Moorlach’s Folly: Part 2

There are plenty of reasons why Supervisor Moorlach’s assumptions related to the retroactive portion of pension benefit changes for the Orange County Deputy Sheriffs are wrong.  In the first installment of Moorlach’s Folly I covered the primary point used by Mr. Moorlach to justify his proposal.  Today, I’ll cover his other two “Constitutional” reasons and why they do not hold up to scrutiny.

Moorlach claims that in addition to violating the debt limitation clause of the California Constitution, the retroactive increase of the pension benefit is probably a “gift of public funds” (Article XVI, Section 6; and it is “extra compensation” for work already performed (Article XI, Section 10).

A negotiated pension benefit is not a gift; it is a portion of an employment contract that includes wages, benefits, and terms and conditions of an employment relationship. To claim that only the retroactive portion of a pension benefit is a gift of public funds is a grand stretch of flawed logic. To accept the theory proposed by Moorlach, you would need to conclude that any benefit or wage future or current is a gift.

In his third point Moorlach claims that the retroactive portion of the pension benefit is “extra compensation” for work already performed.  For the purpose of determining pension benefits, compensation is wages paid to an employee for labor performed. This is usually calculated by multiplying an hourly rate by a number of hours worked (or compensated in the case of vacation, sick, and holiday pay).

Pension benefits are then calculated based upon the compensation (wages) earned by an individual employee. An employee’s pension is not calculated by considering their wages and benefits received. Only wages are used. You don’t add in the amount of the employee’s health plan and their pension contribution paid by the employer to determine their base compensation for calculating their pension benefit.

Therefore since the retroactive increase in pension benefit cannot be considered compensation, Moorlach’s claim that pension benefits are extra compensation for services already performed is on its face flawed. Pensions are a benefit accrued over the time of an employee’s service. No matter how much Moorlach tries to turn logic and common sense on its head, he is still wrong.

Moorlach is proposing that the Board of Supervisors fund his personal agenda and ongoing battle with the Association of Orange County Deputy Sheriff’s to the tune of millions of dollars in legal fees.

The bottom line here is that, while Moorlach’s arguments regarding the constitutionality of retroactive changes to pension benefits my sound compelling to a layperson, under scrutiny his arguments are not a secure foundation for the Board of Supervisors to write a blank check to fund Moorlach’s Folly.