MOORLACH UPDATE — Final Hours For Bills — September 28, 2018

The Governor has a few more hours to sign or veto the remaining bills on his desk. I’ll try to give you an executive summary next week on how many of the 20 worst bills Gov. Brown actually did, thankfully, veto (see MOORLACH UPDATE — 2018 Top 20 Veto Worthy Bills — September 13, 2018).

One of the bills still on the Governor’s desk is AB 3120. It did not make it to the “Top 20” list, as a number of Republicans voted for it. I am half of the Senators that voted against it. I even spoke against it on the Senate Floor, warning about the potential repercussions implementing this bill will have on our school districts and nonprofits.

AB 3120 would extend the statute of limitations for filing abuse claims and lawsuits. This is righteous. But, it will be expensive.

School teachers who are perpetrators do not pay the damages, the school district does. Usually, the insurance companies provide the settlement funds. But, will they do so after all of the claims have already been settled and now the goal line has been moved? And, will they continue to insure school districts? If they do, how high will the premiums go? And, if not, where will the money come from?

School districts will have few choices if AB 3120 passes and more lawsuits are filed against them. They can litigate and hope to prevail. But, this is an even more expensive proposition if they lose the cases. They can file for Chapter 9 bankruptcy and have a Federal Court forgive the settlement amount, thus damaging further the claimants who have gone through an exercise permitted by this bill. But, we haven’t seen this bankruptcy strategy pursued in California, yet. They could go to Sacramento, which is funded by you, the taxpayers, with hat in hand. But, the general fund is spent out, with additional bond principle and interest payments on the horizon. Or, they could attempt to put an assessment on your property tax bill, again burdening you, the taxpayer.

And I haven’t even mentioned what it may do to nonprofits, who do not have the potential remedies that school districts have. That’s why I took the risk of opposing a powerful legislator’s bill.

These are probably not the politically correct arguments to make, but I represent all of the taxpayers and need to provide balance to what appears to be a vindictive remedy. So, I’ve provided my concerns in the Fox & Hounds piece below.

Another bill still on the Governor’s desk is my SB 656

(see MOORLACH UPDATE — Attaboy — January 22, 2018 ). SB 656 would make minor modifications to the Judicial Retirement System, Tier 2 (also known as JRS II). It is supported by more than one-half of the Superior Court Judges in California, including Judge Lance Ito, who has come up to Sacramento twice to testify on my bill’s behalf.

Orange County Superior Court Judge John Adams was the instigator of this two-year bill. CalPERS was a huge assist in writing the language. It addresses a work hardship concern for those in this pension plan and will provide the Governor either an opportunity to assist many of his appointees to the bench or to shut the door on any pension plan adjustments post his PEPRA legislation.

I’ll be on pins and needles this weekend.

Justice v. Retribution: AB 3120 Could Bankrupt Schools, Non-Profits

Senator John Moorlach

By Senator John Moorlach California State Senate, 37th District

http://www.foxandhoundsdaily.com/2018/09/justice-v-retribution-ab-3120-bankrupt-schools-pensions/#facebook-comments

Assembly Bill 3120 is aimed at the wrong target. I’m for justice, not retribution.

The bill by Assemblywoman Lorena Gonzalez Fletcher, D-San Diego, would increase childhood assault victims’ ability to sue both perpetrators and employers for claims that already have passed the statute of limitations. Yes, crimes committed against children are egregious, and deserve to be addressed swiftly without hesitation or disregard. I share the sentiment of the author. Something must be done.

Sexual misconduct allegations have prompted a series bills in the California Legislature, many of which I’ve supported. This legislation echoes a cry heard across the nation as the #MeToo movement exposed those who have abused positions of power to suppress the weak.

The need for justice is valid, but the vengeance unleashed when bills like this come into play negates the very issue it’s seeking to remedy. While trial attorneys may take 40-60 percent of the damages, schools and other non-profit organizations will be left with little to no resources to rebuild or repair.

That includes public schools, many of whose finances are in very bad shape. According to my analysis of California’s 940 K-12 school districts, about two thirds already suffer negative balance sheets. Even worse news will strike over the next year as, for the first time, their Comprehensive Annual Financial Reports must now include unfunded retiree medical liabilities.

For small school districts, one additional lost abuse lawsuit resulting from AB 3120 could lead to insolvency and the cancellation of those retiree benefits. Abuse victims also could receive reduced or no compensation from empty school treasuries.

Those districts that can make payouts will find it impossible to train or implement better procedures to ensure this doesn’t happen again as their budgets will be either completely drained, or greatly impacted from higher insurance premiums (if they can obtain insurance). We cannot even be certain the threat will be eliminated, as a considerable amount of time has passed and employees who perpetuated the abuse are most likely no longer to be present at the school.

We’ve seen this before. In 2002 the Legislature passed Senate Bill 1779 by state Sen. John Burton, D-San Francisco, opening up the statute of limitations retroactively for one year. Despite that, children continue to be abused and cover-ups still occur.

I’ve dedicated my public career to repairing the fiscal integrity of those municipalities I’ve served. In a time when schools are facing massive fiscal distress, I find it troubling the Legislature would even consider such a measure. This is a righteous cause, but it has the potential to devastate school districts and make obtaining insurance next to impossible.

California needs to focus on policies that prevent sexual misconduct so we don’t create more victims. This new legislation is a reactive approach to an issue that requires a proactive, preventative solution.

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MOORLACH UPDATE — LAUSD vs. OC School Districts — September 18, 2018

When I shared our research concerning the Unrestricted Net Positions (UNPs) of the 940 school districts around the state of California on the Senate Floor during the last few days of this year’s Session, I recall receiving only one comment on the Floor from my colleagues on the other side of the aisle.

“I thought there were 1,005 school districts?”

Other than that, crickets.

The districts we reviewed found that a few had combined their balance sheets for auditing purposes. I also intentionally did not include the 58 County Departments of Education, as they are administrative in nature.

To give you the full portfolio of California’s school related districts (with exceptions for a few unique agencies), I have provided the 58 DOEs in the first piece below. They are ranked in order of the highest to lowest UNP per capita. If the actual UNPs were ranked, then the third column provides the placement. The fourth column provides the population of the county. The fifth column provides the actual UNP from the DOE’s Comprehensive Annual Financial Report (CAFR). And the sixth divides the UNP by the population for the per capita. As you can see, Orange County placed well in both categories. San Francisco has one unified school district that includes the DOE.

Of the 58 counties, at least 51 of them have manageable per capita unrestricted net deficits of $159 or less. Obviously, with a few exceptions, the DOEs are not an area of severe fiscal anxiety.

The second piece below is the rankings for the Orange County school districts. The sequencing of the columns is the same, except we have both the Orange County rankings and the California rankings in the first two columns.

I’ve also provided a bonus at the very bottom of the second piece. We hear so much about Los Angeles Unified School District (LAUSD) in the local news about its board, its superintendent, and its teachers union wanting to go on strike for pay raises.

Totaling the number of students in all of Orange County’s school districts, the population is lower, but comparable, to that of just the LAUSD. But, the LAUSD has a negative UNP 234% higher than the negative UNP when we combine all the UNPs of OC’s 27 districts. LAUSD’s UNP per capita is three times that of the average for the entire OC! That’s how massive LAUSD’s fiscal hole is. So, this CPA doesn’t know where the union demanded pay raises are going to come from.

The third and final piece is from the OC WEEKLY on our Top 20 worst bills for the Governor to veto (see MOORLACH UPDATE — 2018 Top 20 Veto Worthy Bills — September 13, 2018).

1 Sierra 9 3,207 $1,577,053 $492
2 Alpine 12 1,151 $512,215 $445
3 Siskiyou 6 44,688 $9,003,498 $201
4 Mendocino 5 89,134 $12,296,835 $138
5 Marin 3 263,604 $21,049,100 $80
6 Modoc 10 9,580 $665,142 $69
7 Mono 11 13,713 $648,512 $47
8 San Benito 8 56,854 $2,100,167 $37
9 San Mateo 2 770,203 $27,472,679 $36
10 San Diego 1 3,316,192 $38,758,618 $12
11 Lassen 13 30,918 $245,495 $8
12 Inyo 14 18,619 $140,423 $8
13 Orange 4 3,194,024 $17,573,424 $6
14 San Joaquin 7 746,868 $2,528,230 $3
15 Sacramento 16 1,514,770 ($868,045) ($1)
16 Alameda 29 1,645,359 ($7,986,633) ($5)
17 Riverside 47 2,384,783 ($27,154,755) ($11)
18 Fresno 43 995,975 ($18,864,868) ($19)
19 Los Angeles 56 10,241,278 ($195,881,054) ($19)
20 Stanislaus 33 548,057 ($11,634,171) ($21)
21 Sonoma 36 505,120 ($12,618,749) ($25)
22 Ventura 44 857,386 ($22,269,861) ($26)
23 Yolo 24 218,896 ($6,211,159) ($28)
24 Santa Cruz 28 276,603 ($7,933,136) ($29)
25 Santa Barbara 37 450,663 ($13,127,872) ($29)
26 San Bernardino 53 2,160,256 ($71,759,024) ($33)
27 Solano 39 436,023 ($14,625,433) ($34)
28 Santa Clara 52 1,938,180 ($69,190,829) ($36)
29 Lake 19 64,945 ($2,323,693) ($36)
30 Contra Costa 51 1,139,513 ($43,909,435) ($39)
31 San Luis Obispo 35 280,101 ($11,719,764) ($42)
32 Shasta 27 178,605 ($7,589,514) ($42)
33 Trinity 15 13,628 ($717,619) ($53)
34 Yuba 20 74,577 ($4,172,000) ($56)
35 Placer 45 382,837 ($22,636,042) ($59)
36 Napa 31 142,408 ($8,453,816) ($59)
37 Mariposa 17 18,148 ($1,108,289) ($61)
38 Tulare 48 471,842 ($30,052,109) ($64)
39 Butte 40 226,404 ($14,715,601) ($65)
40 Plumas 18 19,819 ($1,305,638) ($66)
41 Imperial 38 188,334 ($13,767,069) ($73)
42 Tehama 22 63,995 ($5,092,842) ($80)
43 Tuolumne 21 54,707 ($4,698,833) ($86)
44 Nevada 32 98,828 ($8,996,066) ($91)
45 El Dorado 41 185,062 ($16,936,207) ($92)
46 Kern 54 895,112 ($103,519,447) ($116)
47 Sutter 34 96,956 ($11,707,823) ($121)
48 Kings 42 149,537 ($18,595,053) ($124)
49 Merced 49 274,665 ($36,520,205) ($133)
50 Madera 46 156,492 ($24,785,793) ($158)
51 Calaveras 26 45,168 ($7,177,756) ($159)
52 Glenn 23 28,731 ($5,812,763) ($202)
53 Amador 30 38,382 ($8,006,786) ($209)
54 Colusa 25 22,043 ($7,122,875) ($323)
55 Monterey 55 442,365 ($157,829,599) ($357)
56 San Francisco 58 874,228 ($769,634,620) ($880)
57 Del Norte 50 27,124 ($38,578,454) ($1,422)
58 Humboldt 57 136,953 ($200,656,339) ($1,465)
1 102 Fountain Valley Elem 10 56,680 $ 4,442,293 $ 78
2 180 Laguna Beach Unified 417 30,473 $ (6,788,067) $ (223)
3 239 Fullerton Joint Union 814 263,036 $ (90,589,885) $ (344)
4 242 Huntington Beach Un 839 329,030 $ (115,027,881) $ (350)
5 357 Huntington Bch City 696 87,348 $ (44,366,541) $ (508)
6 375 Centralia Elementary 640 58,162 $ (30,967,215) $ (532)
7 384 Orange Unified 848 229,379 $ (126,605,490) $ (552)
8 403 Garden Grove Unified 877 289,419 $ (165,866,377) $ (573)
9 408 Savanna Elementary 551 30,815 $ (18,157,779) $ (589)
10 423 Cypress Elementary 627 45,853 $ (27,831,436) $ (607)
11 426 Los Alamitos Unified 643 51,313 $ (31,761,922) $ (619)
12 463 Anaheim Union High 920 407,353 $ (275,086,177) $ (675)
13 505 Magnolia Elementary 711 65,387 $ (48,436,096) $ (741)
14 507 Fullerton Elementary 816 124,400 $ (92,384,118) $ (743)
15 517 La Habra City Elem 685 54,112 $ (40,700,535) $ (752)
16 530 Saddleback Valley 882 216,853 $ (168,874,907) $ (779)
17 557 Ocean View 795 96,613 $ (78,587,392) $ (813)
18 573 Tustin Unified 841 139,222 $ (116,529,487) $ (837)
19 579 Anaheim Elem 887 207,135 $ (174,109,858) $ (841)
20 605 Brea-Olinda Unified 648 36,778 $ (32,674,279) $ (888)
21 612 Buena Park Elem 698 50,423 $ (45,271,021) $ (898)
22 662 Placentia-Yorba Lda 874 166,393 $ (160,733,330) $ (966)
23 663 Capistrano Unified 924 361,468 $ (349,462,462) $ (967)
24 679 Westminster 808 88,390 $ (87,333,440) $ (988)
25 729 Newport-Mesa Unif 914 205,879 $ (224,251,945) $(1,089)
26 743 Irvine Unified 911 196,209 $ (218,735,844) $(1,115)
27 901 Santa Ana Unified 934 268,905 $ (485,362,423) $(1,805)
Totals 4,157,028 $ (3,252,053,614) $ (782)
922 Los Angeles Unified 940 4,688,889 $(10,855,983,000) $(2,315)

SoCal Conservatives List Proposed “Noxious” Veto-Worthy California Laws

R. SCOTT MOXLEY

https://www.ocweekly.com/socal-conservatives-list-proposed-noxious-veto-worthy-california-laws/

Calling the state legislatures current session in Sacramento “over-the-top with noxious legislation,” Orange County-produced The FlashReport this month published a list of the “Top 20” proposed new state laws conservatives view contemptuously.

The list is the work of state Senator John Moorlach (R-Costa Mesa) and assemblywoman Melissa Melendez (R-Lake Elsinore), both known in their political circles as hardcore budget watchdogs over the plans of the Democratic Party majority, which controls both houses of the legislature as well as the governor’s mansion.

For example, hoping for Gov. Jerry Brown’s extensive use of his veto powers, Moorlach and Melendez lambast the following pending bills:

–Exempting the troubled and wild spending California High-Speed Rail Authority from thorough financial audits;

–Fining already poorly-paid restaurant employees for giving customers plastic straws unless requested;

–Raising the age to legally purchase handguns from 18 to 21 while the draft age for military combat service remains 18;

–Banning smokeless e-cigarettes smoking at all parks, public campgrounds, state beaches, monuments and historical markers; and

–Requiring gender-based quotas on board of directors for private California corporations, including a statutory-mandated 2021 benchmark of hiring at least three female directors if a company has slots for six directors.

You can see the rest of the list at Jon Fleischman’s FlashReport site.

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