City Council Review for August 15

Here’s what happened Tuesday night at the City Council meeting...

DISTRICT ELECTIONS

During a discussion agendized to talk about the language to use in the 2018 election so people can vote on districting, Councilman Hamilton tried to get the Council to give the law firm threatening to sue the City $30,000 and then he recommended the City refuse to move to district elections. Hamilton is against district elections. There is no evidence that the general public are opposed, but Hamilton is opposed. District elections will almost surely put him in the same district as Councilman Robinson and Hamilton would surely lose.

In my opinion the problem with Hamilton’s thinking is two-fold.

• Once we give $30,000 to one law firm we are liable for another $30,000, and then another, and then another. We are sitting ducks for any law firm that wants to collect $30,000 for the costs of writing a threatening letter to sue us. We will be like an ATM for any sleazy lawyer who can write a letter. By law they will be entitled to up to $30,000 to"cover their costs".
• Once we refuse to move to district elections, we can be sued by a plaintiff and then we may be in a situation in which we will spend hundreds of thousands of dollars and ultimately have to move to district elections in any event. No City has yet successfully defended itself against this type of lawsuit, and some cities have spent in excess of $1,000,000.

Thankfully Councilman Robinson joined me in rejecting the idea. Mayor Voigts joined Hamilton and voted for it, and Mayor Pro Tem Basile abstained. The motion failed. Thank goodness.

On the topic on the agenda, language for the election in 2018 will be prepared and presented at a later date. We have until August 2018 to get it right. People will be given the option of voting for a citywide Mayor or not, and determining how many districts they want. The choices are

• Citywide Mayor and 4 districts
• Citywide Mayor and 6 districts
• Appointed Mayor and 5 districts (what we're planning to adopt for the 2018 election)
• Appointed Mayor and 7 districts

The idea was advanced to leave the 2018 and 2020 elections with the same districts, and then convert fully in 2022 based on the 2020 census data. Otherwise we will have 3 elections (2018, 2020, and 2020) with different districts. This may confuse and alienate voters. It will also cost a lot more money to redo the districts in 2020 and then redo them again in 2022. This idea will be pursued at a later date. Meanwhile the city is moving forward with the plan for having 5 districts and a Mayor appointed by the Council. This system most resembles the current system in which we have 5 Council members and an appointed Mayor.

HAMILTON MISSING

Andrew Hamilton didn’t show up last night, but he was available on the phone speaking from San Luis Obispo where he was travelling on business. Hamilton no longer works at the Mesa Water District and formed his own consulting firm, Orange County Accounting Consulting. Hamilton spent much of the night complaining that he couldn’t hear what was going on, but when a resident talked about her fears that "chilled her to the bone" because of reprisals from Hamilton’s supporters, whose antics during the recalls were reported to include physically attacking a senior citizen, roughing up petition gatherers, and intimidating women, Hamilton glibly said that if the woman was feeling chilly perhaps the temperature in the room should be increased. The audience booed. Hamilton once more demonstrated why he is the only City Councilman being recalled.

UNFUNDED PENSION LIABILITY

A few years ago we were fully funded, but the passage of time and changes made by PERS, resulted in the City slipping so that we are now $2.2 million in the hole. PERS charges us interest on this $2.2 million at a rate of more than 7%, while the banks are giving us a mere 1%. Thus it makes sense for the City to pay down the $2.2 million, dig ourselves out of the hole, and save the 6% difference between what we pay and what we get.

Unfortunately we don’t have $2.2 million surplus in our operating funds. At last glance we had about $350,000. This means that we will have to take the money from our reserves, where we have ample funds. While this is a short term fix, the performance by PERS means that we will continue to pour money into this system, which is financially unsustainable.

Mayor Pro Tem Basile asked the staff to consider alternatives. One way is to break away from PERS, and staff reported that this is possible, but there is a “buy out cost” and this cost may be too high. Staff will get us this figure.

Another alternative is to have fewer staff and use more people on a consulting basis. Right now about 70% of our funds are spent on contract and only 30% in-house. With some judicious planning, we could probably fill vacancies with contract people instead of employees. However, contract personnel bring with them their own set of problems. One of the reasons we have been paying nearly $1 million per year in extra payments to the Sheriff’s Department is to cover their unfunded pension liabilities, which are significantly worse than our own.

It’s clear from every perspective that pension obligations are strangling governments. It’s not peculiar to Lake Forest and we are in better shape than almost anyone else. But if this keeps up, cities and counties will move toward bankruptcy. Senator John Moorlach has been a leading voice in the battle against overly generous pensions and his warnings, more than 10 years ago, are now becoming more apparent even to a City in excellent financial shape.

ABOUT THE AUTHOR

Dr. Jim Gardner is on the City Council for Lake Forest. You can check him out on LinkedIn and/or Facebook and you can share your thoughts about the City at Lake Forest Town Square on Facebook. His comments are not meant to reflect official City Policy.

Dr. Gardner has office hours every Tuesday from 4 pm to 6 pm at the City Hall. In addition, he holds a mini town meeting every month. The next meeting will be on Sept 9 at 2 pm at the El Toro Public Library.