Reno v. Hill heats up

NEWPORT BEACH — The GOP elephant looks like it might stomp on former Bell city manager Robert Rizzo's head. That symbolism would be simple enough, but Ed Reno's latest mailer asks reader to make a couple leaps.

If elected to Newport Beach City Council, the thinking goes, his opponent Rush Hill would concede so much to public employees that Newport might go completely corrupt: the city of "Bell by the Bay," it says.

As in other local contests, the Republican Party has staked out its candidate in this year's elections here, and has tied its support to pension reform and union campaign contributions. But it remains to be seen if this type of party establishment backing will help or hurt Reno, who is in a non-partisan contest against Rush Hill, a long-time local civic actor.

"Ed has run a very partisan campaign, and Rush has focused on more local, community-based issues," said Councilwoman Leslie Daigle, who is up for reelection and is supported by the Republican Party of Orange County.

The chairman of that group, Scott Baugh, said partisanship was fine and that he would only support candidates who refuse union contributions.

"Whenever a vote requires you to reach into your philosophy it's necessarily partisan," Baugh said. "We don't believe in non-partisan races. There is no such thing as a non-partisan race."

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THE DEFINING ISSUE

While the GOP's stance against union contributions has helped thrust pension reform into the public consciousness, it is a massive problem that has been brewing for a long time.

Local governments and the state have $325 billion in unfunded pension liabilities, pension consultant Girard Miller told California's Little Hoover Commission earlier this year.

This issue has become so critical to Republicans that even Hill's service in the Reagan California gubernatorial administration — he was Reagan's education advisor and special assistant — is not enough to overcome his acceptance of union funds.

"In the case of Rush Hill you have the situation of someone who has wrapped themselves in the Republican standard, but yet they are endorsed by public employee unions," said Jon Fleischman, the vice chairman south of the California Republican Party.

Hill says that the Republican Party should stay out of the race.

"The issues that the Newport Beach City Council deals with are not Republican-Democratic issues. They're local issues," he said.

Costa Mesa City Councilwoman Wendy Leece is dealing with a partisan backlash. She recently voted to accept a new contract for city employees that the local GOP leaders thought too generous. Because the GOP had backed Leece, and she apparently pledged to challenge the unions, she was called before the Orange County GOP ethics committee.

Union contracts are likely to come to a head in Newport as well. City Manager Dave Kiff has said that the pension obligations are "significantly escalating." The exact numbers will be available in December, he said, when the city gets the latest from its actuary.

Hill, who is close to the city government, has called union members part of the Newport "family."

"Public employees are like family in every community," said Baugh. "It doesn't change the fact that we have a crisis with public employee pensions in this state."

In April, the Newport firefighters agreed to forgo a pay raise and instead contributed 3.5% toward their pension costs.

Hill and Reno have both said that does not go far enough. They have each called for a benefit package tied to investments, similar to a 401(k). Reno would create a new category of employment benefits for each new hire, which is the Republican Party line. Hill would raise the retirement age from 50 to 55 for police officers and firefighters and to 60 for management, he said.

Where Reno and Hill diverge is on the approach to negotiations — especially when it comes to the campaign contributions. The Newport Beach Firefighters Assn. spent more than $6,000 for mailers supporting Hill.

"They realized that I would sit down and work with them," Hill said.

If Reno toes the party line, he may be unwilling to compromise.

"We're looking for candidates that want to stand up," said Baugh. "Rush has good credentials, but he has a different view in tackling the public employee issue. He wants to negotiate."

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LOCAL VS. GOP TIES

Reno's ties to the GOP, especially on the state level, come from years of governmental relations for Allergan, the Irvine-based drugmaker. He directed Allergan's state-level lobbying before moving on to oversee both the state and federal efforts.

He also served in former Gov. Pete Wilson's administration as a special assistant to the governor and was appointed to the Boating and Waterways commission by Gov. Arnold Schwarzenegger.

At least five current or former Republican legislators endorse Reno, in addition to the California Republican Party (which crafted the Bell mailer).

On the national level, Reno has developed relationships with Republicans and major corporate leaders. He's endorsed by three U.S. Republican congressmen and has taken campaign contributions from companies such as Virginia-based Altria, the tobacco giant. Other support has come from the medical device and pharmaceutical industry, and from local contributors.

Many of Hill's large donors have local business connections: the vice president of Hornblower Cruises and Events, which has an office on Mariner's Mile below Hill's home; and Marriott, whose local executives have been highly involved in the Newport Beach Chamber of Commerce.

Hill has twice served as chairman of the Newport Beach Chamber of Commerce and helped found the city's Economic Development Committee. An architect by trade, Hill has also been as a consultant in public-private partnerships. He has owned and operated Hill Partnership, an architecture firm in Newport, since 1975.

His list of endorsements reads like a who's who of Newport: 10 former mayors and 21 citizens of the year. Hill himself was named citizen of the year in 1998.

Orange County Supervisor John Moorlach calls Hill, 65, a "city elder" and Reno, 41, a "great kid." He said he wishes the two weren't running because he likes both, but endorsed Hill because he has, "logged in the years, he has served on the committees."

On public employee pensions, one of the issues most important to Moorlach, he says that Hill should still be able to negotiate a cost-saving package.

"I'm a little disappointed that he took the money," Moorlach said, "but I think Rush still has the fortitude."

Reno said the money would taint the negotiations.

"It's requisite that we have upmost integrity in the process and there is not even an appearance of a compromise," he said.

When asked if his lobbying was any different, Reno said Allergan's shareholders vote to give political support, and their profits are at stake.

"We're talking about taxpayer money here," he said.

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