MOORLACH UPDATE — Appeal to D.C. and Cities 385 to 432 — November 26, 2019

Recommendations To U.S. DOJ and HUD

State Senator Pat Bates has been doing great work addressing sober living homes and opioid addiction through legislative efforts.

She recently requested that I sign on to a correspondence to the U.S. Department of Justice and the U.S. Department of Housing and Urban Development to communicate frustrations at the state level concerning Federal regulations (see https://bates.cssrc.us/sites/default/files/191122_BatesMoorlachLetterToHUD-DOJ.pdf).

City News Service addressed our concerns in the piece below.  During the interview, I also mentioned I’ve been focused on providing assistance to the  severely mentally ill and it was encouraging that Medicaid has given an IMD (Institutions for Mental Diseases) exclusion to Washington, D.C. (see  https://www.modernhealthcare.com/government/cms-approves-dc-waiver-medicaid-imd-exclusion-rule).  This move by the Federal Government is a signal that providing requests for assistance is worthwhile in pursuing.

Cities 385 to 432

We’ve reached the bottom 20th percentile.  Today we have 48 cities and the last edition will have the bottom 50.  This second to last group includes a half-dozen Orange County cities: Fullerton (#394), Huntington Beach (#401), Fountain Valley (#405), Newport Beach (#410), Santa Ana (#414) and Anaheim (#419).

This group also contains the city of Mammoth Lakes (#432), which is one of four California cities that filed for Chapter 9 bankruptcy protection in the last dozen years.

The city of Palo Alto stands out, since it dropped 294 places.  It’s Unrestricted Net Position dropped by $124 million. Two liability increases explain this movement.  It added $109 million in other post-employment benefits to its balance sheet and its pension plan unfunded liability increased by nearly $29 million.

Rank City Pop. UNP 2018 (Thou-sands) UNP/ Capita 2017 Rank Rank Change
385 Montclair 39,326 ($43,902) ($1,116) 413 28
386 Riverside 325,860 ($364,500) ($1,119) 419 33
387 Santa Rosa 178,488 ($200,128) ($1,121) 383 -4
388 Claremont 36,446 ($41,036) ($1,126) 421 33
389 Eureka 26,362 ($29,840) ($1,132) 376 -13
390 Oxnard 206,499 ($234,226) ($1,134) 398 8
391 Healdsburg 12,061 ($13,840) ($1,148) 351 -40
392 Hemet 83,166 ($95,864) ($1,153) 355 -37
393 Calexico 41,199 ($48,003) ($1,165) 396 3
394 Fullerton 144,214 ($169,976) ($1,179) 386 -8
395 Carson 93,799 ($111,098) ($1,184) 374 -21
396 San Diego 1,419,845 ($1,716,136) ($1,209) 420 24
397 San Buenaventura 111,269 ($135,445) ($1,217) 416 19
398 Atwater 31,235 ($38,120) ($1,220) 385 -13
399 Palo Alto 69,721 ($87,040) ($1,248) 105 -294
400 Lompoc 43,599 ($54,573) ($1,252) 384 -16
401 Huntington Beach 202,648 ($254,528) ($1,256) 422 21
402 Albany 19,053 ($24,126) ($1,266) 366 -36
403 Larkspur 12,351 ($15,699) ($1,271) 281 -122
404 San Bernardino 221,130 ($281,170) ($1,272) 457 53
405 Fountain Valley 56,920 ($73,294) ($1,288) 362 -43
406 Ukiah 16,226 ($21,409) ($1,319) 432 26
407 Sacramento 501,344 ($667,254) ($1,331) 427 20
408 Alhambra 86,665 ($115,404) ($1,332) 417 9
409 Monterey Park 62,240 ($85,103) ($1,367) 410 1
410 Newport Beach 87,182 ($119,818) ($1,374) 434 24
411 Santa Clara 129,604 ($180,368) ($1,392) 418 7
412 Scotts Valley 12,195 ($17,334) ($1,421) 436 24
413 Azusa 49,954 ($71,784) ($1,437) 400 -13
414 Santa Ana 338,247 ($501,404) ($1,482) 423 9
415 Redding 91,357 ($135,453) ($1,483) 454 39
416 Barstow 24,411 ($36,244) ($1,485) 275 -141
417 Belvedere 2,135 ($3,231) ($1,513) 253 -164
418 Downey 114,146 ($173,873) ($1,523) 401 -17
419 Anaheim 357,084 ($551,607) ($1,545) 426 7
420 Huntington Park 59,473 ($92,534) ($1,556) 415 -5
421 Del Rey Oaks 1,692 ($2,638) ($1,559) 464 43
422 Vallejo 119,252 ($187,401) ($1,571) 447 25
423 Long Beach 478,561 ($761,817) ($1,592) 435 12
424 Sonora 4,890 ($7,793) ($1,594) 425 1
425 Redwood City 86,380 ($139,527) ($1,615) 408 -17
426 Santa Cruz 66,454 ($108,357) ($1,631) 430 4
427 Montebello 64,327 ($104,997) ($1,632) 448 21
428 Pomona 155,687 ($257,496) ($1,654) 445 17
429 Arcadia 57,704 ($95,841) ($1,661) 433 4
430 Vacaville 98,977 ($166,324) ($1,680) 439 9
431 Folsom 78,447 ($133,461) ($1,701) 333 -98
432 Mammoth Lakes 8,316 ($14,206) ($1,708) 431 -1

25th Anniversary Look Back

The Moorlach Memo continues with Chapter 9.  I provided the obvious solution to address the current conundrum facing the Orange County Investment Pool and its investors.  I also took a swipe at the media for not appreciating the magnitude of the situation.

A couple of years later, in 1997, the Government Accounting Standards Board (GASB) would issue Statement No. 31, requiring municipalities to mark to market (see MOORLACH UPDATE — Marking to Market — July 12, 2019).  I still refer to GASB 31 as “my statement.”

For the introduction and first eight chapters, 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

Chapter 4 — Prognosis —  MOORLACH UPDATE — Officers, Audits, CIRM and Cities 145 to 192 — November 14, 2019

Chapter 5 — Current Media Revelations —  MOORLACH UPDATE — SB 640 and Cities 193 to 240 — November 18, 2019

Chapter 6 — Scaring Credit Markets — MOORLACH UPDATE — PSPS and Cities 241 to 288 — November 19, 2019

Chapter 7 — Borrowing to Invest — MOORLACH UPDATE — 2020-21 Budget and Cities 289 to 336 — November 21, 2019

Chapter 8 — Odessa — MOORLACH UPDATE — Audit Results and Cities 337 to 384 — November 25,2019

APPROPRIATE RESPONSE

As a business-minded solution I strongly insisted, and still insist, that the County “mark to market.” That is, treat the Orange County Investment Pool like the bond mutual fund that it is. Marking to market would let the participants understand the nature of their predicament and allow them to decide their options. They could remain in, receive the still currently higher than market interest income and wait for interest rate to go down, in order to have their principal restored by the market. Or they could withdraw, recognize their losses, invest their funds elsewhere, and not impact the integrity of the investments made by the other participants. Staying with the County’s current policies would be the sanctioning of a government sponsored “ponzi” scheme.

Mr. Citron’s solution was more draconian, he does not want his Pool’s participants to pull out. That’s why he crucified Tustin City Councilmember Jeff Thomas in the press when his city did. The City of Tustin made a move in its best interest by withdrawing their investment in tact. They showed financially astute leadership by emphasizing safety of principal. They were beat up by Citron’s allies in the liberal press.

But sometimes vindication comes quickly. The City of Tustin was just recognized for having one of the top eight investment policy statements in the nation. Following their investment policy statement led to their decision to withdraw from Citron’s Pool, not politics. But you won’t convince Citron or the press of that.

OC Lawmakers Seek Federal Help with Rehab Homes

By Paul Anderson
City News Service

https://mynewsla.com/crime/2019/11/25/oc-lawmakers-seek-federal-help-with-rehab-homes-2/

https://www.msn.com/en-us/news/us/south-county-senators-seek-crackdown-on-sober-living-homes/ar-BBXkio5

State Sens. Patricia Bates, R-Laguna Niguel, and John Moorlach, R-Costa Mesa, have asked federal Housing and Urban Development Secretary Ben Carson for help cracking down on what they say are some unscrupulous sober-living facilities.

In a letter last week, Bates and Moorlach said federal laws regulating access to the disabled are hampering efforts to regulate sober-living facilities.

People recuperating from alcoholism or drug addiction are categorized as disabled under federal law. The two lawmakers say that has allowed some sober-living facility operators to “exploit” transients, using their insurance for profit.

State Sens. Patricia Bates, R-Laguna Niguel, and John Moorlach, R-Costa Mesa, have asked federal Housing and Urban Development Secretary Ben Carson for help cracking down on what they say are some unscrupulous sober-living facilities.

In a letter last week, Bates and Moorlach said federal laws regulating access to the disabled are hampering efforts to regulate sober-living facilities.

People recuperating from alcoholism or drug addiction are categorized as disabled under federal law. The two lawmakers say that has allowed some sober-living facility operators to “exploit” transients, using their insurance for profit.

“We’ve had sober living homes where when the insurance runs out (the clients) end up on the streets,” Moorlach told City News Service.

“Opioid addiction has soared and unscrupulous rehab operators have rushed in to take advantage of mandatory mental health treatment coverage required by the Affordable Care Act,” the two lawmakers wrote in the letter to Carson.

“The quality of care in these facilities is not consistent and does not always adhere to a specific set of standards,” they added. “As a result, patients and their families can be misled, misdirected and misdiagnosed by unqualified individuals. The California State Legislature has recognized that consumers with substance use disorders have disabling conditions and need to be protected. However, the policies that have come down from the federal level do not allow the legislature to act.”

Moorlach and Bates also appealed to the U.S. Department of Justice along with HUD to “issue a new Joint Statement on the Americans with Disabilities Act and the Fair Housing Act to allow local governments to uphold national standards and best practices in sober living environments for the protection of residents in recovery.”

The state senators said a previous statement in November 2016 “only involved zoning regulations and added to the confusion in our districts on this issue.”

Municipalities that try to regulate the addiction treatment homes run into “lengthy and expensive litigation, and the legal landscape remains murky,” the senators said.

Moorlach said he is also working on reforms in the treatment of the severely mentally ill, which has also contributed to the rise in homelessness.

“I’ve been working on trying to get funds available to help people with serious mental health issues like schizophrenia,” Moorlach said. “The federal rules are hampering us.”

Moorlach said two weeks ago the federal government “made an exception for (the District of Columbia) to provide some funding so we see kind of like the window opening a little, so it’s probably a pilot project.”

Moorlach added, “There’s all this money going to mental health, but not to serious mental health issues.”

State laws meant to halt “institutionalizing” patients have led to “migrating these people out of institutions into the streets and in jail, so the largest mental health institution in Orange County is at the main jail,” he said.

Moorlach is seeking more federal money for “appropriate outpatient treatment to help normalize them and get them back to a normal life, and not back onto the streets.”

HUD, for instance, doesn’t provide money for temporary housing, “so we need to modify the rules and regulations at the federal level, so I see this (letter) as an effort to communicate something must be done,” Moorlach said.

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