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Orange County Loses Fight against Deputy Sheriff Pensions

Orange County's four-year fight against the so-called "3% at 50" pension plan for deputy sheriffs ended abruptly yesterday (April 13) when the California Supreme Court refused to hear it, according to the Orange County Register. The arrangement permits deputy sheriffs with 30 years of service to retire at age 50 with a yearly pension that is 90% of their salaries. The supervisor who pushed the case claimed it would save the county $500 million.

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Orange County's four-year fight against the so-called "3% at 50" pension plan for deputy sheriffs ended abruptly yesterday (April 13) when the California Supreme Court refused to hear it, according to the Orange County Register. The arrangement permits deputy sheriffs with 30 years of service to retire at age 50 with a yearly pension that is 90% of their salaries. The supervisor who pushed the case claimed it would save the county $500 million.

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The CA Supreme Court had a duty to take the case and rule on it.

This is a MAJOR issue, with major legal and financial implications, so them denying the case for review is a dis-service to taxpayer and all Californians.

April 14, 2011

The high court's refusal to take the case does point out the dilemma of local governments: judges are public employees, too. When pensions get excessive, how do you bring them back down by going in front of a court? Best, Don Bauder

April 15, 2011

Don, Well that's another interesting, albeit a cynical analysis. It seems reporters who see and write about the worst, like cops, are NOT immune to becoming more and more cynical. . That's a pretty nasty allegation, where's the proof?

I'd argue the Court reviewed the relevant materials and denied Moorlach's petition finding no valid argument(s) for the theory promulgated by Moorlach and his Chief of Staff Mario Mainero. Their case was based on violations of two sections of the State's Constitution.

Article XI, Section 10

“A local government body may not grant extra compensation or extra allowance to a . . . public employee . . . after service has been rendered or a contract has been entered into or performed in whole or in part . . . ”

The question put forth to the Supreme Court in part was; In light of this provision, did the Court of Appeal err by fashioning a new per se exemption from Article XI, Sec. 10 for grants of extra pension benefits awarded to County employees for past work after service had been rendered?

and Article XVI, Section 18(a)

“No County . . . shall incur any indebtedness or liability in any manner for any purpose exceeding in any year the income and revenue provided for such year, without the assent of two-third of the voters . . . ”

The second question in part was; In light of this provision, did the Court of Appeal err by holding that a County can, without first taking a p ublic vote, incur any amount of pension liabilities to be paid in future years and with future tax dollars, so long as the ultimate cost of those liabilities “is not a certain total for which the County is immediately liable”?

Way back in 06 two OC respected law firms opined the case had no merit. Nevertheless Moorlach and Mainero himself an attorney, pursued it spending millions of taxpayer dollars.

Mainero's also a hypocrite. In June 2009 Mainero criticized OC DA for "wasting taxpayer dollars" on Death Penalty cases, maybe a million bucks or more a year. Really? Then Mainero resigned as Moorlach's Chief of Staff on 6/30/09. County CEO Tom Mauk, rehired Mainero to continue working on the appeal. An astute politician himself, CEO Mauk, paid Mainero a substantial hourly salary to shepard the case. Some believe it was to give Mauk cover when the case failed.

So what about Moorlach? His press release on the matter shows his arrogance. Moorlach closed it saying, "As it is the Lenten Season, all I can say is Father, forgive the Supreme Court, for they know not what they do."

OC taxpayers have a couple of real winners, ala Charlie Sheen. One who invokes the words of Jesus Christ as he was crucified on the Cross, to describe the denial of his petition, the other who double dips pursuing his failed theories.

Another example of wacked out California politicians who believe they know more than the people they're suppose to serve and believe they are untouchable too.

April 15, 2011

Yes, pursuing the case cost money. But the proponents say that if they had won, the savings would have been $500 million, or roughly 200 times or more the cost of the suit. So I don't think it was a bad gamble. At some point, society has to realize that 3% at 50 is hopelessly unaffordable. Best, Don Bauder

April 15, 2011

Yes 3% @ 50 has been recognized and, in the City of San Diego, is not available to any new employee prospectively since July 2005. (Exception of FD who will have the same benefits beginning July 2011.

"But the proponents say that if they had won, the savings would have been $500 million, or roughly 200 times or more the cost of the suit." Yes they CLAIMED that, but you must take into account other facts. Two law firms evaluated the theories raised in the complaint and advice against going forward. Moorlach lost at the trial court level but he convinced his peers to continue to spend other peoples money. In my opinion it was after the trial made it ruling, combining it with the two other law firms and the proponents claims became unreasonable.

April 15, 2011

I'd argue the Court reviewed the relevant materials and denied Moorlach's petition finding no valid argument(s) for the theory promulgated by Moorlach and his Chief of Staff Mario Mainero.

LOL..now that is a shocker :)

April 15, 2011

Nevertheless Moorlach and Mainero himself an attorney, pursued it spending millions of taxpayer dollars

The total cost was in the $2 million range, to save potentially $500 million. That is a 250 to 1 percentage. I'll take those odds 100 times out of 100, anyone would.

April 15, 2011

Surfpuppy,

The Court has a duty? Really? A duty to waste its time and the taxpayer's money on two ridiculous theories?

Too much time and money has already been wasted litigating this lawfully negotiated labor contract.

The ONLY ones WINNING, as in Charlie Sheen context these days, are the lawyers.

Is that why you became an attorney surfpuppy? So you too could say.."WINNING"

April 15, 2011

JW, I think, respectfully, that you should be careful using those words "wasting taxpayers' money." Remember, many think that's what 3% at 50 is all about. Best, Don Bauder

April 15, 2011

Yes many think it, but that does not make it so. Remember, when you were a young lad, many thought the world was flat and the sun revolved it, until they became educated.

The fact is, in the context of this discussion thread, the issue here were and are lawfully negotiated contracts.

April 15, 2011

That's what bankruptcy court is for: breaking so-called lawfully negotiated contracts that make it impossible for an institution to survive financially. Best, Don Bauder

April 15, 2011

Maybe...but we'd be making all new law. In the '94 Orange County bankruptcy, the largest municipal failure ever at that time, pensions were never touch.

The same is true in the ongoing case in Vallejo, California. Pensions remained intact.

And while Prichard, Alabama HAS defaulted on its pension payments. Its making changes to right the wrong. Prichard has been in and out of financial problems since the late 90's and declared bankruptcy in 2009. What happened to the case? The judge cited Alabama law and said the city did not meet the state threshold to file for bankruptcy. So no decision has been made regarding changes to pensions from the bankruptcy court.

April 15, 2011

In the '94 Orange County bankruptcy, the largest municipal failure ever at that time, pensions were never touch

Pensions were never challenged.

If they had been challenged they would have taken a 50%-75% haircut, and that will happen eventually in muni BK.

April 15, 2011

The same is true in the ongoing case in Vallejo, California. Pensions remained intact.

==========

Once again, they only remain b/c they were not challenged.

April 15, 2011

The Court has a duty? Really?

IMO, yes, they had a duty to rule on the issue, which ever way it may go.

They are the highest court in this state, it is a state issue, a state issue that is affecting every taxpayer in CA.

April 15, 2011

Well that's one interpretation. Here's another.

The facts are the Court examined the record at the trial and appellate levels and concluded no valid issues or arguments worthy of Court's time existed. So as Surfpuppy has reminded us on so many occasions, this case is over because the California Supreme Court says it is.

Unfortunately this was one man's, John Moorlach's, crusade. He's been tilting at these windmills since 2006, all while using other people's money to do it.

But this could be a deeper issue.

Maybe Moorlach was trying to rekindle his glory days back from back in 1994 when he warned of Orange County's insolvency issues. Sure he was right then, but this time he had his hat handed to him, not once, not twice, but over and over with some very smart people saying the theories were preposterous. But why would he do this? Because he, and other politicians like him hold no personal liability and it's just too easy to spend other people money when your not going to be on the hook for it.

So not only will the taxpayers of Orange County foot the bill (estimated at 2.5 Million so far) for Moorlach's folly, there's little doubt the court will award attorney fees (estimated at another two million) to the Association of Orange County Sheriffs.

And this nonsense over the gift of public funds, from lawfully negotiated labor contracts, is done.

April 14, 2011

You state that the issue is buried. It's not when municipalities begin going into bankruptcy in droves. Best, Don Bauder

April 15, 2011

California's laws can be easily changed so judges will not have the final word on this big issue. The battle will continue until both sides reach agreement. Luckily both sides have powerful reasons to fix this, because so many of these contracts violate basic principles of fairness.

After work is performed, the amount paid should not change from what is promised. The trouble is, the pension contracts are structured so that we can only guess at the final amount owed,. Such contracts are certain to make someone unhappy. It's like playing double or nothing at paycheck time, someone will get cheated. Right now it seems the city is the victim, but this could change.

These contracts should be renegotiated to an easily defined amount.

April 15, 2011

Agreed: the contracts should be renegotiated. Got any ideas how? Best, Don Bauder

April 15, 2011

Contracts are renegotiated all the time. The City just finished doing it for four of its six labor groups.

I believe what you're referring to are vested benefits. Once the benefit vests with the employee it's protected by the California Constitution. with contracts. The only way to rid a vested benefit is to give another one of equal or better value. Laws giving this protection to public employees since politicians were responsible for their living.

As I mentioned the initiative in the works by Governor Brown will correct what is perceived as abuses. Of course no thought these were abuses during the tech bubble or housing bubble when private sector workers were earning truckloads of compensation.

April 15, 2011

Of course no thought these were abuses during the tech bubble or housing bubble when private sector workers were earning truckloads of compensation.

Another public employee whopper.

I bet you also had a "freind" or "neighbor" who was making $500K per year in "real estate" or "loans" or became a billionaire with "stock options"!!!

The fact only 15%-20% of Americans work for public companies, few if any American workers have benefits, and have not seen their compensation go up in over 12 years. In fact it has gone down, while public saftey employees have seen their compensation go up, on average, 97% in the last decade alone in this state.

I really have to laugh at the "truck loads of compensation" comment because it is one of the many whoppers floated by most public employees-while FF jobs are seeing 1k applicants for every single opening.

The so caleld reforms by Brown are far too little, far too late, and only address the most outrageous abuses.

April 15, 2011

Actually I have two friends who represent both bubbles...One made several truckloads of cash during the housing boom flipping properties in Vegas and Henderson NV...

The other a company officer in a SD Tech firm...in late 97 shares were trading in the 3 and 4 dollar range...but by Aug 2000 they were trading at over $400 a share... with her employee options she became an instant multi-millionaire...

April 15, 2011

Well, your two "friends" were one in a million, both of them. And please NAME the SD TEch firm whose shares went from $3-$4 to over $400 in 36 months.

There are 550K licensed RE agents and brokers in this state and 90% earn less than 5K per year. They are similar to actors, yes a few actors make $1 million per picture, but 99% earn under $75K, and 75% earn under $5K per year.

April 16, 2011

Yes it part of what Governor Brown is proposing changes similar to the ones you mentioned as a statewide initiative. And, they are also part of the proposed DeMaio/Sanders/Faulconer ballot proposition.

But don't loose sight of the fact that the City proposed leaving Social Security to save money in 1982 and never saved a penny of it. That's almost 30 of funds intended to pay for retiree medical.

Don't forget it was the City who invented a new financial term, "the waterfall" to describe SDCERS investment returns above the Actuarially expected return of 8%. So instead of re-investing the returns from above average years for years where investments failed to meet the projected rate of return, the City took the "waterfall profits" to pay the health care costs of its retirees until they were caught stealing by the IRS.

And don't ignore that City leaders proposed and paid substantially LESS than their equal portion of their pension payment, taking a euphemistically labeled "holiday".

There is no doubt the plenty of blame to go around.

April 15, 2011

Nobody denies that there is plenty of blame to go around. Trouble is, so many of the politicians who should be blamed are long gone. Best, Don Bauder

April 15, 2011

geesus!!!

the revolution is coming peeps!!!

:=/

April 15, 2011

The natives are restless and deserve to be. Best, Don Bauder

April 15, 2011

BTW-here is a REALLY good article, and short, from Vanity Fair magazine for JW and Don-and anyone else who wants to get an education on why things are so sideways in America today, and while I agree with 90% of what this guys says, I don't agree with all of it-I have to make this disclaimer b/c this guy is supposedly a socialist, but he is really on the money. I think he would add public employees to the problem of wealth inequality given that many public employees are now making so much more than the private sector;

Of the 1%, by the 1%, for the 1%

Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.

. http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105 .

April 15, 2011

I don't think you can say Stiglitz is a socialist, and if he were, what difference would it make? America's capitalism has morphed into corporate socialism; how many big businesses really take risks these days? They want government guarantees. We have a plutonomy, which is aimed at massaging the upper 1%, as Stiglitz says. That article is great. Best, Don Bauder

April 15, 2011

Glad you liked it, I too agreed with nearly all of it. It is really on the money. He sees the writing on the wall, as does the poor and middle clas-us, the other 99% of America.

Wealth concentration is very dangerous, we are are there. We are basically like Mexico with lipstick and a dress.

April 16, 2011

You have said many times that we are becoming a banana republic. Statistics such as those cited by Stiglitz make the case. Nonetheless, the Republicans in Congress and statehouses want even more tax cuts for corporations and the superrich. They must think the public won't rebel. I hope they get surprised. Best, Don Bauder

April 16, 2011
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