Merced Sun-Star
Sounds of hammering is music to Livingston...JONAH OWEN LAMB
LIVINGSTON -- While much of the county's once-frenzied building has come to a standstill, some hammering can be heard in Livingston.
It's not exactly a turnaround, but city officials are taking what they can get from the weak economy.
"I just think that we were in a better position to attract and keep developers," said Donna Kenney, Livingston's community development director.
Livingston's green shoots are either an anomaly or they could be the first part of a slow but real recovery in the construction industry in Merced.
According to City Manger Richard Warne, the city has seen a 150 percent uptick in permits issued for new single-family homes this year. Just since July 1, the city has issued six permits for single-family homes, and it is about to issue three more.
In addition to the new projects, three larger ones are in the works. One is the Super Wal-Mart east of Highway 99, another is a 70-room hotel. The third is a low-income housing project.
Kenney thinks part of the reason for the new development is the city's low impact fees. "Development is moving forward in Livingston as opposed to other areas because we've kept our impact fees comparatively low compared to other cities," she said.
Kenney said another reason why Livingston may be benefiting is because most of its lots that are ready to build on boast all of the infrastructure they need -- sidewalks, sewers and electricity.
All six permits for residential homes in Livingston were pulled by developer K. Hovnanian, said Kenney. And the developer has expressed interest in buying other lots that are ready to build on, she said.
In addition to the new single-family home construction, the city just OK'd a 49-unit affordable-housing apartment complex.
The other two big projects -- Super Wal-Mart and a hotel -- while still in the planning stages could be issued their first building permits by next spring, Kenney added.
Most of the rest of the county doesn't come close to the level of activity unfolding in Livingston.
In Atwater, while several projects are in the pipeline, not one permit for a single-family home has been issued in 2009, said Denise Frazier, an Atwater deputy building official.
Merced has not fared much better. According to the city's building department, only two permits for single-family homes and one for an office building have been issued this year.
The county's building activities have been only marginally better, said Katie Albertson, the county's spokeswoman. This year, only 47 single-family home permits have been issued, compared to 58 in 2008. But, said Albertson, June and July saw more permits pulled compared to those same months in 2008.
For now, Livingston is happy with the sound of hammers. Other cities in the county hope to hear more of them soon.
Feds seize, sell Guaranty Bank branches
Texas firm has operations in Merced and Atwater...The Associated Press
WASHINGTON -- Guaranty Bank became the second-largest U.S. bank to fail this year after the Texas lender was shut down by regulators and most of its operations sold at a loss of billions of dollars for the U.S. government to a major Spanish bank.
The transaction approved by the Federal Deposit Insurance Corp. marked the first time a foreign bank has bought a failed U.S. bank.
The bank failure, the 10th largest in U.S. history, is expected to cost the deposit insurance fund an estimated $3 billion.
The FDIC seized Austin-based Guaranty Bank, with about $13 billion in assets and $12 billion in deposits, and on Friday sold all of its deposits and $12 billion of its assets to BBVA Compass, the U.S. division of Banco Bilbao Vizcaya Argentaria SA, Spain's second-largest bank. In addition, the FDIC agreed to share losses with BBVA on about $11 billion of Guaranty Bank's loans and other assets.
Guaranty Bank, with 162 branches in Texas and California including one on G Street in Merced and one on Broadway in Awater, saw its investments in real estate lending and mortgage-backed securities bought from other banks sour and had been teetering near collapse for weeks. Its parent, Guaranty Financial Group Inc., reaffirmed a week ago in a regulatory filing that the company was critically short of capital and didn't believe it could stay in business.
In April, the federal Office of Thrift Supervision said the company had engaged in "unsafe and unsound" banking practices and ordered it to raise fresh capital, find a buyer or face a takeover by the government.
Guaranty's failure, along with those of three small banks in Georgia and Alabama on Friday, brought to 81 the number of U.S. bank failures this year amid rising loan defaults spurred by tumbling home prices and spiking unemployment. That is the highest number in a year since 1992 at the height of the savings and loan crisis; it compares with 25 last year and three in 2007.
Last week the FDIC seized Colonial Bank, a big lender in real estate development, and sold its $20 billion in deposits, 346 branches in five states and about $22 billion of its assets to BB&T Corp. It was the biggest bank failure so far this year, and the sixth-largest in U.S. history.
Birmingham, Ala.-based BBVA Compass, with 600 branches from Florida to California, said its acquisition of Guaranty creates the 15th-largest commercial bank in the U.S., with about $49 billion in deposits. "This compelling transaction makes excellent strategic sense and represents an exciting growth opportunity for BBVA Compass as we continue to build the leading banking franchise in the high-growth Sunbelt region," Jose Maria Garcia Meyer, chairman of BBVA Compass, said in a statement.
Like Spain's biggest bank, Banco Santander, BBVA has managed to skirt the turmoil that swept the industry worldwide by staying away from toxic assets such as mortgage-backed securities.
Instead, BBVA and other big Spanish lenders stuck to their nuts-and-bolts business of lending to consumers and businesses, relying on it for the bulk of their revenue, Nuria Alvarez, an analyst with Madrid-based brokerage firm Renta 4, said earlier this week.
With its strong presence in the American South through BBVA Compass, the bank had made no secret that it was open to expanding.
"It is no surprise. BBVA had never ruled out buying assets or banks, so long as attractive opportunities arose," Alvarez said.
The deal is especially attractive because it enables BBVA to expand in Texas, she said.
Merced-based County Bank was seized by federal regulators earlier this year and its assets sold to Westamerica Bank.
Sacramento Bee
When the housing crash ends, how will Sacramento grow?...Jim Wasserman
Some day this housing crash will end. Judging from history, Sacramento's ranks of developers will snap right back into growth mode – building a fresh wave of new homes.
The big question: Will this new wave of growth create a more urban, compact Sacramento, as many community activists and politicians hope? Or will it follow the time-tested pattern of past booms in the late 1970s, the second half of the 1980s and the first half of this decade, pushing ever-larger homes farther into farmland?
Perhaps it's easiest to expect more of the same. Suburban development has for decades been Sacramento's main growth industry, aside from state government.
During this decade's housing boom, builders constructed 156,000 homes, condos and apartments in the Sacramento region – largely on empty land in suburban cities. Much of this last wave of housing on former farmland has proved especially vulnerable to shredded values and foreclosures – a fate far less common in established neighborhoods closer to jobs.
Still, signs of change were starting to emerge even before the housing market fell apart. Loft-style housing projects were popping up all over Sacramento's central city. And construction had begun on two 53-story condominium towers on Capitol Mall.
So might visions of mid- and high-rise living in downtown Sacramento take off where they left off – just as it seemed the city was reaching a new level?
Looking ahead, analysts believe the next wave of residential growth in the Sacramento region – perhaps still several years off – might be different. It's likely to roll in with expensive gasoline, higher home energy costs and lenders' continued insistence on tight credit.
State and federal policies governing the flow of public money increasingly favor more compact, transit-friendly types of development. And as baby boomers age, they are expected to move down to smaller housing units.
All these forces could mean more people in the next wave of growth will live in smaller homes, and more may live downtown. But no one should underestimate the ethos of the Central Valley: People here like yards and space.
Around town, people who build houses and those trying to shape the market think daily about what the Sacramento of the future will look like. Here are some of their thoughts:
Industry tracker
Greg Gross flips open a laptop and counts the lots planned for houses, apartments and condos in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties.
His tally: 106,000.
The number is staggeringly ambitious in a housing crash where builders will be lucky to sell 4,000 homes this year. It speaks to the bullish nature of Sacramento land developers.
Around 91,000 lots are on vacant land and called future inventory, just "cows walking across the field," said Gross. He is a regional consultant with Houston's Metrostudy, advising developers and builders on what buyers want.
These lots are where the capital region's future will be written, assuming it follows the suburban development patterns that have guided the region since World War II. Many could remain undeveloped if patterns change, or could be filled with smaller homes or multi-family housing.
Gross' opinion: "The majority of folks are going to raise their family in a single-family home. There are not millions of people looking for a condo."
Giant publicly traded builders that rule this market will want that, too, he said. Builders need empty land to mass produce houses for a region projected to capture about 9 percent of California's job growth until 2050 – and possibly double its population to nearly 4 million.
Yet the consultant issues a caveat. What people want may become limited by constraints on resources, including water shortages and costly energy.
Downtown developers
Scott Syphax and Steve Goodwin are banking on such limits. They plan 2,900 mid-rise homes in an old industrial area north of downtown Sacramento. It's called Township 9.
Their vision wouldn't raise eyebrows in Vancouver or San Francisco. But nothing like it has been done in Sacramento. Next door at the railyard, Georgia's Thomas Enterprises plans to do it even bigger – 12,000 homes on 240 acres.
Syphax, chief executive of Township 9, called it "a project that represents our future."
"A lot of stakeholders other than us are interested in making sure it happens," he said.
Those interested parties include the state of California. It is providing $30 million to redevelop Richards Boulevard for a new transit stop and other street work. (The railyard got $78 million for similar infrastructure.) Sacramento Regional Transit fast-tracked $37 million to open a northbound light rail station at Township 9 in October 2010.
In the next wave of Sacramento's growth, Syphax said, economic incentives will go to land-efficient transit-focused projects like Township 9. Builders at empty suburban edges will face "a growing patchwork of mandates." He cited Assembly Bill 32, which requires the state to reduce its carbon emissions, and Senate Bill 375, which ties transportation dollars to compact regional growth plans.
Township 9 President Steve Goodwin acknowledges Sacramento's long lean toward the suburban lifestyle. But he says cities such as Portland, Ore., "that are farther along in downtown development" show an accelerated acceptance when "people see that lifestyle in practice.
"I think in the next cycle Sacramento is positioned to take advantage of all the research and development that's been done in other cities," he said.
Wall Street home builder
Chris Cady has built single-family homes in the capital region for 13 years as Sacramento division president of Michigan-based Pulte Homes. Having just merged with Centex Homes, Pulte is the region's largest home builder, accounting for almost one in five sales of new homes.
Cady looks at a next wave of growth in the context of now.
"We're kind of set for what we can deliver today. It's in the west Rosevilles and the Elk Groves of the world," he said.
But there's already a change from the last housing wave that planted so many large homes on empty land. Small and basic is back with a price tag around $250,000. Lots are smaller, and even growth magnets like west Roseville now plan stores and town centers into the residential mix.
The new downsizing will especially fit a next wave of empty-nest boomers and Generation Y approaching its key buying years, said Pulte marketing executive Donna O'Connell.
The region's largely flat, open geography has plenty more room for this single-family scenario. When west Roseville is full, Cady anticipates a repeat on 14,000 new lots in neighboring Placer Vineyards – miles from any older city center. It's already been approved by the Placer County Board of Supervisors. But it's challenged by lawsuits raising the sort of air quality and environmental issues cited by Syphax.
Government watchdog
Quickly in a conversation about the next wave of new homes, Michael McKeever says wait a minute: Change is already revealing itself.
As executive director of the Sacramento Council of Governments, McKeever said 60 percent to 70 percent of recent new housing across the region and much now in the pipeline is on "small lots" of 5,000 square feet or less, or is attached, as in condominiums and townhouses.
In 2002, that percentage was a long-range planning goal that the region hoped to meet by 2050 with its new "blueprint" growth plan. Then, just 20percent of new housing was on a small lot or attached.
Rising land prices during the boom forced early change.
"It's clearly dramatically higher than it was when the blueprint was adopted, and in the vicinity of what we hoped would be the average for the next 45 years. That's a pretty significant change," McKeever said.
He cited a 2009 U.S. Environmental Protection Agency report noting a dramatic Sacramento shift toward housing growth in its central city and core suburbs. The EPA ranks the capital region among "leaders in promoting growth management and redevelopment," alongside Denver, Portland and Atlanta.
The report on residential construction says 25 percent of the Sacramento region's 2007 building permits for homes were in developed zones typically referred to as "infill."
That compared with just 9 percent from 1995 to 2000.
"Trends locally and some national and state data make me feel like there's change afoot here," McKeever said. Rising gasoline prices will likely cement an inward trend during the next wave, he said.
"It doesn't mean there's not a plan for master-planned greenfield communities (built in open country). But it will be different than before," he said. "We put the kind of product Pulte is selling in west Roseville with sort of the suburban model of smart growth. And Township 9 is the urban model of smart growth," he says. "They are both very important. We need a lot of both."
Editorial: State should aid clean water push
In Galt and South Lake Tahoe, residents are drinking arsenic with their tap water. Traces of the naturally occurring toxic chemical have leached from old mines, rocks and orchards into groundwater, reaching levels that violate state and federal safety standards.
In dozens of tiny towns that dot the Central Valley, residents regularly sip dangerous levels of nitrates with their water. The chemical comes from fertilizers or fecal matter that washes into the soil from broken septic tanks, or from the tons of manure that flow from dairies. Drinking water in many of these areas is also contaminated with the cancer- causing DBCP. A pesticide that also causes sterility, DBCP was banned in 1977 but persists in groundwater.
When tests show their wells are contaminated, water agencies regularly warn their customers to drink bottled water instead. But that can be expensive, particularly for residents of tiny rural districts, many of whom are impoverished farmworkers. Once groundwater supplies are contaminated, small water districts rarely have the resources to put in new wells or provide the treatment necessary to bring their water up to safe standards. As The Bee's Susan Ferriss reported last week, the state has been less than diligent in helping districts address what is a serious health hazard in too many communities.
Frustrated activists in the Central Valley are pushing legislation that would declare clean drinking water a human right. Assembly Bill 1242 by Ira Ruskin, D-Los Altos, specifically establishes a human right to clean, affordable and accessible water. The bill, which has passed the Assembly and is pending in the Senate, seeks to clarify existing state law that has long given priority to domestic water users. Proponents hope it gives health officials greater incentive and authority to address the problem of contamination.
But the bill does not appropriate any money to make sure that people get the clean water they need, and that's the real barrier here. Though state voters have passed bond measures that provide $230 million for water cleanup, and the federal government provides tens of millions more, a 2007 study estimated that it will cost $39 billion and take 20 years to bring drinking water in California up to federal health standards.
But not every remedy needs new money. The state is not using all the resources now at its disposal to protect public health. A simple example contained in The Bee story is illustrative. Last year, the tiny Tulare community of Alpaugh was barred from obtaining a state grant to build an arsenic treatment system because of a temporary freeze placed on such grants. But when the freeze was lifted in April, no one from the state bothered to inform officials at Alpaugh.
More also needs to be done to address the source of pollution. Tulare is home to more dairies than any other county in the world, a major reason nitrate contamination of groundwater is so pervasive there. The state has the power to force dairies to control waste from their operations. The dangerously elevated levels of nitrate in groundwater suggest that's not being done.
Whether or not California declares that the delivery of clean water is a right rather than simply a public service, the state can and should be doing more to see that all its residents have access to the water they need to sustain their lives
Urgent Action Alert: Stop the Legislative Road Map to the Peripheral Canal...Dan Bacher
I urge you right now to sign this petition and to send letters to your Legislator to to save the California Delta and stop the peripheral canal, Governor Arnold Schwarzenegger's "Big Ditch." This massive government pork barrel project would cost anywhere from $10 to $40 billion at a time when the state has slashed funding for childrens' health care, teachers and state parks.
California Senators and Assemblymembers are now pushing a package of five bills through the Legislature in a fast-track process that serves as a road map to the peripheral canal. The five bills are: AB 39, the Delta Plan (Huffman), AB 49, Water Conservation (Feuer), SB 12, Delta Governance (Simitian), SB 229, Water Use Reporting (Pavley) and SB 458, Delta Conservancy (Wolk). "AB 39 and SB 12 are bullets aimed at the heart of the Delta estuary and its fisheries," according to Bill Jennings, executive director of the California Sportfishing Protection Alliance.
The governance of the California Delta would be turned over to a seven member commission with four of the seven appointed by Governor Arnold Schwarzenegger, who has repeatedly stated he will build the peripheral canal and additional water storage facilities regardless of the public's desires and wishes. This is the same Governor who has presided over the collapse of Central Valley Chinook salmon, Delta smelt, longfin smelt, striped bass, green sturgeon and other fish populations.
The bill package amounts to an unprecedented attack on the Public Trust Doctrine by redefining the Public Trust as merely "coequal" to water supply reliability. The bill also subverts the state water code. "The bills are a thinly disguised attempt to reallocate the state's water and represent a back-door attack on 130 years of California water law and legal precedent," said Jennings.
We must stop this legislative attack on our imperiled fisheries, the public trust and state water code. There is no reason for the Legislature to push this poorly written and environmentally destructive bill package through at this time, other than to enable Schwarzenegger, the worst Governor for fish and the environment in California history, to build his peripheral canal to increase water exports to corporate agribusiness.
I also urge you to send out this alert from the California Sportfishing Protection Alliance (CSPA) to everybody you know and post wherever you can!
Click HERE: http://www.calsport.org/8-22-09.htm
Here is the action alert from Mike McKenzie, followed by an analysis of the Bill by Bill Jennings:
You can save the Delta and stop the canal: Sign the petition, write your legislators, http://www.calsport.org/8-22-09.htm... Mike McKenzie
August 22, 2009 -- Our state legislature is now considering a slate of five bills, the "Delta Bill Package" For the most part, these bills have no real substance but are merely outlines and feel good statements of the legislature's intent to solve the delta's problems.
Other portions of the bills actually work against the delta's best interests. This includes the concept that agricultural water rights are co-equal to environmental rights, and the lack of provisions for the restoration of our fisheries or the recovery of our world famous Chinook Salmon and steelhead runs.
The governance of the delta would be turned over to a seven member commission with four of the seven appointed by the governor, a man who has repeatedly stated he will build the peripheral canal and additional water storage facilities regardless of the public's desires and wishes.
The commission would have the power to fund and construct these facilities without the vote of the legislature or the consent of the voters. These bills would disenfranchise the citizens of California on what could be the greatest issue shaping California's environment and economy for the next hundred years.
The senate and assembly will hold joint "policy" hearings and "conference" committee hearings during the next two weeks with a vote by the full legislature the week after. This is being done in a big push to hurry up and get it done in the last three weeks of the legislative session.
CSPA believes the Delta's future and health is far too complicated to be considered in a hurry up bill program jammed through the legislature in three weeks. It needs a much more thoughtful process and more input from those that would be adversely affected as well as the public who will pay for it (in more ways than one!)
There is no reason for this bill package not to be put over until next year’s legislative session. With real thought and through the normal legislative process, the legislature could come up with a real bill package that would serve the needs of the estuarine environment and its fisheries as well as serving California’s water needs. We DO NOT need to destroy the Delta and our fisheries for the sake of political expediency!
It is urgent that as many folks as possible write their legislative representatives to stop this process and sign the CSPA Petition or we can kiss the Delta, as we know it and our fisheries Good Bye, FOREVER!!
i all: My thoughts, below and attached. Cheers!
Perspectives on Legislative Lunacy and the Perils of Ignoring the Lessons of the Sorcerers' Apprentice...Bill Jennings
"If they robbed us yesterday, does that now give them a vested right to keep on robbing us?"
Paraphrasing the 19th Century economist and philosopher Henry George
After standing on the sidelines of fishery and water quality protection for three decades, legislative leaders have decided to ram a convoluted package of water bills through legislature in the waning days of the session. This ill conceived, poorly written and internally inconsistent package of bills proposes to overturn 130 years of water law and legal precedent, redefine the public trust and institutionalize degradation of the San Joaquin Delta estuary.
Beyond their threat to Delta restoration, the bills symbolize the collapse of responsible democratic process and a breathtaking abdication of legislative oversight, fiscal accountability and due diligence. Normal bill making protocols have been discarded, prudent deliberation and thoughtful analysis have been abandoned and public participation has been marginalized. The frantic effort to hammer the package through in the last weeks of the session epitomizes sleazy backroom power politics on steroids.
The five bills are: AB 39, the Delta Plan (Huffman), AB 49, Water Conservation (Feuer), SB 12, Delta Governance (Simitian), SB 229, Water Use Reporting (Pavley) and SB 458, Delta Conservancy (Wolk). AB 39 and SB 12 are bullets aimed at the heart of the Delta estuary and its fisheries.
The package's failure to define numerous terms like “coequal,” “balanced” or “reliable” ensures twenty years of litigation as attorneys and the courts battle over their meaning. None of the bills acknowledge the elephant in the room: the fact that the State Water Board has issued rights to far more water than actually exists. Indeed, the Legislature avoids the two actions that would meaningfully address the present water crisis: a mandate that the State Water Board aggressively begin the long overdue process of bringing water rights into balance with the amount of water that actually exists and a repeal of the Monterey Agreement that eliminated an “urban preference” that ensured water for the 20 million people on the South Coast during California's inevitable droughts.
To fully appreciate the grievous harm these bills will cause, one must shift through the hyperbolic rhetoric pledging commitment to fishery restoration and Delta protection and focus on the absence of effective standards and guarantees, the consequences to the Water Code and Public Trust doctrine, the enshrinement of an over-allocated system, the placement of the fate of the estuary into the hands of those who chaperoned its demise and the fact that the package is, without mentioning the word, a roadmap to a peripheral canal.
Below, we identify four of many fundamental flaws in the bill package and then pose a series of question that beg to be answered before this package goes forward.
Legislative Attack on the Public Trust
For the first time, the legislature proposes to enact into law its interpretation of the Public Trust. The Public Trust is the doctrine declaring that rivers and estuaries, like the seas and the air, are common property rights belonging to all people and that they must be protected before private parties can make use of them. The doctrine's roots extend back to Roman law, English common law and Spanish civil law. It has been repeatedly upheld by multiple California Supreme Court decisions.
Now the California Legislature proposes to redefine the Public Trust as merely coequal to water supply reliability. Reliable delivery of subsidized water to irrigate subsidized crops on drainage-impaired lands in the desert that belch toxic wastes back to our waterways will now be coequal to the protection of our rivers, estuaries and once prodigious fisheries.
Water agencies will now argue that water delivered, under the most junior water rights, to Westlands is now coequal to the delivery of water to Delta farmers, who have some of the most senior water rights in California. Despite the fact that water delivered to Westlands harms fisheries while Delta farmers depend upon water that is necessary to support fisheries. More absurdly, attorneys for Kern County Water Agency will surely argue that delivery of 1.9 million acre-feet of contracted water to support a half of one percent of the California economy is coequal to the delivery of 1.9 million acre-feet to the Metropolitan Water District serving 20 million people, representing almost half the state economy.
In the last few years, California's appellate courts and Supreme Court, in decisions on the CalFed Record of Decision and the State Board's decision implementing the Bay-Delta Plan, have ruled that water exported from the estuary are subordinate to environmental protection of the estuary's environment and that the beneficial uses of water in and upstream of the estuary are superior to beneficial uses of water exported from the Bay-Delta. These rushed and poorly drafted bills undermine these precedential decisions and essentially tell the courts they're wrong.
Subversion of the Water Code
The bills are a thinly disguised attempt to reallocate the state's water and represent a back-door attack on 130 years of California water law and legal precedent. It's not surprising that the State Water Contractors are supportive of this scheme to enable water exporters, holding the most junior water rights, to secure upstream water at the expense of the most senior water rights holders. Incredulously, the scheme then tags the upstream water rights holders with much of the expense for facilitating the reallocation of water and mitigating the environmental consequences of reallocation.
Recognition that California's water had been over-appropriated in the early 1900s led to the development of the modern Water Code between 1913 and 1928. The system is predicated on the dual rights of riparian and appropriative diverters. Simply put, those living adjacent to waterways have the most senior rights to water. Appropriative rights to divert to storage and transport to other areas are based on a seniority system. Water must be put to beneficial use and the waste and unreasonable use of water is prohibited.
Political pressure has resulted in a vast over-appropriation of water in California: far more water has been promised than exists. The over allocation of water has resulted in the degradation of waterways and the destruction of historic fisheries. Proper enforcement and compliance with the Water Code would have prevented the present water crisis and enforcement and compliance would solve it.
California's water problems cannot be resolved without addressing the cause of the problem: the over-allocation of water. Colorado recognized the problem in the 1970s and undertook a ten-year adjudication that balanced water supply with water availability.
Unfortunately, rather than accepting the politically difficult task of addressing the root causes of the crisis, our legislators embrace the politically expedient course of making the “reliable delivery” of over-appropriated water coequal with protection and restoration of California's waterways. It is a recipe for environmental disaster.
The Absence of Standards
Despite an abundance of rhetoric on the value of the Bay-Delta ecosystem and the intent to restore it, the bill package is embarrassingly silent on specific standards, goals or yardsticks that would measure and ensure restoration. It assigns all responsibility to develop protective measures to a Bay Delta Conservation Plan (BDCP) process that is largely comprised of the individuals and agencies that for the last two decades ignored, acquiesced and chaperoned the collapse of the estuary. In fact, BDCP is largely a conveyance project masquerading as a Habitat Conservation Plan.
The 1980 peripheral canal legislation that was defeated by a vote of the people in 1982 contained specific measures and standards, such as minimum outflows, to protect fisheries. It even included a constitutional amendment to protect the Delta. The 1995 federal water quality standards for the Bay-Delta adopted by the U.S. Environmental Protection Agency following its disapproval of state standards for inadequacy contained a number of specific requirements protecting fisheries. Among these were outflow and salinity standards to protect striped bass and required percentage survival ratios of outmigrating salmon and steelhead sufficient to attain the doubling goal of the Central Valley Improvement Act. The federal standards were ignored after the State Water Board implemented new state standards. Not only are the state's Bay-Delta Plan standards seriously inadequate, the Department of Water Resources and U.S. Bureau of Reclamation routinely ignore them. In fact, they have violated virtually all of them during 2009.
Any new water legislation must include specific enforceable standards to protect the estuary. However, new standards cannot be proposed, evaluated and discussed in the remaining days of this legislative session.
Legislative Abdication
In a stunning abdication of legislative responsibility, the package authorizes the creation of the Delta Stewardship Council comprised of four members appointed by the Governor, two from the legislature and the Chairperson of the Delta Protection Commission. The Council would have authority to implement the recommendations of the BDCP and assess fees and issue bonds to fund them. The centerpiece of the BDCP process is the contradictory goals of restoration and export reliability and an alternative conveyance scheme (i.e., peripheral canal) to secure delivery reliability. In other words, our legislature proposes to allow the Governor, who strenuously advocates building a peripheral canal, the authority to appoint a majority of members to a Council that has authority to build and fund it. Despite claims that the legislative package doesn't, per say, authorize a peripheral canal, its clearly an enabling roadmap to its construction.
Anything less than retention of authority to review and approve any final BDCP plan and issuance of fees and bonds would represent an abominable abdication of legislative responsibility.
Questions Begging for an Answer
How can we believe that promises, assurances or even laws will protect the estuary when state and federal agencies have grievously failed to enforce and comply with them in the past? In other words, how do you achieve restoration by placing the fate of the estuary in the hands of the architects of its collapse?
How can you solve the Delta's problems by excluding the farmers, fishermen, businessmen and communities who live and work in the Delta from the process?
Is it really acceptable to construct a peripheral canal that would leave salmon and Delta smelt with only a 20-50% and 10-40% chance of survival, respectively? (Note: this is the estimate of the PPIC report, based upon an analysis of a peripheral canal exporting 40% less water than was exported between 2000-07)
How do you marry the most complicated HCP and the largest hydrologic modification of an estuary in history, disconnect them from tributary waters and ram it through in record time? And, how do you begin CEQA/NEPA review of that process without a project description?
How do you protect the estuary's water quality by diverting dilution flows? Diversion of relatively good water around the Delta can only increase the concentration and impacts of pollutants in the Delta. How will further degrading Delta water quality comply with the federal Clean Water Act?
Why would you proceed with engineering a peripheral canal to protect export reliability without evaluating the cost and feasibility of constructing no-fail seismically safe levees, especially as analysis shows that the 53-75% of exports during dry and critically dry years must still come from the south Delta?
Why would you spend 15-30 billion dollars building and mitigating a 15,000 cfs peripheral canal that analysis shows will be dry three times more often than it will be full and will export less than 4,500 cfs half the time? And why would you size a peripheral canal to divert more water than is in the Sacramento River 46% of the time?
Isn't 30 years enough time for Westside farmers to stop discharging prodigious quantities of selenium and other pollutants into the San Joaquin River? What can be the justification for sacrificing Delta agriculture so that we can continue to provide subsidized water to irrigate impaired lands in the desert that belch toxic wastes back to our rivers?
What is the rationale for refusing to comprehensively analyze the benefits to California's environment and the costs to the California economy of eliminating all Delta exports?
How do you restore the San Joaquin River when 98.5% of its water molecules and fish never reach San Francisco Bay?
Why should we trust the same individuals and agencies that caused and acquiesced in the crisis to now solve it?
Does anyone really believe a few hundred industrial farms in the south Valley deserve the same amount of Delta water as the 20 million people and the economic engines of the south coast and Santa Clara Valley?
What is the justification of requiring urban areas, that use 20% of developed water supplies, to become 20% more efficient and not establishing targets for agriculture, which uses 80% of the water?
Are you really contemplating the sale of the State Water Project to the State Water Contractors?
If the State Water Board has failed to comply with the law, how does delegating the powers of the Board to a Watermaster who is answerable to the Board substantively change anything? Do you really believe yet another layer of bureaucracy will solve the problem?
A Final Observation
We have constitutional provisions prohibiting unreasonable use and diversion of water, a comprehensive water code, state and federal endangered species act, water quality acts, environmental review acts and a Fish and Game Code that - while imperfect - are sufficient to equitably distribute available water and protect pelagic and salmonid fisheries. We have regulatory and resource agencies charged with implementing and enforcing these laws.
The present crisis would have been prevented had these laws had been complied with and enforced. These laws are sufficient to fix the problem over time, if enforced.
But, if the Legislature lacks the will, creativity or authority to enforce existing laws, no new laws or layers of bureaucracy will restore Delta fisheries and water quality or equitably and reliably deliver water to those who need it.
Bill Jennings, Chairman
Executive Director
California Sportfishing Protection Alliance
3536 Rainier Avenue
Stockton, CA 95204
p: 209-464-5067
c: 209-938-9053
f: 209-464-1028
e: deltakeep [at] aol.com   http://www.calsport.org
Contra Costa Times
Governor's Delta plan hits bumpy patch...Mike Taugher
August started out with a big step forward for the governor's plan to address twin crises in water supply and the environment when water officials, regulators and environmentalists belatedly published a 200-page outline of a key part of the plan.
Then things got complicated.
First, after eight years of pronounced disinterest from Washington, the Obama administration signaled it would be much more active in California and committed to fixing the Delta, an estuary whose importance it compared to that of the Florida Everglades. But the administration's point man, Deputy Secretary David Hayes of the Department of the Interior, did not appear anxious to follow the state government's lead when he appeared with state water officials recently.
Then state lawmakers weighed in with their own fix — which Gov. Arnold Schwarzenegger vowed to veto if it does not change — that among other things would firm up the plan's environmental protection. Key parts of the bills would, for example, require the plan's authors to figure out how much water must flow through the Delta to ensure its health and that the plan make a firmer commitment to recovering species in the Delta.
Add to that the inflamed opposition of anglers and residents around the Delta and the observation last week by a Contra Costa Water District engineer that the central feature of the plan — a highly controversial canal — would take many years to build, might not deliver as much water as agencies hope and would not eliminate the need to maintain fragile levees.
All that left administration officials in the contradictory position of, on one hand, claiming they were in the "ninth inning" of writing the plan and, on the other, facing an increasingly complicated political environment.
Many of the plan's critics say the Bay Delta Conservation Plan might still be a good idea, but that it might not happen as quickly or in the form envisioned by Schwarzenegger's team.
The administration still contends it can finish the plan by the end of next year. If that were to occur, it would appear to be the fastest "habitat conservation plan" ever written and what may be the most complicated such plan ever.
Taken together, the challenges that broke into public view in recent weeks add up to a reality check for an administration that has been barreling forward on a highly ambitious schedule.
"What we're witnessing is a much more public reality check on the direction and timeline of the (Bay Delta Conservation Plan) given its immense complexity," said Ann Hayden, a water policy analyst at the Environmental Defense Fund who is on the committee drafting the plan. "Many of the issues being raised by Delta interests and the Legislature are valid and are not going away — it's best to deal with them head on and soon."
To be sure, except for many Delta residents and anglers, plenty of the plan's critics agree it might be a good idea if done properly. If it works, it would secure water supplies for much of the state while also providing a plan and funding to restore an entire ecosystem, the West Coast's largest estuary and a water supply for much of the state.
But there are plenty of disagreements about its numerous details.
None is more contentious than its central feature, a new canal, tunnel or other structure that takes Sacramento River water to south Delta pumps outside of the region's maze of levees and channels.
By building a new aqueduct to deliver Sacramento River water to pumping plants near Tracy, the strategy would reduce the impact those powerful pumping stations have on fish in the south Delta while also restoring wetlands. An aqueduct could, however, also reduce the amount of water that flushes through the Delta and reduce flows salmon need to migrate, depending on how big it is and how it is operated.
The origins of the conservation plan go back to 2006, when the ripple effects of the collapse of several Delta fish populations were beginning to be felt and policymakers were coming to the conclusion that the state's existing water plan for the Delta was not working.
The collapse in the environment and of the state's guiding policy left water officials with two big problems: how to secure reliable, high-quality water and how to avoid conflicts with endangered species.
The answer: a habitat conservation plan, which is an alternative way to comply with endangered species laws. It requires more comprehensive ecosystem protection, but water agencies would get more assurance that supplies would not be disrupted by issues with Delta smelt, salmon or other imperiled wildlife.
One Bay Area state senator with a record of strongly siding with environmentalists said the canal is worth considering but the Schwarzenegger administration has so far refused to address related issues.
"You have to talk about these other issues," said state Sen. Joe Simitian, D-Palo Alto. "Saying, 'No, no, no, that's not our department,' is not satisfactory."
San Diego Union-Tribune
Water system on state agenda
Businesses, agencies want better delivery...Michael Gardner, U-T Sacramento Bureau
SACRAMENTO – Prowling the halls of the Capitol, San Diego business leaders cornered lawmakers and ranking aides to the governor to press their case.
But it wasn't taxes or regulations on their agenda last week. It was an issue carrying equally important consequences for the health of business in the San Diego region: water.
“Companies making major economic decisions are actually weighing water supply,” said Andrew Poat, a vice president of the San Diego Regional Economic Development Corp.
Those business executives and local water managers plan to become familiar faces in the Capitol over the next few weeks, a seize-the-moment strategy after Gov. Arnold Schwarzenegger and legislative leaders added fixing the state's water system to their to-do list before recessing Sept. 11.
The challenge will be closing sharp divisions over the future of California's water supply, including building dams and a 40-mile delivery canal through or around the Sacramento-San Joaquin Delta.
“We are now on a time clock,” said Maureen Stapleton, general manager of the San Diego County Water Authority. “The crisis will only get worse.”
The crisis centers in the delta, an economically and environmentally valuable estuary under pressure from water shortages, growth and pollution. The maze of waterways, farmland and subdivisions is roughly the size of Rhode Island.
Despite its distance, the delta is a vital conduit for the San Diego region. More than a third of the water reaching homes and businesses from Chula Vista to Fallbrook flows through the delta.
That's why San Diego water agencies, with the backing of much of the business community, have put a new north-to-south water delivery system at the top of their priority list.
Supporting the cause in Sacramento last week were Debra Reed, president and CEO of San Diego Gas & Electric and Southern California Gas; Doug Hutcheson, president and CEO of Leap Wireless; and Mike Neal, president and CEO of H.G. Fenton, a real estate company.
Building a better delivery system is so important that the water authority and other Southern California agencies have offered to pay construction costs and for some environmental safeguards. Estimates vary wildly, from $7 billion to $17 billion, depending on the size and location of the canal.
“It is a lot of money,” Stapleton said. “But to some degree, it's 'put your money where your mouth is.' We're demanding improvements in the delta to improve water reliability.”
But it's not as simple as writing a check. The failed Peripheral Canal haunts those pushing new plumbing 27 years later.
“Don't say Peripheral Canal. It's alternative conveyance,” said Senate President Pro Tempore Darrell Steinberg, D-Sacramento, with a knowing laugh.
“The delta is unsustainable as it is,” Steinberg said, turning serious. “We have to be open to alternative conveyance. But only if there is a co-equal commitment to restore the fragile ecosystem and there is respect for those who live there.”
Delta-area residents, farmers and fishermen are sounding alarms. They have aligned with some environmentalists wary of promises to protect fish and wildlife.
“It's all about taking water south,” said Charlyn Connor, who grows wine grapes near Sacramento. “They need to stop building in the desert. They killed the Colorado (River) and now they want to kill the delta.”
A one-two punch of drought and court-ordered protections for fish has squeezed delta water deliveries to Central Valley farms and Southern California cities. Water shortages combined with a deep recession have idled farmland and farmworkers, transforming main streets in Mendota, Parlier and Caruthers from rows of robust stores to shuttered hulls.
The Rev. Samuel Rodriguez, president of the National Hispanic Christian Leadership Conference, sees direct links among water, unemployment and a growing spiritual and moral crisis in the depressed Central Valley.
Domestic violence, alcoholism and drug abuse are on the rise along with the jobless numbers, he said.
“It's morally reprehensible. . . . The church needs to stand up and say enough is enough,” said Rodriguez, who believes farms and cities should be first in line when water supplies are short.
At the same time, nets and lines are not being cast for salmon for the second straight year, forcing many commercial fishermen to the docks. If not for those water diversions from farms to fish, they believe their way of life would disappear completely.
“I'm a food producer, the same as the farmer. Our common denominator is water,” said Larry Collins, who used to troll for salmon out of San Francisco.
Even as jobs evaporate, fish numbers plummet and the delta nears collapse, deep political divisions have stalled progress.
And as if closing a deal over dams and a new canal isn't challenging enough, another obstacle has emerged to further divide the governor and lawmakers as they chart a new course on water.
Democrats intend to move ahead with a package of measures aimed at restoring the delta, including establishing an agency and “water master” with broad powers. New fee authority is also in the mix.
“We don't need more bureaucracy. We need more water,” said Sen. Dave Cogdill of Modesto, a Republican leader on water issues.
Cogdill and Schwarzenegger promote more reservoirs as part of a statewide bond measure, which will require a two-thirds vote of the Legislature to pass.
Steinberg says he will consider a smaller bond, but it is not the top priority.
“I want to make sure we first get the policy right on how to restore the delta and then deal with the issue of water supply reliability,” Steinberg said.
That drew an immediate and pointed warning from Schwarzenegger: Pass a water bond that includes new storage or he will veto related bills.
“We need a whole package to restore our water today and ensure we have water for tomorrow,” the governor said.
The county water authority is monitoring the debate over reservoirs, but is reserving its political pull for a new canal. The water authority has committed nearly $1 billion to several local reservoir expansions, including $600 million to raise San Vicente Dam. Many Democrats, still stinging from being forced to drastically slash funding for social programs and education, are reluctant to take on even more debt to build reservoirs that they are not convinced are necessary.
For example, the governor's $11.7 billion bond proposal from last year would have taken $760 million a year to pay off over 30 years, according to the nonpartisan legislative analyst.
Assemblywoman Mary Salas, a Chula Vista Democrat involved in water talks, said it's important to review all potential sources, including reservoirs, groundwater, conservation and desalination.
But she, too, places a priority on protecting the state's water hub.
“If you don't save the delta, then it doesn't matter how many dams you build,” Salas said. “The whole system collapses.”
Regardless of the challenge, Steinberg insists a deal is within reach for a Legislature and state facing a host of difficult issues.
“I want to get water done. I do – because I also think the institution and the state need a big win,” he said.
Las Vegas Sun
25 years out, no end in sight to water pipeline fight...Stephanie Tavares
If water wars were still fought with bullets, the Southern Nevada Water Authority would have just unsnapped its holsters.
Facing scores of angry eastern Nevadans saying their way of life was being placed in jeopardy, the water authority’s board of directors instructed its staff on Thursday to continue working on permits to build a 300-plus-mile pipeline so water from the Great Basin can be drawn south.
The vote and the four-hour hearing that accompanied it were unnecessary. But it was a public demonstration that the water authority’s general manager, Pat Mulroy, had gathered a formidable posse — one with the political clout and financial backing to counter the mounting opposition to her proposed pipeline from White Pine County.
“The rhetoric (of opponents) has been that the new board doesn’t support us and this move,” Mulroy said after the vote. “It’s important to take this position to continue the process because we still have millions to spend in this permitting process.”
As in a scene from an old John Wayne movie, adversaries had queued up on each side of a line drawn in sand.
A cadre of developers and business advocates voiced their support of the pipeline, countering the arguments of environmentalists, national parks advocates, American Indians, and residents who say their livelihoods would be threatened by plans to pump 50,000 acre-feet of water from their rural Snake Valley basin to Las Vegas.
The mood was tense, but participants were polite in the main meeting room where about 100 people found seats or space along the walls. Another 170 filled a second room in the Molasky Corporate Center and a room at the county Government Center down the street where live feeds were provided.
At least for the crowd in the water authority boardroom, it was wedding-style seating: split down the middle. Dozens of union workers, their hard hats beneath their seats, filled the back rows for the first two hours, drinking coffee and answering cell phones. They were there to show support for the pipeline, which they believe will put hundreds of their peers to work.
In the front of the room sat dozens of nervous and angry Snake Valley residents who endured a six-hour bus rides across the state to be at the meeting. Some of them brought their grandchildren; others called on the water authority to think of its political legacy. A woman cried because she would have no where to go if the project’s worst projections come true and the valley is sucked dry.
None of the arguments were new. But both sides wanted to weigh in one more time to show they have not lost their passion over the project that’s been in the works for a quarter century.
The Bureau of Land Management, the agency that will decide whether the pipeline gets built if the water authority can acquire water rights in Snake Valley, expects to release its environmental impact statement on the project early next year for public comment.
The water authority has acquired or purchased water rights in four out of five basins from which it has requested water. Much of the opposition comes from the fifth: Snake Valley, a high desert enclave of farmers and ranchers who live on the Utah-Nevada border in the shadow of Great Basin National Park. A recently proposed agreement between Utah and Nevada over use of water in the basin would require the Southern Nevada Water Authority to not pursue water rights in Snake Valley for 10 years.
And that’s OK with Mulroy, because she says the pipeline may not be built for 10 years anyway.
With growth in the Las Vegas Valley stunted by the recession, demand for water to fuel growth is on hold. But because of the continuing drought along the Colorado River basin, the water authority says water from eastern Nevada may eventually be needed to sustain Las Vegas.
With Thursday’s vote, the water authority will keep spending millions of dollars to pay for the environmental studies ordered by the BLM to assess the effects of the pipeline and how to offset them. Had the board voted no, years of work by Mulroy’s staff to find water and secure the water rights in other parts of Nevada for taps in Southern Nevada would have been for naught and she would have had to go back to the drawing board.
Mulroy says the project won’t be built unless it’s “absolutely necessary,” but even that’s a changing concept.
“This ground water project has been around for a long time,” Mulroy said at the meeting. “It has changed character and purpose many times over.”
Two years ago, Mulroy said the pipeline was needed to support Las Vegas’ growth. Then the development bubble burst, taking thousands of Las Vegas families down with it. Today, the developers still say they need the water for future development, but Mulroy says the pipeline is the valley’s guarantee of a stable water supply.
The water level at Lake Mead, source of 90 percent of our water, has dropped 100 feet in the past decade, and global warming models predict continued and worsening drought conditions along the Colorado River over the next 50 to 100 years. Anticipating that, the water authority is building a third and deeper intake, or straw, to pump water from the lake. But if lake levels drop to the point where that intake is needed, Nevada’s rationed share of the lake’s water could be cut, leading to more severe conservation measures and rationing.
Conservationists say the city can grow without more water. Basic water saving measures such as the water authority’s popular cash-for-turf program have significantly cut water use. Mandating pool cover use, providing rebates for installing low-flow toilets and faucets or requiring water conserving technology in new developments would be cheaper, easier and have a greater effect, said Scott Rutledge, executive director of the Nevada Conservation League.
But the pipeline has 25 years of momentum behind it, and the water authority seems intent on building it whether Las Vegas needs it or not, opponents said.
“This phrase ‘absolutely necessary’ keeps coming up, but no one wants to define what that really means,” said pipeline foe Launce Rake, spokesman for the Progressive Leadership Alliance of Nevada. “For some developers who want to build half a dozen golf courses, absolutely necessary was yesterday. But I don’t think your average Las Vegan shares that definition.”
Washington Post
Without Prospects, They're Prospectors
Metal's High Price, Economy's Low Ebb Create New Gold Rush...Karl Vick
COLUMBIA, Calif. -- Maybe it was the nail in Ray's head. Maybe it was the economy. His wife said one as much as the other drove the decision to auction off everything that wouldn't fit in the trailer and leave Vermont for the mother lode.
"Thought we'd try to make a living at it," Kim Lague said, standing in a mining camp that was busier during the Great Depression than it was in the Gold Rush of 1849, and is busy once again.
And so, 18 months after a co-worker's pneumatic hammer drove a 2 1/2 -inch stainless-steel nail into Ray Lague's skull -- "the plunger of the gun brushed my hat and discharged" -- the once-thriving contractor took his place among the prospectors lining the steep banks of the South Fork of the Stanislaus River, 40 miles west of Yosemite National Park. The bearded man helping him drag the mining gear into the water was a jobless logger who lost his home to foreclosure.
Fifty feet downstream, an unemployed concrete-truck driver scoured the river bottom beside a laid-off furniture mover, back to prospecting after a day spent wrestling with the unemployment office.
"You have to consider the economy," said Gary Rhinevault, caretaker of the Lost Dutchman's Mining Association campground, where 45 prospectors pay as little as 30 cents a day to pitch their tents. "In 1932 there were more prospectors out trying to make a living than in the 1850s."
Even in the trough of today's great recession, most of the prospectors still double as hobbyists. The Lost Dutchman's club allows members to camp for six months at a time, and its dozen or so claims are crowded first with the motor homes of freewheeling retirees.
But as the economy soured, their ranks were swelled by adults of working age, pulled by gold prices flirting with $1,000 a troy ounce -- the highest in more than two decades -- and pushed by unfortunate circumstance. While there is no way to quantify the trend, anecdotally it is clear that the jobless are showing up not only in California but also elsewhere around the country where gold has been found in the past.
"I have been seeing a lot of it this year, with so many people getting laid off or hours cut way back," said Tim LeGrand, owner of TN Gold & Gems in Coker, Tenn. Permits for prospecting in the nearby Cherokee National Forest, named for the tribe pushed westward after gold was discovered in the early 1800s, have more than doubled since 2007.
"People come out with high hopes and don't realize the work that is involved until they get into it," LeGrand said. "Most try a few days and give up. Many struggle on and learn to pan. Very few get enough gold to do them any financial good."
On the South Fork, everyone claims to know this.
"No one's making a living down here," said Tony Stroud, an unemployed machinist who, like the other prospectors repeating the phrase, surely believes the words.
And yet, here they all are, investing $1,500 to $5,000 for the suction dredges that vacuum up gravel, for the sluices that separate the gravel from the black sand, and, not least, for the big plastic pans that, after the machines have done the heavy work, reveal the glimmers of color that set hearts to racing and render reason irrelevant.
"You didn't hear it from me," Stroud went on a moment later, "but a guy in Columbia said downstream he took 14 ounces out in 48 hours. And we're going to jump his hole."
Robert McFadden, seated to his right on a picnic table, set down his morning beer.
"What's the appeal of prospecting?" he said. "Hope I can get rich, number one."
The river is cluttered with the miners' gear and the boulders they constantly rearrange in the search for a spot not already groomed of flakes. Yet the feeling is orderly, tents and motor homes lined around a rustic clubhouse that evokes familiar notions of prospecting as reliably as the bushy beards sported by many of the men.
In a shady bend a mile downstream, DeWayne and Nick Shepard labored in frustration beside the Michigan flag, planted upon arrival 30 days earlier on a trip planned for three years.
Their vision of prospecting was informed by repeated viewings -- "must be hundreds of times," Nick said -- of "Gold Fever" and other cable television programs produced by members of the family that owns the camps.
"He shows you, in his pan, what must be $15,000 in gold he says he got in two days," said Nick Shepard, 28, who left his masonry job to come west with his retired father.
"We had hoped to come out and make enough money, take care of some things."
But even if their truck's transmission had held up, they would still be deep in the hole. "We wonder if there aren't people who got sucked in worse than us," DeWayne said.
The Lagues watched the same shows.
"Realistically, when we first started out, they say you can make an ounce a day," said Kim Lague, in the 31-foot trailer the couple now calls home. "Now it's down to, we just want to make an ounce a month."
Their work is cut out for them. Large dredges can churn through so much river bottom that environmentalists fret for the salmon. California Gov. Arnold Schwarzenegger (R) signed a bill this month banning gold dredging while the question is studied, but it is not yet being enforced and it faces a likely court challenge.
In any event, the two-inch nozzle of the dredge the Lagues chose to start with disturbs very little.
"More of a toy than anything," said Stephen Buttram, the jobless logger spending the day helping Ray Lague. Buttram, 37, moved to the camp after losing his three-bedroom house in Pioneer, Calif.
"I pretty much sold everything I had, my furniture, everything, trying to keep up," he said, moving stones to expose gravel for Ray to hose up. "I paid for my dad's funeral with my credit cards."
The Lagues were falling behind on their own bills. Ray had laid off all workers in his contracting businesses and was spending more time looking for work than working.
"The furthest west I'd ever been was St. Louis," he said. Now, chest-deep in a mountain stream, he looked to Buttram. "Want to check it? Just for the heck of it?"
They waded over to the dredge, which looked a bit like a snowmobile floating between the rocks. Gazing into the boxes that shone with the glitter of the mica and pyrite that so excited Ray his first couple of times out, Buttram shook his head.
"Just a fleck," he said.
"Nothing for a snuffer bottle, eh?" Ray ventured, meaning a squeeze tube used to suck up the smallest bits.
"No," Buttram said. "Nothing to write Mom about."
Lague gazed at the mica. "If that was gold, you'd be, 'Yeah!' " he said, and threw his arms wide under the blue summer sky. Then his hands met in a gesture that combined relish and determination.
"Day's not over yet," he said.
CNN Money
Analyst Bove sees 150-200 more US bank failures...Reporting by Jonathan Stempel; editing by Gunna Dickson
* New buying by foreign banks, private equity possible
* Fees could eat up 25 pct of banks' pretax income in 2010
NEW YORK (Reuters) - A prominent banking analyst said Sunday that 150 to 200 more U.S. banks will fail in the current banking crisis, and the industry's payments to keep the Federal Deposit Insurance Corp afloat could eat up 25 percent of pretax income in 2010.
Richard Bove of Rochdale Securities said this will likely force the FDIC, which insures deposits, to turn increasingly to non-U.S. banks and private equity funds to shore up the banking system.
"The difficulty at the moment is finding enough healthy banks to buy the failing banks," Bove wrote.
The FDIC is expected on August 26 to vote on relaxed guidelines for private equity firms to invest in failed banks, after critics said previously proposed rules were too harsh and would actually dissuade firms from making investments.
Bove said "perhaps another 150 to 200 banks will fail," on top of 81 so far in 2009, adding stress to the FDIC's deposit insurance fund.
Three large failures this year -- BankUnited Financial Corp in May, and Colonial BancGroup Inc, Guaranty Financial Group Inc in August -- collectively cost the fund roughly $10.7 billion.
The fund had $13 billion at the end of March.
Regulators closed Guaranty's banking unit on Friday and sold assets of the Texas-based lender to Banco Bilbao Vizcaya Argentaria SA. The FDIC agreed to share in losses with the Spanish bank.
Bove said the FDIC will likely levy special assessments against banks in the fourth quarter of this year and second quarter of 2010.
He said these assessments could total $11 billion in 2010, on top of the same amount of regular assessments. "FDIC premiums could be 25 percent of the industry's pretax income," he wrote.