Good News for Newport Beach!

What’s the good news?

Well, the City of Costa Mesa is going to lay off half of its City employees, more than 150, and start outsourcing those City services. 

Why are they doing that?  Primarily because Costa Mesa has a whopping $130.8 million dollar unfunded pension liability and a current-year $1.4 million budget deficit.

So they’ve drawn a line in the sand and made some very, very difficult decisions.

Why is that good news, especially for Newport Beach?

How else will our City keep that wonderful distinction of having the largest City Employees-per-resident ratio in the County, even as compared to other beach towns (apples to apples)?

There will be an additional 150 seasoned, but unemployed, City Employees available in the job market soon, who need to continue earning their “Deserved” (to paraphrase former lifelong City Employee/Councilman Don Webb) pensions?  Webb must be salivating at the possibility of having MORE City Employees telling businesses in Newport Beach when to open and close, as well as how to operate, while deservedly earning their retirement benefits.

Plus, how else will our City fill all those empty offices in our new shiny City Hall/Civic Center/Taj Mahal?

The shiny new City Hall/Civic Center/Taj Mahal that will cost an additional $8.5 million dollars, up to $131.5 million, from their “hopeful” estimates of $123 million bucks in November. 

If we are truly lucky, then the final costs may come closer to $135.5 million dollars. 

And that’s AFTER our Magnificent Seven voted down a $2 million dollar bridge (to nowhere…) and $750,000 for solar panels…

Makes you wonder…hmmmm…any other great ideas buried in that potential $131.5 million to $135.5 million boondoggle?

“Irked” Mayor Mike Henn commented, “The numbers are not coming in certainly where I hoped.”

Really?  I’m certainly glad that Mayor Henn is irked about it.

But couple this $135.5 million dollar “adventure” with OUR unfunded pension liability and Other Post-Employment Benefit liability of $200 million dollars, plus whatever the heck OUR current budget deficit is (I’m too frustrated right now to find what that number is/was) and I would hope that the $335.5 million dollars of Newport Beach’s debt would have Mayor Henn just a bit more than…irked.

In the beginning of February, in one of my many masterpieces, I wrote about the next Bubble to Burst (you can find it on http://www.newportbeachindy.com/jack-wu/).  I called upon Mayor Henn and the rest of the Newport Beach City Council to draw that line in the sand that enough spending, enough debt had been incurred and called for layoffs of Outsource-able City Employees. 

Instead I watch Costa Mesa and their non-Union supported (ooops…did I just stumble upon something?) City Council majority take REAL action to fix their budget mess.

Take a quick look at our City Council and see if you can figure out how many of our Magnificent Seven were endorsed and financially supported (with both direct cash and Independent Expenditure money) by the Newport Beach Police and Fire Unions.

Try all Seven.

Almost $100,000 dollars have been spent by Newport Beach’s Public Employee Unions over the past decade to get all Seven of the Newport Beach City Council elected.  All Seven of THEIR Newport Beach City Council elected.

Enough money to keep the layoffs from happening?  Maybe.

But in fairness to the City Employees and Unions, how could they be expected to tighten their belt if the City Council itself cannot control their wild spending on the new City Hall/Civic Center?

Nixing (not even permanently) $750,000 Solar Panels?  Not even close to real cutting.

So, I’m saying “don’t worry” to those soon-to-be-laid off Costa Mesa City Employees, you will soon have a new home here in Newport Beach, off of MacArthur Blvd and Coast Highway.  Your new office will have a great, million-dollar view of Catalina and the Pacific Ocean.  You’ll have a great Espresso Stand to hang out during your break and enjoy the smell of the sea. 

And you’ll be able to keep earning your deserved pensions.

Happy Days are here again!

The Loud Minority

Out of the 62,471 voters in Newport Beach, 56% are registered Republicans, while 22% are registered Democrats. 

In Anaheim, out of 145,188 voters, 39% are Republican, 38% Democrat. 

Our City Council is 85% Republican and Anaheim’s is 80% Republican.

Why am I comparing Newport Beach to Anaheim?

Because on Feb. 8, the Anaheim City Council voted UNANIMOUSLY to rename Toyon Park in Anaheim Hills to Ronald Reagan Park.

And not one Anaheim resident stood up to speak against it.  No one asked for committee discussion, no one asked for private donations.

Not only did not one Anaheim resident speak up against it, but the Anaheim City Council actually nixed the original park to be renamed in favor of a LARGER park.

In speaking with Anaheim Mayor Tom Tait about it, he was actually surprised at how easily it went through.

And in a City where there is a 1% spread between Republicans and Democrats, a “Divisive and Extremely Partisan” former President was given the fitting tribute that he deserves.

But here in Newport Beach, where the Republicans overwhelmingly outnumber the Democrats, where we have a newly elected Councilman Rush Hill touted his personal friendship with President Reagan, we get Councilman Keith Curry booed and shouted down for having the audacity to have Reagan honored with a privately funded statue. 

Shame on you who did that.

But before I further incense you, let me ask you something.

Why are you Republican?  Why does Newport Beach have 34% more, 21498 more Republicans than Democrats here in this City?

Are you all, like our former Governor Arnold, Nixon Republicans? 

No, most, if not all, are Republicans BECAUSE of Ronald Reagan. 

I am a Republican because of Ronald Reagan.

Now, in doing my research for this little column, I found the comments to be the most interesting.

Revisionist, destructive, lacking of morals, embarrassing are some of the responses to honoring President Reagan.

And I’m sure that I’ll get my share of angry responses.

But I don’t care.

I know Ronald Reagan was a Democrat until his mid-50s. 

I know Ronald Reagan raised taxes in his first term of Governor.

I know Ronald Reagan was the head of a major Labor Union.

These “offenses” would have ironically precluded him from receiving the Republican Party of Orange County endorsement in any election.

However, as President, Reagan faced up against Unions and squashed them.

Reagan faced up against terrorists and squashed them.

But most importantly, Reagan faced up against the Communist Soviet Union and squashed them, and made them tear down a wall.

Heck, they even made a “Star Trek” movie using that Cold War victory as a theme.

And according to Gallup, President Reagan left office with a 63% approval rating, with only Clinton and his 66% approval rating being higher in the 20^th century.

President Obama’s approval ratings during this past midterm election?  44%

So what is wrong with having a Park named after President Reagan?  I’m sure there are plenty of parks in Newport Beach, which could have used that honor, with the “Weed Park” being the first one that comes to mind.

But our republicans (note the small “r”) were too … um … apprehensive (read: SCARED) to do that.

So a privately funded statue was suggested, and that has received tons of heat.  Why?

Because Reagan was, as one anonymous commenter wrote, “Divisive and Extremely Partisan.”

But Councilman Curry said, “Reagan is a historical figure; he is no longer a political figure.” 

And he is absolutely right.

California, with its overwhelming Democrat majority, recognized February 6 as Ronald Reagan Day.  An airport in Washington D.C. is now named after him; hospitals, tollways, stamps, an Aircraft Carrier and generations of children are now being named Reagan.

All these people honored Ronald Reagan, not because of his politics, but because he made history.

Perhaps the loud minority in Newport Beach should get off their political high horses and honor President Ronald Reagan as the historical figure that he was.

And our Republican City Council need to quit being such populists and support Councilman Curry in honoring the man who made us all proud to be Republicans.

Made us all proud to be Americans.

The Next Bubble to Burst

Compared to Mayor Mike Henn, I’m a mid-level pencil pusher. 

He was a CFO for two very large public companies; I’m just a Corporate Controller for small private companies. 

He filed quarterly 10-Qs to the Securities and Exchange Commission.  I file quarterly payroll tax returns to the IRS and sales tax returns to the State Board of Equalization. 

He’s the star Quarterback in the NFL, I’m a third-string QB in the Arena Football league.

So when I read that based on the Fiscal Year End 2009 California Public Employees’ Retirement System report, the City of Newport Beach has an unfunded pension liability of $134 million dollars, as well as an unfunded $60 million dollar Other Post-Employment Benefits (OPEB), or Health Insurance et al., liability, I cannot help but wonder: Why isn’t Mayor Henn’s head exploding? 

What does all those numbers above mean? 

What it means is that if every City Employee - every Police Officer, or every Fireman (or Fireperson) and Lifeguard - eligible to retire did so today, the City of Newport Beach would be almost $200 million dollars short on paying for their “Well-Deserved” (former Councilman Don Webb’s paraphrased words) post-retirement Pension and Health Insurance benefits for the rest of their lives.

Let me repeat in terms that even a Third Stringer like me can understand.

The City of Newport Beach is $200 million short to pay for the Pension and Health Insurance for all of its present and future retired employees.

And that is based on the June 30, 2009 report by CalPERS, released in December 2009, which leads me to a couple of questions.

First, when did the City of Newport Beach know that its pension liability jumped up 44% from the year before, to $134 million dollars?

And, second, is the City going to do something more than just have the Public Safety Employees, whose contracts expire in December, contribute more than just 3.5% (while the City contributes the remaining 96.5%) to their pensions?

With question #1, one cannot help but wonder, after an election season where Pension Liability was a huge topic, where Council candidate Ed Reno brought up privatizing more City Functions (Trash Service as an example), where the size of government was questioned, did the City wait until after the November 2010 elections, 11 months AFTER the CalPERS report was released, to drop this little tidbit of information?

If we, the voters, would have found out that the City was $200 million dollars in the hole to pay for the bloated, yet “deserved,” pensions and health insurance of its employees, would the election results have been different?

Perhaps. 

But couple this with the $128 million dollar loan to build the City Hall/Civic Center, and the City of Newport Beach faces a debt of more than $328 million dollars, which will choke even the most robust bank accounts, even the most robust companies.

Is being $328 million dollars in debt a good thing to be during these tough economic times?

So how far will the City go to alleviate this problem?  And how much will the Public Employee Unions concede to prevent this fiscal bubble from inevitably bursting?

Contributing 3.5% to 8% to their own pensions will not work.  Having them raise their retirement age from 50 to 55 won’t do anything, either. 

Only having employees go from the traditional CalPERS system to a “defined-contribution” program similar to a 401k, as Mayor Henn suggests, would help, but instead of hoping that it could be done “well down the road,” it needs to be done immediately.

Doing it “well down the road” would be like ordering more lifeboats for the Titanic long after the ship has sunk.

Will the Public Employees, Firefighters, Lifeguards, Police Officers, and Trash guys be willing to dump their juicy pensions for a normal 401k plan like you and I have? 

And what will Mayor Henn and the rest of the Newport Beach City Council do if they won’t and “concede” to just contributing 9% to their pensions?

Here’s what I would love to see happen.

- The City Council draws a line in the sand and says that being $328 million ($128 million for the City Hall/Civic Center and $200 million in unfunded Pension and OPEB liabilities) in debt is enough.

- The City Council immediately implements a “Defined-Contribution” program similar to a 401k, and raises the retirement ages to 60 years old.

- If the Unions don’t agree, then let the layoffs begin.

Yes, I repeat, let the layoffs begin. 

Just like in Colton, CA, and in Camden, NJ.

You read that right: the City Council needs to start acting like Fiscal Conservatives (like many claim to be) and take the necessary actions to ensure that the next bubble that bursts isn’t Newport Beach’s. 

And Mayor Henn needs to step up to the plate to keep the Newport Beach ship from sinking.

Democrats in Newport Beach? Where?

Last year, when the Newport Beach Independent was starting up, I was told that I wouldn’t be in every week’s issue. 

After all, this wonderful paper didn’t want its Forum page to be filled with the Crazy Right-Wing Ultra Conservative rantings of this lunatic on a regular and consistent basis.  This new paper didn’t need that kind of reputation right? 

No problem.

So after six months of searching, our fearless leader/Editor Roger Bloom, during our most recent Newport Indy columnist/reporter meeting, gave up and passed the task of finding a good Democratic-registered writer to me.  After all, who better to know good Democrats than a good Republican, right?  Friends close, enemies closer right?  Sheshhhh…should be easy.

Well, turns out I only know Democrats (with extensive opinionated writing experience who are willing to identify themselves as Orange County Democrats) in the People’s Republic of Irvine.  There are some in Costa Mesa, too, but somewhere in Newport Beach there has to be some, right?

The most obvious choice for me is one who has run for Congress three or four times (who can remember?) and most recently short-lived Newport Beach City Council candidate Steve Young.  But he’s only been a resident of Newport Beach for a just over a year and needs more seasoning in the Newport Beach broth, especially for a paper “For Locals, by Locals.” 

OK, next.

The second obvious choice (at least for me) was Barry Allen.  For those not familiar with Barry, he’s an attorney who’s sat on numerous Boards and Committees for Newport Beach.  I knew him from his years on the Environmental Quality Affairs Citizens Advisory Committee where he would go through and meticulously scour through the agendas and paperwork to make sure every T was crossed and I was dotted. 

But his bigger claim to fame is his marriage to his wonderful bride Debra Allen.  You see, Debra has been a fixture, and an icon, in city for decades, but moreso, she’s a staunch Republican while Barry is a staunch Democrat. 

But it turns out Barry is a successful and very busy attorney too.  And I’m sure his every day political conservation with Debra gives him enough agita, regurgitating it again for this paper might be too much for him…

After Barry and Steve, things started getting more difficult.

So I started working the phones and called a few former Mayors, some current Councilmembers, some tree huggers, and some other Newport Beach prominents.  And guess what?  Finding a willing Democrat in Newport Beach is much more difficult than you’d think.

Now don’t get me wrong, I’m sure that are plenty of good Democrats in the City who would be very willing to write and counterbalance my lunacy.  But I’m not too sure there are too willing to actually publicly identify themselves as a good Democrat in Newport Beach. 

Plus, since all my political friends (except one) in Newport Beach are Republican nut-jobs like me, they probably have as many Democratic friends in the City as I do ... the same two as I mention above, Barry Allen and Steve Young.

So now what? 

Well fortunately after leaving a message on the Hart line, I received a call back from former Mayor (and one of the three ladies in Newport Beach who I truly respect and am frightened of at the same time) Evelyn Hart.  Stumping Evelyn is no easy task, and at first thought that I had. 

But given enough time, Evelyn ALWAYS delivers and she came through with a couple of names to start with. 

I passed the names and info onto our fearless leader and will sit back and eagerly await the wise musings of the Democrat (hee hee…gotta remember my New Years resolution…). 

So there.  Democrats in Newport Beach DO exist.

Attack of the Moderates

A wise politico once told me that there are only two types of Politicians you can trust: Ultra Conservatives and Ultra Liberals, because you always know where they stand. 

That predictability makes telling the future that much easier, and irregardless of the final outcome, at ease to know what storm would be coming, even before it came.

That’s one of the many, many reasons why the Governor Arnold years were soo crazy.  He had both sides of the Aisle hopping, jumping and guessing his next move creating an unpredictable nightmare for both the Republicans and the Democrats in the Legislature. 

This is what is called a Moderate.  Someone who is neither Conservative nor Liberal.  For instance, a Moderate Republican is one who is Fiscally Conservative AND Socially Liberal.  An Arnold Republican.  A Newport Beach Republican.

The Newport Beach City Councils have always traditionally been relatively Moderate, with this current incarnation of the City Council being no different.  That is one of the reasons that Newport Beach has never had a Former City Councilmember get ELECTED to higher office in its 104 year history.

Well, that might change, and you can thank the just-passed Prop. 14 for it. Here comes a Open Primaries!  

The Primaries will no longer be Republicans running against Republicans, Democrats running against Democrats to face off in November.  Nope, it’s now going to be the top Two Vote Getters in the Primary, regardless of Political Party, making it onto November. 

What does this mean?  In the Republican-heavy 70^th Assembly District (before the upcoming redistricting), the top two vote getters will most likely both be Republicans, most likely meaning a moderate and conservative will face off in November. And who do you think the Democrats, and Arnold Republicans, will vote for in the General Election, a Conservative Republican or a Moderate Republican? 

You got it. 

Take this scenario to the more Liberal/Democrat heavy areas, and the same things will happen, the Liberals will start losing to the Moderate Democrats.  Pretty soon, the California Legislature will be run by a bunch of Moderate Republicans and Democrats, neither side being able to predict what the other will do. 

Nightmare.

How does this relate to Newport Beach?  Well it’s no secret that every Councilmember looks in the Mirror each morning and sees an Assemblyman.  I’ve personally heard wistful wishes for higher office from Councilman Steve Rosansky as well as rumors of future higher-office runs by Councilwoman Leslie Daigle.  But because neither could ever get confused for a Chuck DeVore-class Conservative, running for State Assembly would be WAY out of the question in the Conservative 70^th.  But now…with an Open Primary in the mix, how could they not run for State Assembly in the future?  Both would beat a Conservative candidate in a heartbeat.

Who do you think a Moderate Republican/Moderate Democrat/Liberal Democrat will vote for in the Open Primary and in the General Election, someone who votes to raise fees/welcomes Federal Earmarking/borrows $128 million to build an unnecessarily Pretty Taj Mahal - or someone who is staunchly Pro-Life/staunchly Anti-Tax/staunchly Anti-Union?  How do you think we got Tom Harman in office back the last time this Open Primary nightmare was attempted?

So I truly think that the Newport Beach City Council will graduate its first member of Legislature soon, soon, soon and the 100-year-old jinx will finally be broken. 

But so will the State of California.