Bob Archuleta, D-Pico Rivera, was in CalChamber’s third tier, voting with the organization half of the time. And Sen. Tom Umberg, D-Santa Ana, was with 19 other Democratic state senators in CalChamber’s fourth tier.

“Where there’s been a tension between environmental concerns and others, I have tended to go with the environmental crowd,” said Umberg, who voted in line with the chamber on six out of 18 bills.

While Umberg said he respects CalChamber, he said he doesn’t take rankings from any interest group much to heart.

“I want to consider each measure on its individual merits versus what’s going to happen on a particular scorecard.”

Does your lawmaker support a special session to discuss PG&E power shutoffs, wildfires?

by: Ashley Zavala

https://www.kron4.com/news/california/does-your-lawmaker-support-a-special-session-to-discuss-pge-power-shutoffs-wildfires/

With wildfire season underway and the possibility for more widespread power shutoffs, we’re asking lawmakers if they think a special legislative session is needed on these issues?

There are still two months left before lawmakers come back to the Capitol to start passing new laws.

Governor Gavin Newsom has the power to call back lawmakers for a special legislative session to pass policy to address urgent issues, but he’s said multiple times recently he doesn’t think it’s necessary now with PG&E under the microscope of regulators and a strike team.

“To the extent more is needed, I will continue to pursue that,” Newsom said.

The specific question we posed to lawmakers was would you be supportive of a special session on issues seen now on public safety power shutoffs, investor-owned utilities, and fires?

In the assembly, more than half of the members either refused to comment or respond.

28 members total said they would support one, including Assembly Member James Gallagher, who represents part of an area destroyed by last year’s deadly Camp Fire.

“It should take thought, you have to think through these issues, we could be doing that right now, we don’t necessarily have to wait until January,” Gallagher said.

The situation was similar in the Senate where more than half did not comment or respond while 15 members said they would support a special session.

Two senators flat out said they would not support one right now, including Bay Area lawmaker Jerry Hill.

“We need information first, you don’t bring legislators together to try to define the problems to work out solutions. Nothing worse than having a bunch of legislators coming together with no defined role around the holidays to come up with a solution, it would not be the best result, I can guarantee it,” Hill said.

The leaders of both chambers say they’re in constant contact with the governor on the issues.

A committee of senators will gather Nov. 18 for an oversight hearing on power shutoffs.

See how your representative responded to our poll:

No response = We reached out and they didn’t respond
No comment = We reached out and this was their response

Assembly (in alphabetical order)

DISTRICT 04 (D) Aguiar-Curry, Cecilia M. -Other: Statement: “I do not know if a special session of the legislature is the correct way to address the complex and urgent issues around wildfires and public safety power shutoffs. What I do know is that they threaten the health and safety of my constituents as well as impose huge economic hardships on working families, low-income residents, seniors, and small businesses. This cannot continue! I’m less concerned with what venue the Governor and Legislative leadership choose to address these widespread blackouts than I am about getting to the bottom of how much of this is absolutely necessary to protect the safety of the public, and how we can hold accountable anyone who would use them to protect corporate profit.”

31 (D) Arambula, Joaquin -No response

16 (D) Bauer-Kahan, Rebecca -Yes

24 (D) Berman, Marc -Yes

05 (R) Bigelow, Frank -No response

50 (D) Bloom, Richard -No

76 (D) Boerner Horvath, Tasha – Yes

18 (D) Bonta, Rob – No comment

73 (R) Brough, William P. -Yes

62 (D) Burke, Autumn R. – No comment

57 (D) Calderon, Ian C. – No comment

51 (D) Carrillo, Wendy -No response

60 (D) Cervantes, Sabrina -No response

49 (D) Chau, Ed – Yes: “If a special session is held, I am more than happy to work with the Governor and my colleagues.”

55 (R) Chen, Phillip – No response

17 (D) Chiu, David – Yes

08 (D) Cooley, Ken -No response

09 (D) Cooper, Jim -Unable to be reached

35 (R) Cunningham, Jordan – No response

69 (D) Daly, Tom -No comment

72 (R) Diep, Tyler – No response

13 (D) Eggman, Susan Talamantes – Yes

12 (R) Flora, Heath – Yes: Statement: “If the state is serious about working with the Feds, the environmentalists, and the business community on better managing California’s forests then I’m all-in for a special session. If it’s the same dog and pony show about who pays for wildfire damages, then it’ll be a waste of everyone’s time. The state’s been standing on a 33 million-acre tinder box trying to discourage people from lighting matches next to it so maybe it’s time to take a look at what’s under our feet.”

34 (R) Fong, Vince – Yes

11 (D) Frazier, Jim – No comment

43 (D) Friedman, Laura – Yes

45 (D) Gabriel, Jesse – No response

03 (R) Gallagher, James – Yes

58 (D) Garcia, Cristina – No comment

56 (D) Garcia, Eduardo – No comment

64 (D) Gipson, Mike A. – No response

78 (D) Gloria, Todd -No comment

80 (D) Gonzalez, Lorena -No response

21 (D) Gray, Adam C. -No response

14 (D) Grayson, Timothy S. -No comment

41 (D) Holden, Chris R. -No response

44 (D) Irwin, Jacqui – No response

59 (D) Jones-Sawyer, Sr., Reginald -No response

2196 27 (D) Kalra, Ash -Yes

54 (D) Kamlager, Sydney -Yes

06 (R) Kiley, Kevin -No response

36 (R) Lackey, Tom -Yes

10 (D) Levine, Marc -Yes

37 (D) Limón, Monique -No comment

28 (D) Low, Evan -Yes

77 (D) Maienschein, Brian -No response

26 (R) Mathis, Devon J. -Yes

42 (R) Mayes, Chad -Other, statement: “Special Sessions succeed when there is a clear, defined policy solution proposed in bill format. Special Sessions fail when there is not a clear defined policy to debate and oftentimes results in quick, not well thought out legislation that may give us unintended consequences and make the problem worse.”

07 (D) McCarty, Kevin -No comment

61 (D) Medina, Jose -No response

67 (R) Melendez, Melissa – No response

66 (D) Muratsuchi, Al -No comment

46 (D) Nazarian, Adrin -No response

33 (R) Obernolte, Jay -No response

70 (D) O’Donnell, Patrick -No comment

23 (R) Patterson, Jim -Yes

74 (D) Petrie-Norris, Cottie -Yes

20 (D) Quirk, Bill – No

65 (D) Quirk-Silva, Sharon – Yes, “I would be in favor of a special session to address the concerns of the PG&E power shutoffs, the impact of the recent fires, and other legislative matters if found necessary. I feel that most of my colleagues would agree that if a special session was proposed, they would agree.”

40 (D) Ramos, James C. -No comment

63 (D) Rendon, Anthony -Speaker-Statement: “I’ve been in regular contact with Governor Newsom, who is the only one with the authority to call a special session. I’m grateful to Assemblymember Chris Holden, chair of the Utilities and Energy Committee, for joining me in discussing the current wildfire crisis with the Governor.”

47 (D) Reyes, Eloise Gómez – No comment

39 (D) Rivas, Luz M. -No comment

30 (D) Rivas, Robert -Yes, “The Governor is already taking steps needed to develop immediate solutions and ensure that these issues will be addressed when the legislature reconvenes in January. However, one benefit of having a special session is that bills become operative within 90 days, even absent an urgency clause. Special session or not, we must, and I’m confident the legislature will work diligently to address this crisis.”

52 (D) Rodriguez, Freddie -No response

48 (D) Rubio, Blanca E. -Yes

32 (D) Salas, Jr., Rudy -Yes

53 (D) Santiago, Miguel -No response

38 (D) Smith, Christy -Yes

29 (D) Stone, Mark -No response

19 (D) Ting, Philip Y. -No response

71 (R) Voepel, Randy -Yes

75 (R) Waldron, Marie -Yes, “Under a decade of Democratic leadership, our wildfires and utility markets have only gotten worse. We need action – if that means calling a special session, that’s what we should do.”

79 (D) Weber, Shirley N. -Unable to be reached

15 (D) Wicks, Buffy -Yes

02 (D) Wood, Jim -Other, statement: “The overwhelming and numerous impacts of these widespread PG&E power shutoffs, along with the loss and stress people are feeling after another devastating wildfire – apparently caused once again by PG&E equipment – only emphasizes the critical need for solutions. I have met hundreds of people who have gone days without power, not just losing the food in their refrigerators, but unable to work and get paid, small businesses that have lost thousands in income, schools shut down, parents scrambling for childcare, and our vulnerable seniors whose care has been disrupted. It seems to me that PG&E is only interested in protecting itself and recent comments by its CEO have proven him to be tone-deaf to the real-life impacts PG&E’s actions have had on the individuals and families who pay their salaries. Whether or not a special session is called, we are already doing the work by listening to our constituents, sharing thoughts with our colleagues and hearing from experts so that our solutions will acknowledge the urgency of these issues.”

Senate (in alphabetical order)

26 (D) Allen, Benjamin -No response

32 (D) Archuleta, Bob -No response

39 (D) Atkins, Toni -Pro Tem- Statement: “The Senate will be holding a hearing on Nov. 18 to discuss California’s response to wildfires and utility public safety power shutoffs. We will continue to work closely with the Administration to properly respond to this crisis.”

36 (R) Bates, Patricia -Yes

15 (D) Beall, Jim -No comment

08 (D) Borgeas, Andreas -Yes

35 (D) Bradford, Steven -Yes

12 (D) Caballero, Anna -No comment

29 (R) Chang, Ling Ling -Yes: “Blackouts and fires caused by bad power lines are unacceptable. The legislature and Governor need to address this problem as soon as humanly possible. I support the call for a special session as soon as we develop solutions to a problem that has take a decade to create.”

01 (R) Dahle, Brian -Yes, has publicly urged the Governor to call a special session

03 (D) Dodd, Bill -Yes

24 (D) Durazo, Maria Elena – No response

05 (D) Galgiani, Cathleen -No comment

07 (D) Glazer, Steven -Yes “If there is a proposal to enact immediate health and safety protections from fires and utility breakdowns and it requires a special session of the legislature to put it into effect, I would support such a session.”

33 (D) Gonzalez, Lena-Yes

16 (R) Grove, Shannon – Yes: “I support a special session because the Legislature needs to take immediate action and provide real solutions. Instead of diverting money to expensive renewable energy contracts, we need to focus on real priorities such as mitigating and preventing wildfires, hardening and providing a secure energy grid. Over the years, Senate Republicans have introduced commonsense legislation to reduce the risk of catastrophic wildfires, invest in vegetation and forest management, and secure a reliable energy grid. Unfortunately, these measures have been ignored by the Democrats. This is the 21st Century, recurring power outages and destructive wildfires cannot be the new normal. California deserves better,” said Senate Republican Leader Shannon Grove (R-Bakersfield).

18 (D) Hertzberg, Robert -No comment

13 (D) Hill, Jerry -No

40 (D) Hueso, Ben -Other- Supports having November 18th oversight hearing

14 (D) Hurtado, Melissa -No comment

19 (D) Jackson, Hannah-Beth – No response

38 (R) Jones, Brian – Yes

20 (D) Leyva, Connie – Referred us to Governor’s office

02 (D) McGuire, Mike – No response

30 (D) Mitchell, Holly -No comment

17 (D) Monning, Bill– No comment

37 (R) Moorlach, John -Yes, “I would attend a special session because my constituents deserve reliable power and protection from wildfires. The current legislature rejected common-sense solutions to this issue when I authored SB 1463, so I’m not confident a new solution would be crafted quickly.”

23 (R) Morrell, Mike -Yes “I would support a special session as long as it focuses on the issues surrounding utility power shutoffs, wildfires, and homeowners insurance policy cancellations. It cannot become a free-for-all for legislative Democrats to create laws on unrelated topics outside the normal policymaking process.”

04 (R) Nielsen, Jim -Yes

06 (D) Pan, Richard– No comment

25 (D) Portantino, Anthony -No response

31 (D) Roth, Richard-No response

22 (D) Rubio, Susan -Yes

09 (D) Skinner, Nancy -No response

27 (D) Stern, Howard -Other-“As a member of the Senate EU&C Committee, Senator Stern will be taking part in the November 18th hearing on the PSPS events. As for what happens next, the Senator looks forward to working with the Senate Pro Tempore and the Administration.”

34 (D) Umberg, Thomas -Other- Will wait to see what happens with oversight hearing

10 (D) Wieckowski, Bob-No

11 (D) Wiener, Scott -No comment

21 (D) Wilk, Scott – Yes, publicly urged Newsom to call special session

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