No love lost in O.C. pension quarrel

John Moorlach sat on a restaurant patio last fall with a few of his staff members when a union official representing sheriff’s deputies approached the table and asked to shake his hand.

The chance encounter soon turned ugly.

Moorlach, then Orange County treasurer and the recent winner of a vitriolic campaign for county supervisor against a union-backed candidate, refused the overture. Other leaders of the union asked Moorlach to shake hands and were similarly turned down. Someone took a picture of him with his arms folded and posted it on a union blog called the Tin Star.

In just one year, the new Orange County supervisor and Assn. of Orange County Deputy Sheriffs have built up an astonishing amount of bad blood. Moorlach has labeled union activists “thugs,” sought an audit of some union finances, and championed an independent review board to handle citizen complaints against law enforcement officers.

Union officials have blamed Moorlach for having to work for nine months without a labor agreement and sought to bar him from attending any deputies’ funerals. Even union officials from other parts of the state have joined in the fight against the supervisor, with the Los Angeles Police Protective League declaring Moorlach “an enemy to law enforcement.”

The bitter feud climbed to new levels on July 20, when Moorlach proposed that deputies’ pensions be pared back, saying the 5-year-old agreement defining benefits was unconstitutional because the sweetened retirement packages contained a retroactive clause that constituted a gift of public funds and gave extra pay for work already performed.

The union has rejected the claim, saying the deal can’t legally be undone. The county board is scheduled to take its first vote on the matter Tuesday.

Moorlach’s proposal has reverberated across the state as politicians and government workers wait to see whether the challenge to the popular retirement packages will be successful. In recent years, more than 1,000 local and state agencies have awarded retroactive pension benefits to public employee unions, including virtually all of those representing public safety officers.

As a result, according to the conservative California Foundation for Fiscal Responsibility, the state faces at least $12 billion in pension obligations that it has no money to cover.

“He’s developing a reputation as sort of a zealot on this issue,” said Dave Low, a lobbyist for the California School Employees Assn. and chairman of a group of public employee unions seeking to safeguard pension benefits.

Moorlach insists there is no personal animus to his proposal and that he wants only to restore fiscal health to the county’s pension fund, which faces a $2.3-billion deficit over the next 30 years.

Moorlach was the candidate for county treasurer in 1994 who famously warned that the county’s money was placed in high-risk investments that would implode if interest rates rose. He was dismissed as “Chicken Little,” and voters reelected incumbent Robert L. Citron. Six months later, as interest rates shot up, the county was forced to declare the largest municipal bankruptcy in U.S. history. Savoring the vindication, he got a vanity license plate that read SKYFELL. He was appointed to fill the remainder of the disgraced Citron’s term and was reelected twice.

As treasurer, Moorlach began criticizing the deputies’ 2001 pension agreement as fiscally irresponsible. The deal allowed deputies to retire at age 50 with 3% of their highest year of pay multiplied by their years of service. It also granted the benefit immediately to each deputy, causing a pension shortfall because the additional funds hadn’t been set aside for the veterans’ boosted retirement pay.

Moorlach’s office estimates that $70,000 is now the average annual pension for deputies who retired after 2002, and the retroactive portion of those pensions generates as much as a quarter of the pension system’s unfunded liability.

When he ran for supervisor, Moorlach used the looming pension debts as a campaign issue, much as he had the county’s investments a dozen years before. He portrayed underfunded pension packages as the county’s next potential financial catastrophe.

County employee unions fought back. The deputies union poured at least $80,000 into the campaign for Moorlach’s opponent, David Shawver. It also sent out mailers and aired a television commercial saying Moorlach was seeking to take pensions away from the families of slain officers. Moorlach said he had never proposed that and felt the ads were unfair and misleading.

The campaign did little to dent his popularity in the Republican-dominated northern coastal region he represents -- he won with nearly 70% of the vote. Emboldened by the results, on election night he declared he would take on public employee unions that want “to make Orange County into France.”

Other unions called and made peace with Moorlach. In a board vote Tuesday, the Orange County Employees Assn. is now set to receive a new contract that both sides appear happy with. But the fight with the deputies escalated.

In a speech during his swearing-in ceremony, he proposed merit pay for county employees rather than raises through across-the-board union contracts. He also advocated an audit of the deputies union medical trust fund as a part of any new labor agreement, which also angered them.

In reported comments, he said he viewed union leaders as “thugs,” which prompted the union to seek to bar him from attending any deputy’s funeral in his capacity as a supervisor if they are killed in the line of duty.

The union’s president, Wayne Quint, further criticized Moorlach during a board meeting in January. Moorlach replied by questioning Quint about the money he made as a union president in addition to his sheriff’s deputy salary.

Both sides are at a loss to explain how things got so bad so quickly, though both suggest it probably stems from bruised feelings during Moorlach’s last campaign.

Moorlach said he expected the union to come after him, but the campaign rhetoric went too far. “They warned me, ‘You’re going to have to run the gantlet.’ It was no surprise for me and no surprise for them. It kind of went over the top.”

Mark Carre, acting general manager of the deputies union, said in a recent interview that Moorlach took what “happened during the campaign very personally.”

christian.berthelsen@latimes.com