MOORLACH UPDATE — Officers, Audits, CIRM and Cities 145 to 192 — November 14, 2019

Public Safety Quality Control

The big California story this week has been the investigative reporting on California’s police forces and the release of embarrassing personnel records.

I co-authored SB 1421, which required the disclosure of personnel records of public safety officials in certain categories.  At that time, I did not know what was hidden (see MOORLACH UPDATE — SB 1421 and SB 828 — May 31, 2018 and MOORLACH UPDATE — SB 1421 and CNPA — February 7, 2019).

The series of investigative pieces that have been released have this preamble:

In early 2019, reporters from the Investigative Reporting Program at the UC Berkeley Graduate School of Journalism obtained a list of criminal convictions from the past decade of nearly 12,000 current or former law enforcement officers and people who applied to be in law enforcement. The records — provided by the state’s Commission on Peace Officer Standards and Training in response to a Public Records Act request — didn’t indicate which individuals on the list actually worked in law enforcement nor the departments where they were employed.

Instead of providing any more information, POST referred the reporters to state Attorney General Xavier Becerra’s office, which wrote the reporters a letter calling the release of the records “inadvertent” and indicating mere possession of the document was a crime. The letter instructed the reporters to destroy the list or face legal action.

Instead, the reporting program formed an unprecedented collaboration to investigate the list, involving three dozen news outlets across the state.

The Sacramento Bee is one of many newspapers throughout the state publishing this investigative journalism project, with the follow-up piece below.

Office of Inspector General

A recent federal audit of California nursing homes reflected a deficiency by the Department of Public Health needing some attention.  I sit on the Joint Legislative Audit Committee, which assigns projects to the State Auditor for oversight. The Kaiser Health News piece highlights an area that may qualify for such an audit request.

CIRM

The San Diego Union-Tribune provides a letter to the editor from a man who was put off by my substantive critiques of the California Institute for Regenerative Medicine and its failure to provide the cures it fervently promised in 2004 during its first campaign for a $3 billion bond (see MOORLACH UPDATE — CIRM and School District’s Group 5 — September 26, 2019).  Fortunately, the letter writer provides an insight to his bias by stating the name of his affiliation.  And, although questioning my knowledge of the subject, he refers to me as an Assemblymember. You’ve got to love the subtle humor in it all.  UC San Diego Health has an Alpha Stem Cell Clinic that has received $35,656,270 through a dozen CIRM grants.

If a $5.5 billion bond is approved in 2020 and issued, and it results in another $5.5 billion in interest costs, then it would take 763,888 individual taxpayers paying $300 per month to honor the $275 million annual obligation.  What will Sacramento cut out of its budget to satisfy this commitment? Roads? Schools? Public safety? Isn’t it great when government strays from its core mission and drifts into expensive causes the private sector should be addressing?

Cities 145 to 192

The fourth group of 48 cities includes two from Orange County:  Mission Viejo (#164) and Laguna Hills (#178). Both cities moved up in the rankings.

The cities of Blue Lake and Windsor are highlighted, as we’re still waiting for their audited financial statements (see MOORLACH UPDATE — Business, Electricity and Top 48 Cities — November 7, 2019).

Let’s take a sample to see what’s occurring with California’s cities, as the Governmental Accounting Standards Board has required the reporting of liabilities like Retiree Medical on the Balance Sheet.

The city of Ontario (#179) dropped 117 places.  It has a very-user friendly website explanation for its Comprehensive Annual Financial Report (see  https://www.ontarioca.gov/sites/default/files/Ontario-Files/Administrative-Services/fiscal-services/cafr_executive_summary_june_30_2018.pdf).  It shows the Unrestricted Net Assets decreased by $146.7 million, while its Noncurrent Liabilities increased by $199.0 million.  But, when reviewing the actual CAFRs for 2017 (see https://www.ontarioca.gov/sites/default/files/Ontario-Files/Administrative-Services/Annual-Operating-Budgets/CAFR/cafr_2017_websitecd.pdf) and 2018 (see https://www.ontarioca.gov/sites/default/files/Ontario-Files/Administrative-Services/Annual-Operating-Budgets/CAFR/20181218_cafr_fiscal_year_ending_june_2018revised.pdf), these amounts are for the combined Governmental Activities and Business-Type Activities.

For our study, I only look at the Governmental Activities.  This shows that the Unrestricted Net Assets declined by $163.6 million.  Its Other Post-Employment Benefits (OPEBs) increased by $166.3 million, explaining the change.  But, its Net Pension Liabilities also went up by $32.7 million. An increase in Cash and Investments of $58 million may explain why the Unrestricted Net Assets did not take a harder hit.

The good news?  Even after adding this significant amount of debt to the balance sheet, the city of Ontario still has an Unrestricted Net Asset balance above zero.  The next group of 48 cities will dip below this critical threshold.

For the first group, see MOORLACH UPDATE — Business, Electricity and Top 48 Cities — November 7, 2019.

For the second group, see MOORLACH UPDATE — 3P, Cities 49 to 96 and Holding to Maturity — November 12, 2019.

For the third group, see MOORLACH UPDATE — Measuring Insincerity and Cities 97 to 144 — November 13, 2019

Rank

City

Pop.

UNP 2018 (Thou-sands)

UNP/ Capita

2017 Rank

Rank Change

145

Temecula

113,181

$31,700

$280

158

13

146

Rosemead

55,267

$15,299

$277

165

19

147

Palmdale

158,905

$43,373

$273

167

20

148

Hughson

7,738

$2,087

$270

168

20

149

Wasco

27,691

$7,399

$267

197

48

150

Calistoga

5,334

$1,415

$265

110

-40

151

San Jacinto

48,146

$12,281

$255

163

12

152

Blue Lake

1,280

$316

$247

115

-37

153

Ripon

15,847

$3,847

$243

46

-107

154

Waterford

9,149

$2,217

$242

164

10

155

Tehachapi

12,299

$2,939

$239

179

24

156

Tehama

430

$102

$237

207

51

157

Lakewood

81,179

$17,346

$214

138

-19

158

Temple City

36,411

$7,753

$213

151

-7

159

Goleta

31,949

$6,766

$212

98

-61

160

Burlingame

30,294

$6,415

$212

298

138

161

Yucca Valley

21,834

$4,518

$207

172

11

162

Bellflower

77,682

$15,797

$203

181

19

163

Orland

7,932

$1,583

$200

160

-3

164

Mission Viejo

95,987

$17,421

$181

171

7

165

Imperial Beach

28,163

$4,934

$175

74

-91

166

El Paso de Robles

31,559

$5,499

$174

232

66

167

Visalia

136,246

$22,633

$166

189

22

168

Ione

8,058

$1,268

$157

174

6

169

Yreka

7,840

$1,160

$148

188

19

170

Corona

168,574

$23,750

$141

95

-75

171

Hillsborough

11,543

$1,586

$137

59

-112

172

Calimesa

8,876

$1,074

$121

202

30

173

Farmersville

11,443

$1,282

$112

149

-24

174

Kerman

15,083

$1,630

$108

194

20

175

Lincoln

48,591

$5,020

$103

317

142

176

Moreno Valley

207,629

$20,689

$100

191

15

177

Dos Palos

5,679

$563

$99

204

27

178

Laguna Hills

31,818

$2,956

$93

198

20

179

Ontario

177,589

$16,251

$92

62

-117

180

Windsor

28,060

$2,456

$88

114

-66

181

Walnut Creek

70,667

$6,045

$86

244

63

182

Atherton

7,135

$609

$85

65

-117

183

Perris

77,837

$6,580

$85

178

-5

184

Escalon

7,558

$628

$83

224

40

185

Fresno

538,330

$43,381

$81

209

24

186

Rocklin

66,830

$5,318

$80

237

51

187

Lemoore

25,892

$1,833

$71

183

-4

188

Huron

7,302

$498

$68

187

-1

189

Mendota

12,051

$759

$63

169

-20

190

Corning

7,515

$468

$62

260

70

191

Port Hueneme

23,929

$1,490

$62

152

-39

192

Marina

22,424

$1,153

$51

112

-80

25th Anniversary Look Back

The Moorlach Memo continues with Chapter 4.  In this edition, I share a version of that old proverb, “Be careful what you wish for.”  I also reiterate how the Orange County Investment Pool implosion will occur and predict its debilitating long-term impacts in the last paragraph.

For the October 13, 1994 OC Register piece mentioned below, go to MOORLACH UPDATE — Burying Electric Lines and Bills — October 13, 2019.

For the first four segments, see:

Intro — Context — MOORLACH UPDATE — Constitutionally Flawed Legislation — November 5, 2019.

Chapter 1 — Introduction — MOORLACH UPDATE — Business, Electricity and Top 48 Cities — November 7, 2019

Chapter 2 — Hold to Maturity — MOORLACH UPDATE — 3P, Cities 49 to 96 and Holding to Maturity — November 12, 2019

Chapter 3 — We Do Not Mark To Market — MOORLACH UPDATE — Measuring Insincerity and Cities 97 to 144 — November 13, 2019

PROGNOSIS

Am I screaming sour grapes?  No. I am very grateful that I did not unseat our incumbent.  Mr. Citron needs another term to clean up the mess he has created.

Am I overreacting?  No. The portfolio holds some $3.5 billion in “inverse floater derivatives” that have already declined some forty percent in value.  And, with interest rates continuing to rise, Citron’s problems continue to become exasperated.

Let’s continue with our scenario. The $22 billion in investments will pay out their agreed to interest rates (or a lower amount in the case of the inverse floater derivatives) for the next four years.  Like a rental property with a four-year fixed rent agreement, our income will remain constant (and capped).

However, our County has to service the debt on the $14.6 billion.  The terms, for the most part, are renewable contracts that come due every three months as the short-term interest rates increase, as they have.  Accordingly, our costs will increase every three months. Citron’s borrowing costs are already up some sixty percent from a year ago.

With revenues fixed, or decreasing, and costs going up as short-term interest rates increase, our County’s portfolio will generate ever decreasing yields.  If the short-term interest rates increase to a high enough rate, we may not see a yield at all.

Citron confirmed this fact in the October 13 “Register” article, “Citron says he zigged, Fed zagged:”  “he said his forecasting error will mean reduced interest earnings in the coming year.”  

Should the yield become noncompetitive, the participating municipalities will request their funds in order to move them elsewhere.  After all, this is a competitive society that we live in. So, if the lenders haven’t shut Citron down first, these liquidations certainly will.  Our “Armageddon” will occur. Citron’s worst nightmare will transpire and our County will suffer from it for decades to come. All the same he makes the claim that the “investors[‘] . . . principal remains safe.”  Now there’s either a true optimist or a charlatan.

California lawmakers: Time to

consider revoking badges of

problem officers

BY ROBERT LEWIS AND DAVID DEBOLT

INVESTIGATIVE REPORTING PROGRAM AND BAY AREA NEWS GROUP

https://www.sacbee.com/news/california/article237339084.html

State lawmakers said this week that it’s time for California to consider joining 45 other states that can revoke the badges of officers who commit crimes and other serious misconduct.

The call for action comes in the wake of a six-month investigation from a statewide coalition of news organizations, including McClatchy, that revealed more than 80 law enforcement officers working today in California have a prior criminal conviction.

“We need to do something about this,” said state Sen. Hannah-Beth Jackson, a Democrat and member of the Public Safety Committee representing Santa Barbara and part of Ventura County. “Having convicted criminals on our police force is just not O.K. in any way, shape or form.”

With demands for more police accountability growing in Sacramento, Democrats and a Republican on state public safety committees said they are deeply concerned about revelations in the series.

Jackson said she was “upset and angered,” particularly about officers routinely pleading down domestic violence charges to lesser crimes that allow them to keep their guns and in some cases remain on the job.

California is one of only five states in the country that doesn’t “decertify” an officer for misconduct — or essentially take away a license to work in law enforcement. Instead, almost all hiring and firing decisions are up to local departments.

So while many departments hold officers to the highest ethical standards, there are some that allow officers accused — and even convicted — of egregious misconduct to stay on the force.

And some small rural departments have a history of hiring cast-off cops. For example, the news coalition’s investigation found the police department in the Kern County city of McFarland hired more than a dozen officers in the last decade — nearly one of every five officers — who were either sued or fired from another department for misconduct or convicted of a crime.

Jackson said the question now for her fellow legislators is: “Do we want some kind of state oversight?”

At least one Republican legislator agrees. State Sen. John Moorlach, who represents parts of Orange County, is vice chair of the senate’s Public Safety Committee. Moorlach said he’d likely support more state oversight, including decertification.

“It’s the right thing to do. It’s not a partisan issue. It’s about quality control,” Moorlach said.

Assemblywoman Buffy Wicks, an Oakland Democrat who sits on the Assembly’s Public Safety Committee, agreed. “There’s no denying that we need to explore changes once this level of sunlight is cast on law enforcement,” she said in a statement.

SECRET DATABASE OF COPS

The series examined the cases of 630 current and former officers convicted of a crime in the past decade, featuring many of the cases in a searchable database. The exact number of officers with convictions is unknown.

Earlier this year, reporters from the Investigative Reporting Program at UC Berkeley obtained a secret state list of nearly 12,000 officers and applicants with convictions in the past decade. But the state Attorney General’s Office refused to say who on the list was an actual officer. Reporters ultimately were able to review about 1,000 court files and used news clips to identify other cases.

Attorney General Xavier Becerra has refused to answer questions about the list and his office declined numerous interview requests before the series ran and again for this story.

Michael Rains, a Bay Area-based lawyer who represents law enforcement, including officers named in the newspapers’ investigation, said he was “dismayed” to read about the crimes committed by police officers, calling them a “smear on the great name and reputation of their colleagues.”

“I’m a firm believer the badge is something that should be valued and honored by law enforcement officers,” Rains said. But, “rather than saying we have 630 bad apples, that’s the wrong way to look at it. We have close to 80,000 good ones. Those are the ones we should be thanking for all that they do.”

California Police Chiefs Association President Ronald Lawrence echoed those comments earlier this week in a statement, stressing that only a tiny percentage of officers are convicted of crimes. There are about 79,000 sworn officers in California.

“Our criminal justice system, for both the public and peace officers, must offer due process as well as pathways for an individual to accept accountability and correct their mistakes,” Lawrence wrote. “For those who are deserving and willing to embrace accountability and retraining, there must be a way to retain experienced, well-trained officers in an environment that is already difficult to recruit new hires.”

Rains, who is also a former police officer, said he’s seen examples around the state of troubled small agencies like McFarland, due to a combination of low pay and benefits and a smaller pool of applicants.

“Departments are lamenting the fact that the people they are hiring don’t have in some cases the level of education, life experience, and maturity that in an ideal world they’d prefer,” Rains said. “If those agencies get in such trouble they can’t find quality candidates and individuals that have not had problems elsewhere, they should call the county sheriff to bail them out.”

Powerful police unions have had strong pull over the years in Sacramento, but the latest call for more accountability comes after California enacted a law known as SB 1421 that opened some officer disciplinary records to the public for the first time. However, after unsuccessfully fighting the law in court, many departments have been slow to comply.

Rains said he is not opposed to the state asserting some control over decertifying officers, but he would “insist it be a fair, impartial and thorough investigation” that sometimes does not occur at the local level due to what he called “politics and mob rule.”

“That’s a joke,” Rains said, “and that’s not fair to anybody.”

This story is part of a collaboration of news organizations throughout California coordinated by the Investigative Reporting Program at UC Berkeley and the Bay Area News Group. Reporters participated from more than 30 newsrooms, including MediaNews Group, McClatchy, USA Today Network, Voice of San Diego, and Reveal from the Center for Investigative Reporting.

Email us at cacriminalcops.

NURSING HOME SAFETY VIOLATIONS PUT RESIDENTS AT RISK, REPORT FINDS

Barbara Feder Ostrov, Kaiser Health News

https://www.columbiabasinherald.com/article/20191114/AP/311149871

As huge swaths of California burned last fall, federal health officials descended on 20 California nursing homes to determine whether they were prepared to protect their vulnerable residents from fires, earthquakes and other disasters.

The results of their surprise inspections, which took place from September to December of 2018, were disturbing: Inspectors found hundreds of potentially life-threatening violations of safety and emergency requirements, including blocked emergency exit doors, unsafe use of power strips and extension cords, and inadequate fuel for emergency generators, according to a report released Thursday by the U.S. Department of Health and Human Services Office of Inspector General.

The nursing home residents “were at increased risk of injury or death during a fire or other emergency,” the report concluded.

The threat is not theoretical in a state that has been ravaged by natural disasters: One of the nursing homes that was inspected burned down in a wildfire afterward, so the report only includes results for the 19 remaining facilities, which it does not identify.

“The fact that one of the nursing homes inspected was later destroyed by a wildfire speaks to the grave danger residents are facing today,” said Mike Connors of the advocacy group California Advocates for Nursing Home Reform. He called the findings alarming but not surprising.

Even though the report didn’t name the nursing home that was destroyed, the California Association of Health Facilities, which represents most of the state’s skilled nursing facilities, identified it as one that burned down in the November 2018 Camp Fire, the deadliest wildfire in the state’s history.

Craig Cornett, CEO and president of the association, said all the residents were evacuated safely from that home — and from two others destroyed in the same fire. Hundreds of other nursing homes also have responded to emergencies in the past three years without loss of life, he said, which shows that “the deficiencies in the report do not reflect true facility readiness.”

The association is concerned about safely violations, he added, but “this is an example of bureaucracy equipped with blinders.”

The federal auditors said the violations occurred because of poor oversight by management and high staff turnover at the homes. But they also criticized the California Department of Public Health, the agency responsible for overseeing nursing homes in the state, for not ensuring the homes complied with federal safety and emergency requirements.

In some cases, the state’s own inspectors had previously cited nursing homes for the same problems, but did not inspect the facilities again to ensure they had been fixed, the report said.

The department “can reduce the risk of resident injury or death by improving its oversight,” the report said. For example, it could “conduct more frequent site surveys at nursing homes to follow up on deficiencies previously cited rather than relying on reviews of documentation submitted by nursing homes.”

The public health department told the auditors it had followed up with the 19 remaining homes to ensure they were addressing the problems auditors identified. But the state disagreed with the auditors’ recommendation to inspect nursing homes more frequently, saying in a letter to the auditors that federal rules don’t require onsite visits to determine whether problems have been fixed — and that the agency simply does not have enough inspectors.

The department declined a California Healthline request for comment.

The Office of Inspector General is auditing nursing homes across the nation that receive payments from the public health insurance programs Medicare or Medicaid to determine whether the facilities meet the stricter federal safety and emergency guidelines that were adopted in 2016. The auditors did not choose the 20 nursing homes randomly out of the approximately 1,200 statewide, but rather selected those in fire- and earthquake-prone regions, as well as ones already on notice for health and safety violations.

The inspectors found a total of 325 violations at the 19 homes. Among them:

Two of the homes had pathways leading to emergency exit doors that were blocked, including one exit door blocked by a pallet. 16 had violations related to their fire alarm and sprinkler systems, including two that didn’t have their fire alarm systems routinely tested and maintained. All had violations related to electrical equipment, including using power strips that did not meet requirements or were unsafely connected to appliances or other power strips. Eight had not properly inspected, tested and maintained their emergency generators, which provide electricity for critical medical equipment during a power outage. Two didn’t have enough generator fuel to last 96 hours. Generator power has become critical for nursing homes in recent months amid widespread power shutdowns aimed at preventing wildfires. Three nursing homes’ emergency plans didn’t address evacuations.

“We don’t want reports like this,” said state Sen. John Moorlach (R-Costa Mesa). “It sounds like maybe we need to ask the state auditor to see if the site visits done by the state are being done thoroughly.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Readers React: Stem cell research can benefit every person

Stem cell research is underfunded nationally.

https://www.sandiegouniontribune.com/opinion/letters-to-the-editor/story/2019-11-14/readers-react-stem-cell-research-can-benefit-every-person-utak

Re “Promises were never kept while conflicts of interest abound” (Sept. 26): Assemblyman John M. W. Moorlach’s piece shows little knowledge of research and its benefits — which could save his life someday, as he has no contract with the almighty.

Funds for medical research, with immeasurable benefits, like the work of Jonas Salk, shouldn’t compete with immediate needs addressed in the annual budget. That’s why it’s done with bonds paid for over 40 years.

Stem cell research is underfunded nationally. More funding will drive exploration to treat diseases that kill or make life miserable. Like the Cancer Moonshot, California Institute for Regenerative Medicine (CIRM) fills that need.

CIRM funds created therapies for which no solutions existed, and made California the leader in this crucial science. Moorlach’s minority view could resonate with those uninformed about how research works and helps us.

Such voices must not dictate our scientific future which, if allowed to thrive, will benefit everyone.

Matthew C. Strauss

UC San Diego Health Board of Advisors

image18.png?w=660&h=165

This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District. If you no longer wish to subscribe, just let me know by responding with a request to do so.

Also follow me on Facebook & Twitter @SenatorMoorlach