Lobdell: City on course for financial ruin

October 28, 2010|By William Lobdell, columnist

I've learned the hard way to listen to John Moorlach.

In 1994, when he was running for Orange County treasurer-tax collector, Moorlach walked into my office at the Daily Pilot with a foot-high stack of documents.

"It's all here," said Moorlach, then a Costa Mesa CPA who read financial reports as accurately as NFL quarterback Peyton Manning reads defenses. "Orange County will go bankrupt if interest rates move up even a little. Please, please, please, do the story."


Moorlach handed me what could have been my Pulitzer Prize. And I, editor of the Pilot, let it slip through my hands.

I didn't understand the complex (and, it turned out, high-risk) investments made by the incumbent treasurer-tax collector, and I lazily bought the political narrative being spun by just about everyone: Moorlach's wild, the-sky-is-falling accusations were part of his desperate campaign to unseat Orange County's only elected Democrat.

In the months that followed, Moorlach lost the election, interest rates ticked up, and Orange County filed the largest county bankruptcy in U.S. history. On the day after it was announced, I stopped by Moorlach's office to apologize.

His voice was hoarse from scores of interviews with the national media, and his eyes red from crying. He looked at me and asked, "Why didn't you listen, Bill? You at least could have had a Pulitzer."

Fast forward to today. Moorlach — now a county supervisor — issued this month a DEFCON 1 warning to Costa Mesa that it's on the precipice of financial ruin. The facts he used to back up his claim were sobering.

The city has plowed through $50 million in savings in three years, it's reduced capital improvement spending by 80%, it's eliminated 113 positions (about 18.5% of its staff), and it's relentlessly hacked away at services. The only place left to cut is staff costs, which account for nearly 90% of the budget.

So what do council members Wendy Leece, Gary Monahan and Katrina Foley do this week? Ignore Moorlach's unassailable analysis and approve multi-year contracts with the police and city employee unions that extracted the mildest of concessions, leaving Costa Mesa's annual budget still about $6.5 million in the red. (Mayor Allan Mansoor and Councilman Eric Bever voted against the contracts.)

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