RIGONOMICS

Need to Conserve is Still On

2008-08-11T08:53:00.000-07:00

I never thought I would be so happy to see gas priced at $3.99 a gallon. After paying $4.49 a gallon just a few weeks ago, it feels like a good buy. It is amazing what a little market pressure can do to bring down consumption, increase supply and lower prices.

Market forces cannot only balance supply and demand against price; it can also make our environment greener. Just like in the ’70s when we had the first oil shock, business and industry learned very quickly how to be more efficient and use much less energy to save money. The byproduct was cleaner air.

Government mandates did not make us more energy efficient. Individuals and business on their own made rational decisions to save money by using less energy. People did not buy smaller cars because of government CAFE standards. They bought smaller, fuel-efficient cars because they saved money; and if companies in Detroit did not want to build them, they would buy them from someone else in the world who would.

This latest oil shock, which is now subsiding, also made us look at becoming more energy efficient. It did not take a government mandate for airlines to mothball their older, less fuel-efficient planes; it was the $5-a-gallon jet fuel that did it. It wasn’t a governmental mandate that made us consolidate auto trips, take the metro or get rid of the sport utility vehicle; $4.50 a gallon did it.

Now I know what some of you are thinking: Now that prices are dropping, the pressure is off to conserve. Wrong. Even at $3 a gallon, the average hard-working American will want to save money and conserve. High energy prices also helped tip us into a recession.

Ask any small-business owner who serves the public. Not many people can afford to go out to dinner after they just put $100 in their tank. People will adjust and consume less fuel so they can have money for discretionary spending.

I am not the first to say we need a new paradigm on environmentalism in this country. The old paradigm was to use government red tape and litigation to stop any new power-generating facilities, highway construction or new housing. The old paradigm wanted a centralized bureaucracy that thwarted personal liberty, destroyed good-paying jobs and worked to keep us gridlocked until we all agreed to take a bus.

Most Americans consider themselves “green,” but at $4 per gallon they want us to drill, drill, drill in the Arctic National Wildlife Refuge in Alaska, offshore, anywhere. Most Americans want to protect the environment, but would be appalled to know almost every major solar energy project in the country is being stopped by litigation from the old-paradigm environmental groups saying they are bad for the environment. Solar energy bad? Please.

Billionaire businessman T. Boone Pickens is touting a plan for wind energy, yet windmill projects were killed off the coast of Martha’s Vineyard because it might affect sailing. Even discussing the cleanest of all energy sources, nuclear power, makes old paradigm environmentalists go apoplectic.

The new paradigm for being green has to be growing the economy while keeping the environment healthy at the same time. The left would have you believe that any increase in the standard of living is a detriment to the environment, when in fact the opposite is true.

Travel around the world, and it is easy to see. Democratically controlled countries with strong economies have cleaner air, cleaner water and are more environmentally friendly. It takes a strong economy to promote a strong environment.

It is true we need some government regulation with regards to polluting the air and water. It would not be fair if one manufacturer dumped untreated water in our rivers to get a cost advantage over a competitor that cleaned the water it used. These external costs need to be paid by the ones polluting; not everyone else.

The American public has now been awakened to the whole energy equation. No longer are they going to let the old-paradigm environmentalists scare them. People want answers to problems, not scare tactics to stop progress.

This will be my last column for at least a few months. I have decided to run for City Council in Costa Mesa, and the Daily Pilot editors and I agree it would not be fair to continue writing during the campaign.

However, no matter how the race turns out in November, I hope to be back writing again.

Thank you all for your comments and critiques of this column. It has been a privilege to write it.

Football Has its Home

2008-08-02T14:30:00.000-07:00

Football and cheerleading practice kicked off last night in Costa Mesa at Parson’s Field behind Estancia High School’s Jim Scott Stadium.

The new and hopefully permanent (I will talk about that later) home of the Costa Mesa Pop Warner league fielded more than 275 kids for football and cheerleading.

The league has grown more than 50% in one year, so I decided to ask new league President Steve Mensinger how he did it. His response was direct and to the point.

“We re-created the program to exceed the expectations of the community with great coaches, a professionally structured administration and excellent facilities.”

Steve and I have been close friends and business associates for more than 15 years. My girls call him Uncle Steve, and to his sons I am Uncle Jim. I asked him this week to remind me why he got so involved.

It started three years ago when one of his sons was practicing in what Steve called the unlit drainage basin fields at the Farm Sports Complex just next to the soccer teams who were playing on the bright green fields under bright lights with a permanent concession stand.

When Steve asked another parent why they had the unlit fields in the drainage area, the response was that they were lucky to have a field at all.

Since its inception, the league has never had a home of its own. Year after year, it has been moved from one field to another. One year the league was moved to three different fields in a season. Soccer dominates the city politically, and that was the way it had always been.

Mensinger, a volunteer assistant coach at the time, immediately got on the phone with then-Mayor Allan Mansoor and asked what it would take for the team to get a permanent home.

Mansoor connected him with Recreation Manager Jana Ransom, and they started by looking at aerial views of the city. When they came upon a sorry-looking but underused field next to what is now the Waldorf School, Mensinger knew he had a diamond in the rough. Right next door and still under construction was Estancia High School’s new stadium with its year-round synthetic field.

The big question remained whether or not Pop Warner could use the stadium for their home games. Councilwoman Katrina Foley then set up a meeting with Mensinger and Estancia High School Principal Phil D’Agostino. Steve made his pitch, and Phil welcomed the league with open arms.

The Newport-Mesa School district and the city approved the arrangement as part of the joint-use program the city and district have in place. To show their appreciation, league officials changed their mascot from the Mustangs to the Eagles to mirror their host school.

Volunteers worked hundreds of hours to get the field in shape. They repaired fences and built ramps for the two cargo containers that doubled as storage facility and concession stand.

I called Ed Baum, the director of football, who started with the league in 1967 when his now 53-year-old son was in seventh grade. He told me this was the most participants Costa Mesa ever had, and it reminded him of the league’s hey-day in the late ’60s and early ’70s when “we won all the conference titles and trophies.”

Ed told me the most important function of the league was not to see how many kids went on to play football or cheerlead later in high school or college.

“What we are doing here is teaching life’s lessons of hard work, discipline and character,” he said. “We are more concerned about the type of people they become when they are 35 than how many touchdowns they make in high school.”

I couldn’t agree more.

Pop Warner football started in Costa Mesa in 1963. It is the oldest youth sports organization in the city. The program, which has had its ups and downs, is enjoying a rebirth after 45 years.

If anyone one is interested, there are still some spots open on the 10 teams that are categorized by age and weight, including a flag football team for 5- and 6-year-olds. The cheerleaders also have a squad that starts at 5. Come to Parsons Field to sign up or get information at http://www.costamesapopwarnerfootball.com/.

Opening day for the newly christened Costa Mesa Eagles is Aug. 16 at Jim Scott Stadium. Hope to see you there.

Solution to Tax Trouble is Simple

2008-07-26T08:24:00.000-07:00

Why do tax rates always go up? When the economy is cruising along at 100 miles per hour and taxes are flooding the city, county and state treasury, why aren’t tax rates lowered? When homes are selling like hot cakes and the property tax revenue increases 500% on the same house, why aren’t property tax rates lowered?

When revenue from taxes such as the Transient Occupancy Tax that visitors pay cities for the pleasure of renting a hotel room increases 41% in three years, why aren’t the hotel tax rates lowered?

I ask because whenever the economy slows, we have all this pressure to raise the tax rates. So why is that?

It is actually very simple.

Government has learned to spend more revenue in the good times and cry poor in the bad times. During the bad times, you raise tax rates to balance your budget; during the good times, you raise your budgets to spend all that newfound money you have from the previously raised tax rates. Then the cycle repeats itself during the bad times when government again raises rates to pay for increased spending it committed to in the good times.

Here is a fact the tax raisers always want to blur: The amount of actual taxes brought in year after year is always higher than the previous year. The problem is the spending in some years goes even higher.

Government does not have a revenue problem — it has a spending problem.

The distinction, which is purposely blurred by those who want to raise tax rates, is the difference between raising taxes or raising tax rates. For example, let’s look at the Transient Occupancy Tax in Costa Mesa. When it is said that the Transient Occupancy Tax has not been raised in 27 years, those who want to raise taxes are somehow trying to tell the public that the amount of taxes paid has not increased, when in fact it has.

The Transient Occupancy Tax collected by the city of Costa Mesa increased 9.94% from the fiscal year ending in 2004 to fiscal year 2005. It increased again by a whopping 17.75% from fiscal year 2005 to fiscal year 2006, and again increased 9.26% from fiscal year 2006 to fiscal year 2007.

All in all, the Transient Occupancy Tax collected in Costa Mesa went up 41% in three years. This happened without raising the tax rate one iota. Not bad, a tax that was not raised in 27 years increased by 41% in three years.

When a city or state does a budget, it is in for a world of hurt if that budget spends all the excess revenues in good times and expects those good times to continue. They never do. Costa Mesa is projected to spend 6.47% more for fiscal year 2009 than fiscal year 2008. The problem is the projected revenue in out years may not keep pace.

The burning question in Costa Mesa is how we survive when the amount we want to spend is more than we have coming in.

It is easy — spend less.

This may sound ridiculously simple, but that is because it is. Let’s just look at the Finance Department’s report dated July 8, 2008.

The second reason stated that expenses are higher than they could be is due to the many facilities added over the last several years, such as TeWinkle Athletic Field, Volcom Skate Park, expansion of Brentwood Park, renovation of the police facility and development of sports fields at Fairview Development center. Adding new facilities in good years is prudent. Continuing to add them in a slowing economy is not.

Here’s a thought: When the economy slows down, do not add new facilities. The citizens will understand.

The City of Costa Mesa General fund budget has grown 37% in five years; not too bad. Compared to other cities in Orange County, we are in great shape. We get almost half of our general fund budget from sales taxes where other cities get about one-third. Thank you, Henry Segerstrom and family.

There are other ways to increase income in our city, and that is to increase the tax base.

When the economy slows, we must take that time to plan for areas like the Westside, which can be a major improvement for the city and help bring in more future tax revenue without raising the rates.

Nanny State Says ‘No Cellphones’

2008-07-12T09:06:00.000-07:00

I have to admit, when California started giving out tickets for not wearing a seat belt, my knee-jerk reaction was to oppose it.

My attitude was to ask what right does the state have to force people to wear a seat belt? Common sense should be enough.

This was one more reason why California has been known as the mother of all nanny states. Our legislators love telling us what they think is good for us. If we disagree, they use the power and force of the state to get compliance.

It’s kind of like a nanny making you finish your Brussels sprouts.

Only now if you continue to disobey, instead of not getting dessert, your driver’s license can be revoked.

However, after some consideration I began to understand the arguments about how it saves lives and severely reduces injury in an accident. The numbers made sense.

I realized that a lot of the same people who chose not to wear a seat belt also did not have enough insurance to pay for their medical care when they got in a wreck. Their medical care was going to be paid by someone, and someone usually means the taxpayer. My logic was that if wearing seat belts cuts down on serious injuries, then we all save money on medical care if people wear them.

I still may not like it, but at least we have some data, and it saves lives and money.

But then the nanny state struck again with the California Wireless Telephone Automobile Safety Act of 2006.

As we all know, this gem became effective Tuesday. Putting a cellphone to your ear while driving a car is now a crime.

Now let me come clean: I spend about 3,600 minutes of my life on a cellphone each month. That’s correct: I spend 60 hours a month, 15 hours a week or 2.14 hours a day on a cellphone. I also drive a car during a large portion of that time.

To say this law affects me would be an understatement. Before you start telling me all I need is a wireless earpiece, you should know that I have spent hundreds of dollars trying to find one that works. I have a drawer full of them.

The batteries run down, they are not comfortable to wear, and they sound like you are in a cave to whomever you are talking to.

I have had to end calls because I cannot understand what someone is saying to me and vice versa.

The fact of the matter is there is zero evidence that talking on a cellphone while driving is a safety issue.

In fact, the author of this bill, Santa Cruz Sen. Joe Simitian, who has been introducing an almost identical bill since 2002, has no data that this will save any lives or prevent accidents.

The CHP, which was required to do a study, concluded that they may cause some distraction, but they had no statistics to show it caused accidents.

In fact, a 2003 study by the AAA’s Foundation for Traffic Safety found that ‘reaching’ and ‘leaning’ were the most prevalent distractions when driving. Using a cellphone was eighth on the list.

I have no problem driving a car safely and talking on the phone at the same time, and I think most Californians can do the same.

Just because someone can’t chew gum and drive a car at the same time is no reason the rest of us should have to stick metal earpieces with blinking lights in our ears.

So here is what I propose: Simitian cites a recent study by Jed Kolko of the Public Policy Institute of California, which says the new law will lower yearly traffic deaths in California by 300, or about 7%.

If traffic deaths are down by July 1 of 2009 by any significant amount, then the law should stay in place.

If not, the law gets repealed. However, my guess is that if traffic deaths do decrease, Simitian will push what he has always wanted: to outlaw cellphones in cars entirely. You heard it here first.

Freedom to Gather

2008-07-05T08:14:00.000-07:00

Normally I write about the problem issues of the day; high gas prices, political shenanigans and governmental snafus. During this political season you hear a lot about what is wrong with America. But on the birthday weekend of this great nation, I want to write about what is great about America.

Two hundred and thirty-two years ago in a hot and humid hall, 56 men of great stature pledged their lives, fortunes and sacred honor to declare our independence from England.

What they gave us was liberty. The God-given right to be free and to make decisions that guide our lives. Freedom comes with rights and responsibilities. In this country you even have the freedom to make bad decisions. The greatness of this country is derived from the fact that our people have the freedom to improve their lot in life through hard work and discipline. In fact, despite what the politicians want you to believe, with less than 5% of the Earth’s population, we have the largest middle class in the world. Our standard of living, recession or no recession, is second to none and in fact on a world scale we have the wealthiest poor people on the planet. We have safety nets in place so that no one in this country has to go hungry for need of food.

America is not great because of latitude and longitude. It is great because we have the liberty to do as we please as long as we respect the rights of others to do the same.

The right to succeed or fail is completely American. Americans love a comeback story.

This last week I was reminded of what a great country this is. My wife and I packed up the kids and flew back to the Midwest where I grew up to have a family vacation with Grandma and Grandpa Righeimer, my four siblings, their spouses and all of their children at my parent’s lake house in Whitewater, Wis. All told, we had 30 people at the house. The ages ranged from 77 for my dad to our youngest, Katherine, who is 2. Whitewater is a typical summer home community that you find on the lakes in southern Wisconsin. Where Southern Californians go to the beach or mountains to get out of the summer heat, Chicagoans head to Wisconsin with their boats and wave runners to cool down and enjoy the summer with family and friends. To get to Whitewater you drive straight north from O’Hare Airport for about two hours. When you get off the interstate in Wisconsin, you set back your watch about 50 years. There is something about getting all of your family together for a long weekend at the lake that feels like 1958. The older cousins are planning weddings; some are finishing high school or college. The younger ones are learning to swim or trying their first time on water skis.

This whole family started 54 years ago when James Joseph Righeimer met my mother Therese Katherine Redican at a friend’s wedding. He was a young high school teacher and football coach, and she worked at an insurance company in downtown Chicago. His father drove a beer truck and her mother came to America as a domestic. Through hard work and second jobs, my mother and father raised all five of us. My father was the original recycler. He had us bring home our lunch bags to be used again. They scrimped and saved and though some took longer than others, we all got college degrees and raised families of our own.

In no other country in the world could this happen. Only in America could a son of a truck driver achieve the American Dream.

On this Fourth of July weekend while we are having fun with family and friends, thousands of America’s finest sons and daughters are in far-off lands protecting us from people in the world who do not like our way of life and have sworn to destroy it. Like some of the signers of the Declaration of Independence, some of them will give the ultimate sacrifice to protect the liberty we sometimes take for granted. Just remember while you are popping that cold one, the temperature in Baghdad will be 112 degrees. Please keep them in your prayers.

Help Burst Gas Bubble

2008-06-20T09:02:00.000-07:00

Last month I wrote about my first $4 gallon of gas. I yearn for those days after paying $4.59 a gallon this week. We need to solve the energy crisis in this country, but we are never going to do it, if our national leaders say it cannot be done — so why even try? The economy will only get worse if Americans do not have any money left in their wallets after they fill up their tanks.

There is such a defeatist attitude on the left that no matter what we try to do to solve our energy problem, they say it either can’t be done or that it will take too long. This reiterates my point about our acting like children. Children do not understand delayed gratification; they need the fix now, and if it cannot be fixed immediately, they just do nothing and stomp their feet. Adults understand that sometimes it takes time to do the right thing.

The left’s latest example of foot stomping came after President George W. Bush stated that we should end the 27-year ban on offshore drilling in the U.S. Immediately the left, including democratic nominee Barack Obama, attacked the plan saying it would take 22 years to get any benefit out of offshore drilling.

Obama is preaching to the children on the left, arguing not to do anything to produce more oil because it would take too long. Sorry, kids: I cannot lower the price at the pump with new supply this week, so let’s just punish the big bad oil companies with a windfall profits tax.

First off, where does he get his facts? Does the American public really think it takes 22 years to drill an oil well? Even with all the bureaucratic paper work involved I think we could drill a well in say, a year or two. But according to Obama, why try at all? It will simply take too long.

When Bush also said we should build nuclear power plants, GOP nominee John McCain agreed and added that he proposes we build 100 nuclear power plants with 45 in operation by the year 2030. McCain’s plan, like JFK’s 1961 speech to put a man on the moon by the end of the decade, was a challenge to the nation to do whatever it takes to reach our goal. In this case, reducing our dependence on foreign oil.

The left loves alternative fuels like corn-based ethanol. The only problem is that it doesn’t work. It takes more energy to produce corned-based ethanol than the energy it produces. That’s why U.S. taxpayers subsidized ethanol 50 cents a gallon when gas was $1.80 a gallon, and we still subsidized it 50 cents a gallon when gas is $4.50.

Ethanol is just a way to send billions of dollars to farmers in the Midwest. Sugar is five to six times more efficient to make ethanol out of than corn, but until they find a way to grow sugar cane in Iowa, there won’t be any political will. In fact, we add a tariff on any sugar-based ethanol that comes into the country to make it uneconomical. I guess it is better to buy oil from Middle East dictators than hurt the profit margins of agribusiness.

I am all for getting off our oil dependency, but we need to be realistic. First things first: We do not need to bankrupt every American family because they cannot afford to put gas in their car. The price of oil at more than $134 per barrel is a bubble about to burst. The sooner the leadership in the country acts to produce more oil, remove tariffs on sugar-based ethanol and approve nuclear power plants in a timely fashion, the sooner that bubble will burst and we will see oil back in the sub $80 per barrel range, which would put gas back at $2.70 per gallon.

The American public will support leaders who want to solve problems and not just give it lip service. At $4.50 a gallon, their patience is running out.

Keeping Tab on Progress

2008-06-06T22:47:00.000-07:00

My 6-year-old daughter Morgan loves Angels baseball. She scans the sports page every morning to read the scores aloud: “Angels six, Mariners four; we win.” Or she’ll sadly say, “Angels three, Mariner five; we lose.”

Another local newspaper last week published scores ranking our four public high schools among the 63 in the county. The scores reflected state data on academics, college prep and cultural environment.

Our schools ranked as follows: Corona Del Mar High, 12th; Newport Harbor High, 37th; Estancia High, 51st; and Costa Mesa High, 58th. Ouch.

The most-cited reason for our schools’ rankings was that some students’ lower economic level lowered our scores. It is interesting to note, however, that La Quinta High in Garden Grove ranked seventh, yet has a higher percentage of low-income students (61%) than all but Estancia, where 63% of the students qualify as low-income.

If money were the only factor in scholastic success, Newport Harbor and Corona Del Mar should have ranked in the top five.

Recently, Newport Beach did a customer satisfaction survey to compare its services to those of other California cities and the nation. The respondents rated the “overall quality of services provided by the city,” at 87% satisfied or very satisfied, which ranks Newport Beach in the top 5% of cities surveyed.

On a not-so-good note, the development services division, which is primarily the planning and building departments, had more than 60% of the respondents dissatisfied with the actual process and 60% dissatisfied with the time it takes to get plans checked. The city staff had some explanations; but in the end, no matter how you spin it, the score was sub-par.

Whether it’s baseball, a high school or a city, it is of the utmost importance that we somehow keep score. I am not sure why the Angels win or lose, why some city services meet expectations or why some schools rank higher than others. The answer for those questions is for the people who manage those organizations to figure out. What I do know is that you cannot manage properly if you don’t measure first.

Newport Beach is going one step further and looking to set benchmarks. With these, they will be able to determine whether what they are doing is working.

I didn’t talk to any school district officials, but I think they also can use the newspaper’s ranking as a benchmark to see whether they’re taking the right steps toward improvement. The good news is that with rankings, at least we know where we stand.

Some people think scores and ranking are too judgmental. They are supposed to be. Someone is first and someone is last. Whenever you go to a school board or city council meeting, the elected officials always say how they have the best teachers, staff, city manager — just fill in the blank — than any other school or city around. The fact of the matter is they might, but they really have no way of knowing unless you measure.

By the way, the Angels are first in the American League, and Morgan is very happy. Go Halos!

Country Club A Local Gem

2008-05-30T22:08:00.000-07:00

Every community has hidden gems. Whether it’s a locals-only restaurant, a small park or community event, they are what make every community special.

Usually they are small and out-of-the-way places. In this case, the hidden gem may be out-of-the-way, but at more than 100 acres it is not small. What I am talking about is the Mesa Verde Country Club, which turns 50 this January.

Many of the non-golfers in the community confuse it with Costa Mesa Country Club, which is off of Mesa Verde East but just south of Adams Avenue. Mesa Verde Country Club is north of Adams just off Mesa Verde West. You can understand the confusion.

The land where the golf course sits was sold in 1956 to investor Adolph Sleceta, who planned to work with the developers Ray Watt and Walter Gaynor to build more housing in Mesa Verde.

Due to terrain and utility issues, however, they could not build homes. They instead decided to fund construction of a golf course and clubhouse. Not so good for them, but lucky for us.

Over the years, the club passed though several corporate owners until 1975 when the members bought it from Japan Golf Promotion for a whopping $2.1 million. Today, even in a down market, many of the homes on the course sell for more than that.

The golf course has a very rich history. It has been home to many PGA and LPGA tournaments. It hosted the first Orange County Open, a PGA Tour event in 1959 and continued that event until 1962. Starting in 1979 it hosted LPGA tour events for six consecutive years.

This club rates high among golfers. Steve Rhorer, club vice president, avid golfer and Mesa Verde resident, joined in 2000. Prior to that, he had been a longtime member of the Virginia Country Club in Long Beach.

“I have played every private course in the county and from a pure golfing standpoint; this course is second to none,” he told me. “You will use every club in your bag, and with the tree-lined fairways, you better be accurate.”

More than 600 local families are associated with the club as golf, tennis or social members. Seventy percent of the families used to be from Costa Mesa. Now it is composed of almost equal parts Costa Mesa, Newport Beach and Huntington Beach residents.

I talked with past board member Pete Daley, who joined in 1977. Daley, now residing in Aliso Viejo, lived on the bird streets for more than 20 years. He told me it is a very family-friendly club.

“Our three kids went through all the swimming and tennis programs,” he said. “The club played a big role throughout their youth.”

For the past 50 years, Mesa Verde Country Club has been one of those hidden gems that make up Costa Mesa and Newport Beach. It has not just been a place to play golf and tennis, but a place that makes you part of a community. It is where your kids learn how to swim and where you make friendships that last a lifetime.

On a different subject, make sure you all get over to the Lions Club’s annual Fish Fry today and tomorrow at Lions Park (18th Street and Anaheim Avenue). I recently received a call from longtime Lions Club member Jim Wahner, and before the conversation was over he had yours truly committed to help work the Fish Fry. So come on by, say hi and introduce yourself, even if you do have a “fish to fry” with me (pun definitely intended).

All the money raised goes to good local causes. It goes from 11 a.m. to 8 p.m. Besides the famous fish, there will also be carnival rides, local bands and the cutest baby contest.

Martin has advantage for Sheriff

2008-05-24T16:47:00.000-07:00

The Board of Supervisors on Tuesday will hold public interviews with the nine finalists to replace Mike Carona as the next sheriff in Orange County.

The voters normally pick the position — it’s a politically-elected position. Sheriff Carona’s resignation has handed the decision to the supervisors.

The one-at-a-time interviews will last all day and into the evening. Think of the sheriff as being the CEO of a company with 3,800 employees, a budget of $700 million and serving 3 million customers who, by the way, has to be elected by the people within two years to hold onto his or her job.

Even if every accusation against Carona is proven to be false, the department has still been through a severe amount of turmoil over the past few years. In the next highest positions the department has, two of his five assistant sheriffs have pleaded guilty to federal charges and are awaiting sentencing. A recent DA investigation shows a complete breakdown in administering the jail system.

Needless to say, the new sheriff will have to do a wholesale shake-up at every level of the department’s leadership.

I do not want to presume that I understand all the issues and concerns that a supervisor has in making this decision. But in my 30 years of running companies and being on boards, I do know a lot about hiring and firing of leadership.

So, without trying to be too presumptive, here are the issues I think should be taken into consideration when choosing our next sheriff.

All nine candidates on paper seem qualified to be considered for the job. My comments here mean no disrespect to any of them. I am sure they are all fine people. The reality is you can pick only one.

The sheriff’s position, while it will be appointed this time, will require the chosen candidate to run for office in 2010. Running for office requires a whole different skill set than running a law enforcement organization.

Therefore, the new sheriff must have ties to Orange County that will ensure he will get elected. This is an absolute must. The department cannot afford to have a leader who has any chance of losing his job in two years.

First off, it makes that person a lame duck as soon as he takes the job, and anyone who disagrees with his decisions will just wait them out.

Secondly, the decisions that must be made will not make everyone happy; if the candidate does not have a lock on the election, he will find himself making decisions based on the politics of special interests that may not be in the best interests of the 3 million Orange County residents he serves.

The department’s various labor unions have spent millions of dollars over the years getting people elected who will get them more pay for less work and more generous retirement packages. The labor union’s job, rightfully so, is to do what is best for its members.

The sheriff needs to do what’s best for the citizens, which will be in conflict with the union’s goals. The unions will spend millions of dollars to get a new sheriff in two years if they think they have a chance of getting someone who will give them what they want.

Of the nine candidates, only six have any connection to Orange County, of which only four have the political skill set and local support to get elected. For example, Beau Babka of Salt Lake City may make a fine sheriff in his hometown, but he would not have enough time to figure out the freeway system let alone understand the political landscape in Orange County. He would not stand a chance against a well-known, well-financed candidate in 2010.

Which leaves us with Orange County Interim Sheriff Jack Anderson, recently retired Orange County Deputy Sheriff Lt. Bill Hunt, who ran previously against Carona, Commander Ralph Martin of the Los Angeles Sheriff’s Department and Santa Ana Chief of Police Paul Walters.

This next cut is much tougher. Over the years, I have met all of these men. Each one has the education, experience and credentials to do the job; but again, you can pick only one.

In any company or organization that has similar leadership problems, there needs to be a clean break from the past in order to move forward without any constraints. In a properly functioning organization, it is perfectly reasonable to move someone up though the ranks to the top spot.

In this case, not only is it not functioning properly, but the top leadership has also been tainted with associates that have either pleaded guilty to federal charges or are under indictment for the same.

Any candidate with direct ties to the department will not have the clean slate necessary to make the hard decisions without first having to consider previous relationships.

This choice on a personal level pains me in that I know both Hunt, who was one of the first to bring forward the problems in the department, and Anderson, who has done his best to run the department after the scandals.

The fact remains that it will take an outsider to clean it up. In business, we call them turn-around specialists, and they very rarely come from inside of a broken organization.

This leaves us with Martin and Walters. Both men lead large groups of sworn and non-sworn staff. Both will interview well. The only concern is who is electable in 2010. Once we choose a sheriff, he has to win in 2010.

We cannot go though this again. Martin is a lifelong Republican. Walters was a lifelong Republican and then became a Democrat in 2000 and then became a Decline to State in 2003 and then became a Republican again in 2007, after Carona was indicted.

I cannot assess the motives of someone who changes political parties three times in seven years; that would be for the voters to decide. But I can guarantee you that Walters would draw very strong opposition in 2010 because of his lack of commitment to any one party. This is an elected position, and politics matters.

The supervisors do not want to have a sheriff with political trouble in two years. Therefore, in handicapping this pick, the advantage goes to Ralph Martin.

$4 A Gallon: We Did It To Ourselves

2008-05-09T22:24:00.000-07:00

I just bought my first $4-plus gallon of gas today. My wife’s car takes premium, and there it was; $4.05 per gallon at the Arco on Bristol Street. The price of oil hit $126 per barrel this week. That is a 650% increase over the $22 per barrel we paid just six years ago. But we have nothing to complain about as Americans and especially Californians — this is exactly what we asked for.

Through our legislators we have decided that we do not want offshore oil drilling, nuclear power, oil refineries, power plants, power lines, pipelines, faster freeways or windmills that spoil our ocean views.

Well, we might consider windmills if we don’t have to see them. Drilling for oil in the Arctic National Wildlife Refuge in Alaska is completely out of the question. God forbid, if we drill on 1% of it during the winter, it might affect Caribou mating patterns.

Bottom line, we have done everything we can to thwart the discovery, production or distribution of energy in this country, especially here in California.

The energy problems in California are self-imposed. Like self-indulgent children we stomp our feet until we get what we want. We want to drive our cars, air condition our homes and watch our energy-sucking, 52-inch, flat-screen TVs. But how we get the energy is someone else’s problem. Of course when we are given solutions to supply the energy we complain. Recently, when the residents of Ladera Ranch were told they needed a small peaker power plant to avoid summer blackouts, more than 500 people protested. They want it built somewhere else — like, say, India.

I talked to Rep. Dana Rohrabacher regarding his recent comments in the Daily Pilot on how to bring down oil prices. For the readers who do not know, some full disclosure is in order: Dana and I have been close friends for 18 years. I have volunteered on his campaigns, given and raised campaign funds for him and celebrated our children’s birthdays together. So to say I am a little biased would be an understatement. “Before we send our young men and women in uniform overseas, to ensure that our supply of energy is not controlled by radical Islamists who hate us, we should be drilling for oil in our own country and that includes [the Alaskan wildlife refuge] as well as offshore.”

Rohrabacher must be kidding. He can’t actually be thinking of drilling off our coast. Not Newport Beach. Does he really want us to lose our unspoiled coastline view just to save the lives of some unknown soldiers? Could you imagine how traumatic it would be for us to look out over the ocean and see an oil platform five miles off the coast? The horror could cause a collective mental disorder. The fact that someone’s son or daughter might get killed protecting our strategic interests is minor when you compare it the beauty of an unblemished ocean view. The parents will get over the loss, but a view is forever. In case you hadn’t noticed, I’m being sarcastic, OK?

We could save millions of barrels of oil a day if we built environmentally clean nuclear power plants like the French and Japanese. But where are the screams of support for Assemblyman Chuck Devore’s bill to start building nuclear power plants in California? The silence is deafening.

I can already hear the pseudo environmentalist’s peanut gallery screaming all we have to do is conserve energy, take mass transit or car pool. Unless you carpool or take a bus to work, have solar panels on your roof and live like Ed Begley Jr. save your comments for someone who cares. For the people who tell me, “I would use a mass transit system if it would take me where I want to go when I want go,” they already have that — it’s called a car.

Don’t get me wrong. I am all for conserving energy and pushing technology as far as we can to come up with solutions to our energy needs. But I am also a realist. There is no perpetual motion machine. Unless you want to live in the dark ages, we need energy. I would rather we produce energy here than send billions of dollars to foreign dictators and despots who hate our way of life. So, at the risk of being politically incorrect, here goes: Let’s start drilling the wells, building the nuclear power plants and windmills. It is time grow up and start acting like adults.

Toll Road to Cost Millions More for Us

2008-05-02T23:05:00.000-07:00

Did you know that today we pay 47% more per mile to use our end of the 73 San Joaquin Toll Road than South County residents pay to use their end of the same toll road? It gets worse. By 2031, we will be paying 108% more than they do. That same toll road will collect $100 million this year in tolls. That’s three times what it did when it opened in 1997.

How did I become such an expert on toll roads? It all started when Newport Beach City Councilman Don Webb left me a message two weeks ago about an idea for a column. I got a hold of him later that week and he asked if I had heard about the rate increases that were being proposed for the San Joaquin Hills Toll Road. I remembered skimming over an article in the Pilot referring to a 25-cent increase. He explained how Newport-Mesa residents were going to be charged more per mile entering or exiting the toll road at Newport Coast Road.

I’ve got to be honest with you, getting excited over a 25-cent increase seemed a little over the top; but what the heck, I thought. I was in my car on the Eastside and Don’s home was two minutes away, so I stopped by his house to pick up his copy of the “Traffic and Revenue Report for the Transportation Corridor System.”

This two-inch-thick tome was packed with graphs, charts and models that only an engineer could love. Don, who in his previous life was Newport Beach’s city engineer, had his copy all highlighted and tabbed. Don also created his own graph showing the cost per mile up and down the 73. Sure enough, based on his calculations, Newport-Mesa residents were paying more per mile to use our end of the toll road than south county folks paid to use theirs.

The 73 is a major transportation backbone for Costa Mesa, Newport Beach and UCI. Of the 6.5 miles that go though our towns, 1.8 miles of it is a toll road. That last 1.8 miles costs you $1.50 each way today. You could argue that there are other ways to get to the Eastern parts of Newport Beach without using the toll road, but the options are limited. If you are already traveling south on the 73, it would be unusual to get off two miles before your destination and take side streets to Newport Coast. So unlike other parts of the county we have to pay to travel around our community.

But is Don really getting worked up over a two-bit increase? Well, it was not the first 25-cent increase that was his concern. It was getting a 25-cent increase every two years until 2031.

That $1.50 trip will cost you $4.25 in 2031 while south county users don’t get a 25-cent increase for seven years; and then they get only a 25-cent increase every five years. Their trip that costs them $1.25 today goes up to only $2.50 by 2031.

If I have not confused you enough, here is the bottom line: Newport-Mesa users will pay $66 million more than South County users for traveling the same distance. Didn’t think those quarters could add up that fast, did you?

On May 10 the San Joaquin Hills Transportation agency’s “SJHTCA” board will probably approve the rate increases. Only two of the 14 board members, Don Webb and Costa Mesa Mayor Eric Bever, are from our end of the road.

I will let you in on a little secret about local governance. While most of the residents are still arguing about where we should locate City Hall or whether we should light the athletic fields — be it the SJHTCA, F/ECTA, OCWD, OCSD, MWD, OCWM, OCTC or SCAG — the real money is being spent in a bunch of agencies you’ve never heard of with alphabet soup-like acronyms.

Stadium Instills Pride in School

2008-04-26T13:06:00.000-07:00

I could feel the electricity in the air as I walked onto the Estancia High School campus Friday morning.

An idea that started a dozen years ago was becoming a reality as the formal dedication of the Jim Scott Stadium was about to begin. I will steal a line from Board President Martha Fluor’s dedication address: “The stadium was Jim Scott’s original idea, and he spent more than 12 years uniting and mobilizing the community… without Jim’s vision and dedication, the stadium may not have been built.”

Costa Mesa City Manager Allen Roeder recalled to me the conversations he had with Jim Scott Sr., 12 years earlier. Scott had a dream that both Costa Mesa high schools should have a field they can call home. Twelve years is a long time. Parents, whose children were in kindergarten when Jim Scott had this dream, will be sitting in these beautiful bleachers as their now young adults walk across the field in their cap and gowns this June. “This will be our first high school graduation in our own stadium,” said one of the graduating seniors.

You have to understand what this means to a community whose high schools never had a proper stadium. I know we are all part of the Newport-Mesa Unified School District, but for the residents of Costa Mesa there has always been the feeling of being a second-class citizen because both Costa Mesa and Estancia High School played their home games at someone else’s stadium.

I talked to Bruce Garlich while standing on the state-of-the-art, all-weather track that looped around the vibrant green artificial turf field. Bruce, whose son graduated in ’78 from Estancia, told me, “You never really felt like you were ever playing a home game, you always felt like a guest on someone else’s field.” I could see a glint in his eye as he looked over the field with pride.

You could see the amazement in people’s eyes as they filled the bleachers or walked around the track. This is the kind of field that you only see when watching the NFL on Sunday. The quality of the facility, with its new locker rooms, snack bar and professional press box, was not something the people of Costa Mesa were expecting.

Many of the people who followed Jim’s dream and started Costa Mesa United to get a stadium and pool complex for our high schools no longer have any children in the district. People ask why someone without any school-age children would work so hard to get these facilities. The answer I get is simple. Someone did it for us before we came along. People we will never know built our schools, parks and playgrounds before we came. In a real community, people do it for the future; for people they will never know.

Not only is the stadium being used for football, soccer and track for both Costa Mesa and Estancia High School athletes; but now thanks to Steve Mensinger, president of Costa Mesa Pop Warner Football, an agreement has been struck with the district so that our young Mustang players will have it for their home games as well.

If you are reading this early in the morning, head over to Estancia and take a look at the facility. The inaugural event starts this morning with a 5K and 2K run. Registration starts at 7 a.m., the races start at 8 a.m. and 9 a.m., respectively. If you are like me and would rather not run, they start serving pancakes at 8 a.m. Proceeds will go to support both High School foundations.

When the dedication ended I asked a few of the Estancia football players, who proudly stood on the field sporting their jerseys, if any of the other schools they played had an artificial turf field? The question bounced around some of the players, and as they turned to me to answer you could actually see them standing taller as one of them replied, “No one in the league has anything like this.” Our kids and community deserve something this great. Thank you, Jim Scott, for your field of dreams.

Damage Offends All Neighbors

2008-04-19T14:09:00.000-07:00

There was a very disturbing incident that occurred in the wee hours of Friday night or early Saturday morning. The incident took place in the very quiet and peaceful Mesa Verde neighborhood known to many as the State Streets. Which, not surprisingly, takes its name from the fact that all the streets are named after States.

According to Realtor Larry Weichman, president of Weichman Associates, this neighborhood is known for its sense of community and cohesiveness. “This is your typical friendly Costa Mesa neighborhood where they have neighborhood Fourth of July barbecues and everyone knows each other. It is the reason people choose to live in Costa Mesa instead of the more ‘master planned’ communities to the south where nobody knows who lives next door.”

It all started off when a resident of Montana Street, Charlene Ashendorf, received an anonymous typewritten letter in her mailbox asking her to remove her portable basketball hoop from the street. Though the hoop had been there for more than two years, Ashendorf told me the letter stated that the hoop was an eyesore and that it was lowering property values.

I have heard about a lot of things that lower property values. Uncut lawns, yes; Christmas lights hanging from eaves in July, yes; cars parked on lawns, yes; but in my 30 years in the real estate business, portable basketball hoops in the street was not one of them.

In fact, just take a drive to the “Port Streets” neighborhood in Newport Beach, where the homes go for more than $2 million apiece, and you’ll find a portable basketball hoop every sixth house. In fact, the number of portable basketball hoops is only exceeded by the number of USC flags hanging from every fifth house.

Three days after getting the disturbing letter, when the Ashendorf’s were not home, a City of Costa Mesa flatbed truck came by to remove the basketball hoop only to be stopped by several of their neighbors who convinced the driver not to take it as they quickly rolled it up onto the driveway. Now that’s the difference between a Costa Mesa neighbor and a “fill in the blank with any South County master-planned city” neighbor. Costa Mesa neighbors watch out for each other.

Now the story only gets more bizarre. That Friday evening with the help of her neighbors, the portable basketball hoop was moved down to the end of the cul-de-sac off the street. At 8 a.m. the next morning, Charlene Ashendorf noticed a group of her neighbors, still in their slippers drinking coffee, at the end of the street. She walked out to see what was happening only to be stunned by the sight of the basketball hoop’s metal pole and backboard cut up in pieces and dragged out to Gisler Street.

Now, even though I am a planning commissioner for the city, I am not sure what the codes say regarding portable basketball hoops. But what I do know is this type of vigilantism cannot be tolerated. If you have a complaint with a neighbor and for whatever reason you do not want to confront them about it, the city has a code enforcement department that will handle the complaint.

The fact that some disturbed person, in the middle of the night, would cut up a steel pole and backboard and throw it out onto a main street makes the hair on my neck stand up. Costa Mesa police should not treat this incident as some minor act of vandalism.

This is an act of neighborhood terrorism. The person or persons who displayed this act of cowardice, in the cover of darkness, was trying to settle a score with not only the Ashendorfs but the whole community when they threw the metal carcass into the middle of Gisler Street. This is an offense against the community, and I hope our fine police department is treating it that way. This terrorist needs to be brought to justice.

Costa Mesa is a great place to live because of the neighbors that Charlene Ashendorf has on Montana Street. Great neighbors make great neighborhoods. In the long run that is what really affects real estate prices. If people want to live there, the price goes up.

55 Mess Requires Compromise

2008-04-12T14:14:00.000-07:00

Traffic is always considered one of the biggest issues for residents whenever a poll is taken in Orange County. Newport-Mesa residents are no different. Recently the Orange County Transportation Authority had three local meetings to get input from residents on seven solutions for the traffic problem along Newport Boulevard.

The transportation authority was looking to shed some light on solving the problem, but in the end I think they just got a lot more heat. Discussing traffic solutions just isn’t done in polite company. It’s too emotional. Everyone wants to find a solution, unless they think it might negatively affect them.

Some history on the topic: The last approved plan, which would significantly increase capacity from the 55 terminus at 19th Street to the beach, was in 1985 when California’s population was less than 26 million.

By 2010, we will be approaching 40 million. That plan extended the 55 freeway just east of Newport Boulevard, bulldozing homes and businesses along the route. Lucky for us it was never built, or we would have another scar running though Costa Mesa dividing our town.

The traffic on Newport Boulevard is at a complete standstill on any summer day with people coming and going to the beach. These motorists that block the street are not just from Orange County. More and more are coming from the booming Inland Empire.

The 55 is the backbone between the beach and the 909 area code, and that doesn’t count the 5 million out-of-town visitors from Disneyland who want to cool off in the blue Pacific.

One thing to understand is that even though they are driving to Newport Beach, their final destination is not always Newport Beach; it’s Huntington Beach.

Huntington Beach has 10 miles of wide sandy beaches with available parking almost the whole length. It draws more than 11 million visitors a year, and a large percentage of them come via Newport Boulevard and the 55. This traffic problem will get a lot worse before it gets better.

We need to figure out how to get cars from the 55 to Huntington Beach without going down Newport Boulevard.

One obvious way would be to have a bridge at 19th Street connecting us with Brookhurst Street’s direct shot to the beach.

Though this may move a lot of cars off Newport Boulevard it sends a chill down the spine of some Eastside residents who are leery of any plan they feel will bring more cut-through traffic to their neighborhood.

A bridge on 19th Street is one of those plans. You also have some Westside residents who would rather drive a circuitous six-mile route to Huntington than have a bridge if they thought it might bring one more car though their neighborhood.

I am not advocating any of these ideas and do not know whether they would solve the traffic problem created by a freeway that ends abruptly in the middle of a city.

Of the seven solutions that OCTA presented, the preferred solution by those at the meeting, was called “cut and cover.” This plan involves building express lanes under Newport Boulevard from the end of the 55 to Industrial Way.

The disruption from digging up the street would be disastrous for some of the businesses along the route. Expect them to fight it.

The guesstimate of a $100 million price is mind boggling. But in the end it may be the best solution.

Transporting people to and from the beach isn’t really a traffic problem; it’s a political problem. That is why, 23 years after a plan was approved to solve a traffic problem, nothing has really been done.

You see, it’s very hard to get elected to City Council if you upset any one constituency. Elected officials in both Newport, Costa Mesa and for that matter Huntington Beach have been kicking the can down the road for years on solutions for the beach traffic problem.

The problem with these types of issues is they take several election cycles to get solved. Even if a council can agree on a solution, environmental impact reports take years. Planning and design take years and lining up funding takes more years.

No matter what plan you come up with, someone is not going to be happy. Unhappy people vote council members out of office. So the problem never really gets solved because you cannot keep a majority on a city council long enough to finish the project.

Unless all sides can come together and agree on a plan, nothing will ever get done. It’s time for all sides to hold hands, compromise and agree on a plan. This is one issue that has to be solved sooner than later.

Acts Won’t Save Homes

2008-04-05T21:21:00.000-07:00

You can always count on the political class in this country to solve any problem they perceive with a check. Now, of course, that is easier for them to do because it is not their money. In the case of the federal government, it’s not even our money. In fact, with the size of the growing national debt, it’s our children’s money. As I wrote in last week’s column, we are still paying back state bonds authorized in 1970.

The latest political boondoggles on Capitol Hill are the “Economic Stimulus Act of 2008” passed in January and Senate Bill 2636 “The Foreclosure Prevention Act of 2008” passed out of committee by the Senate Thursday. The economic stimulus package will cost our children $168 billion. The Foreclosure Prevention Act will cost another $15 billion.

Neither act will stimulate the economy nor prevent any foreclosures. But they are not really meant to do that. Their only purpose is to get incumbent legislators reelected.

All Congress seems to cares about, Democrats and Republicans alike, is demonstrating to the public how much they care. If the economy is in bad shape or foreclosures are growing, just do something about it. It is oh-so painful to watch an economically illiterate Congressman yap on some cable network that this legislation is needed to avoid a recession or to stop foreclosures.

The voting public needs to understand that very few Congressmen or women actually understand anything about economics or how the real economy works. The only requirement to be in Congress is to receive the most votes. How do you get the most votes? By letting the voters know how much you care. It’s a vicious cycle.

Now, I guess you could argue that if the money is spent on items that will help the economy, it could pay for itself. Don’t hold your breath. For the most part, the stimulus act, among other things, is just sending out checks to 119 million households in the hope that it might strengthen the economy. Though some of the tax incentives for business may be good, sending families checks for more than $100 billion is a very inefficient way to stimulate the economy. The whole stimulus package, according to Office of Management and Budget Director Jim Nussle, is supposed to create 500,000 new jobs. Let’s see, $168 billion divided by 500,000 jobs. That comes out to only $336,000 per job. I wonder where we can apply.

Imagine my surprise, when I learned from my accountant that my family would be getting one of these checks for more than $2,000. Needless to say, the Righeimer family is not missing any meals. My accountant explained that with the magic of loss carry-forwards and accelerated depreciation on some of the shopping centers I built, we qualify. I had no idea how much we needed the help.

The Economic Stimulus Bill passed in the house with 385 ayes to 35 nays with 10 abstaining. Only one out of 12 representatives knew that this bill was a fraud and would not do anything to help the economy. Lucky for us, we have two of those nay votes, Reps. Dana Rohrabacher and John Campbell.

I haven’t talked to either of them about the bill, but I know their personalities. Campbell, a former certified public accountant, probably modeled the economic impact to the economy in net present value and concluded it was a net loss.

Rohrabacher, former Orange County Register editorial writer and speechwriter for President Reagan, just figured that you could never stimulate the economy by handing out the treasury. Rohrabacher’s Libertarian mind never fails him in fiscal situations. Either way, they both got it right. It’s a lonely place in Washington when even your own party is voting against you. These gentlemen need to hear from us that they did the right thing.

The fact is, there is very little Congress can do in the short run that will be effective in stimulating the economy or preventing foreclosures. Last I checked it was the private sector that created jobs, and I understand they can do it for less than $336,000. And as far as foreclosures are concerned, I will leave it to the lenders and borrowers to figure out how to solve that problem. Congress could never pass a law that both the lenders and borrowers would not abuse at the expense of the taxpayer.

Labor Unions’ Clout Worsening Our Debt

2008-03-29T20:24:00.000-07:00

The state has an $8 billion hole in next year’s $141 billion budget, which does not include the $2 billion we overspent this past year.

The state needs to find an additional $10 billion just to balance the budget. Fixing budgets is very easy. All you have to do is increase your revenue or lower your expenses.

The Democratic legislators think the problem is a lack of taxes Californians pay.

The Republicans think it is overspending. Most of the problems occur when certain programs have an automatic 7.5% increase, yet the tax revenue only increases by 3%.

Another part of the overspending is self inflicted by the voters of California who pass any bond measure that has a good 30-second commercial.

While digging into the state debt load recently, I was surprised to see that we are still paying back 1970 bonds that were authorized when I was in the sixth grade.

California has a total of more than $42 billion in general obligation bonds outstanding and another $61 billion that were already approved by the voters, but not yet issued, for a total of $103 billion in bond debt.

The payments on the issued debt are more than $6 billion a year and growing at 12.2% per year. That means before we pay $1 for anything we must first pay $6 billion for bond debt.

The largest part of the state budget is personnel. In that category the Sacramento Bee did a great service this month for the taxpayers and compiled a database of salaries by name and job title of all 367,680 full- or part-time employees who cash a state paycheck. www.sacbee.com/statepay.

This database includes every UC Irvine professor, state trooper, highway worker and clerk.

Needless to say, many state employees have blown a gasket that these public records, which were always available upon request, are now on a searchable database accessible to all Californians.

Did you know the 186 staff psychiatrists we have in the prison system make a base salary of $258,708 per year and that the 22 chief psychiatrists we have make $282,792?

We have 257 employees of the state Senate and Assembly who make more than $100,000 with the top earners breaking $200,000. That’s more than the legislators they work for get paid.

Our own UCI had 157 employees who made more than $150,000 base pay, with 28 making $200,000. You will note that I am talking only about base pay.When you add in overtime, bonuses and grants; five UC employees made more than $1 million. In fact, 91 UC employees took home more than $500,000 gross pay. These numbers do not include healthcare benefits and lifetime pensions.

A really disturbing part of searching the database is to see how many state workers make more than $200,000 per year. Just four years ago there were 36, today there are almost 1,000. One in 14 state employees make more than $100,000 per year.

According to the Bee, the highest paid 10% of state workers had their pay jump almost 25% in the 38 months from November of 2003 to January of 2007. It is impossible to balance a state budget with those types of increases.

Now, clearly all state workers are not overpaid, and some actually earn every dime they make. But when you figure in the overly generous pension plans and lifetime heath benefits, plus the fact that it is almost impossible to be fired; it is not a bad gig.

The state budget has been growing out of control for years. Besides the lack of adult supervision in Sacramento we have also made a mess with so-called campaign finance reforms.

All that these laws have done is restrict the speech of Californians by limiting what a person can give to a candidate for state office and at the same time allow public employee unions to use mandatory union dues for political campaigns with no limits on what they can spend.

Organizations like the Howard Jarvis Taxpayer Assn., who fight to keep taxes down, have a hard time competing with unions that electronically take union dues out of each state worker’s paycheck, under the guise of union dues, and spend most of it on political campaigns without the worker’s permission.

In 1998, I and two other Orange County residents, Mark Bucher and current Mission Viejo City Councilman Frank Ury, put an initiative on the ballot to stop the practice (Proposition 226).

Gov. Arnold Schwarzenegger put a similar one on the ballot in 2005 (Proposition 75). Both times it was defeated by state labor unions using those same workers’ dues to fight it.

California will never get its financial house in order as long as the state employee labor unions decide who is going to be in office.

There is an old saying , “You dance with the one that brought you.” In California, the state labor unions brought most of our legislators to the dance, and we have a $10 billion budget deficit to prove it.

Mission At The Border Can’t End

2008-03-28T21:30:00.000-07:00

Last week I was invited by Assemblyman Van Tran to go on a fact-finding tour with the California National Guard to see the work our men and women in uniform have been doing to stop the flow of illegal immigrants, cocaine and other contraband across our southern border. To say the least, I was very impressed by what was being done by our California Guards. What was really an eye opener was to realize that before the Guard was in place, there was really no substantial barrier between the U.S. and Mexico.

For most Americans who cross from Mexico to the U.S. at the Tijuana or Otay check point, all they see is high steel fences, concrete walls and a lot of Border Patrol personnel. What most of us do not realize is that for most of the border, until the Guard started building a secondary 16-foot fence, there was only an easily scalable 10-foot steel fence, between the U.S. and the millions of people who live just across the border in the Tijuana metropolitan area. The secondary fence is several hundred feet north of the primary fence.

With millions of people living right on the border, it is physically impossible to stop the flow of illegal immigrants without some physical barrier. Before the secondary fence was installed, the existing 10-foot fence proved to be only a minor speed bump for people crossing illegally into the U.S. The 12-plus million illegal immigrants in this country are a testament to how ineffective it was.

What we really had was a very sophisticated game of cat and mouse with our Border Patrol agents trying to stop the wave of people crossing California’s 157-mile border with Mexico. Many times a small group of illegals would act as if they were about to cross to draw the Border Patrol agents to them only to have another group cross where the agents just left. The secondary fence has put a stop to that.

Not only is the Guard building a proper fence but also an all-weather, high-speed access road between the two fences that allows our border agents to quickly get to any points of incursion along the border.

When the National Guard started the program called “Jump Start” 20 months ago, it was set up to help the Border Patrol get a jump start on controlling the border. President Bush and Congress had approved funding to add 6,000 additional border agents in 2006, but it takes 18 months to hire and fully train a border agent.

So far, the Border Patrol has been able to hire only 3,000 agents. Besides building infrastructure, the Guard is used to backfill positions such as vehicle maintenance, electronic early detection “eye on the border” and aviation support.

This releases border agents to do enforcement duties such as apprehending people who cross the border illegally, which the military is precluded from doing. By law, the military is not allowed to act as police on U.S. soil.

Now that we have a program that seems to be working, it is about to end. The funding to extend the program has not been approved by Congress. The Guard has orders to shut down and pull out by July. It seems the Democrat-controlled Congress doesn’t feel the pressure to even bring up an extension for a vote.

So here we are with only half of the additional border agents hired, the 15-mile secondary fence needed in the Tijuana/Otay area not complete, and we are about to send the Guard home before the mission is complete.

Protecting the border is a responsibility of the federal government. Until recently the only reason the feds were concerned about controlling the border was for the “war on drugs.” Later, 9/11 raised the concerns of protecting borders from terrorists. The fact is the federal government is not really concerned about controlling the flow of illegal immigrants across the border. The real cost of illegal immigration is not borne by the federal government. It is borne by local governments with increased costs of education, medical care, law enforcement and incarceration.

Unless Congress is politically forced to do something, they won’t. Call, write or e-mail our U.S. Sens. Barbara Boxer and Dianne Feinstein to ask them to continue the funding of the California National Guards efforts to protect our borders. It’s the least the federal government could do.

Cable TV competition on its way

2008-03-14T22:31:00.000-07:00

Cable TV gripes are not new.Costa Mesa residents are getting upset lately over quality-of-service issues and ever-increasing prices for cable TV.

Nothing infuriates a customer more than having to wait on hold for 25 minutes to solve a simple billing problem.

The basic problem for consumers is that cable TV by its nature is a monopoly; and monopolies, unlike other businesses, do not have to compete to keep or get business.

They know that because you cannot get the service anywhere else they can keep you on hold and that there is nothing you can do. It costs them more money to add service representatives. It costs them nothing to keep you on hold.

Unlike with other monopolies such as electrical, natural gas and water utilities, cable TV prices and quality of customer service are not regulated by the government.

Now, I can hear all the cable executives screaming about how they are not really a monopoly and that they have competition from two satellite providers, DirecTV and Dish Network.

Though there is some truth to this, cable TV’s ability to also deliver Internet and phone service on the same network gives those companies a competitive cost advantage over their satellite colleagues.

The best satellite can do is force cable into a duopoly. This is where you have two competitors in a marketplace.

I’ll spare you a painfully long explanation of French economist Antoine Augustin Cournot’s duopoly model, but let’s just say that duopolies compete on anything but price.

Once a duopoly is established, it is clear to both companies that lowering price hurts them.

Therefore, they may have lower introductory prices (three months free, etc.) as a sales gimmicks to get more market share, but they will never compete on price over time.

Now take note that I am not advocating that government regulate the cable companies.

But I also do not want government to protect them. This is what, until last year, was happening around California.

Local governments were, through the local cable franchise system, protecting cable TV franchises from competitors.

In October of 2006 that all changed when California passed the Digital Infrastructure and Cable Competition Act.

Now a cable competitor gets its franchise for the whole state. No longer can local jurisdictions shake down cable competitors to get local approval.

Now, finally, real competition is just around the corner. It is coming in the form of light beige utility boxes being installed throughout the city. What is in those boxes will finally bring long-awaited competition to cable TV in Costa Mesa.

AT&T is installing its fiber-to-the-neighborhood network, which will have not only high-speed Internet but also TV and phone service.

Several years back the cable TV companies got into the phone and Internet business.

They already had a wire to your house, and now with newly developed technology, they can deliver Internet and telephone service over that same wire.

This has been so successful that in South County the cable company has more phone subscribers than the local phone company.

The cable companies brought real competition to the local phone company for phone service and also Internet access.

The local phone companies were already getting fierce competition from wireless carriers, but it was cable that finally forced down prices.

Long distance is now basically free. In fact, more than 50% of people younger than 30 have never had a land-line phone in their home. The local phone company was not going to sit around and take the financial beating as more and more Americans disconnected their phone lines and replaced it with their cable or wireless phone.

If the cable companies want to compete on phone service, then the phone companies will compete on TV service.

And that is where we are at. AT&T is spending billions to bring TV, phone and Internet service to customers all across the country. That competition is now coming to Costa Mesa.

Mayor Eric Bever has also leveled the playing field by letting AT&T have the public access feed that broadcasts City Council and Planning Commission meetings.

Costa Mesa residents are spending more than $16 million a year on cable TV, and for the first time in 30 years, we are going to have some competition for that business.

‘Liars’ Get Last Laugh?

2008-03-01T19:24:00.000-08:00

I was hoping last week’s column regarding the real estate market would be my last for a while. I wrote about the “liar loans” that allowed people with no money down to puff up their incomes to get larger home loans than they could afford.

Lenders did not verify anything, including whether home buyers were even employed. These same people are now starting to lose their homes to foreclosure.

To the rescue to all these poor “uneducated” people is none other than Senate Majority leader Harry Reid (D-Nev.) with Senate Bill 2636, “Foreclosure Prevention Act of 2008.” Reid thinks these people just did not understand what they were signing.

This bill would reward everyone who took out Liar Loans. If passed, it, among other things, would allow bankruptcy judges to lower the principal and interest payments on a home loan to the amount the borrower could now afford based on their income when they filed for bankruptcy.

Lets look how this would affect two couples who were looking to buy a home in Orange County. Both couples went house hunting in Costa Mesa in the summer of 2006.

First we have Jane and Joe Liar. The Liars got a no-money-down loan to buy a 2,500-square-foot home in Costa Mesa for $850,000. On the Liars’ non-verified loan application they stated their income was $11,200 per month.

At least it had been for the last six months. Both Joe and Jane were in sales and with the economy humming along their commission checks were higher than normal. Their 4% adjustable- interest only loan payment was $2,834 per month. With taxes of $850 their total house payment was $3,684 month.

The other couple; Bill and Sarah Doright, were also looking for a home in Costa Mesa. They too were in sales and the humming economy also shot up their incomes.

Some months, with help from large commission checks, they also made $11,200 per month. The couple also saved $45,000 over the last four years by not eating out, forgoing expensive vacations and continuing to drive their eight-year-old cars.

Their lender verified their average income over the last two years and even though they wanted a single-family home they were only qualified to buy a 1,100-square-foot condo for $450,000; which they did. Being on the conservative side they put down $45,000 and got a 30-year 6% fixed loan for $405,000. The loan payment was $2,135, and with taxes and association dues their total house payment was $2,735 per month.

Now let’s fast forward to January of 2009. Barack Obama is sworn in as president, and he signs the “Foreclosure Prevention Act of 2009.” The economy has slowed down, and both the Liars and Dorights are feeling the pinch. Both couples have much lower commission checks and are living off their base salaries. The real estate market has also tanked, and neither couple could sell their homes for what they owe.

The Liars’ adjustable loan goes up to 6%, and they can no longer afford what is now a $5,100-loan payment. No problem. The Liars file for bankruptcy and, lo and behold, because of the Foreclosure Prevention Act, they are saved.

A bankruptcy judge comes to the rescue and reduces their payment to what they can now afford, by lowering the principal on their loan to $395,000. This lowers the loan payment to $1,975. With taxes they are now paying $2,825 per month. A savings of more than $2,000 per month and $455,000 knocked off their loan balance to boot.

Meanwhile the Dorights, who make enough money to make their mortgage payment, continue to make the payments and live in their condo and hope someday to save up enough money to buy a home.

What message does the government give to people like the Dorights, who do not go into debt over their heads and borrow only what they can afford to pay back?

Reckless behavior gets rewarded. And good behavior gets punished.

There is nothing noble in preventing foreclosures. Foreclosures are the market’s way of re-pricing the housing market to what people can afford. The foreclosed homes we see in some neighborhoods with the unkempt lawns won’t stay vacant very long.

Remember: For every family that loses a home to foreclosure, there is another family who buys it at a price they can afford.By the way, lending institutions cannot stay in business if the money they lend out gets reduced by a judge and never gets paid back.

To stay in business, they will just make up their losses by charging higher interest rates to the rest of us. That won’t help anyone.

Liar Loans Sting Our Schools

2008-02-23T21:52:00.000-08:00

The Daily Pilot recently reported that the Newport-Mesa Unified School District was postponing the sale of bonds.

The money raised by the Measure F bonds was meant to fund improvement projects at various schools.

These projects are being pushed back at least one year. The reason for not selling the bonds now was because the assessed valuation of real estate in the district was much lower than anticipated.

California has a staggering estimated $15-billion deficit because tax receipts are much lower than anticipated.

Capital gains taxes are expected to be a lower percentage of personal taxes this year than previous years.

Capital gains tax is paid whenever assets such as stocks, bonds and real estate are sold for more than their purchase price.

In Fiscal 2000-01, just prior to the bubble bursting on the stock market, the state collected $17.5 billion in capital gains taxes. This represented 39.3% of all personal tax revenues.

By 2002-03, capital gains taxes in the state were only $5.4 billion or 16.6% of personal tax revenues.

Whether it is school bonds or state budgets, the drop in real estate values will affect the economy for at least the next 18 months.

But to be fair, the drop in real estate values is directly proportional to the artificial increase in value we had in the last couple of years, which was primarily due to the creation of no money down “liar loans.”

These no-documentation loans allowed borrowers to overstate their incomes and qualify for larger loans, which in turn pushed prices higher than anyone could really afford. They also allowed a lot of people to buy widescreen TVs and RVs with their newfound equity.

As I wrote previously, until the $100 billion in losses, that lenders on Wall Street have already taken get to Main Street, the number of real estate transactions will continue to drop thereby continuing to put downward pressure on prices. Homes are now selling in our area for about the same prices they did in 2005. Not surprisingly, that is the same year the liar loans really took off.

There is, however, some good news in the real estate market. The Wall Street lenders have finally gotten their “short sale” departments up to speed to handle the actual write down of loans.

A short sale is where the lender agrees to take less than what is owed on a home in order to facilitate a sale. Lenders seem to agree that it is better to do a short sale and have an orderly transaction from one homeowner to another than to do a foreclosure and still have to find a buyer. Homes always sell better furnished than vacant.

Though it may only be anecdotal, I know of at least two buyers in as many weeks who bought homes this way. In one case the previous owners, who bought in 2006, paid $750,000 (all borrowed) for a four-bedroom, two-bath Costa Mesa home.

My friends, after waiting four weeks for the lender’s approval, paid just $512,000. The lender agreed to accept a $250,000 loss on the loan. This is what I mean when I say moving the loan losses from Wall Street to Main Street. Not coincidently, $512,000 was what neighboring homes were selling for in 2005.

I spoke with Valerie Torelli of Torelli Realty, and she said last year her office did one short sale. This year they expect one out of three home sales to be a short sale.

The other good news is that President Bush signed HR 5140, the economic stimulus bill. The important part of the bill was not handing out $600 checks to anyone who can breathe.

Any idiot can borrow from Peter and give to Peter and Paul. That was a political stunt to show the American people how concerned Washington is about us in an election year. That’s another column.

The important part is increasing guarantors Fannie Mae and Freddie Mac limit on the size of loans they can buy from $417,000 to $729,750. This allows lenders to make loans at the higher amount knowing that Fannie or Freddie can buy it on the open market. Lenders should start making these loans in April.

Until now, even strong buyers with large down payments could not get a reasonable loan, over the $417,000 limit. Most lenders are afraid to make larger loans because they do not have any confidence they can sell the loan later if needed. Raising the limit raises confidence. Raising confidence brings liquidity to the mortgage market and allows home buyer to get loans.

The number of home sales will trend up throughout 2008. Notice I did not say prices will go up. Homes are worth what they were in 2005. But at least now you will be able to buy and sell them.

You Win Some, You Lose Some

2008-02-16T20:34:00.000-08:00

The last two weeks were politically a little rough for me. Super Tuesday was almost two weeks ago, and I am still feeling the pain.

I had been working to get former Massachusetts Gov. Mitt Romney elected for more than two years, and trust me: When you lose, it leaves a mark.

Looking back now, it is easy to see how it all played out. The conservative vote was split between Romney and former Arkansas Gov. Mike Huckabee.

Former New York City Mayor Rudy Giuliani had lost in Florida the week before, so he dropped out of the race. With no other moderate in the race, Arizona Sen. John McCain picked up the plurality of votes and won most of the delegates on Super Tuesday.

My hope was that Romney could do well in California and take the race all the way to the convention. That did not happen. McCain won fair and square.

This week Romney endorsed McCain and thereby forced every conservative in the country to make a choice about whom we wanted in the White House.

In any political race you do not get to create your own candidate. You chose from the candidates who are on the ballot.

When I look at my choices now they are McCain and Sens. Hillary Clinton and Barack Obama. Though I cannot believe I am about to say this, I will support McCain for president. He may not have been my first choice, but among the three, he is the best choice.

On the local level everything I voted on came out my way except for Indian Gaming.

But I already knew those initiatives were going to pass when they started the “please help our poor tribe” ads six months ago.

One measure I supported that did pass was Newport Beach’s Measure B “City Hall in the Park” referendum.

Though this was passed by the voters, the issue is still muddled up with the Allan Beek lawsuit.

Mr. Beek sued under the argument that only the city council had the authority to decide where a city hall should be built and that the citizens could not make that decision.

It was reported in this paper that even though the initiative passed, he has decided to continue with his lawsuit.

The very essence of his suit is that the voters do not have the right to decide this type of issue. He wants his day in court.

Well, I am not a lawyer and can’t give a legal opinion of Beek’s lawsuit. But one way to solve this is to give Mr. Beek what he wants.

The council could vote on the City Hall in the Park’s location. This would solve Beek’s concern that only the City Council can make that decision.

Previously, four of the seven city council members did not support having the city hall at the park.

Hence, Bill Ficker and friends collected signatures and put it on the ballot. Now that the initiative has passed, I think the council vote would be quite different.

Mayor Ed Selich, who was one of the four who did not support the City Hall in the Park’s Avocado Avenue location, has said publicly all along that if Measure B passed he would go with the will of the voters and move forward to have the city hall built at the Avocado site.

I talked with Councilman Keith Curry, who also was not a supporter of the park location. He told me that the people have spoken and that no matter what happens with Beek’s lawsuit, he will now support the city hall in the park location.

That would now make it at least five of seven votes for the city hall in the park. Curry surmised that if a vote came forward he thought it would probably be 7-0 in favor.

Just prior to finishing this column I got a return call from Councilman Mike Henn.

Though he said he did not want to declare a vote in the newspaper, unless there was a prior decision in the Beek case, he would also support the will of the people.

Just as in the presidential race, some of us have to work with the choices we have, and not the choice we want. It is nice to see that the Newport Beach council is looking to unify the city and move forward on a location for city hall.

A Week of Sickness and Excitement

2008-02-01T23:51:00.001-08:00

The week started off as any other in the Righeimer household. Saturday morning I met up with Costa Mesa City Councilman Allan Mansoor at the Hale Crest and Hall of Fame Homeowners’ Assn. yearly meeting.

We had recently approved the CarMax at Harbor Boulevard and Gisler Avenue, and we wanted to hear how the construction was affecting the neighborhood. My almost 4-year-old Ellie, who begged to go that morning, was now squirming in her seat thinking she should have stayed home with her sisters instead of learning how CarMax had designed the center dividers to keep truck traffic out of the neighborhood.

The neighbors seemed fine with CarMax, so I headed home. We had a ski vacation planned for Friday, so when I got home Lene was off to Sports Chalet to buy the girls ski clothes. Our two youngest girls had colds, so we stayed inside and tried to enjoy the rain. Mitt Romney’s loss to John McCain in Florida didn’t help my spirits, but there’s nothing like playing with your kids to put your life back into perspective and make you realize how good you have it.

Monday morning started completely different. The Romney campaign had contacted me earlier about doing a rally in Orange County and they just confirmed that, despite the loss in Florida, Mitt was not giving up. They needed the rally and could I work with the advance team and put it together for Thursday morning?

I am what you call in politics a true believer. You stick with whom you believe in until the end. If Mitt is not going to quit, neither am I. This game is not over.

I called in a favor from Rick Huffman, one of the owners of the Bassett Furniture store in a center I developed in Fountain Valley. Could we use the warehouse part of your store for the rally, I asked. How many people, he asks. Maybe 250, I say. He thinks for a second and says, “You got it.”

I call the Romney headquarters in Boston and tell them we have the location. The advance team kicks it in high gear. We have less than 72 hours to pull off what may be Romney’s only rally in Southern California before Super Tuesday. We have to set up a stage with sound and lights, risers for the press corps television cameras, contact the VIPs and rally the Romney supporters to get a crowd.

About this time I get a call from Lene — the cold our 22-month-old Katherine has worsened, and our pediatrician says she has a respiratory virus and admitting her to Fountain Valley Regional Hospital now. This is when hiring good people pays off. One of my assistants, Ethan, a smart 23-year-old with a little campaign experience, says he can handle it. I put him in charge and head for the ER.

When I get there Katherine does not look happy with the IV in her little arm and oxygen tube in her nose. The ER is crazy, but Lene is keeping her happy. Boy did I luck out when I went on that blind date 14 years ago. Fountain Valley’s staff is great, but they do not have an available bed in pediatrics.

Mesa Verde neighbors Steve and Robin Mensinger came to the rescue and picked up Morgan from school at St. John the Baptist. I stayed at the Hospital for a few hours to give Lene a break, but now I had to leave for my planning commission meeting. I got home after 10 p.m. and called the hospital. They finally had a room, and Katherine was responding well to treatments. Things were starting to look better.

Tuesday morning I get up early and head to the hospital to give Lene a break. She has been up most of the night. Needless to say, without going into all the details, the stress and worry you go though during these times, I did not get much sleep. Two days pass, and they release Katherine from the hospital. We get home by noon Wednesday with a list of prescriptions for antibiotics and breathing treatments.

Well, I still have a company to run and a rally set for Thursday so it’s back to the office. I get in and start making phone calls. We have less then 24 hours to pull off the event. I head to the warehouse about 8 that night, and the place is hopping.

These Romney people are pros. They have the stage and risers built for the TV cameras. Sound and lighting is almost finished. Before morning we will have three satellite trucks set up in the parking lot linking us to the world. Only one issue left. Did we do enough to get the crowd? Without a cheering crowd this rally is going to be a bomb and that’s not exactly what the campaign needs right now on national TV. We put out the word to everyone we knew, but it is not like people are going to make a reservation for a rally.

I have two business meetings Thursday morning, and all I can think about is whether anybody show. By 10:15 I get a text message from Ethan that just says “big turnout.” I rushed over to find there wasn’t a parking space for blocks. The turnout was huge. I see Rep. Dana Rohrabacher in the parking lot, and the crowd is so big we cannot find a way to get into the building.

Finally I see a familiar face, and we get though a different door. I count 21 TV crews on the risers. The Romney staffers are stunned by the size of the crowd. After the loss in Florida they were all concerned about losing traction. To make a long story short, Mitt shows up, and the crowd goes nuts. He delivered the best speech I had ever seen him do. He energized the crowd, and they energized him.

If you are wondering what happened to our ski vacation, well, Lene and I talked it over, and she decided that I should take Morgan to Aspen. Morgan had been really looking forward to her first ski trip and she didn’t want to break her heart. Lene would stay at home with Ellie and Katherine. We got up at 4 this morning and headed to the airport. So here I am in Aspen on a daddy-daughter ski trip. The snow is falling as I type these words.

A Primer to Ballots for Feb. 5

2008-01-28T22:42:00.000-08:00

Absentee ballots have been delivered, and voting has now started in California for the Feb. 5 presidential primary. Here are my picks, starting with the propositions.

Proposition 91 transportation funds: According to the proponents, this initiative is no longer needed. Subsequent to 91 qualifying for the ballot, a bipartisan group of legislators and the governor put Proposition 1A on the ballot in November of 2006 that accomplished what Proposition 91 set out to do.

Proposition 1A passed with 77% of the vote. Therefore, 91 is not needed. VOTE NO

Proposition 92 Community College Funding: This is the first time in my life I agree with the California Teachers Assn., which is against Proposition 92.

This initiative is a feeble attempt by one part of the public educational monopoly — community colleges — trying to get a locked-in share of the state budget by changing the California Constitution with a funding formula based on population and unemployment, and not on the number of students that attend their schools.

They try to pass it off as something to help poor students by lowering fees from $20 per unit to $15. The problem is this reduction is for all students. Poor students already get the fee waived. All this initiative does is give wealthy students more money for Starbucks and iPods. VOTE NO

Proposition 93 Term Limits: This is filed under, “How stupid do they think we are?”

Though it is called a term limits initiative, it does not add limits and in fact adds four more years to all incumbents senators and six more years to all incumbent Assembly members.

In fact, the reason we have two primaries this year was so they could pass this in February and then place their names as incumbents on the normal June primary before they are termed out.The Democratic leaders thought with some slick ads and good spin they could pass this in the dead of the night. VOTE NO

Proposition 94-97 Expansion of Indian Gambling Casinos: The Native Americans have more money to influence elections than any other special interest because they have the only gambling franchise in the state.

Almost every elected official, Republican and Democrat, is too afraid to ever upset the American Indians. The tribes will spend millions against any senator or assemblyman who gets out of line. The tribes always get what they want.

These particular compacts allow four tribes to more than double the amount of slot machines they have to 17,000. Tribes have been trying to get casinos into Orange County for years.

I enjoy gambling just as much as the next guy, but expanding this monopoly only puts more political power in their hands to do just that.

And please don’t fall for that argument that it will help the state finances.

Every dollar put in a slot machine would be spent in some other business and those businesses pay more taxes on each dollar they get than the tribes do. VOTE NO

Measure B City Hall in the Park: This is for my friends in Newport Beach. I have written extensively on this issue; it’s a simple no-brainer.

Cities should build on property they own before the buy more. It is the only fiscally prudent thing to do when you already own a perfectly good piece of property in the center of the city that is only growing weeds.

It makes no sense to spend $8 million to buy a smaller piece of property from the Irvine Company a few blocks away, which does not have enough room for its own parking. Not exactly the relationship the city needs; to be a tenant of The Irvine Company. VOTE YES

Now, when it comes to picking the nominees for president I will cede the choice of the Democratic nominee to someone who has a clue. I do not. You can pick a Hillary Clinton with no charm, a Barack Obama with no resume or John Edwards with no chance.

On the Republican side I told you before that I was already extremely biased. I hitched my wagon to Mitt Romney over a year ago when nobody knew his name.

I said last month that Romney would sweep Iowa and New Hampshire. Boy, was I wrong. He took second place in both, but won Michigan and Nevada handily.

Lo and behold, he is in a dead heat in Florida with John McCain. Giuliani spent the whole campaign in Florida and looks like he will place third there this week, which will end his campaign.

If Romney wins Florida, he will be the front runner when the race gets here.

So it’s now down to two horses, Mitt and McCain. Rep. Dana Rohrabacher made his choice this week and endorsed Romney. We need a Republican, not a rebel. VOTE ROMNEY

Reporting Violations Helps All

2008-01-18T20:55:00.000-08:00

Last week in this column I discussed what we as individuals can do to improve our town. Improving the city is all of our responsibility, but the reality is that most of us have day-to-day obligations that do not leave a lot of extra time. Working to pay the bills, raising kids, keeping the house in order or doing some charity work leaves little time for civic involvement.

The city of Costa Mesa has a powerful resource that will help you fulfill your civic responsibility, and it only takes five minutes. Just remember two words: code enforcement.

We have seven full-time and two part-time positions in the code enforcement department. The department also has a very sophisticated system in place that tracks all complaints for any property in the city.

Looking around the county, Costa Mesa may have more code enforcement staff per resident than any of the other cities in the county. Past and present councils have made funding this operation a top priority.

There are two ways that a code violation gets into the system. The first way is for a code enforcement officer to drive around town looking for violations. The second (and this is where you come in) are complaints filed by citizens.

Under both scenarios, a complaint goes into the city code enforcement data bank, and it gets a case number. Once the complaint has a number, a code officer follows through by contacting the property owner to rectify the situation.

According to Don Lamm, city development services director, 75% of all complaints get rectified once the property owner gets notice of the violation.

The remaining 25% may get a fine before the problem is rectified. In an extreme case the city can do an abatement procedure, which is to correct the problem and lien the property for the cost of doing so.

The city is not looking to collect fines and in most cases a fine is never imposed if the violation is corrected. What the city is looking for is compliance.

Now let’s look at the second way a violation gets into the system; a citizen-reported complaint. It is a lot more efficient for the citizens themselves to report violations, and have code enforcement officers spend their time getting compliance.

One way to make a complaint is to call the department at (714) 754-5623. A very friendly city employee will put your complaint in the system and create a case file number.

This case will be followed up very quickly by a code enforcement office. I notified the city of a violation at 11 a.m. and had a phone call back from a code enforcement officer that afternoon.

Filing a complaint online is even easier. A form pops on the screen, taking three minutes to fill out, and bingo, your complaint is now in the system. Your name is kept confidential and is only used to let you know the status of your complaint.

One last gripe of mine: people that park their cars or oversized trucks so that they hang over or sometimes completely block a sidewalk.

Do not call code enforcement; call the non-emergency number of the Costa Mesa police (714) 754-5290. Any violations from the sidewalk to the street should be reported to the police, including cars parked on a city street for more than 72 hours. An officer will go out on his or her normal rounds and ticket the vehicle.

So when you drive around town and see chipped paint, broken fences, inoperable cars or cracked up driveways; do the right thing and file a complaint with code enforcement. Don’t wait.

The sooner it is corrected the better. It will take only a minute, and you will be doing your civic duty to improve your city.

Tips for Boosting City Pride

2008-01-11T21:54:00.000-08:00

There is a lot of talk about what it’s going to take to improve Costa Mesa. The complaints are endless: over-crowded apartments, over-parked streets, not enough park land or lighted fields, and the list goes on.

Many of these issues are structural and cannot be fixed over night. Some will take years.

But what can a resident do right now to improve the city?

The first thing you can do is take a look at your own home. The second is to take a look at your neighborhood.

How does your house look? Is the paint fresh and bright? Are the colors from the ’80s or earlier? Do you have large oil stains on the driveway?

How about your landscaping? Those shrubs you planted 30 years ago may have a lot of sentimental value, but they may also just be overgrown. You might want to think about replanting.

How are your fences? If they are original, chances they are more than 40 years old.

Now the next question will have more impact on your home and neighborhood than all of the above.

Can you park a car in your garage? We are all guilty at one time or another of putting so much stuff in our garages that we cannot get two cars in.

But if you cannot get even one car in the garage, it is way past the time to think about an early spring cleaning. One of the biggest blights to any neighborhood is cars on the street.

What has happened to many neighborhoods around town is that over time garages have become so full of stuff that more and more cars are being parked in the street. Though this is not in any way illegal or violation of code, it just looks better to have cars in garages.

Now I know a lot of you are going to say, “I can park both my cars in the driveway, so it shouldn’t matter if my garage is full.”

Trust me, it looks better to have cars in the garage instead of the driveway. It frees up space on your driveway for friends and family to park when they come by. It also makes the neighborhood look better.

Think also of the benefits. It’s so much nicer to get into a shiny car in the morning instead of one dripping with dew, especially if you just had it washed the day before.

By the way, this issue is more critical for apartment owners. Are your tenants using the garages for storage? Especially in these areas of higher density it is very important that garages are used for cars. These neighborhoods were not designed to have everyone park on the street.

Now, you may not be able to force tenants to park in the garage, but you can require, as a term of the lease, to keep clear a space for a car. It is easy to tell which landlords monitor garages and which ones don’t. The good ones check every 60 days to make sure they are not stuffed with junk.

While we are on the subject of landlords, how about implementing occupancy standards?

Though the city has its hands tied in enforcing reasonable occupancy standards, as long as you follow Fair Housing guidelines, you can restrict how many people live in an apartment. Seven people in a two-bedroom apartment may not be illegal, but it sure brings down the neighborhood.

I will let you in on a secret: It is hard to get good quality tenants if they cannot park their car and two families live in the apartment next door.

Next week I am going to talk about code enforcement and how you can get involved to improve your neighborhood.

Costa Mesa may have some issues but it has a great coastal location with terrific people and a lot of outstanding neighborhoods.

Let’s have everyone do their part to keep it that way. It’s called neighborhood pride. Costa Mesa pride. I would not live anywhere else.

Mapping Out Politics in New Year

2007-12-28T21:42:00.000-08:00

With Christmas behind us and the new year nearly upon us, I spent some time this week thinking about what next year will bring: presidential politics.

The first voting will start Thursday and end Nov. 4, when we pick the next president of the red, white and blue.

By Thursday night we should have a better idea who will be the Democrat and Republican nominees for president. Iowa, with a population less than Orange County, will hold its caucuses in living rooms and meeting rooms across the state that day. How Iowans vote will have an enormous impact on the race.

On the Democrat side, which has become a three-way tie in Iowa within the margin of error, according to the average of all polls followed by RealClearPolitics.com, a Hillary Clinton victory would help push back Barack Obama’s surge and could end the John Edwards campaign unless he gets second place. An Obama win bloodies Clinton’s nose but doesn’t cause any real damage unless he wins five days later in New Hampshire.

An Edwards win could change everything. After seven years out in the desert, the Democrats want the White House back and will pick whichever candidate they think can take it back in November. If anything, they are pragmatic.

With Clinton’s very high negatives among many general election voters and Obama’s lack of any real experience, Edwards may get the nod as the only top tier candidate who is smart enough and likable enough to win the White House in November.

First, a full disclosure before we talk about the Republican side. I drank the Kool-Aid for former Massachusetts Governor Mitt Romney more than a year ago after meeting all the top candidates except Fred Thompson. Thompson wasn’t a candidate then and, even with the hard work and help of some of my close friends, is not much of a candidate now. I have given and raised money for Romney and I am completely biased.

On the Republican side you have former Arkansas Gov. Mike Huckabee rocketing to the lead from nowhere to pass Romney by five points in Iowa.

A win by Huckabee would propel his candidacy past his certain-loss in New Hampshire where his southern charm does not wear well. Then into Michigan, where Huckabee is already neck and neck with Romney and on to the Bible-Belt South Carolina, where he is expected to win.

Romney will need every bit of his organizational skills and a perfect execution of his plan to win in Iowa. A second-place finish would not end his campaign if he turns around and beats McCain in New Hampshire, but it would leave a mark.

McCain has to win in New Hampshire to continue. Though loved by many Americans for his service to this country, his maverick style has never been something Republicans have warmed up to.

Former New York Mayor Rudy Giuliani is another candidate that I have a lot of good friends working hard to get elected. He has watched his poll numbers drop in every early state caucus or primary where voters have had a chance to see him up close. The campaign continues to say it has a “Big State” campaign and it is ahead in many of the Feb. 5 primaries, where 19 states including California, Colorado, Illinois and New Jersey choose their nominee.

The problem with this strategy is that by Feb. 5 you will have had seven major contests in four weeks. All eyes will be on the winners of the previous contests. A goose egg in every win column, for all intents and purposes, will end Giuliani’s campaign by the time we vote here.

My best guess: Romney will pull off a win in Iowa and New Hampshire (I told you I was biased) on his way to securing the Republican nomination. Republicans want a real executive in the White House.

The Democrats will go with Edwards if he wins Iowa, otherwise it will be Hillary vs. Romney in November. This is going to be a very long year.

Prop. 92's Fans Need Education

2007-12-21T21:27:00.000-08:00

The people pushing Proposition 92, a.k.a. “Community College Governance, Funding Stabilization, and Student Fee Reduction Act,” must think that the public is deaf, dumb and blind if they really believe they can hoodwink the electorate into amending the California Constitution to, in their words, “stabilize funding” and lower student fees $5 per unit for community college students. They are, in fact, just lining their own pockets.

First off, if anyone decides that without the $5 per unit reduction in fees, they cannot afford to go to a community college then please don’t go! The good citizens of California are already giving you a $5,500 gift for your future, and if you do not think the extra $75 bucks per semester (full time) is worth it, then maybe we shouldn’t either. The student fees going full-time is $320 per semester. Not only will the state taxpayers completely subsidize your education, but if you really do not have the money, the feds will give you a grant to pay your fees and books.

There is no reason why anyone, no matter how poor, cannot afford a community college education. Try this — you can pay for your complete education by just brewing your coffee at home and passing on your daily Starbucks (OCC has one on campus). It is just about choices.

Before anyone says that I am just bagging on our local Coast Community College District, I am not. I may not agree with them when they basically gave away a $32 million TV station to a bunch of wealthy donors. But that only speaks to how they value taxpayer resources. I do not want to mix the good mission of the States Community College system with how some of the districts handle their finances.

With that being said, the fact that they now want the citizens of California to change the State Constitution so that they can forever lock in an ever-increasing percentage of the state treasury with no accountability is a bit more than this former community college student can take.

This Constitutional Amendment not only locks in a fixed percentage of all state revenue; it would also reallocate the revenue not by how many students the college has or how many courses the students take. No, they actually changed the definition of “changes in enrollment” to mean “the change in the population served by the public community colleges.” What that means in English is that if half the students at OCC did not show up next year, they would still receive the same amount of funding from the state as long as the population of the area served has not gone down.

Another disingenuous part of this Constitutional Amendment is where it states, “Community Colleges should be accountable to taxpayers through the election of local boards facing regular elections.”

It then proceeds to create a brand new state bureaucracy, “The Board of Governors of the Community Colleges.” By this amendment it would require that the majority of this board be composed of people who are either employees, faculty or administrators of the college system they are entrusted to govern. It also adds a new chancellor and six deputy chancellors. That is called the fox guarding the hen house.

I could go on more, but I am feeling charitable with it being Christmas and all.

All in, California spends more than $17 billion for its community college system. On balance, with the need for lifelong learning, it has served the citizens well. Adding another layer of bureaucracy run by a un-elected unaccountable insiders is not a class we need to take.

Homes Are Not Piggy Banks

2007-12-14T22:14:00.000-08:00

It is only 10 days before Christmas, and to some, what I am about to say will sound like Santa Claus but to others, Scrooge.

But sometimes you just have to say it like you see it. The real estate market, depending how you measure it, hit all-time highs in 2006-07 in the Newport Beach/Costa Mesa area. Homes had more than doubled in value in less than four years.

Now, sales activity has dropped off a cliff and won’t return until prices drop enough, across the board, to get first-time home buyers on the first rung of the housing ladder.

Looking at the data, we can see the average home in Costa Mesa’s 92626 zip code went from around $350,000 in 2002 to over $700,000 in 2006. Newport Beach’s 92660 went from an average of about $500,000 to more than $1 million during the same period. More than a 100% increase in four years.

To get homes selling again, we need to understand how we got here in the first place. The increase in sales prices can be put at the foot of lenders who loaned people money to buy homes with no down payment and no verification of income.

To put it bluntly, if you could fog a mirror, you could get a loan. Welcome to Wall Street’s invention: the sub-prime loan.

In a market like Orange County, with very little supply, it does not take much increase in demand to rocket home prices up. With these sub-prime loans in hand, buyers bid up all available houses.

People will always bet with other people’s money if they have nothing to lose. Prices go up, I win; prices go down, the lenders lose.

If a buyer actually had to come up with a $20,000 or $30,000 down payment, they might not bid up home prices to where they could afford only the house with a temporary teaser rate that lasted long enough to move in. Prices were being forced up by people that had no skin in the game.

So now that sub-prime lending is over and buyers will actually have to pay for a house, prices will have to move down to what people can really afford.

This already happened in the new home market where builders have to sell homes for what people can actually pay in this post sub-prime market.

Take a look: New homebuilders are selling homes at 2005 prices. It’s a great time to buy a new home.

What about buying a resale home, which makes up most of our market? Do not waste your time trying to buy a home unless a seller is really motivated to sell.

For the most part, the only sellers who are really motivated have no equity and their lenders have agreed to accept less than what is owed on the house.

This is what is known as a short sale. Instead of foreclosing the lender, knowing they are about to have a loan go bad, decides it is better to take a loss now with an orderly sale than to have to go through the foreclosure process and end up with a vacant house, which they have to sell anyway.

Vacant houses do not show too well. Well that’s what happens when you loan 100% of the sales price.

Lenders have already written down $76 billion in real estate-related loan losses in 2007. But this is just an adjustment on their books, and until they foreclose or do a short sale, it will not be reflected in the home prices.

Home buyers can get only part of that $76 billion if they make an offer to buy, at a price they can afford. Call your local Realtor, you would be surprised what lenders will accept. Most large lenders have already staffed up their short sale departments, but be patient after you make your offer. This may take some time.

The reality is that more than half of the homeowners in the above zip codes paid less than the lower of those two numbers because they bought their homes prior to 2002. Many bought much prior and for a lot less.Whether you live in a $700,000 home or a $2 million home, most of you did not actually pay that much for your house. In fact, chances are you did not pay half of that amount.

The point I am trying to make is that the fluctuation in home value for most people should make no difference in their lives.

A home is a place to live. It is not a piggy bank. For those who bought their house after 2005 with no money down, you probably have no equity. But if you can afford your payments, pay down your loan and enjoy your home. You will be OK over the long term. Merry Christmas.

Balloons to Inflate Cost

2007-11-30T22:07:00.000-08:00

One of the toughest parts of writing this column every week, while also holding down a real job and raising a family, is finding something interesting to write. Then sometimes a story just falls right in your lap.

In June I wrote about the Great Housing Project — excuse me, The Great Park in Irvine. The former El Toro airport will soon be a 9,500 home project.

Not exactly what the voters of Orange County were told when they voted down the airport use and voted for the Great Park. Part of the project will be a $1.2-billion park. I said billion.

It was kicked off in July with a $4.6-million balloon attraction. The tethered balloon is designed to give rides up to 500 feet over the future development. It was built and subsidized by the Great Park Corporation, which owns the land and collects the development fees from the home builders supposedly to pay for its construction and operation.

In July it was explained to the public that the balloon rides, which would cost $20 for adults and $15 for children, would be given free to the public for about six months.

The cost to operate the ride was $1.6 million per year. With some corporate sponsorship revenue — and there hasn’t been any so far — the balloon ride would take approximately 60,000 visitors a year to break even.

The project is on target to get the 60,000 balloon enthusiasts. The problem is that it drew that many because the rides are offered for free.

As I have said previously, nobody in his or her right mind would expect a family of four to take a 10-minute ride up 500 feet and pay $60.

Well, guess what? None of the Great Park directors, except for Christina Shea and Steven Choi, ever expected to get any revenue for the balloon rides. In fact, this week, Chairman Larry Agran made it very clear that he never expected and or wanted any revenues from the balloon from “individuals and families.” He thought it would ruin the whole experience of the park if people actually paid for the ride.

I’m wondering when the balloon ride was first brought to the board, with the $20 charge, why Chairman Agran never mentioned that he would never, ever support any charge for the ride. Maybe he knew that if he said that, the $4.6 million expenditure would never be approved.

What I just described to you was just background for what happened last Thursday at a special meeting of the Great Park Corporation.

On a 7-1 vote they agreed to never charge any fee for the balloon. To add insult to injury, they added additional days of operation and night flights for free. This raised the cost of the whole operation from $1.6 million to $4.2 million per year. And it’s all subsidized by the Irvine taxpayers, despite the fact that only about 30% of the riders are from Irvine.

That is not all. As part of the same vote, they approved an additional expenditure of $11.5 million for a 5-acre lawn, a larger parking lot, visitor tent and lighting for night flights.

Add it up, and they have spent $16.1 million to build and expect to spend another $17.5 million over the next five years to operate a balloon ride. That’s correct — $33.6 million for the ride.

While other parts of Orange County, including Costa Mesa and Newport Beach, are trying to figure out how to pay for basic needs like road repair, soccer fields and better school facilities, Irvine is blowing $33.6 million on free balloon rides.

To paraphrase a famous quote, “Just look how expensive it gets when it’s free.”

Activists Have the Real Power in Elections

2007-11-16T22:21:00.000-08:00

“The world belongs to the activists.”

Rep. Dana Rohrabacher is fond of saying that whenever we talk politics.

Whether we were discussing a recall campaign or fighting the half-cent sales tax the county supervisors put on the ballot to pay for the county bankruptcy, it was always clear to Dana that the activists usually won in the end.

No matter how good the idea or candidate, in America, the most votes win. It may not be a perfect system, but it beats the heck out of all the others.

It took the residents of South County three elections and a supervisorial race to stop the airport at El Toro.

When you count the final tallies for votes, money and passion, they were clearly more active than the rest of the county. They put the final nail in the coffin by getting an anti-airport supervisor elected in North County, thereby flipping the 3-2 majority in their favor and forever ending the debate.

Elections have consequences. That activism put us in the horrible situation we have now at John Wayne. Since that vote in 2002, passenger travel is up 28% to 8.4 million. At this rate it will pass the 10.8 million cap before 2011.

Activism is not always at the ballot box. Most times it is just people in the community who are concerned about local issues.

The fact is, most people are not active in their community and, therefore, they give control over to the people that are. Sometimes for the better; sometimes not. It is amazing how small of a group, even two or three people, can change the outcome for everyone.

Here in Costa Mesa last week, we saw how much of an effect activist citizens had by speaking up at a council meeting. Right or wrong, they had a tremendous effect on the city’s future direction regarding park land, skate parks and even model trains.

Speaking of parks, Costa Mesa’s Eastside residents should keep their eyes on Brentwood Park. Brentwood is a small pocket park just west of Santa Ana Avenue on Monte Vista.

Costa Mesa recently paid $3.5 million to buy a 1.2-acre closed preschool to increase the size of the park. The Eastside has been short on park land since it was subdivided in 1906 by Stephen Townsend of the La Habra Land and Water Company.

That area has less park land per resident than almost any other area in the city. The city wants neighborhood input and will soon put out a request for interested citizens to get involved in the planning of the enlarged park.

The park already has a tot lot but no other amenities like a basketball or tennis court that would be of any recreational use to anyone over the age of eight. If history and human nature follow its normal course, the only people that will be interested enough to show up will be the neighbors.

Nothing wrong with having next-door neighbors give input, but if other Eastside residents don’t show up, I expect the neighbors will win by default, making the additional land into unusable open space for the benefit of them. I can’t blame them, but I do not think the city paid $3.5 million to expand a green belt around a dozen homes.

Getting involved is good for you and your community. Remember, “The world belongs to the activists.”

City Plans Aid Renters

2007-11-09T22:28:00.000-08:00

Tuesday’s Costa Mesa’s City Council meeting went long into the night with a three-hour debate on a skate park at Lions Park, followed by a debate to reopen the Fairview Park master plan for a dog park or another skate park. One issue was an appeal of the Planning Commission’s forbidding an Eastside apartment to convert to a condo.

It was clear not everyone understood the condo conversion issue or how it affects property owners’ rights.

For decades, property owners nationwide have tried to convert apartments into condos. It is not a complicated business model to buy apartment buildings for $200,000 per unit and convert them to condos that sell for $450,000 or more. Even with extensive upgrades costs, the profits are sizable. This is what was happening until the condo-conversion moratorium, now over, here in Costa Mesa.

During the last two years, unlike the rest of the county, Costa Mesa had a surge of applications for conversions. This started with the city’s thinking that it could turn renters into homeowners.

To achieve that goal, we allowed condo conversions to be granted without the units adhering to current standards. Most people at the time thought we would get some 20- or 25-year-old apartments whose standards would be close to current. Nobody expected applications from ’50s and ’60s properties, which were way out of standard.

Because the city had no real code, the decision to approve a conversion was at the complete discretion of the Planning Commission and city council with no guidelines to follow.

Besides health and safety issues of older properties, the city was getting applications for ’60s projects that had 40% less parking than was needed. These parking codes were set in a time when families had one car. Now, families have two or more cars. Neighborhoods that had older apartments had no parking for residents. People would have to drive around the block several times to find a space. Single-family residences close to these apartments had cars from apartment residents who lived blocks away.

Over time these issues usually take care of themselves. As buildings get older and lose their economic value, developers buy these properties, raise them and build new homes or condos with adequate parking in their place.

Remember that every other city in the county would never allow a conversion unless the property was up to current standards.T

o help bring more homeownership without hurting neighborhoods, the city adopted a condo-conversion ordinance that would allow apartments to be converted with standards between the old and new ones. Except for health and safety issues, a property could be approved if it met minimum standards. For example, when you figure in guest parking on a two-bedroom unit, the existing standard is 3.5 parking spaces per unit. If it is a conversion the ordinance now allows 2.5 spaces per unit. What will not be approved are older properties that sometimes had 1.5 spaces per unit.

Some may say that it is impossible to bring a 1962 property up to 1985 standards, let alone 2007 standards. That’s the point. When an apartment building was built in 1962, it was built as an apartment, not a condo. The owners of the property have an apartment building not a condominium project. Not allowing an under-parked, over-crowded apartment building from converting to a condominium is not taking away any of the owners’ property rights — they never had that right.

Property owners should know that the city will not hurt their values by prolonging the economic life of a building that, in any other city, would be torn down to make room for a new development. On the other hand, we need to have flexibility to rehabilitate older properties. The new conversion ordinance does both.

City Trying to Throw Us a Curve

2007-11-02T22:06:00.000-07:00

Tuesday night’s joint Newport Beach City Council/Planning Commission meeting had a verbal presentation of The Irvine Company’s plans for future development of Fashion Island and Newport Center.

Though some might disagree, on balance, The Irvine Company has been a good steward of the development and management at Newport Center. The problems in the presentation started only when it tried to explain the development of the city hall project.

A rule of thumb in business is that if something that shouldn’t be confusing is, someone is trying to confuse you.

That’s how I felt when I walked away after the presentation The Irvine Company (TIC) made for their “non-expansion” expansion of Fashion Island. The confusing part was not the adding of 420 high-rise condos or the 278,000 feet of office space to be built instead of the previously approved 195-room hotel.

It was trying to understand how a new 72,000-square-foot city hall, which needed three acres of land to be built anywhere else in town, now only needs a little more than an acre.

The lack of land needed seems to be explained in The Irvine Company’s statement: “ guarantee use of required parking spaces to exclusively serve the City Hall.” By using TIC’s parking structure, the city would not have to buy the additional land needed for parking.

Does that mean that The Irvine Company is going to pay for the portion of the parking structure that the city uses? I don’t think so.

Calling around to people who have some idea of what would be negotiated in a development agreement with TIC, expect that the city will have to pay for construction of its portion of the parking structure and maintenance of the same.

So now it looks like the city will be paying for 280 spaces in a parking structure on land the city will not own. How do you think this affects citizens who want to visit city hall?

First understand that the parking on San Nichols Drive between Newport Center Drive and Avocado, where city hall is being proposed, is already “Controlled Access Parking.”

What is controlled-access parking? It’s parking for which you pay $1 for each 20-minute segment because you lost or forget to get your parking ticket validated before you got back in your car. TIC is planning an additional 206,000 square feet of office space in this same area.

Therefore, the city’s parking spaces will also have to be accessed controlled. So whenever you go to do anything at city hall, you will have to take a ticket. Just don’t forget the validation.

Of course, that does not include city staff or council — they get a card key to get in and out. Only citizens need to take a ticket.

Now compare this to the City Hall in the Park plan. Thursday afternoon I had the pleasure of talking to two proponents of the park plan: Bill Ficker and Ron Hendrickson.

Besides the fact that the citizens of Newport Beach already own the land, another major difference with their plan is that the “below line of site” parking structure they have planned would provide not only 280 parking spaces for city hall but an additional 120 much-needed spaces for the library.

In addition, the parking could also be used for the park. This parking would be open to the public with no parking tickets to lose.

What a concept: free parking when you go to the library, city hall or the park. Here’s a tough decision. Should the city use the several million dollars already budgeted for the parking lot in the park on city hall or should we just save it?

The reason I bring up these inane issues is that when you are being told that it costs more to build on land we already own than on land we have to buy, you have to wonder are the opponents of city hall in the park comparing apples to apples.Parking costs are just one of the issues with which they are trying to confuse you.

Proposed Bills Nit-Picky, Redundant

2007-10-12T22:00:00.000-07:00

By midnight Sunday, Gov. Schwarzenegger will have vetoed, signed or let pass into law — by doing nothing — 965 bills that were approved by a majority of both houses of the Democrat-controlled state legislature.

These 965 bills that received enough votes to get to the governor’s desk could become 965 additional laws that some people think Californians could not live one more day without.

Understand that this is whittled down from the 5,000-plus bills that our elected representatives thought we needed badly enough that they had their staff, with the help of legislative counsel, write and put into the legislative hopper. To think that we could not live another day without the help and protection of this legislation boggles the mind.

The reason for all this legislation is that government in California has gotten so out of hand that it must now control every aspect of our lives 24 hours per day.

Do not get me wrong: Laws are necessary to protect us from violent criminals, unscrupulous individuals and to set basic standards to protect our food, water supply etc. My point is we had enough laws on the books last year to protect us from all those things without these 965 additional laws.

California has become the ultimate “nanny-state,” and it gets worse every year. Much of our legislation is laws that are written to fix the unintended consequences of previously passed laws.

Some legislation that passes may be considered a good idea, but should not be a law.

An example of that would be SB 7, which the governor signed into law and that makes it a crime to smoke in a car with anyone younger than 18. Now is it a good idea not to smoke with minors in a car? Probably, even if you do not believe all the overblown and unproven statistics about the dangers of second-hand smoke.

But is it to the level that we should have our police force and our overcrowded courts system spend the time to enforce or adjudicate it? Aren’t there enough real crimes to go after with our limited law enforcement resources?

How about AB 105, which will make it a crime if a tanning salon does not see a driver’s license or some other government document showing that the would-be tanner is 18 years of age?

You also have to be given a written warning specifying the dangers of indoor tanning.

It is already a crime to let anyone 14 to 18 tan without a signed parental/guardian written permission form. Now it will be a crime if a 40-year-old doesn’t show ID.

This law was written and passed by the same legislative body that finds it unconscionable and a grievous obstruction of your constitutional rights to ask for any identification before you walk in a voting booth.

We spend more time and money protecting people from tanning booths than we do to protect the vote of citizens not to be canceled out by someone who should not be voting.

This week I was reminded again of how our nanny-state intrudes in my life.

A friend called and said someone had dropped out of a pheasant hunting trip in South Dakota and asked if I wanted to go.

Now understand I am not really a big hunter and have hunted birds only on a couple of occasions.

But a pheasant hunting trip to South Dakota may be a once-in-a-lifetime experience.

Like a good husband, I got permission from my wife to go. The cost was within our budget so I called the airlines to book a flight.

One problem: I don’t own a shotgun. No problem, I can go on Saturday after the Pop Warner football game where one of my daughters is a cheerleader.

I called back my friend to confirm and told him about buying the shotgun. He then let me know about the 10-day waiting/cooling-off period we have in California to buy a shotgun.

I asked if he meant a handgun, but he reiterated that it now included shotguns as well.

So here I am, a 49-year-old father of four with no criminal past (they do a criminal background check), and if I don’t leave in the next 10 minutes I will not be able get to the store, pay for a shotgun and start the 10-day clock, after which I have to come back to the store to pick it up in time to get on the plane.

Gotta run now and explain to my wife why I am going to be late for our date night.

UCI’s Rehiring Ensures Liberal Slant

2007-09-28T22:06:00.000-07:00

The decision to rehire uber-liberal lawyer Erwin Chemerinsky as founding dean of UC Irvine’s new law school by Chancellor Michael Drake was a mistake of historic proportion.

I am not here to criticize Drake or to even try to understand the labyrinth of three-level chess he has to play to navigate in the largest publicly funded university system in the world.

But this decision will set UCI’s law school on the road to becoming one of the most liberal law schools in the nation.

Erwin Chemerinsky is not being hired to be a professor at an existing law school where he can spout off his liberal views.

He is being hired as the founding dean of a new, yet-to-be-formed public law school.

The founding dean is the person around whom the school is built, as in any new organization, whether academic, business or social; it is formed and guided by its leadership. Chemerinsky is the leader Drake has chosen.

What kind of professors do you think he will hire, liberal or conservative? Will they be professors who believe in the actual words of the Constitution, or like him, believe that the Constitution is some living, breathing document that has to be reinterpreted as time goes on?

Do you think they will be professors who think that lower courts should use decision from the United States Supreme Court, or should they also use cases and opinions from foreign courts that do not have the Constitution as a hindrance in their decision?

This is a man who has been a board member for the ACLU for more than 10 years. He has worked to get “Under God” taken out of our Pledge of Allegiance and fought to have a cross taken out of Los Angeles County’s “City of Angels” seal, even though the city was founded by Christian missionaries.

He does not believe in the death penalty no matter how heinous the crime; he fought against the three-strikes law; and when it comes to national defense, he thinks that every enemy combatant should have the full protection of the Constitution — even in the time of war, no matter what danger it poses to our men and women fighting in harm’s way.

What amazes me is hearing extremely educated individuals, mostly with law degrees, explain to us less-educated proletariat how hiring one of the most polarizing left-wing lawyers in America as a founding dean will make no difference in what type of law school UCI creates. He is not just liberal. He is polarizing.

Now I already know what he and his supporters will say. “We do not pick law professors based on their politics; we just pick the best qualified professors.”

If you believe that, you must either be a lawyer or have some other advanced degree that removed your common sense. It has been known to happen that in higher education any bit of common sense you might have after college will be completely removed by some liberal professor in grad school.

That’s the same argument bandied about whenever a president puts forward a new justice to the Supreme Court. “All we care about is if they are qualified.”

Baloney. We care about how they think and they learn how to think in law school.

I am not saying that Chemerinsky would not be sincere in trying to create a non-ideological law school. It’s just that, because he is who he is, he can’t. The pool of talent he will attract will be left-leaning because that’s who he is.

How many conservative law professors would want to work full time for him? Would you want to be in an environment in which your superior is against everything that you believe in?

Clearly the pool he will have to pick from will be more likely liberal than conservative.

Sending our best and brightest to a law school run by an extremely liberal dean and faculty and asserting it will not affect the type of lawyers it produces is like jumping in a pool and not expecting to get wet.

It can’t happen.

Don’t Bother With Health-Care Bill

2007-09-14T10:44:00.000-07:00

he Assembly passed its vision of health-care reform this week just prior to ending the 2007 session. The governor said he will veto it and intends to call lawmakers back Wednesday for a special session to come up with a health-care-reform bill he can support.

Gov. Arnold Schwarzenegger and the Democrats are looking to overhaul how health care is paid for and delivered in California. If they get their way, the state will slip down the road to more socialism and more unemployment.

This won’t be good for the citizens, taxpayers or health-care providers. The best thing that can happen is nothing.

Assembly Bill 8, which was passed and introduced by Assembly Speaker Fabian Nuñez and co-authored by the other half of the terrible twosome, Senate President Pro Tem Don Perata, proposes to create the California Cooperative Health Insurance Purchasing Program, Cal-CHIPP, in order to function as a purchasing pool for health-care coverage by employers.

To fund this idea, they intend to charge all California employers a 7.5% tax on the total Social Security wages for its full-time or part-time employees, if they do not already provide health care.

Schwarzenegger will veto that bill for several reasons, mainly because it is funded purely from employer’s funds.

Also, the bill does not force every Californian to purchase or otherwise get health care (sometimes referred to as “individual mandate”). In his proposal, Schwarzenegger would tax several areas, not just employers.

He would charge employers with 10 or more employees a 4% tax of their payrolls, hospitals would be charged a 4% tax of their gross revenues, and physicians would be taxed 2% of their gross revenues. What a brilliant way to lower health-care costs — tax the health-care providers.

The problem with both bills is that no matter what you want to call it, this is a new tax on Californians. More taxes never lower costs. Lucky for us, either legislation needs a two-thirds vote to raise taxes and that would take Republican votes that neither the governor nor Democrats control.

Not so lucky for us is how the governor and the Democrats get around that. I expect them to cut a deal in the special session without the taxes included and to put the method to pay for it on the ballot as an initiative, which only takes a simple majority. That’s right. Expect to see television ads with heart-wrenching stories of how some poor soul was denied health care because he or she did not have insurance.

And the fault will be blamed on some greedy corporation. It’s not that difficult to get people to vote to tax someone else, especially if that someone is portrayed as some uncaring corporation.

Next stop on this health-care train is “Single-Payer Universal Health Care.” Once the government collects the money, it decides how it gets spent. Doctors and hospitals will be told, just like in Medicare, what they can charge for a service or procedure. They will not be allowed to contract with you outside the system.

The private sector will be completely driven out of health care. This affects you even if you have private insurance. Once we go to Single Payer Universal Care the government also controls the providers. Your doctor will no longer be able to work directly with you; it will be against the law.

Rationing of services will be next. The government will decide what care, if any, that you will get. How many young people will want to be a physician if their employer is the state or federal government?

So while Canada and England avoid the flaws of socialized medicine, California leads us toward them.

If you are sick, really sick, where in the world would you want to be?

The answer is the United States. We have the finest health-care system in the world. And no matter what they show you in “Sicko,” there isn’t a quality facility like Hoag Memorial Hospital Presbyterian, let alone the Mayo Clinics, in Cuba.

‘Equitable’ Tax Plan Just Won’t Cut It

2007-08-24T22:23:00.000-07:00

It’s normal in a political year for candidates to talk about an “equitable” tax system.

If you are on the far left of the Democratic Party and in control of both houses of Congress it is now time for you put your more “equitable” tax plan into place. The people who put Democrats in office, the left, have been complaining the rich keep getting richer and the poor keep getting poorer.

The truth is all boats have risen since the post-9/11 tax cuts of 2001.

But don’t let facts get in the way of a good political fight. No matter how well the economy has grown because of the tax cuts, you can not convince someone who believes the government’s jobs is to redistribute the wealth of others in order to make a more “equal” society.

If a country’s corporate tax rates are too high it will not attract that capital. When Ronald Reagan came into office and lowered personal tax rates from 70% to 28%, the U.S. became one the most competitive places on the planet to invest.

What the left does not realize is what the rest of the world has figured out: Lower personal and corporate taxes create jobs, which in turn grow the economy so everyone has a better standard of living.

When looking at the largest 30 economies in the world, who would think that since the Reagan tax cuts in the ’80s, the U.S. has gone from being one of the most competitive in the world to now, according to the Washington, D.C.-based Tax Foundation. Previously high tax rate countries like Sweden, Denmark and Norway have corporate tax rates 50% less than the U.S.

Our tax rates are 50% higher than “socialist” Scandinavia, and the Democrats still want to raise the rate! Europe and the former Soviet bloc countries have figured out lower tax rate
s actually bring in more revenue as a percentage of the Gross Domestic Product (GDP) than do higher taxes. In fact, while the U.S. collects 2.2% of GDP in corporate taxes, the other 29 countries collect 3.1% of GDP with much lower rates.

With world tax rates down, any increase in the U.S. rate will move more capital offshore, hurt the economy, and put people out of work. No matter; I predict higher taxes in the near future. The 2001 tax cuts have sunset provisions that if Congress does not act to extend, will automatically raise rates to pre-2001 levels. With Democrats squealing for a more equal tax system, do not expect to see any legislation that would keep taxes from going up, let alone legislation to lower taxes.

What is a concern for the country is a much bigger problem for the people of California. California has some of the highest tax rates in the country. Not only are we losing jobs to other countries, we are losing jobs to 0% tax states like Nevada, Texas and Florida.

Jobs are not the only thing we are losing. We are also losing some of our most productive citizens. Two baby boom business acquaintances in as many weeks have told me they are leaving California solely because of the high tax rates here and moving to 0% tax states. As one of them said: “When we were raising our son, I just paid my taxes and did not complain … I no longer feel I am getting anything out of sending that six-figure check each year.”

Expect more baby boomers to come to the same conclusion. These taxpayers are not the type California can afford to lose. You need 10 families of four making $80,000 per year to replace one high income earner who leaves for a more tax-friendly environment.

While politicians try to create a more “equitable” tax system, people and capital around the world will vote with their feet and move to where they think it is a more equitable system.

Mortgage Woes Not Taxpayers' Problem

2007-08-11T20:59:00.000-07:00

This week has seen turmoil for the financial markets. The seeds of this turmoil started right here in Orange County, which is ground zero for the sub-prime mortgage industry.

These are loans to buy or refinance homes for less-than-creditworthy borrowers. The chickens have come home to roost, as many borrowers cannot or will not make their payments. Many of the homes purchased in the last couple of years are worth less than what is owed.

Unlike in the past, these homes were sold with 100% financing. Any drop in value and the loan is underwater.

In Econ 101 you learn very quickly that people and businesses will do what is rational. In the last two to three years what has been rational for lenders is to make what may look like risky loans — zero down payments, bad credit, etc. Because the property that these loans were secured against was rising in value, the lenders were always secure.

In case of a default, the lender could always recoup the loan amount from the sale of the property.In most cases, if a borrower got behind they would sell the house on the open market and put cash in their pocket.

Lending and borrowing have intrinsic risks to both parties. Let's look at the rational decisions each party made at the time the loan was given.

The lenders charge interest and fees for the loans. They enjoy great profits on loaning money at higher rates than their cost of funds. What about the borrower/home buyer? They made a rational decision to buy the home with no money down. They risked nothing because they put nothing down. They also got a tax deduction to subsidize their payments.

Clearly, looking back now, we can see that these buyers, with nothing to lose, bid up property prices.

Part of today's drop in prices is just the lack of buyers who were buying with no money down. Now that these people are out of the market, prices have come down.

Now we hear from presidential hopefuls and other politicians on the left that the U.S. taxpayer should bail out these borrowers because they did not know what they were doing. Their argument is that it is mean-spirited not to help them keep their home.

Don't get me wrong: If a lender wants to negotiate a loan with a borrower for a lower interest rate or payments, I am fine with that. In many cases it is in the lenders' best interest to keep the borrower in the house and get some payments.

But a government bailout would be the worst thing that could happen.

First off, taxpayers would not only be bailing out homeowners but also billion-dollar banks that made these bad loans.

Taxpayers shouldn't be bailing out lenders or home buyers who got in over their heads and bought houses they couldn't afford. The only way to have a free market is to allow people's bad decisions to have consequences. If not, people will always take a risk if someone bails them out.

In the name of home ownership, the left wants taxpayers to subsidize risk for multinational billion-dollar businesses. This is called privatizing profit but socializing loss.

If the loan is good and the house goes up in value, the government does not get the gain. We only take the losses. Not a good way to run a railroad.

Being what human nature is, we will always have excesses in the market. People have short memories. Real estate markets will always go up too high and come down too low.

There is one big difference between the last real estate downturn in the late '80s and now. Back then, the government-insured banks took the hits and the taxpayers picked up the tab to the tune of hundreds of billions of dollars; socialized losses. This time, the private sector is taking the hits. Let's keep it that way.

City Hall Land Talks Not Smart

2007-08-03T22:59:00.000-07:00

It is heating up here in Newport Beach as proponents of the "City Hall in the Park" initiative gather their signatures. Meanwhile, the City Council majority is getting plans ready to build a $5 million passive park on the same site.

City Councilman Keith Curry, who penned a column against the initiative, called me to discuss our differences on the issue. Before I talk about our differences, let me say Curry is an engaging advocate for not locating the City Hall next to the library on Avocado Avenue. He thinks the OCTA site up the street would be a better location for City Hall. Though I completely disagree with him on this issue, the people of Newport should be glad to have a councilman of his caliber representing them. Curry comes out of the John Moorlach mold: elected officials not afraid to speak their minds.

My issues are simple: What is doable, and how much will it cost the taxpayers? To that end, the city has commissioned a study known to all as the DMJM study. What the study says is Newport would save $10 million building on the land next to the library. You would think that might settle the issue. That isn't chump change.

This $10 million in savings does not take into account the fact that the land is already owned by the city. If you read my previous column, you will remember I valued the land at $21 million. That would make a savings of $31 million to the taxpayers by voting for the initiative.

The opposition disagrees, saying the city is required to replace the park land somewhere else in the city and therefore you cannot count the $21 million savings. Really? Last time I drove by the site it was still a vacant lot, not a park.

They might have some argument had a park already been built; but it is not. The city is under no obligation that a majority vote of the council can't solve.

Now let's look at what is doable: On the library site, we do not have to negotiate price or terms with anyone. We already own it. The other site is owned by OCTA. Has anyone even asked OCTA what they think? Last I checked, the property was being used for buses. OCTA has in no way, shape or form approved selling, relocating or swapping any site with the city.

And the property the city wants to swap with OCTA is owned by the Irvine Co. Do we have a price for that parcel? Will they even sell it?

I have done enough negotiations in my life to know you do not want to get yourself into any negotiations involving two other parties that have no reason to do anything.

Why would OCTA want to move the bus transfer station? If you do not think they know how to negotiate, ask the bus drivers who just ended their strike.

Let's not fool ourselves. This issue will be on the ballot, and like it or not, the citizens of Newport Beach will be making the decision.

The City Council should slow down on plans to build a park until the voters have had a chance to speak. That vote will give the council all the direction it needs.

Lack of Transparency in KOCE-TV Sale

2007-07-30T02:29:00.000-07:00

One of the most important factors in running any public agency or governmental body is transparency.

Without transparency, you have corruption. The framers of our Constitution knew it was so important that they included in the First Amendment, "Congress shall make no law … abridging the freedom of speech, or of the press." Journalists are needed to make sure government is transparent so that we the citizens understand what is happening with our public institutions.

This last week we saw the final chapter in an embarrassing and bizarre example of the lack of transparency. I am talking about the so-called sale of Coast Community College District's television station KOCE to the KOCE-TV Foundation.

Just getting the facts of this actual sale was a feat in itself. What I found was that the terms of the sale were different depending on which source you went to. Neither of the two major papers in Orange County had the same terms of sale, and the college district's website added an additional fact that nobody had ever reported: That the KOCE-TV Foundation was given credit from previous donations it had given to KOCE as part of the purchase price. I decided to use the facts from the actual Asset and Purchase Agreement between KOCE-TV Foundation and Coast Community College District, and the opinion from the 4th District Court of Appeal. The opinion, filed June 23 2005, involves the interpretation of a statute governing the sale of property, other than real property, belonging to a community college district.

The facts laid out by the justices were simple. The district put KOCE up for bid, the trustees rejected an all-cash bid for $40 million and accepted a bid of $8 million in cash (later to be reduced by previous contributions) and a 30-year note with no interest and no payments for five years for $17.5 million from the KOCE-TV Foundation.

Now we all know that money tomorrow is worth a lot less than money today. That is why we have to calculate the present value of the future payments to figure out how much the offer from the KOCE-TV Foundation was really worth. You would assume the payments would be $700,000 per year, which over 25 years equals $17.5 million. The net present value of those payments are approximately $5.5 million. If you add it to the supposed down payment of $8 million, the total purchase price would be $13.5 million. That offer is $26.5 million less than the $40 million all-cash offer. Last time I checked, the college district, like all school districts, was in need of money. But money from a religious group would be heresy in the world of public education.

The court concluded that the district refused taking the additional $26.5 million because it came from " … a group of televangelists." The justices correctly invalidated the sale and said the district could keep KOCE or sell it, but if they sold it, it would have to go to the highest all-cash bidder.

But there is a twist here that no one reported; a twist that only the world of insulated college trustees could get away with: Upon examination of the Asset and Purchase Agreement, we find that the payment to the district is not the $700,000 per year you would expect. No, in fact, the payments are zero for the first five years, $125,000 for the next five years and $187,500 for the remaining 25 years, for a present value of $1.47 million. If you add the supposed $8 million down payment, the total purchase price comes out to $9.47 million. That is more than $30 million less than those "slimy" evangelists offered. And why were the payments lower than expected? You won't believe it. The college district has to pay the KCET-TV Foundation $357,000 per year for programming (telecourses) and advertisements. That was not reported anywhere.

The main argument for selling the station to the foundation was it would air the telecourses for free. Nobody expected the college would have to pay $357,000 for the privilege.

This last week the foundation settled with those "slimy" evangelists. The district, which was a defendant in the lawsuit, refused to disclose the settlement saying, "that they did not have a copy of the agreement and did not know the terms…. " Next week we will look at the settlement and how much more money the college trustees left on the table.

KOCE-TV Foundation, District's Deal Done Dirt Cheap

2007-07-21T21:52:00.000-07:00

I have been traveling a lot this week, but I finally got a chance to analyze the latest information about Coast Community College District's supposed sale of the public TV station KOCE to the KOCE-TV Foundation. I say "supposed" because once you talk to all of the players (and I have), and you read all the documents, it is clear KOCE was not sold to the foundation but was given to them in a no-money-down deal.

To understand how this was done, let's go back to 2004. The college district was in a contentious exchange of what should happen to KOCE. Some faculty thought the money used to subsidize the station should be spent in the classroom (in other words, to get them higher salaries). Others understood the station paid for itself with the Tele-Courses and should be left as is. The state was paying close to $2 million a year for students to take the courses, and the actual courses cost 15% of that.S

ome college district trustees, like Board President Jerry Patterson, said they would be just fine with giving the station to the foundation. Others thought it should be sold to the highest bidder and the money put back into the colleges. The trustees who wanted to get the most money for the TV station won out, or so they thought, and a bidding process was set up with an outside media brokerage firm to obtain the highest bids in a closed-bid process.

This is where opinions diverge on what happened next. But here is what we do know: Among several bidders, Daystar Television Network bid $25.1 million. The KOCE Foundation made a winning $32-million bid of cash and terms. Once the bidding was closed, Daystar upped its bid to $40 million. The trustees still chose the foundation as the highest "responsible bidder" and started the process of negotiating the actual terms of the sale. This is where they gave away the station behind closed doors.

Negotiating the final terms for the sale on the district's side of the table was Patterson.

First off, they lowered the price by $4 million. The foundation had 12 million reasons why the price was too high and as Patterson told me, "We negotiated it down $4 million" and lowered the price by the same. Forget the fact that the foundation thought the station was worth $32 million when it made the bid.

Foundation officials agreed on an $8 million cash down-payment and a note of $20 million. Problem was, the foundation did not have the $8 million. Though district officials were supposed to pick a "responsible bidder" they knew the foundation did not have the money and would have to raise it. What the public does not know is the college district's trustees allowed the KOCE-TV foundation to borrow $10 million from a bank, secured against the assets of the TV station and all of its equipment. I have never seen a situation where a government entity sells an asset and allows the buyer to not only borrow the down-payment, but also take an additional $2 million to put in their pocket. In addition, the district loaned its $20 million subordinate to the banks.

In layman's terms: If the foundation defaults on its bank loan, the bank takes the TV station and wipes out the district's $20 million note. So much for a "responsible bidder."

So how do you make sure the foundation does not default on the bank loan? You loan the district's money at 0% interest for 30 years with no payments for five. Try getting those terms at Bank of America. So how does the foundation make the payments to the district in five years? That is where the Tele-Courses come back into the picture. The district signs a seven-year agreement to pay the foundation $357,142.85 per year to run the courses in the early morning and evening. But remember, there are no payments for five years. It just so happens that if you multiply $357,142.85 by seven years you get $2,499,999.95. Let's lower the note to the district (a.k.a. taxpayers) by $2.5 million and now the foundation only owes $17.5 million. In fact, by the time the deal closed, the sale price was not $28 million, as the district's news release stated, but the lower price of $25.5 million.

Now I could go on with other terms which would make your head spin. But suffice it to say the note to the district in my opinion was written by the foundation, for the foundation, by the foundation's attorneys.

So let's go over it again. The foundation bought the TV station with no money down, put $2 million in its pocket and sold airtime back to the district to make its payments to the district.

I've been making business deals for about 30 years and I believe in my bones this deal was agreed to in principle with a wink and a nod by the foundation members and some college trustees prior to any bidding for the station.

No one would bid $32 million they didn't have unless they knew they would never have to pay it. Anyone got the D.A.'s number?

Let's Look at the Peters and Pauls

2007-06-23T00:10:00.000-07:00

I never expected to write about the candidates for the presidential race. It's not exactly local news, but after hearing the Democratic candidates' debate on CNN two weeks ago, I've been annoyed by how out of touch they are with reality.

Listening to the Democratic presidential candidates, you would think the U.S. economy is in the tank, people are dying in the streets from lack of health care, we have no middle class — just haves and have-nots — and only the government can fix the inequities of society.

Of course, the only way the Democrats know how to fix these inequities is to take from Peter and give to Paul. Peter won't like it, but you will always get Paul's vote, and there are a lot more Pauls than Peters. They always try to put Peter in the worst light by making him or her a sleazy executive from some Enron-type company that gets rich stealing money from poor widows.

The reality is that the Peters (or Patricias) are the most productive citizens. I am sure there are some Peters who are lazy rich kids living off of grandpa's hard work, but for the most part, the ones I know are not. The vast majority are self-made, very hardworking and honest to a fault. They work a lot more hours than most Pauls, and they are very disciplined. They understand the concept of delayed gratification and are willing to wait for things if it will help them in the long run.

At the risk of sounding politically incorrect, let's talk about Paul (or Paula). Before I go any further, let's take off the table the Pauls who have real physical or mental disabilities and children who through no fault of their own are being raised by Paul. In that case, Peter has been more then generous in giving to Paul. In fact, Americans give the disadvantaged around the world more money per capita than any other country on earth — and, by the way, "red" county Peters give more than "blue" county Peters.

Statistically speaking, Paul has children earlier in life than Peter and is more likely to raise those children alone without a spouse. In fact, the vast majority of poverty in this country plagues children born without a father in the home. But just like Europe before us, the left wants to make fathers unnecessary and have the government fill that role. I just don't know how the government can discipline a 13-year-old boy without a father around. Sure it's been done, but I wouldn't want those odds in Vegas. The only way government knows how to discipline is with juvenile hall — not exactly the most compassionate way to raise a child.

If the left took all the money they wanted from Peter, they could never solve Paul's problems. Paul can only change his situation by becoming Peter.

What we should be teaching in this country is how to be a Peter and not a Paul, how to get ahead in life by working hard and being honest.

I never heard any of the candidates talk about relying on self-sufficiency or self-discipline to get ahead, only how the government could solve their plight.

These ideas may not sound compassionate. But whether people like it or not, the truth is the truth no matter how you spin it.

The ideas may sound old-fashioned, but they come from a time when we had more Peters than Pauls.

The Bill That Wouldn't Die

2007-06-16T00:08:00.000-07:00

Last week I thought we were safe. The U.S. Senate had gone home and pulled the Comprehensive Immigration Reform Act of 2007 off the senate floor to go where all dead bills go. Then on Thursday, like Frankenstein, Senate Bill 1348 came back to life.

A lot of people have very different opinions of this immigration bill. They should, since it has 281 sections. The problem for most people is not necessarily the wording in the bill, though some sections would make you wonder if this bill was written by senators from the U.S. One opinion that does seems universal is that when it really comes down to it, no one thinks the Feds can implement it. No matter how much tough language the Senate puts in about strengthening the border with beefed-up border patrols or electronic surveillance equipment, no one believes it. No matter how much it talks about verifications and doing background checks, no one believes it. In fact, most average Americans have evidence to the contrary that the federal government cannot handle any program of this size and complexity. Government agencies make the cable companies look good.

Example: This week, the government admitted it was unable to process passports to legal U.S. citizens even though it had two years to prepare for the increased need based on the 2005 Western Hemisphere Travel Initiative, which required U.S. passports for travel between the U.S. and Mexico, Canada or the Caribbean. By Friday, the State Department was so overwhelmed with passport applications that the U.S. House Rules Committee voted to prohibit the implementation of the travel initiative. This was just for processing passports to existing U.S. citizens.

Let's look at what the Comprehensive Immigration Reform Act of 2007 asks to implement. First, this bill would require that Homeland Security process an estimated 12 million immigrants who can "establish that the alien was in this country for 5 years prior to April 5th 2006 and was not legally present in the United States on April 5th 2006 or their visa expired and therefore were not legally in this country … for purposes of this subparagraph, an alien who has violated any conditions of his or her visa shall be considered not to be legally present in the United States." The only way you can stay in this country is to admit you were here illegally. The immigrant would have to produce "conclusive documents" showing employment, pay stubs, etc., and if they can't, then they can offer — and this is a tough one — "sworn affidavits from nonrelatives who have direct knowledge of the alien's work." This will help those people out of work making fake green cards. Now they can make "sworn affidavits."

Second, the department has to set up an Automated Biometric Fingerprint Identification System (IDENT) and have all the immigrants fingerprinted. I am sure all the illegal immigrants who have committed crimes will be first in line.

After that, the IRS has to provide proof that the immigrant has either paid their taxes or doesn't owe any. This from a department that can't even answer its phones. With a backlog of 12 million, I am sure they will do a full audit. My guess is they will just require another "sworn affidavit" stating that the immigrant did not make enough money to pay taxes.

Let's be honest — nobody believes that this bill would ever really be enforced. Business leaders want cheap labor; taxpayers pick up the cost of education, health care and uninsured drivers; and liberal politicians — well, they just want votes. In fact, if we gave liberals everything they wanted except "the path to citizenship," then this bill would be dead faster that you can say "amnesty."

I agree that 12 million illegal immigrants in this country is a big problem and that the Feds need to do something. But to simply change the law and, presto, all 12 million become legal is not the way to solve a problem. This problem didn't happen overnight, and it won't be fixed overnight. In fact, the status quo is better than this bill.

Great Park is a Misnomer

2007-06-09T02:19:00.000-07:00

It has been six weeks since I started this column. My goal for each article is to look at issues that affect us all and try to drill down to what is really going on below the surface. People who have a vested interest in how a particular situation turns out will spin things in such a way as to hide or confuse the public to the point that it is hard to understand what is actually happening.

This reminds me of George Orwell's book "1984," which when I went to high school was mandatory reading but, taking a quick survey in my office, none of college-educated 20-somethings had even heard of it.

Orwell wrote it in 1948 and flipped the date for the book about the future. Orwell's Thought Police make not just doing something but thinking something illegal a "thoughtcrime."

Fast forward. We call those "hate crimes" today. That is where our criminal justice system adds additional penalties to crimes not for what you did, but what you thought about while doing what you did.

In "1984," Big Brother used language to control people. War means peace, freedom means slavery, and ignorance means strength. By changing the meaning of words, Big Brother renders the populace incapable of seeing what is really happening. It's not that much different today.

When talking about health care, the left wing says there is a "right to health care," that everyone should have it even if that means it has to be free to some and, therefore, cost more for everyone else.

When talking about the immigration bill stalled in the Senate, the left uses phrases like "path to citizenship," "family unification" and "orderly process," when in fact the real issues are overcrowded schools, overflowing emergency rooms and downward pressure on the wages of workers who are here legally.

But let's talk about an issue closer to home. Two weeks ago, I wrote about the chance we might lose the back nine of the Newport Beach Golf Course because of the expansion plans for John Wayne Airport. Elections have consequences, and we in this part of the county are about to feel them. The fight for an airport at El Toro Marine Corps Air Station is over, the runways have been torn out, and the south part of the county has won its "Great Park." It has to bother you a little that the plan for a park at El Toro has now become the great housing project with traffic, people and pollution, that south county said they were trying to avoid by not having an airport.

But just like in "1984," changing the meaning of words is everything. Not many people would have voted for the "Great Housing Development," so just call it the Great Park.

The original plan pitched to county voters was 4,700 acres of "urban regional park and a variety of agricultural, material recovery/recycling, recreational, cultural, educational, employment, public and housing land uses." Once the measure passed and the county let Irvine annex the base, Irvine rezoned it to 3,700 homes, an industrial/office park, some retail and the now much smaller park.

Based on Irvine's new zoning, the federal government (read federal taxpayers) sold the property to the highest bidder in four parcels. Two parcels had only one bid. Subtract out the industrial and retail piece and the property sold for less than $90,000 per lot.

To put that in perspective, I bought lots in 1989 for $90,000 to build $300,000 homes. Needless to say, Lennar, the winning bidder, made a killing.

But something interesting happened on the way to developing what is now call Heritage Fields. The cost of building the Great Park went out of control. The park's cost, which started at less than $200 million, was now approaching $1.5 billion and rising.

The only way to pay for it was more park fees. That's when the city pulled another trick out of its hat. Officials rezoned the one parcel, which had only one bidder, to residential and allowed Lennar an astounding 5,800 additional homes for a total of 9,500 homes. To put it another way, $42,000 per lot.

Well, you might think who got taken on that deal. Do you think the bids might have been higher if builders knew they could build 9,500 homes instead of 3,700?

Instead of $640 million to the United States Treasury, it would be more like $1 billion.

Which brings me back to the use of language. If you go to the Heritage Fields website (www.heritagefields.com), you will find little if any reference to housing.

The nonpublic part of the property was broken into three districts: The Park District, The Lifelong Learning District and the Transit Oriented Development District, all three of which, if you didn't know it already, are 9,500 units of high-density housing.

Nowhere on the website does it talk about dense housing, just "neighborhoods designed for a creative class" of people who seek a stimulating environment."

The Costs of 'Free' Health Care

2007-06-02T00:07:00.000-07:00

What is it about the health-care system in America that makes politicians think they can fix it by giving it away to more people for free? Remember Economics 101, Rule No. 1: Whenever you price something at less than it costs, people will use more of it than they need. This is true whether you subsidize cars, corn or health care. Rule No. 2: People will not buy something for what it's worth if the government will give it to them for free. Rule No. 3: If you charge people more when they can get it elsewhere less expensively, then they will get it elsewhere.

With this in mind, let me tell you what are our caring politicians are cooking up for us in Sacramento. Assembly Speaker Fabian Nunez (D-Los Angeles) has proposed a bill that has three main aspects that I will focus on.

First, it gives free or almost-free health insurance to families that make up to 300% of the federal poverty level, which is $61,950 per year ($31 per hour) for a family of four.

Secondly, this grand idea will be paid for by every business in California that has more than two employees and a payroll over $100,000 per year, with a 7.5% additional payroll tax on employers who do not provide health insurance to all employees and their dependants. When did it become the responsibility of business owners to provide health care to everyone?

Lastly, the Healthy Families Program, which is a state program that uses federal funds (paid for by you, the taxpayer) would, "delete as an eligibility requirement … that the child must meet citizen and immigration status requirements." By the way, the program is already running in the red and will spend $3 billion more than it takes in within just five years, so trying to add 1 million children of illegal immigrants may not be the best idea.

So let's look at the consequences of this brilliant solution.

1) Do you think people will use more or less health care if it is free than if they had to pay a portion of it? Think about it: You have a runny nose? Go to the doctor — heck, it's free! Hurt your ankle? Let's do an MRI — hey, it's free! The fact is, consumers like you and me need to be invested in our own health.

2) People who are now paying for their own health care as responsible parents and adults will quit paying for it and get it free from the government. Do you think that might wreck the assemblyman's budget when the already self-insured jump on board the government gravy train? Also, do you think you might get a few more people to come across the border if they get free health care, no questions asked? Heck, why not bring the whole family? It's free!

3) Let's say I am a widget maker in California and you charge me an additional $5,000 per year for every $31-per-hour worker I have, compared with say Arizona, Nevada or Texas. You can bet that over time I will take my widget factory and that $31-an-hour job to Arizona, Nevada or Texas. This leaves California with more people on free health care and less jobs to support them.

In the end, it does what all socialized health-care systems in the world do where health care is "free": Use goes up and the price goes out of sight. Next, the government has to ration it out. One-year wait for a hip replacement, unless you are over 68 and then they rationalize that the benefit to society is not that important if you walk anymore or not. Next thing you know, we are discussing doctor-assisted suicide as a way to cut costs. This is not fiction. Any European will tell you that it is happening in Europe today.

Now, it may not be perfect, but the United States of America has one of the finest health-care systems in the world. And I know enough that "free" healthcare is the most expensive health care you can get.

When Golf Trumps Cash

2007-05-25T23:23:00.000-07:00

What is the ideal use of land? That is a difficult question to answer without first looking at several factors: What is it being used as currently? Do you have alternative uses? What does the public want? These are all important questions to ask, but the answer to one alone will not suffice.

I raise this issue because the lease will soon be up on the back nine holes of the Newport Beach Golf Course. The county leases the land to a course operator, and at the same time, John Wayne Airport needs more space for rental car companies. Should the county extend the lease or make another use of the property?

This is clearly becoming a heated issue around town, but so far all I have heard are the anecdotal stories of how much people love the course. Give that credit to Dave Ellis, the consultant hired by the course operators to get their lease extended. No one knows how to craft a debate better than Ellis.

In the end this may be more of a political decision than an economic one. Going against golf courses is more dangerous than fighting Republicans, Democrats, union bosses and big business combined. It could be because so many of these people mentioned are golfers themselves. Let's face it: Golfers can be a little fanatical. What other sport calls spouses golf widows?

Let me start off by saying that I am not on either side of this debate. I live on a golf course (Mesa Verde Country Club). It's a great game, and the last thing I want to do is tear out a golf course and put in a parking lot. I do, however, want the debate to be more than just, "I like golf, so the golf course should stay."

We need to look at the issue as a whole and come to a few conclusions before we make a decision. And if that decision is to keep the golf course, then I will be more than happy. I just want to make sure that the decision is made with all the facts on the table. I am always amazed by how many of these issues are decided without all the facts.

So here is my stab at some of the important questions.

How large is the back nine? My back-of-the-napkin calculations put it at 30 acres plus.

How much is it worth? Land in the area easily sells for $2 million an acre for office buildings. Let's discount it 25% for being under the flight path, about $1.5 million per acre. That times 30 acres equals $45 million. Now we're talking about real money.

Does the county have any other uses for the land? So far we have only heard about the rental car lot.

But there are other competing issues. John Wayne's proposed expansion adds a new terminal and an additional 2,500-space parking structure. You might ask yourself if we would have to build a parking structure that large if we had some land for parking, hence the back nine. Parking structures cost roughly $25,000 a space. If we move half the new need at JWA (1,250 spaces) multiplied by $25,000 we save at least $31,250,000 in construction costs, and we only used eight of those 30 acres.

So in the end, I am just asking a few simple questions, the most important of which is this: How much is it worth to the taxpayers to have the back nine? Thirty-one million dollars? Forty-five million dollars?

The driving force behind all these issues is the expansion of John Wayne. As we have predicted for years, the airport use is going up.

Bottom line, if the airport gets expanded it will need more parking for passengers and rental car companies. And, therefore, this decision — and many more like it — are coming down the pike.

So while we get the hard decisions in this part of the county, Irvine is debating how to spend its $1.5 billion on El Toro Great Park instead of El Toro airport.

Maybe they should use some of that money to pay for the additional parking structures needed. That way we wouldn't have to worry about losing our golf course.

Our Budget Boondoggle

2007-05-18T23:00:00.000-07:00

The news out of Sacramento was good last week if you are a state worker, teacher or prison guard. At first glance it looks like the state brought in more money this year than was expected, hence the pay raises for government employees and pension plans.

You may ask how the state took in so many more of your dollars.

First, let's thank smokers. I know they are a dying breed, but without them we could not come close to balancing the budget. The 1998 Tobacco Settlement Act pays California $10 billion over 25 years. Cigarette manufacturers raise smokes another buck and, bingo, California gets billions. But why wait 25 years if you can get it now? California borrowed almost $4.5 billion of that 25-year payout in 2003 to balance the budget. The state securitized that revenue stream, and when the money comes in from the tobacco companies we just give it to Wall Street with interest. It worked so well we did it again: Less than four years later we borrowed an additional $1.2 billion to balance this year's budget.

Second, the governor proposes to sell the EdFund, which guarantees student loans in the state. A $1 billion, one-time boost that I'm sure will allow Wall Street to be extremely generous to our California college students — not to mention the loss of income down the road.

A closer look at the numbers and you find that all of these one-time revenue-generators are really borrowing against future revenue to pay today's expenses. Making one-time sales of government assets is like refinancing your house to buy groceries. Sooner or later the borrowing comes due.

But the state can be more creative than that. With these $3-plus gasoline prices, the state is raking in extra gas and sales tax (California makes more on a gallon of gas than Exxon). Proposition 42 and Proposition 1A force the state to use most of this money on transportation projects. What a novel idea, gas taxes for roads!

Well here's an idea: Why don't we move $627 million from the public transportation account to a new budget line item, "home-to-school transportation"? That's right, in one fell swoop we moved more than $500 million to pay for school buses. Forget that this used to be a school expense. Now it is taken out of your gas taxes — a slight of hand that would make an Enron chief financial officer blush.

When doing a long-term business deal — which is not unlike what the state budget is — what sense does it ever make to sell off a potential long-term revenue source for a mere percentage of the total worth? Sure, you may make some teachers and prison guards happy in the short term, but what about a few years down the road when we don't bring in money from these long-term revenue sources?

Case in point: To balance future budgets, Gov. Arnold Schwarzenegger is also planning to lease the state lottery for 40 years to some hedge fund for a lump sum of around $37 billion. He'd sell it but the state Constitution won't allow it. Last year, the lottery brought over $1.3 billion to our schools. Over the next 40 years, the lottery would bring in an estimated $90 billion — a $53-billion loss no one seems to mind.

In California, we do not have a revenue problem; we have a spending problem. We are not going to solve the problems of today by sacrificing the future. First and foremost, we need to balance the budget the old-fashioned way, by reducing spending and keeping it less than what we bring in.

Sure, we can make some people happy today by selling off our assets, but what about five or 10 years down the road?

Alienable Rights

2007-05-11T23:08:00.000-07:00

Most of us know of our certain inalienable rights — life, liberty and the pursuit of happiness. These rights separate us from every other country in the world and are why America is the great nation it is today.

More directly, with regard to property rights, we have the 5th Amendment: "… nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation" as well as the 14th Amendment: "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law …"

But what about those rights that aren't inalienable, those rights that some presume to have? When thinking about your home, do you think you have a right to a view? Do you think you have the right to a certain amount of sunlight? What about the right to keep someone from innocently looking into your backyard from their secondstory window? What about the right to decide the color of your neighbor's home? How about the design? Is it your decision to say what's "compatible" in your neighborhood?

What about your neighbor's rights when they want to remodel their home? What about their right to build their home to better suit them and their family? Do you really think you have the right to tell them how to build and design their home?

Many of the homes in our communities built in the 1960s and '70s are ready for major renovations. This is a good thing. It is imperative as we have more homeowners interested in doing just this that we respect their right to do what is in their best interest.

When we buy property, we own from the center of the earth and outward, including the land underneath, and the air above. Though we have "due process of law" and zoning jurisdictions, should we really be subject to losing our inalienable rights because some people think they have phony rights to a view, sunlight and compatible design? It is not the responsibility of a homeowner, absent of an existing deed restriction, to protect a neighbor's view, sunlight or ocean breeze, or to make his or her house compatible with your 1972 "Brady Bunch" special.

Homeowners' rights are bent, walked over and crushed every week in city council and planning commission meetings all across the United States when your neighbors get up to the microphone and assert all of these phony rights in front of a council that may just be counting votes for election time.

Let's face it. Some politicians would make the "majority" happy and get reelected rather than stick their necks out to protect some homeowners' rights and maybe lose an election. We need leaders in city halls to stand up for property rights and to communicate why they are so important. In turn, they need voters to support them when they do the right thing.

Hefty Price For City Hall

2007-05-05T20:49:00.000-07:00

How rich is Newport Beach?

I know some very wealthy people call Newport home, but is the city so flush with cash that, when it comes to capital expenses, total cost is lost in the equation?

I am referring to the largest capital expenditure the city will incur this decade: building a new city hall. The number being batted around town is $50 million. No study, no report, just an out-of-the-air guess.

My antenna always goes up when I see a large government project proposed.

Call me cynical, but why is it that whenever a capital project is proposed, some members of our local government always say, "This is what we need"? They should ask how much it costs, if the city can afford it and if there's a better use for the money.

The supposed need always overwhelms the question of cost.

In making any large capital decision, whether it's a Fortune 500 company, your immediate family, or, say, the city of Newport Beach, you should always ask yourself several questions: Do we need it? What do we have (cash, assets, land)? What do we owe (bonds, loans, pension obligations)? What will we have left after the fact?

If, after asking those questions, the proposal seems affordable and logical, only then should we be asking where to put it, what design to use and what color to paint it.

Let's, for argument's sake, acknowledge that a new city hall is needed. Call me a cheap, unsophisticated hayseed from the Midwest, but why would the city consider not using the surplus land it owns? Specifically, a 12-acre vacant lot at MacArthur Boulevard and San Miguel Drive.

Let's see, the land needed for a city hall is 3 acres. At the asking price of about $7 million an acre, the cost for the land alone would be $21 million.

Even in Newport Beach, $21 million is real money. But let's not stop here.

The land is next to the city library. How novel, a city library next to a city hall. If you haven't seen the library from the road, you are not supposed to; it was dug into the hill, not exactly inexpensive construction either. But what the heck? You wouldn't want to affect the view of a few homes. It's just taxpayers' money.

But wait one minute. Previous City Councils said the land should be a park. Oh, I forgot. We still have 9 acres left for a park, and with a city hall next door we might even have people to use it.

Given the choice, previous councils might have saved 3 acres had they known a new city hall might be needed.

Let's be real. Twenty-one million dollars is a lot of hard-earned money from the people of Newport Beach.

There is an old real estate axiom: When someone makes an offer and you don't take it, you just bought it for that price.

Let's just say we already had a 9-acre park and 3 additional acres becomes available for $21 million. Would you pay that much for the additional land?

If Newport doesn't use the land for a new city hall, its taxpayers and leaders just paid a steep price.