10-3-09

 
10-3-09
Modesto Bee
Valley's pain not endured equally by all...Michael Doyle
http://www.modbee.com/local/v-print/story/879222.html
WASHINGTON — San Joaquin Valley cities remain mired in the great economic meltdown, though a new study shows some are suffering more than others.
High unemployment, devastated housing prices and rampant foreclosures are keeping Modesto ranked near the bottom among 100 metropolitan regions evaluated by Brookings Institution experts. Fresno is faring slightly better, though it's not exactly soaring.
"Things are still bad, but they aren't as bad as they were at the beginning of the year," study author Alan Berube stated, adding that conditions "have moderated in most metropolitan areas ... but there is still a great deal of variation."
For residents long accustomed to uniformly grim economic report cards, the latest assessment from Brookings' Metropolitan Policy Program offers a somewhat nuanced message: The valley's pain is deep but not distributed equally.
Fresno, in particular, has been having relatively fewer home foreclosures of late. But while Fresno has joined the likes of Sacramento and San Jose among the 20 cities listed in the tier of "second weakest" metropolitan areas, Modesto and Stockton still count among the nation's "weakest" areas, as defined by the Brookings study.
Fresno faring a little better
Most tellingly, a 20.6 percent decline in housing prices since last year ranked Modesto 99 out of 100 cities nationwide. Fresno ranked 92nd, with a 16.6 percent housing price decline.
"Our assessment has (also) been that Fresno has fared somewhat better than its Northern San Joaquin Valley neighbors," agreed Jeffrey Michael, director of the Business Forecasting Center at the University of the Pacific's Eberhardt School of Business. "The first year of the recession hit harder in Modesto and Stockton, and the recession was later arriving in Fresno."
Michael's latest forecast predicts that the valley's recovery will lag behind the rest of California. He estimated unemployment will peak in the first half of next year at 17.9 percent in Modesto and 17 percent in Fresno before starting to subside. In part, Michael noted, northern valley communities will be coping for a while with the aftershocks from the closure of the NUMMI auto plant in Fremont.
The subtle contrasts among cities along the Highway 99 corridor, in turn, are much smaller than those between the region as a whole and other, more economically dynamic areas.
"Differences in economic performance among metropolitan areas remained stark," the Brookings study notes.
In this recession, success is strictly relative.
For instance, Omaha's unemployment rate of 5.4 percent in June increased over the past year, but only by 1.7 percent. This ranked Nebraska's largest city at or near the top among areas evaluated by Brookings' economists.
Modesto's unemployment rate in June, by contrast, was 16.5 percent. This was second worst in the nation among all metropolitan areas, ranking above only Detroit. Always high, Modesto's unemployment rate had increased 5.8 percentage points over the prior year.
Four of the five metropolitan areas nationwide with the highest June unemployment rates — Modesto, Stockton, Fresno and Bakersfield — are in the San Joaquin Valley.
Fresno's unemployment rate of 15.3 percent in June marked a 5.7 percentage point increase over the prior year.
While Modesto and Fresno have horrific unemployment in common, they diverge somewhat in foreclosures.
The foreclosure pandemic has left Modesto with the third-highest percentage of bank-owned properties among all metropolitan areas nationwide. Fifteen out of every 1,000 properties in the Modesto area have been taken by banks, the study shows.
In Fresno, by contrast, only about seven out of every 1,000 properties had been taken over by banks as of June. The pace of foreclosures also continued to be notably higher in Modesto than in Fresno from March to June, analysts found.
Fresno Bee
Judge: Smelt plan lacked critical analysis...John Ellis
http://www.fresnobee.com/updates/v-print/story/1660695.html
The federal government failed to conduct a critical environmental analysis before approving a controversial set of rules for the endangered delta smelt, a Fresno judge said Friday, providing an encouraging legal win for farmers.
The analysis was required under the National Environmental Policy Act -- and it should have taken into account the environmental effect on humans, U.S. District Judge Oliver W. Wanger said.
Wanger did not order any immediate changes in the smelt plan or the resulting water cutbacks for west-side agriculture and users in the Bay Area and Southern California. But that could happen during a critical hearing in December, when Wanger could order the federal government to rework the smelt plan -- and possibly suspend it while that revision is performed.
The decision does not open the door to considering economic effects of the plan, which have stirred widespread anguish. But a rewritten plan that takes into account the environmental effect on humans could result in more water for west-side agriculture.
In a nod to the complicated water law and legal issues at play, Wanger said he probably will bring in an outside expert -- someone who is neutral and "super qualified" -- to help him wade through the case.
Still, Wanger appears to already have concluded that the smelt plan has hurt the environment. He said it has caused dust to rise from dry fields, possibly reducing air quality. And increased ground-water pumping has caused land to sink, he said.
"How could this not affect the human environment?" Wanger asked of the smelt rules, which are known as a biological opinion. "It has had catastrophic effects."
His oral ruling -- which attorneys from both sides were still trying to understand late Friday -- wasn't unexpected. In May, he agreed with a claim in a lawsuit filed by the Westlands Water District and the San Luis & Delta-Mendota Water Authority that the new smelt plan lacked an assessment on the environmental effect on humans.
Terry Erlewine, general manager of the State Water Contractors, praised Wanger's latest decision.
"We strongly believe these other human impacts should be reviewed before you make a decision," he said.
Westlands spokeswoman Sarah Woolf said Wanger "was very fair on all fronts in trying to find a solution."
"Unfortunately," she added, "this doesn't result in any new water tomorrow, but it is a step in the right direction."
Friday's four-hour hearing stemmed from a March lawsuit filed by Westlands and the San Luis & Delta-Mendota Water Authority, which sought to stop the federal government from enforcing the new smelt-management plan.
Several other agencies -- including the State Water Contractors and the Metropolitan Water District of Southern California -- filed almost identical lawsuits.
All have now been combined into one legal action, which marks a major pushback by agriculture and urban water users to challenge the new federal rules that protect the smelt. The U.S. Fish and Wildlife Service released the rules in March.
The updated rules were drafted after Wanger had invalidated earlier regulations because they did not comply with the federal Endangered Species Act. They have been under fire ever since.
Wanger also dismissed arguments made in a related lawsuit filed by the Pacific Legal Foundation on behalf of three San Joaquin Valley farming operations.
The foundation claimed the federal government has no constitutional authority to oversee the endangered smelt, because it has no commercial value and is not involved in interstate commerce.
Because of that, managing the smelt and placing it under the protection of the Endangered Species Act violates the U.S. Constitution, which limits federal domestic authority to things involved in interstate commerce, the suit claimed.
Wanger rejected that argument.
California competing for high-speed rail funding...E.J. Schultz, Bee Capitol Bureau
http://www.fresnobee.com/local/v-print/story/1660817.html
SACRAMENTO -- The nationwide race is on for federal high-speed rail money, as state after state jumped on board Friday -- including California with a giant bid.
Gov. Arnold Schwarzenegger submitted the state's $4.7 billion bid for stimulus dollars, including nearly $1.3 billion for Valley routes.
California's application seeks more than half of the $8 billion that Congress and President Barack Obama set aside for high-speed and intercity rail projects across the country.
But the competition is intense.
Federal officials would not confirm how many states had applied as of late Friday afternoon in advance of the 9 p.m. deadline. But bids were streaming in, according to news reports and statements from other states.
Florida, with the support of Walt Disney World, is seeking $2.5 billion, the Orlando Sentinel reported. Virginia wants $1.8 billion, including for a stop in Washington, D.C. Wisconsin and Ohio are asking for more than $500 million each. A Chicago-based rail also is expected to be a major competitor.
California officials touted their project as "the only true high-speed train," with top speeds of more than 200 mph. Most other proposals are for trains with much slower speeds. Virginia is shooting for 90 mph, for instance.
California also has a $9 billion voter-approved bond at its disposal -- yet officials still don't have a firm financing plan for the entire project, expected to cost more than $40 billion.
The rail is planned to eventually connect Sacramento and San Francisco to San Diego.
"It will revolutionize travel in California," the governor said at an event in Los Angeles announcing the bid. Rail officials also promoted the bid at an event in Fresno, attended by politicians and others.
The $4.7 billion bid -- which largely follows what the state's High Speed Rail Authority approved last week -- would pay for work to begin on four segments: Merced-Fresno, Fresno-Bakersfield, San Francisco-San Jose and Los Angeles-Anaheim. Stimulus rules require construction to start by September 2012 and finish in 2017.
The state chose not to prioritize the route segments, Schwarzenegger administration officials said. So if California gets less than its bid -- which is very possible -- officials will face politically tough and potentially polarizing choices about where to spend the money first.
The Los Angeles route has the advantage of so far drawing a lot more local financial support compared with the Valley. The Valley's selling point is that its rural stretches are the only place where the train can reach top speeds, rail officials say.
By applying solely for high-speed rail, the governor rejected proposals to seek money for conventional rail upgrades. Critics said that was a mistake.
"The governor's decision means that California would discard most projects that could actually go out to bid in the near-term, to benefit $4.5 billion of high-speed rail applications that have much longer timelines, and are unlikely to meet the 2012 deadline," the California Rail Foundation said in a statement.
The foundation, a nonprofit that seeks to promote "cost-effective" rail expansion, is a longtime critic of the High Speed Rail Authority.
California has pledged to match federal money with state and local dollars, including using a good chunk of the $9 billion in bond money voters approved in 2008 to jump-start construction.
The state still needs to find at least $26 billion to complete the entire project.
Officials are expected to seek private investments as part of their financing plan.
EDITORIAL: Time for action on water issues
While river flow has begun to be restored, other problems still loom.
http://www.fresnobee.com/opinion/v-print/story/1660542.html
The water releases into the San Joaquin River have become a high-profile symbol in the battle over how California parcels out a precious resource that must accommodate the state's 38 million people. On Thursday evening, we saw the first releases of water from Friant Dam under an agreement between farmers and environmentalists to help restore the river.
But while there's a legal agreement on the river restoration, there's not a political one. Farmers protested the water releases from Friant Dam, claiming that environmentalists reneged on the agreement by continuing to sue to limit water for agricultural purposes.
While we have supported the river settlement, farmers have a point about their water sources being under attack. There would have been no reason for agricultural interests to agree to the river settlement if they were going to lose water deliveries anyway.
Water politics have always been contentious in California. You can't grow crops, build homes or keep our environment sound if there isn't enough water to go around. We simply have too much demand and too little supply.
This is the result of the state and federal governments refusing to solve the state's long-term water problems. The water system was built for half as many Californians as live here now, yet our leaders have refused to solve the problem.
Now in a third year of a drought, and with water pumping limited under environmental restrictions, acreage on the west side of the Valley is being fallowed. Unemployment is high in the area, and the farm losses are hurting the Valley's economy.
Farmers say the river settlement will lead to the same result on the east side of the Valley. That is unacceptable.
In addition, Southern California cities don't have enough water for growing populations.
It is time for action for the good of the entire state. We believe California's limited water supply can be stretched to meet most of the needs if our leaders develop a comprehensive water plan. These are the basic elements needed:
The state must provide additional water storage in reservoirs and underground water banks to capture water in wet years to be used in dry years.
The serious environmental degradation of the fragile Sacramento-San Joaquin Delta must be resolved.
The state must promote conservation by urban, agricultural and industrial users and spread the conservation mandates equitably across the state.
The structural improvements must be funded, and we have long supported a water bond. The federal government also must help in funding the improvements.
Meanwhile, the federal government needs to increase water pumping from the Delta as a short-term solution on the west side.
Ignoring California's water needs is not an option.
Inside Bay Area
Nuclear material stockpile dwindling at Livermore lab...Suzanne Bohan, Contra Costa Times
http://www.insidebayarea.com/news/ci_13472528
Two-thirds of the plutonium and weapons-grade uranium stored at Lawrence Livermore National Laboratory has been removed, the agency overseeing the lab announced this week.
The removal of the "special nuclear material" marks a milestone in the National Nuclear Security Administration's goal of "denuking" the Livermore lab by 2012, two years ahead of its original target of 2014. To save costs, the dangerous radioactive materials will be consolidated at five sites — none in California — down from 10 sites nationwide listed in a 2007 Government Accountability Office report.
"The removal of two-thirds of LLNL's nuclear material demonstrates real progress and is the result of some very hard work," said Thomas D'Agostino, administrator of the nuclear security agency. "NNSA continues to make tremendous strides in transforming a Cold War nuclear weapons complex into a 21st-century nuclear security enterprise that is smaller, safer, more efficient."
But 2012 isn't soon enough for Marylia Kelley, executive director of Tri-Valley CAREs, a Livermore watchdog group.
While she said the group applauds the reduction, it wants it all removed by the end of 2010 due to security concerns.
The 2008 failure by the lab's protective forces, during a mock terrorist attack, to secure a store of pretend nuclear material leaves Kelley worried that the lab is vulnerable to a bona fide attack and release of the material. Such a release "would make our communities uninhabitable for generations," she said.
The GAO report noted that the plutonium and highly-enriched uranium at the Livermore lab could be the target of theft for use in an "illegal nuclear weapon," dispersed during an act of sabotage, or released in a "dirty weapon." A release of the radioactive materials would have "devastating consequences for the site and its surrounding communities," the report stated.
Jennifer Wagner, a spokeswoman with the nuclear security agency, however, said that the lab succeeded in its last security drill for protecting the nuclear material, conducted in April 2009. "We take our responsibility to nuclear security and this community very seriously, and we are committed to the removal of special nuclear material from Livermore as quickly as logistically possible. This latest milestone reaffirms that commitment," Wagner said.
Kelley added that a small amount of plutonium and high-enriched uranium will remain at the lab indefinitely, posing an ongoing security risk.
Wagner confirmed that a small amount of the materials, which she said would be comparable to amounts kept at other research facilities around the country, will be retained for scientific research.
New York Times
Rules for Clean Energy Projects in California...Todd Woody, Green Inc.
http://greeninc.blogs.nytimes.com/2009/10/02/clean-energy-project-rules-for-california/?pagemode=print
Shutterstock Regulators in California want to strike a balance between accelerating renewable energy projects and protecting fragile desert ecosystems.
Regulators have a message for companies seeking to build solar power plants in the California desert: Don’t use much water, take good care of endangered species and make sure you have signed a deal with a utility before you submit an application to regulators.
Those are some of the rules laid down this week by a state task force charged with developing guidelines to protect fragile desert ecosystems while accelerating the rollout of dozens of megawatt solar farms and other renewable energy plants in California.
The “Interim Guidance for Desert Renewable Energy Project Development” is a draft report and subject to revision, but it offers some insight into regulators’ thinking.
Given that there are already a dozen large-scale solar power plants undergoing licensing in California, with another two dozen projects moving into the queue, it is a bit like assembling a car while driving at 100 miles an hour.
Most of the guidelines laid down by the task force — which includes representatives from the California Energy Commission, the California Department of Fish and Game, the United States Bureau of Land Management and the U.S. Fish and Wildlife Service — reflect existing state and federal policy.
But the main idea is to head off conflicts over water and wildlife that have bogged down some big solar projects.
The report’s authors say in no uncertain terms that solar developers should not even think of using drinking-quality ground water or surface water to cool their power plants. They are also encouraged to embrace dry cooling, which uses relatively little water.
Those facilities planning to tap reclaimed water from a local municipality are instructed to have an agreement in hand before submitting a license application.
The regulators also want a renewable energy developer to have signed a power purchase agreement with a utility before filing a license application with the California Energy Commission.
There are at least two big solar projects in the midst of a years-long licensing process that have yet to announce a buyer for their electricity.
For Culprits in Miracle on Hudson, the Flip Side of Glory...SIMON AKAM
http://www.nytimes.com/2009/10/03/nyregion/03geese.html?_r=1&sq=conservation&st=cse&scp=7&pagewanted=print
Most great tales have a hero and a villain, and the now-legendary Miracle on the Hudson, in which a pilot successfully ditched a plane that had lost power in both engines, is no exception.
On Thursday, the return of the pilot, Capt. Chesley B. Sullenberger III, to complete the flight from La Guardia Airport to Charlotte, N.C., was greeted with nonstop media coverage, his fans besieging him with applause and autograph requests. The story of the culprits in the Jan. 15 accident — namely the geese that knocked out those engines — has played out a little differently.
The exact number of resident Canada geese is difficult to ascertain — probably somewhere above 20,000 in the New York metropolitan area, according to the State Department of Environmental Conservation. What is certain is that over eight hectic days last summer that number was reduced by 1,235.
In June and July, about a dozen workers from the United States Department of Agriculture Wildlife Services and the city’s Parks and Recreation and Environmental Protection Departments descended on 17 locations across New York. Their aim was to gather as many birds as they could, and they were taking no prisoners.
The exercise was politely termed a roundup, not an extermination, but none of the geese herded out of the water with kayaks and corralled behind plastic barriers would live to see the autumn leaves.
Instead, they were packed in turkey crates and taken away to be gassed. By the time the exercise was over, the geese were dead, and the city had had its vengeance.
Whether the cull has made the skies above New York safer is less clear.
It is certainly true that Canada geese are no friends to aircraft. According to Richard A. Dolbeer, a wildlife scientist who retired from the United States Department of Agriculture in 2008, their bulk — typically around nine pounds, he said — means they can do much more damage than smaller birds, and they also congregate in flocks.
They are abundant, too, with more than five million in the United States. Traditionally, they passed through New York only during migrations in the spring and fall, he said, but a resident population was introduced in the 1930s to provide opportunities for hunting.
“The bottom line with Canada geese is that they truly are the most hazardous species of bird that poses a threat to aviation,” Dr. Dolbeer said.
But some wildlife advocates are skeptical about the efficiency of last summer’s cull. Glenn Phillips, the executive director of New York City Audubon, said research into the goose population in the city was insufficient to know the appropriate number of birds to kill.
“There’s a lot that has to be done before we are taking measures like this,” Mr. Phillips said. “We’re not saying you can’t do these things, we’re saying you have to do your homework first.”
Mr. Phillips said the birds that brought down Captain Sullenberger’s plane, US Airways Flight 1549, were migrants lab tests showed that. He said therefore that reducing the resident population would not necessarily have prevented the accident.
Unsurprisingly, the authorities offer a more positive assessment, although the tally of geese caught fell somewhat short of the 2,000 they had predicted before the roundup.
“Canada geese pose a serious threat to aviation, so to protect people in the air and on the ground, we have taken a number of steps to reduce the likelihood of bird strikes,” said Edward Skyler, a deputy mayor.
The roundup — which Jason Post, a spokesman for Mayor Michael R. Bloomberg, said cost less than $50,000, with the bill shared between the city and the Port Authority of New York and New Jersey — was not the only attempt to reduce the city’s goose population this year. During the nesting season, before the gathering and gassing, the Agriculture Department undertook another goose control measure by coating 1,739 eggs with oil.
“You use 100 percent corn oil,” said Carol A. Bannerman, a department spokeswoman. “The oil prevents air from going through the shell, and the egg will no longer develop.”
Alongside these seasonal efforts, other procedures to keep birds away from planes continue year round. John Kelly, a Port Authority spokesman, said New York’s three major airports have conducted wildlife-control exercises since at least the mid-1970s. Pyrotechnics and falconry have both been used, and the authority also has 20 men and women trained with shotguns.
“Members from Port Authority operations make regular rounds of the airport properties, and one of their assignments is to watch for birds,” Mr. Kelly said in a statement, adding that “some situations call for the use of a shotgun to disperse and kill birds on airport property.”
“The Port Authority maintains a zero tolerance policy towards geese on any airport property,” he said. “The shotgun is used and handled only by trained and certified members of Port Authority operations.”
CNN Money
Bank failure tally tops 98 in 2009
Three regional banks failed in Michigan, Minnesota and Colorado, raising the national tally. failures. The closures will cost FDIC $293.3 million...Hibah Yousuf
http://money.cnn.com/2009/10/02/news/economy/bank_failure/
index.htm?postversion=2009100221
NEW YORK (CNNMoney.com) -- Three regional banks were closed by regulators on Friday evening, bringing the 2009 tally to 98.
Warren Bank, based in Warren, Mich., Jennings State Bank in Spring Grove, Minn., and Southern Colorado National Bank, Pueblo, Colo., were the latest to go down.
Customers of all three banks are protected, however. The Federal Deposit Insurance Corp., which has insured bank deposits since the Great Depression, currently covers customer accounts up to $250,000.
Michigan failure. The Huntington National Bank in Columbus, Ohio, will assume all of Warren's $501 million deposits, according to the FDIC. The bank will also purchase $83 million of the failed bank's $538 million in assets; the FDIC will retain the remainder for later disposition.
Warren Bank, the second bank failure in Michigan this year, will cost the FDIC an estimated $275 million.
Minnesota failure. Central Bank of Stillwater, Minn., will assume all of Jennings State Bank's $52.4 million deposits, according to the FDIC, and will purchase "essentially all" of the failed bank's $56.3 million in assets.
The FDIC said it entered a loss-share agreement with the acquiring bank for $37.7 million of the failed bank's assets. Such agreements are becoming more common place as the FDIC seeks leverage to convince stronger banks to take on failing institutions' risky asset portfolios.
This is the fourth time a Minnesota financial institution has been closed by regulators during 2009. The closure will cost the FDIC an estimated $11.7 million.
Colorado failure. Legacy Bank, Wiley, Colo., will assume all of the deposits of Southern Colorado National Bank's $31.9 million deposits. Legacy also agreed to buy nearly all of the $39.5 million of Southern Colorado's assets.
The FDIC signed a loss-share agreement with Legacy for $25.5 million of the failed Colorado bank's assets.
The closure marks the third bank failure for Colorado this year. The cost to the FDIC will total $6.6. million.
Accounts stay open. Customers of all three failed banks can access their money over the weekend by writing checks or using ATMs or debit cards. Checks will continue to be processed, and borrowers should make mortgage and loan payments as usual.
All branches of the failed banks will reopen on Saturday, but under their new monikers. Customers should continue using their existing branches until they receive notices that the takeovers have been completed.
An average of 10 banks have failed per month this year, nearly four times the number that failed in 2008. It's the highest tally since 1992, when 181 banks failed.
This year's failures have reduced the FDIC's insurance fund to $10.1 billion from $45 billion a year ago. In total, Friday's closures will cost FDIC $293.3 million.
Faced with dwindling funds, the FDIC discussed how to raise money to restock the fund earlier this week. The agency proposed that banks prepay their deposit insurance premiums for the next three years.