Where the manure don't stink...Bill Hatch
Too big to fail -- lenders to the CA dairy industry 
If Washington had had any real concern for the dairy industry, in California or anywhere in the US, it would have dealt with the artificially low milk prices that have plunged the entire national dairy deal into unprecedented debt.
Perhaps, Western United Dairymens's Mike Marsh (WUD is a California dairy lobbying group) was correct that the USDA should have started buying the overstocks of bulk cheese months ago. The crisis, in the wake of the huge ethanol speculations of 2008 that pushed up feed prices, was known, seen, acknowledged. There was no mystery about what was happening and there were remedies -- in pricing and in badly needed programs like simply supplying food banks with commodity cheese, as Marsh suggested.  
But, instead, the situation was allowed to simmer, the Washington opinion was "over-production" was causing the problem when, in fact, as almost always in agricultural commodities, the problem is distribution, as in providing food to hungry Americans for whom, if they live in places like Merced and Tulare counties in California -- the two largest dairy counties in the nation -- the economy sure looks more like depression than recession. The foreclosure rate in Merced increased to nearly 20 percent last month and is showing no signs of abating. Tulare County's August unemployment rate was 15.2 percent. Merced's was 16.7 percent. And that's "official."
In the simmering summer as debt was allowed to pile up in an industry whose prices are set by government to the point that hundreds of thousands of cows were "bought back" and slaughtered and smaller dairies went out of production and often into bankruptcy, government did nothing effective. If the "family dairy" corporation had not in recent years received the large capital infusion from a sale of Southern California real estate that provided a capital cushion sufficient for its new mega-dairy in Northern California to survive the 2009 prices, that dairy's chances of survival were smaller, regardless of the size of its herd.
The $350 million the Senate Boxer-Feinstein and House Costa-Cardoza political teams are demanding will go to banks. The reason for the rigged milk prices on the Chicago Mercantile Exchange, the "basis" for both federal and California milk prices, is the debt load incurred in the mergers and acquisitions that created the monopoly of Dairy Farmers of America and Dean Foods at the top of the dairy processor/distributor pyramid, coupled with its power to manipulate the CME dairy commodity prices in dual roles as sellers and buyers.
As the over-production propaganda and bank bailouts continue, August imports for milk protein concentrate soared. MPCs are not defined in the US as milk products, are not GRAS (Generally Recognized as Safe) milk products, are imported from countries like Belarus, Ukraine and the Peoples Republic of China (where dairies are not inspected by the USDA), and are used as cheap additives to cheese and other dairy products here. The "legal" basis for their importation comes from the World Trade Organization, not from any US agency concerned with food safety. 
 This is nothing but another public gift to banks. If dairy cost/price ratios continue along the same dismal path to keep profits high for Dean Foods/DFA investors, all it will really achieve is to allow mega-dairies to pay down enough debt to borrow more to buy smaller dairies to produce more milk at a loss until the banks again go to Congress for more taxpayer funds to get bailed out again so that even fewer, larger mega-dairies can again restore their credit and buy more cows, until the next time.
It is an absurd system, one of many now dysfunctioning along in the nation. Social status in the agrarian sector of the San Joaquin Valley is based on a size of one's debt. Our fine "family" dairies mortgage cows but their manure don't stink.
Merced Sun-Star
Boxer, other lawmakers push federal government for $350 million to help California dairies... CAROL REITER
Sen. Barbara Boxer, D-Calif., put her foot down and wouldn't budge.
That's the opinion of dairy experts who say Boxer, along with Sen. Dianne Feinstein, D-Calif., Rep. Dennis Cardoza, D-Merced, and Rep. Jim Costa, D-Fresno, went to bat for California dairy farmers to make sure they got their fair share of government monies to help struggling dairies.
"Any form of help is a blessing," said Kevin Abernathy, chief executive officer of California Dairy Campaign, a nonprofit dairy association based in Turlock. 
Abernathy said he personally knows dairy farmers in the San Joaquin Valley who are losing more than $200,000 a month, and families who had no debt at all a year ago who are now mired in loans.
And that doesn't count the dozens of dairy farmers in the state who have lost their dairies and sadly watched their cows go for slaughter.
The money, $350 million, will come from the U.S. Department of Agriculture to help dairy farmers, who were hit with high feed prices, low milk prices, and the overall economic downspin.
Boxer said when the money was first up for grabs, California dairies, because they are bigger and more productive than most Midwest or Northeast dairies, were going to be pushed out of the money.
"I just wanted to make sure these funds would go to help struggling dairymen in California," Boxer said.
And they will.
Boxer said California dairies may be bigger, but they are almost always family farms. "Everything in California is bigger," she said. "We are not Vermont."
Abernathy agreed that almost all the dairy farmers he knows are family farms. "One dairy has three generations, and had four before Grandpa got killed in a car accident," he said.
Those family dairy farms in California produce about 20 percent of the milk in the United States, Abernathy said. The money from the government will definitely help, but he said dairymen will have to do something to help themselves also.
"We can't keep having this boom and bust cycle," he said.
Michael Marsh, chief executive officer of Western United Dairymen in Modesto, said he believes Boxer and the other politicians went out on a limb to keep California dairymen in the running for federal funds.
"The biggest thing would have been if we could have used all the money to purchase stored cheese and given it away to struggling food banks," Marsh said. "But this is almost as good."
The price of milk has been kept down to producers because of more than 100 million pounds of cheese above normal amounts held in storage by the government. Marsh said everyone would have won if the USDA had used the money to buy that cheese and given it to the needy.
"It would have stopped the artificially low prices for milk," he said.
Boxer said she also wanted to make sure that the money from the government would go to dairy farmers as soon as possible, and that looks like it will happen.
"This money should be out in the next couple of weeks," Marsh said. There are 67,000 dairies in the United States, he said, and the money will be used to buy $60 million worth of the stored cheese, and the rest will go directly to dairymen.
"This has been outstanding," Marsh said. "It should really help."
Abernathy said he's hearing that 2010 should be a better year for dairymen, and he hopes that's true.
"I don't want to see anyone else lose their farms," Abernathy said.
Merced Sun-Star
Mortgage woes still on rise in Merced County...DANIELLE E. GAINES
The number of homeowners in Merced County that are more than 90 days past due on mortgage payments has increased since last year.
Eighteen percent of Merced County homeowners were 90 or more days delinquent in paying their home loans this August.
Last year, that number was 14.22 percent, according to First American Core-Logic, a collector of national, state and local data on home prices, foreclosures, and delinquency rates.
Past due mortgages here are significantly higher than the state and national averages.
In California, 9.84 percent of mortgage payments are past due.
Delinquencies in California rose at a rate faster than the national and Merced markets, having shot from 5.9 percent last year.
Nationally, 7.10 percent of payments were late, compared to 4.18 percent last year.
While the percentage of foreclosures in Merced nudged upward to 6.39 percent of all mortgage loans in repayment, fewer homes are going back to the bank, according to the report.
Three percent of homes were seized in August, compared to 5.77 percent last year.
That indicates banks are not taking possession of the homes, or not bringing vacant homes to the market.
Merced maintains a foreclosure rate that is more than double the national average.
Modesto Bee
Home sales could slow, expert says
But it could push median prices higher...Jim Wasserman
Sales of existing homes will fall slightly next year in California as people lose more jobs and cheap foreclosed homes become a smaller part of the market, California Association of Realtors economists predicted this week.
Also, fewer sales of foreclosed homes may push median prices a little higher than this year, the group said.
Watch, too, for trouble in the high-end home market, which has been spared the huge price drops seen at the less expensive end, said CAR chief economist Leslie Appleton-Young.
The California trade group for 172,000 real estate agents is predicting sales of 527,500 homes in 2010 — 2.3 percent less than this year. It also foresees a 2010 median price of $280,000. That's 3.3 percent higher than this year's estimate of $271,000.
But anything is possible in a still-volatile and sluggish economic and housing climate, CAR said. The group, releasing the estimates during a trade show in San Jose on Wednesday, cautioned that numerous wild cards could hurt the real estate market in 2010, including the state budget crisis, rising unemployment and possibly rising interest rates.
"As we get through this, there are a lot of unknowns," said Appleton-Young.
In California, the nation's largest struggling housing market, the wild cards include:
• The supply of foreclosed homes: Appleton-Young said prices could be pressed downward again if a heavier-than-expected wave of foreclosures floods the market next year. Foreclosures accounted for slightly more than half of the state's sales this year; the estimate for next year is one-third.
"I don't see a tsunami of foreclosures," said the CAR economist. "I see an elevated level of foreclosures over the next couple of years, and an acceleration of foreclosures at the upper end of the market." Analysts, including Irvine-based John Burns Real Estate Consulting, note that banks have been slow to foreclose and list existing repos, setting up the potential for a new wave of bank-owned properties going up for sale.
Burns contends that continued government intervention — including tax credits for buyers — is necessary to stimulate housing demand in a slow economy. CAR is among the real estate groups lobbying Congress to extend a first-time home buyer tax credit that expires Nov. 30.
• Sales of higher-end homes: Appleton-Young said many buyers are having trouble financing more expensive houses — and hesitating over fears they will lose value. Those factors, combined with rising joblessness among owners of higher-priced homes, have the potential to bring down prices in the upper segment.
• Loan resets: Projections suggest that thousands of risky adjustable-rate loans — including especially dangerous pay-option mortgages — will reset in 2010 across California, possibly triggering a new stream of loan defaults. Many of those, too, involve owners of more expensive homes.
Fresno Bee
Lawmakers aim for elusive state water deal
Governor confident of a compromise as veto threat looms...E.J. Schultz, Bee Capitol Bureau

Gov. Arnold Schwarzenegger expressed confidence about the prospects of compromise at a rally organized by a Valley-based group.
But in private negotiating sessions, Democrats and Republicans still are arguing over many issues, including borrowing for water projects, complicated water-rights laws and proposed conservation mandates.
Using what little leverage he has, the governor has threatened to veto "a lot of their legislation," if lawmakers don't strike a deal. His deadline to sign or veto about 700 bills passed this year is midnight Sunday.
"We're prepared to work through the weekend, if necessary," said Senate Leader Darrell Steinberg, D-Sacramento. But he said the veto threat was not a factor because "I can't work any faster than I'm working."
At an afternoon rally, Schwarzenegger promised action.
"For three years, we have been talking about this and pushing and negotiating," he said. "No more of that, we are sick and tired of the dialogue, we want to see the action now."
The event was organized by the Latino Water Coalition, a group that includes Valley mayors and water agencies.
Sticking points include the size of a bond to pay for dams, groundwater storage, upgrades in the Sacramento-San Joaquin Delta and more.
Sen. Dave Cogdill, R-Modesto, has pushed for a $12 billion bond that would be repaid from the state's general fund. He is backed by Valley farm groups, which want at least $3 billion for dams -- including a proposed project east of Fresno near Millerton Lake.
Manuel Cunha, president of Nisei Farmers League in Fresno, said he wants a bond as big as $15 billion, because the "magnitude of the projects" warrants it.
But environmental groups, which hold sway with Democrats, are pushing for strong conservation rules over expensive new projects that they say should be paid for by water users.
"Water held behind those dams will only benefit a few," said Jim Metropulos, a lobbyist for the Sierra Club.
The latest conservation proposal calls for a 20% reduction in urban per capita water use by the end of 2020, while requiring farm users to adopt plans to manage water more efficiently.
Republicans fear the mandate could lead to private lawsuits against users that don't meet the goals.
"Making sure we have plans to conserve water is important, but we don't want to create a full-employment act for lawyers," said Assembly GOP leader Sam Blakeslee of San Luis Obispo.
Assembly Member Jared Huffman, a key Democrat on water issues, said Republicans "believe that anyone who fails to meet their conservation target should be protected against that ever being used against them in any way. In other words, they want to make it meaningless."

The parties also are battling over a proposal to punish water users who illegally divert water. Democrats say the plan would free up more water for better uses. But Republicans say the plan is heavy-handed and could lead to removal of water rights for inadvertent mistakes.
SACRAMENTO -- Lawmakers remained at odds Friday over major water legislation, but still are talking in hopes of reaching a deal that has eluded them for years.
Tulare County races to save railroad...Lewis Griswold

They may also have a political battle on their hands: A government watchdog group in Visalia is raising questions about the proposal to use Measure R funds to buy the tracks.
When voters in 2006 approved Measure R, the county's half-cent sales tax for transportation projects, the project list included roads, not railroads, said Darlene Mata, director of the Visalia Community Forum, a watchdog group supported by business interests.
Officials have estimated that the cost to buy the tracks could be as much as $3 million, but Mata said she suspects it would be higher.
"Once you put your money on the table, if more money is needed, you have no choice but to keep throwing money at it," Mata said. "In the end, I don't think it's just $3 million."
Buying tracks was not foreseen when officials were compiling the project list for Measure R, but the tracks are a priority now, Tulare County Supervisor Allen Ishida said. As a result, the Tulare County Association of Governments, composed of county supervisors and elected officials from every city in the county, unanimously amended the plan last year to allow such spending, he said. Another vote would be required to buy any tracks, he added.
"This is crucial for economic development opportunities for the east side of the San Joaquin Valley, and really it's the future of economic opportunity of the Valley," Ishida said.
Keeping the tracks will enable existing businesses to move their products, and could attract new businesses to the area, he said.
The Association of Governments would buy the rails, although not the land, which is owned by Union Pacific. The only thing needed after that is a railroad company ready to use them.
Ishida dismissed the questions raised by the watchdogs as coming from a group based in Visalia that is not focusing on the county or region as a whole.
But Mata said her group's concerns still stand.
"It's not that we think it's a bad idea," Mata said, adding, "Measure R was voted on for road projects."
San Joaquin Valley Railroad, which operates on 345 miles of track in Tulare, Fresno, Kings and Kern counties, determined the stretch of rail from Strathmore to Jovista, located on the Tulare-Kern county line, was no longer making money.
The railroad obtained permission last year from the federal Surface Transportation Board to remove its 30 miles of track.
But county officials and rail advocates say the line, although unprofitable now, won't be so in the future, and should not be torn up.
"All it takes is marketing and getting customers on line," said Chuck Littlefield, former general manager of the San Joaquin Valley Railroad and an unofficial adviser to people trying to save the tracks.
Manufacturers, distribution centers, food processors and agricultural shippers use rails and create jobs, Ishida said.
"If they come in and rip up this line, it's all over," he said.
And if the San Joaquin railroad can scrap the tracks, it's only a matter of time before other tracks get abandoned, he added, noting that the railroad tried, but failed, previously to abandon 10 miles from Exeter to Strathmore.
A May 2009 study by graduate students at the Craig School of Business at California State University, Fresno, makes the case that a short-line railroad in Tulare County could be profitable.
Furthermore, the tracks would be needed if there's ever to be competitive freight rail service from Bakersfield to the Port of Oakland via Fresno on tracks not controlled by either Union Pacific or Burlington Northern Santa Fe railroads, Ishida said.
The "third main line," as it's sometimes called, is included in a California Department of Transportation goods movement plan.
By putting shipments bound for the port on rail cars, there will be less need for truck traffic on the Valley's major freeways, which reduces traffic congestion and also air pollution.
The rail line would need improvements to raise train speeds, and county officials hope the federal government would help with that. Upgrading all the San Joaquin Valley tracks in Tulare County could cost $20 million, according to the Craig School of Business study.
"We're learning that where rails have been saved, most of it's because of federal money," he said.
A similar project took place in Ventura County, where a rail authority was created so a 45-mile train line could carry both freight and tourist trains, he said. Eighty percent of the funding was federal.
To date, Tulare County officials have enjoyed a few breaks in keeping San Joaquin Valley Railroad from tearing up its tracks.
The price of scrap metal had tanked and the California State Historic Preservation Office has yet to approve track removal. And now a white-knight railroad has been spotted coming down the tracks.
Patriot Rail of Boca Raton, Fla., wants to operate on the tracks, if it can come to terms with San Joaquin Valley Railroad, according to local officials. Patriot is in negotiations with San Joaquin and its parent company, Rail America.
"We're waiting to hear," Ishida said.
The Association of Governments would still need to buy the tracks, he said.
Patriot Rail issued a statement that it can't comment because of a confidentiality agreement with the San Joaquin railroad.
San Joaquin released a statement that it "would entertain offers for fair market value" for the Strathmore-to-Jovista tracks. "To date, we have had no binding offer for our assets."
Thirty miles of unused railroad track in Tulare County could be the key to economic development -- and also help cut traffic congestion and smog -- but county officials know they're in a race against time to keep the tracks from being torn up.
Sacramento Bee
Brown balks at challenging governor's veto threat...Jim Sanders
As lawmakers struggled to strike a water deal Friday, Attorney General Jerry Brown balked at interfering with Gov. Arnold Schwarzenegger's threat to veto hundreds of their bills if they can't reach agreement.
Brown, who is preparing to run for governor next year, declined a request by two legislators to consider whether Schwarzenegger would be committing extortion or breaking other laws by vetoing bills en masse as punishment.
"Under our constitution, the governor's decision whether to veto legislation is an intrinsic part of the legislative process," Brown wrote.
"We believe that the doctrine of separation-of-powers counsels against our inquiring into the legality of Governor Schwarzenegger's veto threats."
Creating laws is not always a smooth process, Brown said, citing legal authorities that describe arm-twisting in which lawmakers hold legislation "hostage and extract a ransom in policy concessions."
"Compromise in the rough-and-tumble legislative process is not achieved by doilies and tea," Brown concludes.
Schwarzenegger publicly threatened Thursday to veto many of the 700-plus bills on his desk unless a water deal is struck by midnight Sunday, the state's bill-signing deadline.
"I made it very clear to the legislators and to the leaders that if this does not get done, then I will veto a lot of their legislation, a lot of their bills, so that should inspire them to go and get the job done," he said Thursday in San Francisco.
Senate President Pro Tem Darrell Steinberg downplayed the veto threat Friday, echoing comments he had made previously.
"To me, all that stuff is a sideshow, and I'm confident that the governor will consider bills on their merits � as his job requires," Steinberg said.
Meanwhile, the standoff over water negotiations continued at the Capitol, with Schwarzenegger and legislative leaders locked in closed-door talks for much of the day.
Negotiations are aimed at fixing supply, storage and water-related environmental problems that have been brewing for decades.
One key disagreement focuses on the size of a bond to pay for dams, groundwater storage, upgrades in the Sacramento-San Joaquin Delta and other water-related improvements.
Senate Republican leader Dennis Hollingsworth expressed optimism that a deal could be struck � but it was not imminent, he said.
"Just about every large issue is still open," he said shortly before attending morning negotiations with the governor and legislative leaders from both parties.
Hours later, Hollingsworth said prospects for a deal had not changed.
Steinberg was less pessimistic, suggesting that it is normal for many strings to be left dangling during negotiations.
"The way this works is that it's an entire package, so while we really have, in my view, conceptual agreements on a number of pieces, until you have all the pieces agreed upon or resolved, you don't have a comprehensive agreement," he said.
Steinberg described negotiations as constructive but declined to predict when they would end, conceding that he is "not making big weekend plans outside the Capitol."
Schwarzenegger, at a Capitol rally Friday by the California Latino Water Coalition, urged participants to lobby lawmakers for a deal.
"I think that all of you are here today to give the legislators this extra little push that they need to get across the finish line � and if they need a little bit more, then you're ready to give them that hard shove," Schwarzenegger said.Conservation was a key issue on lawmakers' minds Friday.
Steinberg said Democrats are pushing for an aggressive conservation policy.
"You can build all the infrastructure you want, but if you aren't serious about conservation, none of that will make the difference in the end," he said. "So we're fighting for a very strong conservation bill."
Assembly Republican leader Sam Blakeslee said Republicans fear that mistakes in crafting conservation policies "could set us back a generation in terms of getting real water to people who need it."
"We believe that making sure we have plans to conserve water is important, but we don't want to create a full employment act for lawyers who spend their lives and careers litigating," Blakeslee said.
The two sides also disagree over a proposal to punish water users who illegally divert water.
Democrats say the plan would free up more water for better uses. But Republicans say the plan is heavy-handed and could lead to removal of water rights for inadvertent mistakes.
Stockton Record
Golf course foreclosure auction postponed...Dana M. Nichols
SAN ANDREAS - This week's bankruptcy filing by the owners of the Trinitas golf course has postponed at least until Nov. 20 a bank foreclosure auction for the 280-acre property south of Wallace.
Auctioneer Velma Slaven announced the postponement shortly after the 10 a.m. Friday start of the daily auction of foreclosed properties held in front of the Calaveras County Courthouse in San Andreas. The golf course property had been scheduled for auction because Trinitas owners Mike and Michelle Nemee are in default on $2.4 million in loans made on the property by Community Bank of San Joaquin.
The Nemees on Wednesday filed for chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Eastern District of California.
Ken Foley, an attorney representing the Nemees, said he anticipates the auction date will be postponed again before Nov. 20.
Chapter 11 bankruptcy is generally used to reorganize a business so the business can continue operating while the court imposes a plan for repayment of debts. Mike Nemee said this week that the bankruptcy filing clears the way for him to continue operating the golf course for the forseeable future.
Calaveras County officials, meanwhile, say that golf is not a legal use on the Nemees' agriculturally zoned property. Officials have said they will enforce the county's zoning ordinance but have declined to say how.
County officials say they won't divulge their enforcement approach because of lawsuits the Nemees have against the county government.
Anti-canal video...Alex Breitler's blog
Advocacy group Restore the Delta has a new anti-peripheral canal public service announcement to be posted starting Monday. You can view it here.
I want to know who played the gold miners.
Restore the Delta PSA...video
San Francisco Chronicle
What To Look for in a State Water Deal...John Laird, Recovering Legislator
What To Look for in a State Water Deal
The Governor and legislative leaders have been conducting closed-door negotiations on a major water deal for weeks. I thought I'd offer a layperson's road map to help analyze a deal whenever it comes together and is made public:
The Delta. Issue - The Delta is at the heart of California water policy. Almost two-thirds of Californians get their water after it passes through the Sacramento-San Joaquin River Delta. If no improvements are made in the Delta, it will be a vast inland saltwater sea by the end of this century. A strong earthquake in the Delta will collapse levees, flood Delta islands, and cut off water to the central valley and southern California for a number of years. Current water exports have crashed fish populations and risk significant salt-water intrusion into the Delta. Levee-protected "islands" in the Delta have been farmed in a way that land elevation levels have sunk by twenty or thirty feet. Repairing the Jones Tract levee cost more to repair than the value of the farmland that it protected. There is not a focused governance structure for Delta issues, with responsibility falling to many overlapping jurisdictions. A federal judge has lowered the amount of water that can be exported from the Delta.
What to Look for - What are the provisions to deal with improvements to the Delta to protect against these eventualities? Are they small, short-term improvements or do they deal with these long-term issues? Are they aimed at just protecting water exports, or are they also aimed at the environmental side? Will there be a new governance structure? Are there any prohibitions against increasing water exports from the Delta over current levels?
The Peripheral Canal. Issue - The mother of all controversial water issues, should a canal be built around the Delta to take water from the Sacramento River at the north end of the Delta to the aqueduct at the southern end? The Sacramento River, flowing into the Delta from the north, has the highest quality water flowing into the Delta - but the pumps into the California Aqueduct are located at the southern end of the Delta. Existing river flows keep saltwater in the San Francisco Bay from pushing up into the Delta. Existing pumps draw fish to their death in screens. Voters soundly rejected a statewide ballot measure on a canal almost thirty years ago. The Schwarzenegger Administration contends that state government has the authority to build a canal without voter or legislative approval.
What to look for - Will a proposed canal be left completely out of a deal, inferring that it can be built without further approval? Or will a canal proposal be submitted to voters again? If it is addressed in the deal, how is the authority to build a canal spelled out? How would the canal be sized in terms of the capacity to move water through the Delta? Who pays for such a canal, all taxpayers or those who use the water that would pass through it? If a canal is proposed, how will the Delta be protected against salt water intrusion?
Dams. Issue - The Oroville Dam is the only dam ever been built by state government, paid for 3% by state taxpayers and 97% by water users. There are significant issues about downstream river health wherever a dam is built on a river. To Republicans and Central Valley residents, dams are viewed as vital to any water deal, significant because of the two-thirds legislative requirement to place a bond on the ballot. The Governor has proposed three new dams - to be paid for at least 50% by all state taxpayers, with at least one on a river. Many argue that we are in a water crisis, but dam construction would be such a long process that the first would not likely be online for many years.
What to look for - What does the deal include for dams? Who pays for the dams if they are included, all state taxpayers, or those who benefit from the dams? If they are sited on a river, what are the provisions for keeping the river healthy below the dam? How quickly could they be built?
Water Conservation. Issue - Water conservation is the only water source common to each California water district. Los Angeles has grown by about a million people in the last quarter century on the same amount of water, primarily due to conservation. It is cheaper than most other water sources, but requires a reliable water supply. Serious conservation in one area doesn't necessarily help another. Agriculture is the largest water user in the state, but has resisted state conservation laws. There has been talk about putting a 20% reduction in water use by 2020 into the package.
What To Look For - Is further conservation a part of any package? Is the responsibility to conserve put just on the urban users - or does the agriculture industry also have a role in conservation? Is any goal to reduce enforceable with incentives, or is it just a goal?
Who Pays the Tab? Issue - Since its inception in the Governor Pat Brown years, the California Water Project has been paid for 4% by state taxpayers and 96% by the people who directly benefit from the project. The Governor's initial proposals for dams would have all taxpayers of the state pay at least 50% of the cost of the dams. All taxpayers, not just those who benefit, repay bonds. The issue of building dams to protect fish population has caused some water leaders to argue that all taxpayers should pay for them, not just the people who use water from those dams.
What To Look For - Do the people who benefit pay the tab? Or do all state taxpayers subsidize a subset of state residents through a water deal?
Is the Benefit from a Bond Spread All Over the State? Issue - The State Water Project does not serve many state residents - whether the residents of my former legislative district in Santa Cruz or Monterey counties; the north coast counties of Sonoma, Mendocino, or Humboldt; or large districts such as East Bay MUD or San Francisco that provide their own links to Sierra sources. Past bonds have included an integrated watershed management program as a way to get money to all parts of the state to meet water needs, not just those served by the State Water Project.
What To Look For - Is there distribution of a bond that gives state resources on some equal footing to all residents of the state? Or does the bond money paid for by all taxpayers just go to a lesser subset of beneficiaries?
Obviously, there are other issues - groundwater storage, measuring groundwater use, water rights issues for certain districts, and improvement of distribution systems, among others. But in a short space I tried to list the bigger issues that might be addressed and what to look for to see if a deal is meaningful and fair.
I'm as curious as anyone to see if they can come up with a good, comprehensive proposal that meets state needs and is fair to all of the taxpayers. If a deal emerges, I might write another column examining the proposal against the issues I have laid out here.
Contra Costa Times
Analysis: Even if water deal is reached, long road remains...Mike Taugher
High-pressure negotiations on a massive water reform package ended in a stalemate again Saturday night with Gov. Arnold Schwarzenegger and Democratic leaders saying they would restart talks this morning.
Hanging in the balance are about 700 bills — the work product of the lawmakers' year — that the governor has threatened to veto if no agreement on water is reached.
"The Governor believes we are making progress toward a comprehensive water solution and we'll stay at it until we get the job done," Schwarzenegger spokesman Aaron McLear said in a statement.
With a deadline pending tonight at midnight, McLear said the governor would start signing or vetoing bills after a meeting with the Legislature's top Democratic and Republican leaders.
McLear said there is no agreement on any of the major provisions of a water deal and that the governor and legislative leaders were still haggling over such issues as the size of a water bond, which Republicans have wanted to construct dams, along with Democratic requests to regulate groundwater use for the first time, something farmers have resisted.
"They haven't finalized on anything. Every element depends on the others," he said.
Senate President Pro Tem Darrell Steinberg, meanwhile, said negotiators were on the verge of breaking through, according to his office.
Even if political leaders reach a deal, however, a long road lies ahead before a package that works is signed and paid for.
Details of the negotiations are secret, but in all likelihood either the governor will have to back away from his insistence on money for new dams or voters will have to approve a massive and unprecedented investment at a time when the state can scarcely afford it.
But even before those decisions are made, the road ahead for any deal is full of pitfalls.
The water package is two parts: a policy piece that needs a majority vote from lawmakers and a finance piece that needs two-thirds approval from both chambers plus approval by voters.
It is the finance package that has a much harder path, but even the policy reforms face difficulty.
Those reforms include such things as sweeping conservation measures for cities and suburbs, a new Delta Conservancy to buy and preserve Delta land, monitoring of groundwater use and a new council and standards for the Bay Delta Conservation Plan.
Backed by Schwarzenegger and the state's major water agencies, the conservation plan features as its centerpiece a controversial peripheral canal to carry water around the Delta.
Though the policy changes are environmentally focused, the package has split environmental groups because of the boost it would give the conservation plan.
Many environmental groups are adamantly opposed because of their conviction the canal could not be operated in an environmentally sustainable way, contending more efficient use of water will save enough water to make a canal unnecessary.
"We need to make sure all agricultural and all urban water users are metered and (on) tiered (rates) to send the right price signals," said Jim Metropulos of the Sierra Club.
Others believe it can lead to improved Delta ecosystems under the right conditions.
The Natural Resources Defense Council, Environmental Defense Fund, The Nature Conservancy and The Bay Institute backed the water package rejected by lawmakers last month, while the Sierra Club, Planning and Conservation League, Restore the Delta and others are strongly against it.
The finance package faces higher hurdles. The versions publicly discussed so far have all relied on general obligation bond financing to pay for new dams and for Delta property that would be bought and restored to wetlands to offset the damage caused by construction of a peripheral canal. The cost last month was set at $12 billion, but negotiators are trimming that number and it could come down significantly.
Getting two-thirds approval for dam construction is a tall order in the best of economic times.
What makes passage even more difficult this year is the state budget cuts and the reality that borrowing money is not free. Servicing new debt would cut further into the state budget that suffered deep cuts this year.
State Treasurer Bill Lockyer has sent strong signals that he favors repayment of the bonds by fees on water users that benefit from the projects but so far that kind of financing has not been in any of the plan's details that have been made public.
Still, even if the bond deal passed in the Legislature, it would have to be approved by a majority of voters. If the measure was put on the ballot next year, it would have to be approved by voters with the pain of recent budget cuts fresh in their minds.
Given the difficulty of getting financing, the question arises whether the governor would sign the policy piece without a guarantee that the finance piece would pass — in other words, would the policy reforms be somehow linked to the voters' verdict on the bonds?
Schwarzenegger has said repeatedly that funding for new dams was necessary for fixing the state's water system. On the other hand, the policy reforms alone might provide the Bay Delta Conservation Plan added momentum and burnish his environmental credentials, despite the continued opposition of many environmental groups.
But for a governor long intent on securing major water reforms and infrastructure as part of his legacy, time is running out.
This could be his last chance.
Los Angeles Times
Oregon dam's demise lets the Rogue River run
Savage Rapids Dam, the cause of fights and lawsuits for years, is finally torn away, as across the U.S. the era of dam-building of the early 20th century has given way to a new era of dam breaching...Kim Murphy
Reporting from Grants Pass, Ore
For years, the water stored by the Savage Rapids Dam has nurtured the green bean fields and grazing pastures of southern Oregon, turning them into a lush region of bounty.
But there has been a price: the death of thousands of fish, which slammed themselves into the concrete wall of the dam in a futile effort to head upstream.
Those scenes from years past now resemble a faded sepia-tone photograph. Many of the big farms have turned into 10-acre hobby ranches; the salmon are in danger of disappearing; and even the federal Bureau of Reclamation, the agency that harnessed rivers and irrigated the West, began saying a few years ago that it would be better to just tear down the dam once and for all.
So they did.
On Friday, a platoon of bulldozers and earthmovers tore away at the last of the temporary earthen berms holding water behind the dam. The Rogue River rushed free, flowing through its historic channel for the first time since 1921.
"Starting through," muttered Robert Hamilton, regional project manager for the Bureau of Reclamation, who worked on the dam for more than 20 years, fixing and then finally dismantling it. "Don't see something like this every day."
Across the U.S., the era of dam-building that characterized the early 20th century has given way to a new era of dam breaching.
Here in the Pacific Northwest, where some of the biggest battles over fish and concrete have raged, the Marmot Dam on the Sandy River near Portland was demolished in 2007. An agreement was reached last month to remove four dams on the Klamath River in California and Oregon in what is described as the world's biggest river restoration project. Two dams on Washington's Elwha River are slated for removal in 2012.
In southern Oregon, Savage Rapids is one of four dams being dismantled on the Rogue River. With Friday's breaching three projects are complete, and the fourth, Gold Ray Dam, 18 miles upstream from Savage Rapids, could be brought down by next year, returning a 157-mile stretch of the river to its natural state.
Savage Rapids "has been known as the No. 1 fish killer on the Rogue River," said Bob Hunter, who spent 20 years as a staff attorney with the environmental group WaterWatch, working to bring the dam down. "It's the first dam migrating salmon and steelhead meet on their way upstream, and pretty much everyone in the fishing community knew this dam was causing a great deal of harm."
But the 30-foot-high, 500-foot-long irrigation dam was also providing cheap, needed water to farmers and homeowners in the Grants Pass Irrigation District, which had held a legal right since 1918 to a share of the Rogue's waters.
Over the last two decades, rural southern Oregon had been plagued by lumber mill closures resulting from cutbacks in logging to protect the endangered spotted owl; few in the area were initially enthusiastic about losing their water to the threatened coho salmon, one of several species of salmon and steelhead trout that migrate up the Rogue River.
Many families enjoyed boating and water-skiing on the picturesque 3 1/2 -mile reservoir behind the dam.
"It became, I guess, our Statue of Liberty," said Dan Shepherd, manager of the irrigation district, which spent years fighting to preserve the dam.
But the combined power of the environmental movement, the federal government, the simple economics of water and concrete, and a new population that wants its rivers wild, not tamed, became too massive to fight, he said. "It was either you go out of business, or you reinvent yourself and go forward."
The fights seemed endless. Two fishing organizations filed a challenge to the district's application several years ago to expand its water rights. The National Marine Fisheries Service sued the irrigation district, accusing it of illegally killing salmon protected by the Endangered Species Act. The district filed suits of its own trying to keep the dam.
The aging edifice became a bellwether for conservative state lawmakers from the region who were determined to protect it, and former Democratic Gov. John Kitzhaber, who pushed to let it go.
Michael Lambert, a fish passage engineer for the state Department of Fish and Wildlife, went to the dam to take a look for himself and came to the same conclusion the federal Bureau of Reclamation did: It would be cheaper -- and better -- to simply tear it down.
Hamilton described the damage to fish: "You could see the fish try to come up here and try to leap over a 40-foot dam. They'd hit the spillway and fall back down." In other cases, fish would struggle to climb the dam's rudimentary fish ladder -- meant to help fish migrate past a barrier -- but would fall out and die. Young fish migrating out to sea would get trapped in the water pumps' screens and perish.
The Bureau of Reclamation concluded that it would be cheaper to remove the aging facility and build electrically powered pumps in the river to get the Grants Pass district the water it needed.
In 2001, a consent decree was signed, ending all of the legal fights. In it, everybody got a piece of what they wanted. The dam would go, but WaterWatch and others would help the district get federal money to do the work and build a new pumping plant. The federal authorization came in 2003, followed by $36 million in federal appropriations and $3 million from the state.
Work began in 2006, leading up to the moments Friday when water began rushing past the old dam and through the river's old stream bed.
Shepherd, of the irrigation district, said the agency had been faced with huge costs for improving the old dam, the loss of much of its water rights, a lawsuit from the federal government and no money to fight any of it. Irrigation district residents voted in 2000, and the majority favored dam removal.
"You couldn't just stick your head in the sand anymore," he said. "You name it, we were sued by everybody. And then they basically said that if you guys want to switch over to pumps and go with dam removal, we'll do everything in our power to get you the money and make it happen. If you guys decide to go the other way, which was still our option, we will do everything in our power to stop you."
The electricity bill for the new pumps is $40,000 to $50,000 a month, but spending the $14 million to $20 million needed to fix the dam would have cost $1 million a year in interest alone, he said.
"They were basically saying, 'Quit spending the money. Get on with life,' " Shepherd said.