John Moorlach’s Email Update, July 16, 2012
By: John Moorlach
Not too long ago, Nick Berardino sent out an e-mail to the members of the Orange County Employees Association stating that the Board of Supervisors wanted to reduce employee salaries by 16 percent. The claim is not true and the Board found it very disingenuous. Therefore, on behalf of the Board of Supervisors, I sent out an e-mail to all of the employees about our “total compensation” negotiating policy. Many employees expressed an interest in having numbers provided about their bargaining unit, as opposed to the average for all of the County’s 17,000 employees. Consequently, I have provided these graphs in recent UPDATES. The OC Register has enjoyed the UPDATES and today’s issue has a piece that is an aggregation of recent Watchdog Blog postings.
In this piece, we heard from the Orange County Managers Association’s Executive Director, Karen Davis. I appreciate the professional tone of her response. She addresses the concept directly. I would clarify that we used average numbers, which does not require including the number of managers in the data. However, for the record, the number of OCMA-represented positions in fiscal year 2007-2008 was 1,051 and by fiscal year 2011-2012 had grown slightly to 1,079; not a change that would significantly impact the averages presented. She also mentions that we used budget numbers, versus actual. This statement is accurate, but if the managers have a more precise accounting, I’d love to see it. I might add, however, that the actual expense numbers may show that my conclusions are conservative.
The goal is to provide fair compensation without breaking the backs of the taxpayers or jeopardizing jobs. The lesson of the last few weeks (and what I have presented in my State of the County Address), is that revenues have flattened. Consequently, expenditures need to flatten as well if local governments are to avoid the fates of Stockton, San Bernardino and others. Together, the bargaining units and the Board of Supervisors hope to achieve new contracts that will allow the County to protect its limited reserves until revenues improve.
FIVE-YEAR LOOK BACKS
Chris Knap of the OC Register provided an Orange County Employees Retirement System story in “Pension to sell devalued property – Government: The county retirement-fund trustees invested in office buildings and shopping centers.” One of the lessons from this investment was to avoid co-owning real estate investments in the future. Here is the opening paragraph and a couple of paragraphs relating to a different matter.
Orange County’s pension trustees agreed Monday to liquidate a $165 million real estate investment that has lost 32 percent of its value and dragged down the performance of the retirement fund’s $3 billion portfolio.
Also Monday, the board met in closed session to discuss a settlement that would end the board’s legal dispute with Mary Jean Hackwood, the nine-year administrator of the fund who was fired last year amid allegations of misuse of public resources and conflict of interest.
The board returned to open session after the discussion, and board Chairman John M. Moorlach said no reportable action had been taken.
The lead editorial in the OC Register was titled “Taxpayers tied up by education bonds.” It provided an update on upcoming school district bond measures for the November ballot. Be prepared to see the same this fall. The tax increases, they just keep on a coming. Here are the two opening paragraphs:
Proposition 39 continues to ripple through California and Orange County. The initiative voters enacted in 2000 dropped to 55 percent from two-thirds the threshold needed to pass a construction bond for a local K-12 or community college district.
According to our sources, so far only two local bonds are being considered by school boards for the November ballot, both under the Prop. 39 rules. The deadline to submit a bond proposal is Aug. 8. Both school boards also are planning to meet with county Treasurer-Tax Collector John Moorlach, who in recent years has graded local bond measures according to their financial accountability (although he emphasizes that this is not an endorsement).