Moorlach's Pension Dance

ANOTHER "PENSION" WHACK IN THE HEAD
Almost everyone who opens their eyes in the morning these days is aware of the difficulties most governmental entities face with the looming pension crisis.  In Costa Mesa Mayor Jim Righeimer has used it as a cudgel to bludgeon us during almost every meeting.

BANKRUPTCY PENDING?

The Pension Oversight Committee, stacked with several of Righeimer's pals, continues their exercise in futility - they can do NOTHING about municipal pensions except worry about them like the rest of us.  They have, though, recently heard a primer on Municipal Bankruptcy, conducted by one of their members - Rick Kapko - who apparently has expertise in bankruptcies.  One could probably accurately assume that our Mayor is laying the groundwork for a bankruptcy action for Costa Mesa - the ONLY real way to resolve the unfunded pension liability obligation that exists in a timely manner.

MOORLACH'S PENSION WALTZ
Then, today, Norberto Santana, Jr., over at the Voice Of OC presents us with an interesting essay regarding our termed-out supervisor, John Moorlach, and his personal waltz with pensions as a county employee.  Read it HERE.

DOES IT SQUARE?
In my view, although I'm not happy he's so tightly snuggled up to the OC GOP power elite, Moorlach has done a pretty good job as a public servant.  However, he seems now to be  trapped in that quagmire and is looking for another seat when the music stops in November, 2014.  Read the Voice of OC piece and see if you think Moorlach's pension situation squares with the position of his other OC GOP pals.

MAKES ME SMILE...
You know, you just couldn't make this stuff up!

CalPERS Investments Up 12.5% In Latest 12 Months

BIG NEWS FROM CALPERS

Reuters and other news sources announced late last night, HERE, that the California Public Employees' Retirement System (CalPERS), the biggest U.S. public pension fund, reported a 12.5% return on assets over the 12 months ending June 30th.

GOOD NEWS, FOR SURE
This is great news for most California municipalities, including Costa Mesa, since the pension burden has driven several cities to declare bankruptcy in recent months.  In fact, Costa Mesa's Pension Oversight Committee recently had a two-part Municipal Bankruptcy primer presented by member Rick Kapko to familiarize that group with the process.

LOOKING FOR FISCAL LEADERSHIP, NOT RHETORIC
Hopefully, our elected leaders will ramp down the rhetoric about our unfunded liability just a little and move forward with fiscally sound and prudent policies to manage our city finances. 

HOW WILL THIS BE SPUN?
I suspect this announcement might get some play at the Costa Mesa City Council meeting tonight.. we'll see.

Planning And Pensions And Charters, Oh My!

INTERESTING MEETINGS AHEAD
There's plenty of good stuff going on in Costa Mesa this week, beginning with the Jim Fitzpatrick-led Planning Commission meeting on Monday, July 8th at 6:00 p.m. in City Council Chambers at City Hall.

THE FIRST OF TWO MEETINGS THIS MONTH
This will be the first of two scheduled meetings by this body since they decided they were too overworked with only one meeting each month.  Ever since they made that decision the agendas for subsequent meetings have been pretty darn thin.

THIN AGENDA
This meeting, for example has only 3 items on it.  You can read the full agenda HERE.  The Consent Calendar has a Code Enforcement update, HERE.  Public Hearing #1, HERE is the revocation of a Conditional Use Permit for a tattoo parlor that has relocated.

TOO MANY CHANGES REQUESTED
The only controversial item is Public Hearing #2, HERE.  This one, a proposed development in the 2500 block of Santa Ana Avenue, involves an 8-unit two-story detached residential development and has a load of modifications requested.  There are four (4) variances, three (3) administrative adjustments, two (2) minor modifications and two (2) deviations from residential guidelines being requested by the developer.  The developer recently met with city staff and community members concerned about this development to hash over issues.  This should make for some interesting viewing, either live or on CMTV, Channel 3 on Time Warner Cable or Channel 99 on ATT U-Verse.

A LITTLE REVIEW...
By the way, I took a peek at the length of time Planning Commission meetings have been taking over the past few years.  Here's some information you may find of interest:

          Year          Number of Meetings          Average Length
          2006                       23                                     1:46
          2007                       23                                     1:58
          2008                       21                                     2:10
          2009                       15                                     1:34
          2010                       15                                     3:12
          2011                       15                                     2:43
          2012                       13                                     2:44
          2013                         9                                     2:35

WHAT JUSTIFIES TWO MEETINGS A MONTH?
As you can see, the meetings for the last two full years plus the nine meetings so far this year have been under 3 hours long.  It's curious to me that the Planning Commission finds it necessary to double the meetings - and thereby double the number of meetings staff members must attend after normal business hours.  If they had been running long - five or six hours, for example - I could understand the interest in more meetings.  It's hard to justify two meetings a month with such a light schedule.

WHY SO MANY PENSION OVERSIGHT COMMITTEE MEETINGS?
Speaking of too many meetings, the Pension Oversight Committee meets again on Wednesday, July 10th at 4:30 p.m. in Conference Room 1A in City Hall.  You can read the agenda for that meeting HERE.  This committee has been meeting WEEKLY since it was created and, for the life of me, I can't understand why.  There is NOTHING they can do about our municipal pension situation except join the chorus led by Mayor Jim Righeimer bemoaning the unfunded liability situation.  Yes, I know - that $230 million plus number is staggering, but we're not being presented with a bill tomorrow.  Righeimer has stated many times that he's unwilling to pay another cent to CalPERS toward reducing the debt, fearing that it is going to go under.  Currently the City of Costa Mesa has budgeted around $18 million to CalPERS for our obligations.  If he's not willing to pay down the debt, what IS his plan?

MUNICIPAL BANKRUPTCY?
While I don't necessarily disagree with Righeimer's reluctance to dump money down a rat hole, I don't hear any other solutions being offered.  However, we may have a clue about what he's planning when you realize that committee member Rick Kapko, a CPA who works with bankruptcy cases, presented a 2-part primer on Municipal Bankruptcy  to the Pension Oversight Committee over the past two meetings.  Unfortunately, there are several cities throughout the state that either are in the midst of bankruptcy proceedings or are seriously considering them.

CHARTER COMMITTEE MEETING
Also on Wednesday, at 6:00 p.m. in the Emergency Operations Center (EOC), the recently-formed Charter Committee will hold its second meeting.  They plan to meet the second and fourth Wednesday's of each month at that time and place.  You can read their agenda HERE.  This should be very interesting, since at the previous meeting there was question raised about the purpose of the committee.  Member Harold Weitzberg - the last person selected for the committee - posited that the group should FIRST determine IF a Charter is necessary for Costa Mesa, and why, before plowing ahead to create one.  Attorney Kimberly Hall Barlow advised that the council had earlier charged this committee with creating a charter and copies of various staff reports and meeting minutes are included HERE to support that claim.  Facilitator Kirk Bauermeister stated emphatically that he was charged with facilitating the creation of a charter.  They also plan to discuss Roles and Responsibilities, HERE.

FIRST, DO WE NEED ONE?
However, as I reported HERE following that first meeting, Mayor Jim Righeimer made it very clear in unambiguous terminology that the committee's task was to decide whether we want a charter.  His exact quote, viewable at 03:04:45 on the streaming video tape of the meeting during which the committee was selected, was as follows:
"I want to thank everybody so far whose made it on the committee.  These are gonna be the last final people that will be on the committee.  I think it's going to be a committee made in heaven for Costa Mesa and to decide whether we want to do a charter or not in the city."  This issue MUST be resolved before the committee moves forward to create a charter.

AN EXERCISE IN FUTILITY
And, I must state that, even though many of the volunteers on this committee have their hearts in the right place and, so far, seem willing to be "facilitated" toward the creation of a proper charter for Costa Mesa, this whole exercise is one of futility.  Regardless what this committee presents to the City Council, it is the council, or, rather, the majority on the council, that will decide WHETHER we should have a charter presented to the voters next year and EXACTLY what will be in that charter.

THIS WILL END UP "JIM RIGHEIMER'S CHARTER" AGAIN
I doubt there is any person who has followed Costa Mesa municipal government affairs over the past few years who actually believes the charter that results from this exercise will make it past the council without Righeimer's pet projects included.  For example, he has tried for most of two decades to find some segment of the electorate willing to pass his Paycheck Protection scheme - an issue that has been soundly rebuffed every time it has been presented to voters anywhere - including last November when Costa Mesans crushed his charter scheme, 60% - 40%.  I expect him and his council majority to give lip service about what a great job the committee is doing, but when push comes to shove - or chest bump - I fully expect him to go through another cut-and-paste exercise and convince his majority to place THAT charter on the ballot.  We'll see...

Fairgrounds Sale Scab Ripped Off Again

RE-OPENING AN OLD WOUND
At the meeting of the Fair Board last Thursday morning the panel charged by the Board to investigate the proposed scheme to purchase the Fair Grounds property a couple years ago on the cheap presented their findings.  You will recall that the effort, in which several members of the Fair Board at the time formed a foundation to purchase the 150 acre Fairgrounds site, was quashed due, in great part, to the efforts of now-councilwoman Sandra Genis in her then-role as President of the Orange County Fairgrounds Preservation Society, HERE.

MEDIA ALL OVER IT
Norberto Santana, Jr., Managing Editor of the Voice of OC, first announced this move in an entry on January 17th, early in the morning, HERE.  He followed up after the meeting with another one, HERE.  Mike Reicher of the Orange County Register covered the event HERE and Bradley Zint covered it for the Daily Pilot HERE.  Read all those articles and you'll get a pretty good feel for what transpired on Thursday.

ELLIS' LIST

As you will read, calls were made for a forensic audit of the process of attempting to sell the Fairgrounds.  Major players were former state legislator Dick Ackerman and then-Fair Board President David Ellis, among many others.  When this first came up back in 2009 Ellis presented a long list to the Fair Board of individuals he insisted MUST be interviewed if the Board was to have a clear idea of what transpired in this drama.  That list in below.

As you can see, it looks like a list of everyone who ever muttered the words "Fairgrounds Sale".  I suspect Ellis knows that his challenge to interview all those people would be virtually impossible, particularly since the committee formed to do it had no subpoena power nor any authority to guarantee truthful responses.

WHAT ABOUT RIGHEIMER?
One thing that's missing in these articles is a mention of the role current Costa Mesa Mayor Jim Righeimer played in this scheme.  We know of his participation in "Save The Fair" web site, HERE.  We also know that his commentary in the Daily Pilot under his "Rigonomics" byline back in June of 2009 may have been one of the first mentions of this scheme, HERE.  Personally, I'd like to know more about his involvement.  I'm curious because it was clear at that time that he was likely participating behind the scenes.  Some will recall that ill-fated mistaken voice mail message left for a local reporter instead of community stalwart Rick Kapko informing Kapko that he was a lock to be a member of the Costa Mesa Financial Evaluation Committee before his appointment had been affirmed.  That kind of stuff makes many of us curious.

AN INVESTIGATION?

It's going to be interesting to see how this plays out.  Certainly, there are many questions left unanswered.  I find myself wondering just how far this Fair Board will wish to pursue it.  It is logical to speculate about potential legal sanctions if, for example, the State Attorney General decides to actually investigate this matter.  There is, of course, the cloud of conflict of interest hanging over that possibility, since the Attorney General is, in fact, the counsel for the Fair Board.  I guess we'll see.

Meeting The Latest Bidder (Revised - See below)

FACILITIES MANAGEMENT WEST MEETING
Yesterday I had the opportunity to spend a couple hours with two members of the Facilities Management West team, Guy Lemmon and Kathi Crowley, discussing their firm's participation in the quest to purchase the Orange County Fair and Event Center.

CITY PRESS RELEASE
Wednesday the City of Costa Mesa produced a press release outlining the current status of negotiations with Facilities Managment West. Here is the text of that press release:

PRESS RELEASE

CONTACT: Allan L. Roeder
City Manager
(714) 754-5328

Kathy Crowley
Facilities Management West
9949) 433-8207

May 25, 2010

Costa Mesa, California - City of Costa Mesa and Facilities Management West Move Forward on Public Ownership of Orange County Fair and Events Center

The City of Costa Mesa, through the Orange County Fairgrounds Authority, and Facilities Management West (FMW) are moving forward with efforts to secure from the State of California continued public ownership of the Orange County Fair and Events Center (OCFEC) and to meet the schedule set forth by State officials.

"We were encouraged by our joint meeting last Thursday in the Governor's office and are committed to achieve a signed purchase agreement with the State by June 7, and completing the purchase by September 30," said Allan Roeder, Costa Mesa City Manager. A long term lease agreement between FMW and the Fairgrounds Authority is being drafted. The agreement will be structured to achieve the City's and FMW's goal that the OCFEC continue in public ownership.

"We believe that under the proposed public ownership and lease operating structure, existing fair related facilities, venues and community uses can be retained and improved," commented Guy Lemmon, spokesman for FMW. "We are focused on how these many activities can be made more friendly, more modern and more efficient."

Lemmon said that it is the intention of FMW to:

• Maintain and enhance the existing equestrian uses and related community programming on the fairgrounds property;

• Retain Centennial Farms as a park-like use, operated to encourage even broader community use;

• Host the annual Orange County Fair and continue the 50 year tradition of celebrating arts, entertainment, crafts, community service and family fun;

• Preserve the Youth Expo and its widely praised educational, recreational, cultural and social development programs for children and youth;

• Honor and seek to extend existing agreements with surrounding property owners for reciprocal parking and other cooperative joint uses;

• Continue existing arrangements and understandings with the community with regard to functions, events, services and operations; and

• Give existing employees of the OCFEC priority consideration for retention by Ovations-Fanfare, which has been retained by FMW to assist in the operation of the fairgrounds.

Lemmon said that discussions between FMW and the City of Costa Mesa have produced ideas "we intend to explore for new uses of the fairground facilities", including:

• Creating a singe ticketing operation and other operational efficiencies for the OCFEC;

• Expanding the use of the Pacific Amphitheater with improved marketing and booking strategies while remaining a good neighbor to surrounding residents;

• Expanding the use of the facility as an Exposition Center by increasing the number and length of events beyond what now exist;

• Establishing an advisory group of individuals with strong community and OCFEC connections to offer suggestions and counsel to the FMW organization; and

• Operating complementary facilities for the exposition functions and expanded food and beverage facilities.

Lemmon explained that FMW - under the anticipated terms of the long term lease with the Fairgrounds Authority - will retain Ovations-Fanfare to assist FMW in the operations of the fairgrounds and related activities. "Ovations-Fanfare is already well grounded in the real life, day to day operations of the fair as a result of its 15 year history of providing food and beverage services there," Lemmon said.

Ovations-Fanfare operates nine fair facilities in the state of California - including Cal Expo - and has more than 20 years experience in the fair and exposition business. Ovations-Fanfare is a subsidiary of Comcast-Spectacor, a national entertainment and event management firm.

Lemmon noted that FMW decided to compete for the fairground operations package submitted to bidders by the City of Costa Mesa because OCFEC represents the kind of long term investment favored by FMW's president, Ken E. Fait, a long time resident of Costa Mesa and Newport Beach. Additionally, he said, the Fait family and local individuals it brought into the proposal share a genuine affection for the fair and its connection to the county's agrarian roots.

The Fait Family Trust, owned by Ken E. Fait and other members of the Fait family, is a diversified investment firm with interests in numerous companies, including energy, commercial real estate, mobile home communities, engineering, computer software and a cattle operation.

The FMW investment team includes the Fait Family Trust, Richard Dick and David Pyle. Richard Dick, a Costa Mesa resident, has developed a number of successful retail and residential properties throughout Southern California in the past 40 years. Raised on a farm in Illinois, at the beginning of his career he sold agricultural products, kindling a lifelong passion for agriculture and local fairs.

David A. Pyle was also invited by the Fait family to join the proposing team. For more than three decades, Mr. Pyle has been a leader and innovator in the private, postsecondary education community. He is the owner of American Career College and West Coast University with corporate offices in Costa Mesa serving over 7,000 students on six campuses. both schools are health care educators with campuses located in southern California. Pyle is another longtime Orange County resident since his parents bought a home on Balboa Island in 1960. he supports a number of community based education and health care organizations including; the Orangewood Children Foundation's, Kidworks in Santa Ana, Hoag Hospital Marion Knott School of Nursing and "Circle 1000", Newport Heights Elementary School Foundation and Newport Harbor High School Foundation.

"We are honored to have been selected by the City as its partner in the monumental effort to secure continued public ownership of the fairgrounds," Lemmon said. "We are committed to achieving the schedule set by the State and look forward to concluding the process in a positive fashion."

***30***

NEW TIGHT TIMETABLE
Perhaps the biggest news from that press release is that the City representatives along with folks from Facilities Management West will, once again, travel to Sacramento on June 7th to achieve a signed purchase agreement with the State.

LATE ADDED STARTER
You may recall that Facilities Management West was a late starter in this process. Although one of the original bidders in what may have been the shortest auction in the history of auctions, they were ranked second to American Fairs and Festivals when the City decided to seek partners to purchase the Fairgrounds. Negotiations with American Fairs and Festivals fell apart - some speculate it was because the City couldn't arrive at a satisfactory financial agreement with them.

CURIOUS TIMING
In any event, in a curiously abrupt addition to the agenda for a closed session meeting, Facilities Management West was added to the mix and, at the closed session, was selected as the exclusive bidder with whom the City would move forward.

PRESS RELEASE HAS OUTLINE
The press release clearly outlines the major pieces of Facilities Management West's proposal, which now includes a public ownership element that was missing previously and may have been the reason they were ranked second. Those were re-emphasized by Lemmon and Crowley during our conversation.

FINANCIAL DETAILS UNAVAILABLE
No details of their offer are available at this time. We hope the City will release some of the particulars, as they did with the American Fairs and Festivals proposal, in the very near future. The press release indicates that City officials hope to complete the sale by September 30th. When I mentioned to Lemmon that closing the deal at that late date is going to create big problems re-signing contracts with existing tenants, all of which expire November 1st, he agreed and expressed hope that the deal could be consummated well before that date.

OUR "CONSULTANTS" DID WELL
During our conversation Lemmon volunteered that the City's recently added consultants, Jim Righeimer, David Ball and Rick Kapko, were excellent additions to the team. He felt they had the City's best interests at heart and asked some tough but fair questions.

MICKADEIT'S PART ONE
I apparently was part of a community outreach effort because yesterday Lemmon met with Orange County Register columnist Frank Mickadeit. The first of his two-part report can be read HERE.

I LEFT ENCOURAGED
I left my meeting with the folks from Facilities Management West encouraged by their enthusiasm and their plans as outlined in the press release. Of course, much needs to be done in the week that remains before the next trip to Sacramento. The proof will be in the deal...

MANSOOR VIDEO EXPLANATION
In the meantime, there lingers the bitter after taste of Mayor Allan Mansoor's recent "Rule of Law City" resolution. This resolution, which he explained in detail to the Orange County Register in this video clip, has caused a firestorm of controversy.




ANGRY RUMBLINGS BEING HEARD
I continue to hear rumblings, some of them from highly placed individuals in state government, that this resolution - clearly a ploy to grab the campaign spotlight with an incendiary issue - has so rankled Latino members of the legislature that there is strong consideration being given to punishing the City of Costa Mesa by not permitting the sale of the Fairgrounds to go through. It seems very likely to me that, if they chose to block the sale, there's not much that could stop them. The legislature is Democrat-controlled, so it would be easy for them to simply lock the essential bill into committee, effectively quashing it. They wouldn't even have to put it to a vote.

BREAKING NEWS: At 2:35 Thursday the Orange County Register posted an article, HERE, that confirms the above apprehension.

WE HOPE GOOD JUDGMENT PREVAILS
One would hope that the legislators wouldn't let one stupid, opportunistic, partisan political move by our mayor - one that really changes nothing in our city - cloud their judgment when it comes to the Fairground sale. The City of Costa Mesa, State representatives and bidders have all spent countless hours crafting an acceptable bid that could perpetuate the historical and cultural icon that is the Orange County Fair and Event Center into the future. It would be a shame to have partisan pique block the sale.

WAITING AND HOPING
I guess we can only sit and wait, hoping that the City and Facilities Management West can hammer out a deal and present it on June 7th, that the State finds it acceptable and that the legislature will do it's part and process the necessary legislation with dispatch.