9-15-08

 9-15-08Merced Sun-StarFoster Farms ends 30 supplier contractsCompany cites oversupply of milk, reduced demand...John Holland, The Modesto Beehttp://www.mercedsunstar.com/167/story/453964.htmlFoster Farms Dairy, one of the largest processors in the northern San Joaquin Valley, is ending contracts with some of the 30-plus farmers who supply it with milk.The Modesto-based company cited an oversupply resulting from reduced demand in the sluggish economy. It declined to say how many farmers are affected, or what proportion of its milk supply they produce.Because of a lack of capacity at other processors in the region, these farmers face the prospect of going out of business...The farms losing contracts, from Modesto to Chowchilla, are a tiny fraction of the roughly 1,900 that supply dairy plants in California. But for the farming families losing their contracts, the outlook is bleak.Although processing plants dot the Valley, few have been built or expanded in the past few years.Industry experts said the barriers to expansion include tough environmental rules and the unpredictability of the state's complex milk-pricing system. Hilmar Cheese Co. did expand its operation, but in Dalhart, Texas, rather than its Merced County hometown.Foster Farms firm expanded last year with the purchase of Crystal Cream and Butter Co., a Sacramento producer. Crystal, founded in 1901, boosted Foster Farms' milk production from about 2.5 million gallons a week to 3 million. It also added hundreds of retail outlets...Letter: Reasons for Wal-Mart...DAVID H. LONG, Ballicohttp://www.mercedsunstar.com/180/story/453939.htmlEditor: Wal-Mart promotes jobs, stimulates the economy and is touted as a "superior environmental performer" by the U.S. EPA's Smart Way Transportation Partnership, a designation reserved for partners who are among the nation's most elite, cleanest, and greenest fleets. Why would any member of the community not be proud to have a Wal-Mart Distribution Center in their community?Statistics in a July 2008 report of the State of California Employment Development Department reflect unemployment in Merced County as the second highest in the state at 12.1 percent. And according to the Aug. 23 issue of The New York Times, "Merced has one of the highest foreclosure rates in the country."... Wal-Mart can play an integral part in reducing this unemployment and the overbuilt housing market. Upwards of 1,000 new jobs will be created in the first year. Six hundred of those will be full time, and once Wal-Mart is fully operational, that number will grow to 900. The employees will make an average wage of $16.50 per hour. ...Merced County Suppliers, which support 11,000 jobs, is also directly related to Wal-Mart's participation in the community...If you support the promotion of jobs in our community, stimulating the economy, reducing Merced's housing inventory and reducing greenhouse gases and air pollution, then you must definitely vote yes to a Wal-Mart distribution center in our community.Modesto BeeTrying to derail West Side train plan...TIM MORANhttp://www.modbee.com/local/story/430075.htmlRon Swift is president of WS-PACE.org, a group that formed to oppose the 4,800-acre PCCP West Park LLC industrial park proposed on the West Side. The group claims 1,200 members and has worked to galvanize opposition to the project.Valley Voices interviewed Swift, and the full interview is available on modbee.com. Here are some excerpts:Q: What are the objections to the West Park proposal?A: It started out as objecting to the train line that would bring cargo from the Port of Oakland over the Altamont Pass and down the West Side. The rail line passes right through Patterson. It's a one-way line that ends down near Los Banos, so every train that goes down the line through Patterson has to come back up the line. And because the Crows Landing site is just south of Patterson, all the trains come through here. That seemed to be the opening we thought we had.When we learned that the project would expand beyond the original 1,527 acres of the former naval base at Crows Landing, that alarmed us. The additional 3,300 acres, to make the project 4,800 acres, approximately, we realized, was a project that would have great impacts on the West Side and the communities of Patterson, Crows Landing and Newman. When we heard of the projected 37,000 employees and the vehicular traffic and the air pollution and this sort of thing, this is what alarmed us. We are in favor of development of the original 1,527 acres, which to us is still a major project and still impacts on our area.Q: What are WS-PACE.org's options if the environmental impact report does not satisfactorily address the group's issues?A: I can tell you we are considering legal action. This is just a recent thing. If the environmental law is not followed, the only recourse is through the courts.Q: You have argued that the inland port should be in San Joaquin County. Doesn't that push economic development and jobs out of Stanislaus County?A: It would push the train facility off the West Side, the trains running down and the land on the Crows Landing property devoted to handling these cargo containers.The Port of Oakland employs only a few more than 500 workers. We do not think that hauling of cargo containers for transport off trains onto trucks is going to take a large amount of employees. This is not going to add to the employment base. We think there are other types of businesses that will add more jobs, and probably jobs more suitable to the population here in Stanislaus County.Moving the intermodal facility to western San Joaquin County makes a lot more sense. The train comes right over the Altamont and the facility could be located right there. The line would be much cheaper and wouldn't have 30 miles of train trip down here and back.It's right next to freeways, right next to additional rail facilities. Therefore, we have always felt bringing the cargo down the West Side was an unnecessary cost.Q: Developer Gerry Kamilos argues that the size of the project is necessary to be economically viable and provides regional rather than piecemeal planning. Is that a valid argument?A: I'm no expert on industrial development and what he refers to as his making this an (economically) viable project. I do know that elsewhere he has developed projects, some of which are industrial projects, on a much smaller scale, and apparently they are viable, where he wouldn't have to develop a project that is 7½ square miles in size.We hope that the original 1,527 acres can be developed and be an economic machine that helps Stanislaus County and its population.MultimediaValley VoicesValley Voices interviewed Ron Swift…the full interviewhttp://www.modbee.com/1984/v-media/index.html?http://media.modbee.com/smedia/2008/09/09/15/ron_swift_valley_voices.source.prod_affiliate.11.mp3Sacramento BeeGrounded hawks take flight in Yolo, thanks to group...Jennifer Garzahttp://www.sacbee.com/101/v-print/story/1236043.htmlFour hawks soared to freedom in the sky above Yolo County on Sunday morning.At first, no one watching said a word when the Swainson's hawks were released at Babel Slough, near South River Road south of West Sacramento. Everyone waited until all of them – including the one with the damaged tail – safely flew away.Finally, one of the bird-watchers spoke up."That was great. That is how they're supposed to look," said Kevin McRae, the master falconer who released the birds.If all goes well, the birds will join the other migrating hawks and head south for the winter.Their future didn't look so bright a few months ago. The birds, a threatened California species, were found in the Sacramento area in July before they knew how to fly. Since then, they have been treated and rehabilitated, including exercise in a flight chamber."The goal is to get them prepared for their natural lifestyle," said Judith Lamare, president of Friends of the Swainson's Hawk.The hawks are typically 20 inches long, with a wingspan of 4 feet, and weigh about 2 pounds. They return to the Sacramento area every year, primarily to reproduce. They nest in large trees, often near agricultural fields. In recent years, urban sprawl has threatened their habitats, according to bird advocates. Young birds can become injured when they fall out of their nests.That's what may have happened to the four birds – one adult, three juveniles – released Sunday. All of them had been cared for by the California Foundation for Birds of Prey, which treats injured or sick raptors. So far, the organization has helped 220 birds this year.Returning them to the natural habitat is the goal, which is why, on a clear, sunny morning, the hawks were released at Babel Slough, a well-known roosting site for the birds in September."If we didn't get them out now, they won't be able to follow the herd," McRae said.Los Angeles TimesLehman Bros. was big, early supporter of subprime lending...E. Scott Reckardhttp://www.latimes.com/business/la-fi-lehmanexplain15-2008sep15,0,1405225,print.storyLehman Bros. was an early and enthusiastic backer of subprime lending. It purchased the mortgages and used pools of the loans to back complex bonds, many of which were sold overseas. Merrill Lynch came onto the scene later.After the late-1990s meltdown in the subprime securitization business, Lehman stepped in with funds and other services that enabled First Alliance of Irvine to continue business in 1999 and 2000 despite lawsuits filed by state attorneys general, consumer groups and AARP. A 2003 decision by a Santa Ana federal jury, later upheld on appeal, found Lehman liable for aiding and abetting a carefully scripted First Alliance fraud targeting elderly and financially strapped homeowners. Plaintiffs' attorneys had focused on internal memos, especially a Lehman due-diligence report that said First Alliance required its employees "to leave your ethics at the door."Lehman pressed ahead in the business, saying it believed that it was a positive influence on the practices of the lenders it backed. Later, Lehman became the first in a host of Wall Street banks to operate subprime originators and loan-servicing companies. Merrill, by contrast was among the last to get into this "vertical ownership structure," said Bill Dallas, who started one subprime lender that wound up at Merrill, First Franklin of San Jose, and had started another, Ownit Mortgage Solutions of Agoura Hills, in which Merrill bought a 20% stake. "Merrill was late, late, late" and trying to catch up with Lehman when it bought First Franklin and the Ownit stake, Dallas said.Ownit was among the first of the subprime lenders to collapse, filing for bankruptcy in late 2006, and Merrill was later forced to shut down First Franklin as its losses mounted.Such scenarios industrywide have led Wall Street banking firms to write down their mortgage-related holdings by more than $500 billion.Wall St. braces for Lehman bankruptcy; BofA will buy MerrillLehman will file for bankruptcy and BofA will take over Merrill; the Fed eases its emergency lending terms...Walter Hamilton and Peter G. Gosselinhttp://www.latimes.com/business/la-fi-lehman15-2008sep15,0,2945799,print.storyNEW YORK — Transforming the face of Wall Street, two major securities firms succumbed Sunday to the country's long-running mortgage crisis as Merrill Lynch & Co. agreed to a hastily arranged, $50-billion takeover by Bank of America Corp. and Lehman Bros. Holdings Inc. spiraled into bankruptcy.In a bid to prevent a collapse of Lehman from setting off a chain reaction of financial ruin on Wall Street, the Federal Reserve announced late Sunday night that it was easing the terms of its emergency lending to securities firms.And a group of 10 global commercial and investment banks agreed to ante up $70 billion for a fund that any of them could access for emergency cash. The lending pool is intended to protect the participating firms from a sudden investor retreat of the kind that crushed Lehman, until only weeks ago the nation's No. 4 securities firm."This is frightening as hell," said Richard X. Bove, an analyst at Ladenburg, Thalmann & Co. "We simply have no idea what will happen [today] but we can be pretty sure that it's not going to be positive."The Fed and industry announcements came after a frenzied day in which government officials and industry executives scrambled unsuccessfully to find a buyer for Lehman, then turned their attention to Merrill and insurance giant American International Group Inc., which like Lehman have recorded large mortgage-related losses...The crumbling of Lehman and buyout of Merrill came only one week after the government committed up to $200 billion to shore up home-loan giants Fannie Mae and Freddie Mac. And it came six months after investment bank Bear Stearns Cos., the first big Wall Street victim of the housing crisis, was acquired by JPMorgan Chase & Co. with federal assistance.After enduring withering criticism of those rescues, the Treasury Department and Federal Reserve ultimately refused to commit taxpayer money to salvaging Lehman, prompting Bank of America and British bank Barclays to withdraw from talks to acquire the 158-year-old firm......like Bear Stearns, Lehman was among the most aggressive backers of the boom in high-risk mortgages early this decade.Wall Street provided billions of dollars in funding to non-bank lenders like Southern California's Ameriquest Mortgage Co. and New Century Financial Corp. The lenders specialized in borrowers who had bad credit, huge debt loads, or an unwillingness to document their earnings - and often all of the above.The Wall Street banks purchased the mortgages and used pools of the loans to back complex bonds, many of which were sold overseas. But heavy defaults beginning in late 2006 triggered the crisis that has brought some financial firms to the brink of extinction. Wall Street firms have written down the value of their mortgage-related holdings by more than $500 billion, giving many of them a need to raise capital.Lehman's fate was sealed last week when an expected capital infusion by a Korean bank failed to materialize...The most immediate risk from a Lehman bankruptcy filing is that it could result in the unloading of its portfolio of mortgage-related assets at fire-sale prices, spurring another painful round of write-downs on Wall Street....the crumbling of one firm - Lehman - and buyout of two others - Bear and Merrill - takes the current crisis to a new level...CNN MoneyPlunging tax revenues, higher fuel prices and other factors will lead to cutbacks, layoffs in most U.S. cities next year, report says.http://money.cnn.com/2008/09/15/news/economy/bc.economy.localpinch.ap/index.htm?postversion=2008091509COLUMBUS, Ohio (AP) -- Declining property-tax revenues, high energy prices and other financial headwinds will create greater economic hardships in 2009 for most cities across the U.S., a new report says.City budget officials say they expect more layoffs for municipal workers, cutbacks in parks and recreation programs and library hours, and higher fees for everything from garbage pickup to building permits.Downside trend"Cities for a long while now have been on the upside of the curve, generally experiencing pretty good growth in revenues," said Chris Hoene, director of policy and research for the National League of Cities, which collected data from 319 municipalities in its annual survey. "Now we're coming over the top of the curve and heading down the wrong side of it."The housing crisis has already damaged municipal coffers in 2008, especially in the West, with rising foreclosures and falling home prices resulting in decreased property-tax revenues. Four out of five budget officials who responded to the survey of U.S. cities say next year is likely to be worse.Small but fast-growing suburbs that used low tax rates to attract families are most vulnerable to budget constraints.The three main sources of revenue for cities - income tax, property tax and sales tax - are all declining, the report warns. In the meantime, health care, public safety and fuel are getting more expensive.Basic city needsTwo of every three cities with more than 50,000 residents say it's harder to meet basic city needs this year than last, the survey found. One in two budget officials responding to the survey say they have raised fees on city services during the past year.The report follows a litany of gloomy financial news for the nation's local and state governments in recent months.The Center on Budget and Policy Priorities reported Sept. 8 that midyear shortfalls opened in the budgets of at least 13 states in the current budget year. At least 29 states and the District of Columbia faced or are facing combined budget shortfalls of $48 billion in the fiscal year that began July 1.The Rockefeller Institute for Government said in July that adjusted state tax revenues remained in decline for the third quarter in a row and that sales tax collections were flat for the first time in six years.Cities that rely mostly on property taxes are in for the toughest ride because the loss of revenue from a foreclosed house today won't be felt in budgets for months.Home prices for the 20-city Standard & Poor's/Case-Schiller index peaked in July 2006, and some economists predict prices won't recover until mid-2009 or later.Cities in troubleFor cities already tightening their belts, the squeeze could get even stronger...Sales and property taxesOne of the biggest problems for cities is that revenue from sales and property taxes are declining together for the first time in decades. As consumer confidence sags in the face of declining home values, people are less likely to make big-ticket purchases.Fortunately, most cities have healthy rainy-day funds, filled as buffers in recent years as it became clear to local governments that state and federal funding was drying up.Not every city is ready to raise fees or taxes.In Riverside, Calif., in the state's inland region, the budget was cut by $10 million from 2007 to this year as numerous departments saw reductions, including fewer hours and staff at libraries. Riverside, with a population of 294,000, saw 2,500 foreclosures last year and could have another 7,500 homes at risk."If you take the premise this is the worst economy in the inland area since World War II, it's not good time to raise fees,"said Mayor Ron Loveridge.Ike's aftermath: The return of $4 gasGas prices poised to climb towards record levels again as hurricane hits center of nation's oil refining base; Ike could also cost insurers up to $18 billion...9-14-08http://money.cnn.com/2008/09/13/news/economy/ike_effect/?postversion=2008091408NEW YORK (CNNMoney.com) -- Gas prices are poised to shoot back toward record highs after Hurricane Ike's direct hit to the heart of the nation's oil refineries, analysts said.The average price of gasoline nationwide has already shot up 12 cents in the past two days to $3.795 a gallon, according to figures released by the AAA Sunday. And the average price of gas is now at or above $4 in Alaska, Georgia, Hawaii, Illinois, Indiana, Michigan and South Carolina. In addition, Hurricane Ike could turn out to be the third-most expensive natural disaster in U.S. history, according to preliminary forecasts from a firm that does loss estimates for the insurance industry.Experts say it's too soon to know exactly how much damage the hurricane - which slammed into Galveston, Texas, early Saturday - did to the refineries.Some early reports suggested that the damage could be limited despite the nearly direct hit.But the output at the refineries, which produce nearly 25% of the nation's gasoline, could still be affected if it takes weeks or months to restore full power to the region.The uncertainty left experts projecting everything from a nationwide gasoline spike above $5 a gallon to a jump to just below the $4 mark.Gas prices already climbingMany consumers throughout the Southeast have already started to see sharp increases in gas prices before the storm even hit. The latest nationwide survey by AAA conducted Friday showed that prices were up nearly 6 cents a gallon to $3.733. Some areas, particularly in the Gulf Coast and South, have been hit with a more than a 20 cent a gallon overnight increase. For example, the price of gas jumped 27 cents in Knoxville, Tenn., to $3.924."This is a fear factor among station owners," said Kevin Kerr, editor of Global Commodities Alert. "They're worried that they're not going to get any more supply or if they do it's going to be a lot more expensive."Gas prices soared three years ago in the week after Hurricane Katrina slammed into New Orleans. Prices jumped 17% to a then-record high of $3.0569 due to damage to refineries and pipelines...Financial TimesAIG thrown $20bn lifeline...Francesco Guerrera and Chris Hughes in London and Krishna Guha in Washingtonhttp://www.ft.com/cms/s/0/abaf3dee-834d-11dd-907e-000077b07658.htmlUS authorities were on Monday fighting a fresh fire in the crisis on Wall Street, throwing a $20bn lifeline to AIG, one of the world’s largest insurers, just hours after the collapse of Lehman Brothers and Bank of America’s $50bn rescue takeover of Merrill Lynch.The deal between AIG and New York State insurance regulators allows the company to access $20bn of its own capital in a desperate attempt to stave off a liquidity crisis and credit downgrades.The move came as fears over AIG’s financial health sent its shares into a tail-spin on Monday morning. The stock fell as much as 70 per cent in morning trading in New York to a intra-day low of $3.50 and was trading 47 per cent lower at $6.24 in mid-afternoon.The announcement by David Paterson, New York governor, is designed to give AIG, whose balance sheet has been savaged by billions of dollars in writedowns and credit losses, some time to clinch a deal to raise capital through a share sale and asset disposals.AIG and its advisers spent the weekend hammering out plans to raise up to $40bn in capital, which the insurer needs to shore up its balance sheet and prevent crippling ratings downgrades.At the same time the Federal Reserve battled to contain a ferocious storm in the overnight borrowing market as financial institutions scrambled for cash, pushing up the actual Fed funds rate at one point to about 6 per cent – triple its target rate.The US central bank unleashed first $20bn then another $50bn in overnight liquidity in the shape of repos, driving the Fed funds rate for a while at least to 3.5 per cent, still far above the official rate of 2 per cent. The turmoil raised speculation that the Fed could cut interest rates at its policy meeting today, although it appeared more likely that the Fed would indicate that it is monitoring financial developments closely and will act “as needed” to ensure economic stability.Earlier the European Central Bank and the Bank of England together poured about €36bn liquidity into their own money markets in a bid to contain the hunger for cash unleashed by the failure of Lehman Brothers and wider upheavals on Wall Street. The US central bank is putting intense pressure on weak financial institutions to strengthen their financial positions, if necessary by accepting a takeover.It emerged on Monday that Fed and Treasury officials encouraged Merrill’s tie-up with BofA, telling John Thain, its chief executive, on Friday that his bank would be next to come under attack once Lehman failed and it had to find a solution quickly.Mr Thain, who had been a party to an intense round of discussions with the Federal over the fate of Lehman, said: “Over the course of those discussions it became clear to me that it would make sense to explore options for us.”After filing for bankruptcy late on Sunday night, Lehman was on Monday still scrambling to sell off assets that retained value as most of its 25,000 employees contemplated a grim future. Assets that could be sold included its asset management business, which was still operating on Monday, and parts of its investment banking arm. Executives at its private-equity division were considering a management buy-out of the unit in case the sale of the asset management business fell through...Oil and commodities prices plunge...Javier Blas and Chris Floodhttp://www.ft.com/cms/s/0/049d5066-82fa-11dd-907e-000077b07658.htmlCommodities prices fell sharply on Monday as dealers reduced risk amid an acute crisis on Wall Street after Lehman Brothers filed for bankruptcy protection. However, gold, a traditional haven in times of market turbulence, rose 1.5 per cent to $775 a troy ounce after touching a high of $784.90. John Reade, commodity strategist at UBS, said the next few days would be dominated by risk reduction across all financial markets. “Fundamentals in the gold market will mean very little for the next few days as traders struggle to adjust to the fallout from the weekend and trade out of positions accordingly,” said Mr Reade. Commodity dealers said Lehman had a relatively small presence in base and precious metals markets but was a significant player in the oil, natural gas and power markets. Regulators on commodity exchanges took steps to limit the disruption to trading after the news of Lehman’s fate. The Commodity Futures Trading Commission, the US regulator, said it was “closely monitoring” markets.Walter Lukken, acting CFTC chairman, said in a statement on Sunday that the regulator was taking “steps to maintain the stability and orderliness of the commodity futures and options markets”.The London Metal Exchange suspended Lehman Brothers from dealing on the LME’s electronic Select trading system, which is anonymous, although it was allowed to continue telephone business. ICE Futures Europe, where Brent crude oil is traded, said in a circular to its members that “the exchange has suspended all access to its facilities by Lehman”. Atlanta-based ICE, where West Texas Intermediate oil is traded, also suspended the bank. Bankers said trades in which Lehman acted as the counterparty were being unwound but cautioned that some of Lehman’s corporate clients might be left without their hedges. However, Bank of America’s takeover of Merrill Lynch should provide it with an opportunity to become a leading participant in commodity markets. Traders said Merrill’s global oil business and well- established gas and power trading operations would significantly boost BofA’s presence in commodity markets, which had previously been limited to derivatives trading.Crude oil prices dropped to a seven-month low in spite of hurricane Ike causing widespread disruption to US refining operations and an upswing in violence in Nigeria over the weekend. Nigerian militants declared an “oil war” on Sunday and fighting continued for a third day yesterday with an attack on a Royal Dutch Shell installation. Nymex October West Texas Intermediate sank $5 to $94.18 a barrel after touching a low of $94.13 while ICE October Brent fell $5.58 to $92 a barrel after sinking to a low of $91.17. Traders said deleveraging by financial investors was overwhelming oil fundamentals. Hurricane Ike missed oil and gas facilities in the Gulf of Mexico. Most of the refineries in Texas that shut operations as a precaution last week were reported to have escaped damage. However, restarting refinery operations could be delayed by power supply shortages and threats from flooding...Turmoil on Wall Street...Francesco Guerrera in London, Krishna Guha in Washington and Greg Farrell in New York...9-14-08 http://www.ft.com/cms/s/0/f8834910-82aa-11dd-a019-000077b07658.htmlWall Street is in turmoil tonight as Merrill Lynch rushed to find shelter in a $35bn-plus takeover by Bank of America and Lehman Brothers appeared to be running out of options to save itself from becoming the biggest victim yet of the credit crunch.The moves cap a weekend of high drama which could lead to one of the most radical reshapings in Wall Street’s history. Markets’ reaction on Monday to the weekend’s dramatic events will be closely watched by regulators and banking executives to gauge investors’ sentiment towards the credit crunch that wreaked on the financial sector for over a year.BofA’s rapid U-turn, which saw it abandon talks to buy Lehman and turn to Merrill in the space of just a few hours, will throw the spotlight on Morgan Stanley and Goldman Sachs, which could soon become the only two independent investment banks in the US. Top Wall Street executives last night were still locked in increasingly desperate talks with US Treasury Secretary Hank Pailson and Tim Geithner, president of the New York Federal Reserve in an effort to save Lehman from bankruptcy. However, bankers familiar with the discussion said a rescue plan for Lehman had become increasingly difficult after its two suitors, Barclays of the UK and BofA had walked away. Barclays pulled out of the talks in the afternoon after the US government refused to provide a guarantee to enable Lehman to continue trading until a deal had been completed.Regulators prepared the ground for a Lehman bankruptcy by asking its derivatives counterparties to settle trades between themselves in an extraordinary trading session on Sunday afternoon.Merrill’s decision to enter talks with BofA, which has long coveted its rival’s large retail brokerage business, came after it became apparent that Lehman’s woes could spread to the rest of the investment banking sector in the coming weeks.John Thain, Merrill's chief executive who was attending the Lehman crisis talks, approached a number of rivals asking them whether they would be interested in bidding for his firm.People close to the situations said that Morgan Stanely, BofA and several foreign banks were contacted but many of them declined to pursue the talks because they had insufficient time to pore over Merrill’s complex trading books. Merrill, Morgan Stanley and BofA declined to comment... 9-15-08Department of Water ResourcesCalifornia Water NewsA daily compilation for DWR personnel of significant news articles and comment…September 15, 2008 1.  Top ItemEditorial Farmers must monitor, reduce water use - The San Francisco Chronicle- 9/14/08Another View: State's ag industry already water-wise - The Sacramento Bee- 9/14/08Bill for water fixes stuck in limbo - San Jose Mercury News- 9/12/08 Editorial Farmers must monitor, reduce water useThe San Francisco Chronicle- 9/14/08 Drought, population growth, global warming, a collapsing Sacramento-San Joaquin River Delta environment - it's no secret that California's water challenges are only going to get more challenging in the near future. So you'd think, at the very least, that the state would measure how much water farmers - who use about 80 percent of the water drawn from the ailing delta - use each year.  And you'd best think again. There's no system to measure or monitor how much of our water is being used by agricultural interests - and therefore we have no idea what our state's water needs and policy should be going into the future. (Think about that, voters, before you approve any more water bonds.) That's just one of the surprising revelations of researchers at the Pacific Institute in Oakland in their new study about the potential for agricultural water conservation in California. The other big surprise in their report is the fact that California farmers could save billions of gallons of water every year by expanding practices they already use - sparing the rest of us the cost and environmental damage of at least some of the new dams being discussed by legislators and the governor.  The report lists a number of ways in which farmers cannot just conserve water but save money in the process: installing drip irrigation (about 60 percent of California agriculture is still irrigated using flood-irrigation methods), switching over to crops that require less water and yield higher prices (it's pretty hard to justify growing rice and cotton in what is, after all, a desert climate), and managing irrigation with technology instead of visual inspections.  This is good news: Who likes wasting money? And who wants more dams? So it's disheartening to watch farming interests try to tear the report down. A spokesman from the California Farm Bureau Federation declared that farmers are already increasing their efficiency.  Jasper Hempel, executive vice president for Western Growers Association, the trade group whose members grow 90 percent of California's fruits and vegetables, said in a statement that his organization was "troubled" by a report he described as "incomplete" and added that he hoped a "more serious study" would soon emerge. There are a few reasons why farmers might take umbrage to the suggestion that they could be doing things better, but they all go back to money - money and perceived control. Regarding the money, it requires quite a bit of up-front cash to, say, shift from flood irrigation to drip - $1,000 per acre. But that initial capital outlay is usually recouped within two years, and there's no reason why the state couldn't offer farmers rebates to do the right thing. The other reason for farmers to resist change is that it could upset the infrastructure, delivery systems and financial plans they've already created. But change, like it or not, will have to come to California's water policy. We simply can't continue along the path that we're traveling. Just as urban dwellers in California have had to adapt to low-flush toilets, short showers and mandatory reduction programs, farmers, too, need to step up the efforts to use less water. For the sake of California, that day needs to come sooner rather than later. The first step is for the Legislature and the governor to insist on a measuring and monitoring system for agricultural water use. That system must be approved before voters offer Sacramento yet another check for dams and other water infrastructure. The second step is for our state leaders to go to the farmers and ask them what kinds of changes they're willing to make if they're to continue getting so much water at such a great cost to the state. Will they work with the state to update their irrigation systems? Phase in different crops? And if they say that they won't change a thing - if they say that California's environmental sustainability and future growth are less important than their ability to continue farming rice or cotton using wasteful methods - well, then, they'll have to explain that to the voters themselves.#http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/14/EDSM12R5QB.DTL Another View: State's ag industry already water-wiseThe Sacramento Bee- 9/14/08…By A.G. Kawamura – California farmers have always practiced innovative water resource management practices while producing food for us and the world. The Golden State produces 400 different crops. We are blessed with the nation's No. 1 and world's No. 5 agricultural economy, but rarely do agricultural critics present a true assessment of what it takes to sustain the food and jobs that come with being a top agricultural provider. Critics tend to disregard the facts from people who get their hands dirty. Over the last four decades, the amount of water used on California farms is relatively consistent while crop tonnage has increased more than 85 percent in the same period, according to the Ag Water Management Council, a group that champions farm water efficiency. This is not inexpensive. California farmers in the San Joaquin Valley invested more than $500 million in high-efficiency irrigation systems between 2004 and 2006. It costs $1,000 per acre and up to $100 per acre per year to install and maintain a drip irrigation system. Water use in California agriculture is enormously efficient. It's not used just once, but as many as eight times.  The current 10-year drought in Australia is a grim reminder of what happens to a nation's food supply when they fail to build a flexible infrastructure for water delivery that can adapt to the predictable challenges that come from historical drought, heat spells and other weather-related phenomena. Farmers cannot farm in unpredictable conditions … after all, unpredictable weather means unpredictable harvests. Our current California drought shows more than $250 million in lost plantings and crops this year. But that doesn't include the huge amount of idle farmland that wasn't planted in past years because of cutbacks in the water supply from years of constraints on a water system that is straining to stay predictable. We all need to conserve, while supporting an expanded statewide water management system that includes more efficiency, better water quality and enhanced water supplies. One of the greatest strategic resources we have continues to be our food supply. It's what feeds a nation and a world. Let us use the hard-learned lessons of the past to take the steps now to ensure that we can pursue the California dream not a nightmare … ask Australia.#http://www.sacbee.com/325/story/1232573.html Bill for water fixes stuck in limboSan Jose Mercury News- 9/12/08…By Mike Taugher, Staff Writer It contains about $30 million to help pay for the Contra Costa Water District's new intake, which will help the district draw cleaner water from the Delta, and more than $100 million to prepare for levee breaks and shore up levees that protect pipes that deliver water to the East Bay Municipal Utility District's 1.3 million customers. It also contains funding to link supply systems so that water can be better moved around and to clean up polluted groundwater in Southern California. Water officials say many of those projects could be done quickly and could even help if this winter is dry enough to turn a mild drought into a severe one. "The sooner that bill is signed, the sooner work can commence on all of these fixes," said Randy Kanouse, the East Bay Municipal Utility District's lobbyist. "A lot of this could move very, very quickly," said Greg Gartrell, assistant general manager of the Contra Costa Water District. "It's dependent in many cases just on funding." But with a threat from Gov. Arnold Schwarzenegger that he will veto any bill that comes to his desk before there is a state budget, this bill and many others have not been sent to him. There is also some uncertainty about whether the governor would sign SB1XX, which was written by Senate President Pro Tem Don Perata, D-Oakland. Last year, Schwarzenegger vetoed a similar bill because it did not contain money to build new dams or a canal around the Delta.  "Without them, this bill represents the same piecemeal approach that led us to the current crisis," he said in a veto message last October.  Schwarzenegger's top water lieutenant, Department of Water Resources Director Lester Snow, said the governor did not make similar veto threats about the latest bill because it appeared lawmakers were seriously considering another water bond measure that could be used to fund new dams. That bond measure, however, is for all practical purposes too late for a November ballot, according to several observers close to the negotiations. Nevertheless, Snow said the administration would no doubt keep pushing for an agreement on a bond to place before voters."There had been considerable progress," Snow said. "We were comfortable with the progress that was made. Now everything is caught up in the budget." Snow said that if the drought worsens substantially next year, the governor could declare an emergency and seek expedited funding for key projects. Schwarzenegger spokeswoman Lisa Page said the governor had no plans to make an exception to the veto threat. "The governor is focused on the state budget. His pledge remains in effect," Page said. Mike Taugher covers natural resources. Reach him at 925-943-8257 or mtaugher@bayareanewsgroup.com.#http://www.mercurynews.com/breakingnews/ci_10449867?nclick_check=1 2. Supply –OpinionThink tank solutions run dry in our valley - The Modesto Bee- 9/13/08Green Gadget: Drought fighter - The Redding Record Searchlight- 9/14/08 Two districts plan $200 million aquifer: Padre Dam would pump cleaned wastewater to Helix -San Diego Union Tribune- 9/14/08Water bond difference must be solved - The Salinas Californian- 9/13/08Editorial Water bill deserved to die, for now - Capital Ag Press- 9/12/08 OpinionThink tank solutions run dry in our valleyThe Modesto Bee- 9/13/08 Most likely, the Pacific Institute is sincere in suggesting ways to save water. Last week, the Oakland-based think tank issued a study that said if valley farmers would just be a little water-wiser, the state could save a lot of liquid. The co-authors even suggested that 20 reservoirs could be filled with the water saved by simply using better conservation methods down on the farm. So why build even two more reservoirs -- as Gov. Schwarzenegger, Sen. Dianne Feinstein and many who depend on water are urging -- when all we have to do is re-educate a few wasteful farmers? Perhaps the study's conclusions are applicable in some areas of the valley, but if we followed all of co-author Peter Gleick's suggestions around here, we could end up with thousands of thirsty city dwellers and ruined cropland. Many of our farmers flood irrigate -- the very practice the Pacific Institute finds so wasteful. By switching to sprinklers and drip systems, says Gleick, farmers could save millions of gallons that then could be used to water the lawns of city dwellers. While true, it doesn't tell the whole story. Flood irrigation does more than simply help tomatoes, peaches, walnuts, almonds, alfalfa and hundreds of other crops grow. It is also crucial for replenishing our underground aquifer -- the largest source of fresh water for everyone. Modesto pumps 60 percent of its residential water from underground. Turlock gets 100 percent of its water underground, as do Ceres, Riverbank, Oakdale and most other cities. Some cities, such as Stockton, depend too heavily on wells and have overdrafted their aquifer and now are forced to buy water from others. If there's none to sell and the wells go dry, people will go thirsty. Irrigation helps ensure that won't happen around here. "It's very complicated," said Vance Kennedy, a retired hydrologist and farmer near Modesto. But it starts with the dirt, he said. Fields even only a few hundred yards apart can have very different soil characteristics. Some soil is sandy, allowing water to soak in quickly.  Other soils have more clay, causing water to sit longer where it either nourishes plants or evaporates. The soil mix can change at different depths. Our area has many soil types, but most are fairly permeable -- meaning some of the irrigation water nourishes plants and some recharges the aquifer. Over time, we end up drinking that water. But we wouldn't drink it if it were salty -- and neither would plants. Water flowing from the mountains often contains mineral salts. When water is put on soil in small amounts, plants soak up most of it -- just as the scientists at the Pacific Institute prefer. But when applied more sparingly, water doesn't soak far into the soils and the salts are left near the surface. Enough salts can turn even rich soil sterile. On the other hand, flooding the soil dilutes the salts and pushes them past the root zones, keeping the dirt fertile. New irrigation methods are being developed to use saltier water, but for now it remains a problem on less permeable soils. In Monday's Sacramento Bee, Gleick offered suggestions for solving the state's water problems, including "new water-rate structures" to encourage efficiency and better enforcement of California's water rights laws. Such suggestions often ignore the legal rights of those who built the dams to capture the water in the first place. Faced with a water emergency, we're being offered lots of ideas. Professor David Zetland from the University of California at Berkeley, for instance, points out that farmers aren't stupid and should be given the freedom to sell water allocations -- which brings up a whole new level of issues. And while some of the suggestions offered by the Pacific Institute will work here, others simply will not. There is no shortage of ideas for better use of our water. But there is a shortage of water. And until we find better ways to capture more than we do now, plans to conserve it won't amount to much.#http://www.modbee.com/opinion/story/429132.html Green Gadget: Drought fighterThe Redding Record Searchlight- 9/14/08…By Debra Atlas, Contributing writer Office estimates 36 states will face water shortages by 2010. With California experiencing an escalating drought, reducing water usage by almost 60 percent is exceptionally attractive. HydroPoint Data Systems Inc. of Sonoma County has an irrigation controller system that meets that challenge. Its WeatherTrak system automatically adjusts irrigation schedules based on landscape needs and daily local weather conditions for highly efficient irrigation. More than a timer, after programming WeatherTrak with the physical makeup of your landscape area, the service takes over. WeatherTrak, recently featured on Ed Begley's "Living with Ed" cable TV show, uses more than 40,000 weather stations and satellites (primarily from the National Oceanic & Atmospheric Administration) to gather data to calculate evapotranspiration (ET) rates. ET combines daily amounts of water plants use and the evaporation from the soil to determine how much water the soil needs to be replenished. WeatherTrak pushes that information to individual controllers at the end of each day. Should sudden weather changes occur, WeatherTrak can turn off controllers or change settings remotely. While the system is not available to individual residents, it is available to landscape contractors and suppliers through the Toro Company, which has partnered with HydroPoint. Toro's Web site is www.toro.com. HydroPoint's controllers — compatible with most irrigation systems — are designed for residential and commercial use. Numerous municipalities, including Santa Barbara, Petaluma and Healdsberg, have installed them and have reported water savings, according to HydroPoint representatives. The city of Bend, Ore., achieved 41 percent water savings at its city-maintained landscapes. A two-year study by the Los Angeles Department of Water and Power realized a 95 percent conservation potential. "The statistics are rather shocking," said Chris Spain, HydroPoint's chief strategy officer. WeatherTrak can also reduce runoff by up to 71 percent, according to an EPA test of HydroPoint's technology. And that's important to many California cities operating under a 2005 law that mandated a 20 percent drop in water usage by 2012. Some counties and towns have moved the deadline to 2010. The town of Healdsberg tested WeatherTrak during the past two years. Two of the city's parks saw water use reduction of 18 percent and 23 percent, said David Mickaelian, Healdsberg's community services director. "We're now installing more units throughout the city," he said. Newport Beach, struggling with over-watering and runoff problems, is offering WeatherTrack to its residents through a $1 million grant from the Bureau of Land Management. Corporations and builders are recognizing the benefits of this conservation system. Shay Homes, a division of J.F. Shea Company, Inc., provides HydroPoint's controllers for free with their new homes. Closer to home, Redding's Hilltop Estates Retirement Home is installing WeatherTrak. Its parent company, Hillside Retirement, used WeatherTrak for buildings in Southern California two years ago and saw more than 30 percent water savings. "They're fantastic," said William Timmins, Hillside's divisional maintenance supervisor for the company's southwestern division. Hillside Retirement also plans to install the system at the new Shasta Estates on Buenaventura, slated to open next year. WeatherTrak's average list price is $425, based on the necessary number of watering stations or zones – from a small home of six to nine stations to a large home with a big yard needing 18 to 24. The yearly subscription maintenance service (standard with all irrigation weather systems) is $48. "We're leveraging technology that delivers tangible bottom-line benefits and environmental benefits," says Spain. Debra Atlas is a freelance environmental writer and professional speaker. She can be reached at debraatlas@gmail.com#http://www.redding.com/news/2008/sep/14/green-gadget-drought-fighter/ Two districts plan $200 million aquifer: Padre Dam would pump cleaned wastewater to HelixSan Diego Union Tribune- 9/14/08…By Mike Lee Squeezed by the most severe drought in at least two decades, a pair of water districts in East County is accelerating an unusual plan to generate more drinking water and restore habitat along the San Diego River.  The idea, modeled after a much larger project in Orange County, is to pump purified wastewater from the Padre Dam Municipal Water District into percolation ponds along a portion of the floodplain owned by the Helix Water District. Helix would store the water underground for later use, creating a drought-proof supply of about 5,000 acre-feet a year, equal to about 10 percent of the district's deliveries. The aquifer also would provide water for trees and shrubs in a stretch of the river that usually is dry.  The Helix board is expected to authorize an environmental review of the roughly $200 million project at its meeting Wednesday. It will probably take 10 years to complete all aspects of the proposal – assuming it passes the review and survives opposition from residents who would have to endure several years of sand mining related to the project.  “Not only are we helping our own district, but we are helping the statewide reliability of the water supply,” said Charles Muse, president of the Helix board. “If we can provide the district with new water, that is water we don't have to buy from” wholesalers such as the Metropolitan Water District and the San Diego County Water Authority.  At the Padre Dam district, officials are considering a major expansion of their wastewater recycling plant that would allow it to treat more sewage and to higher standards of purity.  The Helix and Padre Dam districts would split the project's cost, though the details haven't been worked out, said Neal Brown, director of engineering and planning for the Padre Dam agency. The price includes upgrades for the treatment plant, an 11-mile pipeline to carry the purified wastewater and percolation ponds along the river.  The districts are seeking state and federal grants to offset their expenses.  “Our board is excited about the potential of this thing, but the numbers are big enough that we have to fine-tune this quite a bit before we start breaking any ground,” Brown said.  Interest in similar projects is growing in San Diego and elsewhere, said Bill Jacoby, who sits on the board of trustees for the California section of the WateReuse Association, an international advocacy group for water recycling.  “Local initiatives like this . . . are going to get us through the water challenges we face,” Jacoby said.  Purifying wastewater for use as tap water has been a touchy topic in San Diego, where officials have for years debated whether to pump purified wastewater into the San Vicente Reservoir near Lakeside, then distribute it to residents.  The city's water department is preparing to launch an $11.8 million demonstration project next year. If the pilot project eventually becomes a full-scale program, it likely would be the first of its kind in the state.  Mark Weston, Helix's general manager, said the district had been studying groundwater storage for a few years. He hopes the drought has diminished opposition to the concept in his district, which serves about 260,000 people in La Mesa, El Cajon, Lemon Grove and Spring Valley.  “People are becoming more sensitive to how unreliable our water supply is. . . . San Diego is absolutely at the end of the pipeline,” he said.  The Helix-Padre project would span about 500 acres in the El Monte Valley that Helix had leased for two golf courses in the late 1990s, but those courses were never built.  In recent years, environmentalists have been trying to restore habitat on the property as part of a regional effort to revitalize urbanized stretches of the San Diego River.  Weston said the ecological and water-supply goals are compatible. Over the next decade, he envisions, a private contractor will mine at least 10 million tons of sand from the floodplain. Sand removal would create what Helix officials call “a more natural topography” in the valley, and revenue from the sand-mining rights would help pay for the aquifer project.  The Helix district has dug one small percolation pond in the floodplain and installed a series of wells to monitor water movement. Results from that test should be available by year's end.  Eventually, the north edge of the river would be lined with ponds of purified water. That water would filter into the ground and flow south to about 30 wells designed to pump water into Helix's treatment system for distribution to customers across East County.#http://www.signonsandiego.com/news/metro/20080914-9999-1m14helix.html Water bond difference must be solvedThe Salinas Californian- 9/13/08…By Anna M. Caballero Farming is never easy. But with water shortages throughout California, growers and farm workers have had a particularly rough time over the past two years. The problem is acute in San Benito County, where many growers depend upon water imported from the Delta, transported via aqueduct to San Luis Reservoir. But environmental problems in the Delta, combined with lower-than-average rainfall over the past two years, have led to severe cut-backs in water deliveries. Crops have been left to die in the fields, and farm workers are unemployed. Water levels in San Luis Reservoir are alarmingly low. According to the Department of Water Resources, the lake today holds less than 32 percent of its average volume for August and only 15 percent of full capacity. For the past several weeks I have spent many hours co-chairing a special Assembly Democratic caucus water working group that reflects a cross-section of the different geographic regions, political perspectives and concerns found within our caucus. The group was appointed by Assembly Speaker Karen Bass to develop consensus on a water bond that would provide solutions to our water quality and supply problems. The result of that work is AB 8xx, a bill I have jointly authored with my working group co-chair, Assembly Member Jared Huffman (D-San Rafael) and with Assembly Member Lois Wolk (D-Davis). The bill would place a $9.8 billion general obligation bond measure on the November statewide ballot. The bill is modeled on a proposal prepared by Gov. Schwarzenegger and U.S. Sen. Dianne Feinstein, but reflects changes that our working group believed are necessary to win the votes needed for passage in the Legislature. Significantly, AB 8xx attempts to break a political logjam that has for years prevented passage of a water bond measure. Republicans have traditionally insisted on new dams as a condition of supporting a bond, while environmental groups have argued that additional conservation and water reuse measures should be funded before the state allows for construction of major new dams. AB 8xx provides $3 billion for new storage facilities heavily weighted in favor of the construction of dams. Every region of the state has its own water issues, and this measure includes competitive local grant programs designed to help. If this measure was passed by the voters, San Benito growers could benefit from ecosystem and water system improvements in the Delta to help restore water deliveries. Hollister could explore wastewater treatment and reuse projects that could ... provide more water. In Monterey County, funds would be available to develop new water storage or desalination projects, and projects to fix the saltwater intrusion that contaminates local groundwater. San Geraldo and Prunedale could clean up badly contaminated groundwater. Pajaro Valley and Watsonville could work on salinity contamination of groundwater, and improved wastewater recycling. Gilroy could clean up contaminated groundwater, and Santa Clara County could expand recycling and reuse projects. We spent many hours negotiating with our Republican colleagues. A key difference was the Republicans' insistence that funding for new storage facilities be continuously appropriated, rather than appropriated annually by the Legislature following the oversight budget hearings that apply to all other programs. While some members of the Democratic caucus were willing to support funding for dams, a $3 billion blank check was too far for most Democratic legislators to support. We worked hard on a compromise position but unfortunately, the clock ran out before we were able to reach a final agreement in this legislative session. Regrettably, we will not have a water bond on the November ballot. But I am encouraged that we were able to make progress in bridging historical differences on water policy. The Legislature is still in an extraordinary session called by the governor because of the water crisis. We need to continue our discussion through the fall to be ready with a solution as soon as possible. As Tim Quinn, executive director of the Association of California Water Agencies, said in an informational hearing on AB 8xx, "This is the closest we've been in my career to finding a winning proposal. The elements of success are in front of you. We can't let this opportunity pass."#http://www.thecalifornian.com/apps/pbcs.dll/article?AID=/20080913/OPINION/809130333 Editorial Water bill deserved to die, for nowCapital Ag Press- 9/12/08Farmers and ranchers dodged a bullet this legislative session. A potentially damaging proposal to reduce California's water use by 20 percent died in committee on the session's final evening, largely due to the successful lobbying efforts of both the cities and the agricultural community.Sponsored by outgoing Assemblyman John Laird, D-Santa Cruz, the measure was well-intentioned. Much of California is arid, and we all need to conserve and use what water we need as efficiently as possible. Asking the community to do so is not out of line. But Laird's ill-fated bill initially would have required California agriculture to reduce its water consumption by 20 percent, a demand that would have radically altered crop patterns in this state. A tomato, a grapevine, a field of rice all have water needs that cannot be legislated away.Eventually the bill was modified to require farmers to adopt a series of "best practices" in their water use. Again, sounds reasonable on its face. Again, the devil lurks within.If you water your tomatoes using furrows, you might lose a percentage to runoff or evaporation. It's still better than running an overhead sprinkler at noon on a hot summer day. Now drip irrigation will irrigate that same field of tomatoes with less water, but installing it in 500 acres of processing tomatoes is a spendy proposition.Under the proposal, you might be required to buy that drip system. It would ruin the economics of the crop, and you'd probably switch to something of higher value to pay off that drip system. Once again, we're talking about legislating crop patterns.This is precisely what several influential environmental groups want. It is well known that cotton is Public Enemy No. 1 in their eyes, and alfalfa is not far behind. Yes, alfalfa requires a fair bit of water - but it is cheaper and better for the environment to grow it here in California than to truck in millions of bales of hay from Nevada or beyond.State Sen. Mike Machado, D-Linden, was instrumental in defeating the Laird bill. Machado's criticisms of the measure were legion, but among them a few stand out:If you change crop patterns to dryland agriculture such as barley or wheat, what will that do to the economy? A hundred acres of cabbage generates far more cash, and creates far more jobs, than 100 acres of barley on a hillside.Should farmers save water in, say, San Joaquin County, there is no reason to believe that savings could then be translated into water available elsewhere.Some of the less-efficient watering systems actually have side benefits. Flooding orchard floors helps recharge the area's groundwater.What about the processors? The vintners? The dairymen? Making wine requires water, as does processing tomatoes. Yes, there are ways to make these enterprises more efficient, but health laws require a lot of water be used in the making of such products. If a processor is in town, does its water use get charged against the citizens?Keep in mind that the Natural Resources Defense Council was the prime mover behind the Laird bill, aided by the Metropolitan Water District of Los Angeles, one of the state's thirstiest - and most ruthless - seekers of water.They will return next session, most likely with a new legislative sponsor. Should the bill receive a proper vetting, a landmark water efficiency and conservation bill may not be a bad thing. But agriculture must be involved in the process, and the urban majority must understand that the world's most productive farmland - California's primary economic engine - runs on water, not sand.#http://www.capitalpress.info/main.asp?SectionID=75&SubSectionID=767&ArticleID=44396&TM=62718.26 3. Watersheds – Top trout lakes hold promise, but watch that fishing lineThe San Francisco Chronicle- 9/14/08…By Tom Stienstra On a warm, late-summer afternoon this past week, we made our first scout trip for the approaching fall trout season in Northern California. We went through all the good-luck rituals required and in a few hours had 20 strikes, landed about 15, kept a few for the smoker and the frying pan, and released several beauties. It's just a start. This was at the headwaters of Iron Canyon, named by field scout Tom Hedtke, who released a 20-inch native rainbow trout and 16-inch brown on this trip. Our good luck has launched hopes that the upcoming season will be great at many lakes. The key is water temperature. At mountain lakes, when the water temperature drops to 63 degrees, then falls to 56, the trout come alive for one last feeding binge before winter. It stays good at most lakes until it hits 48, when the fish stop attacking lures and flies, and instead prefer slow-fished nightcrawlers, as the trout mellow into winter mode. Another key this year is the weight of your fishing line. With no rain since May, mountain lakes are very clear and the trout are line-shy. Use as light line as possible. On our trip, one rod set up with fresh 4-pound Maxima ultra-green out-caught two rods with 6- and 8-pound line (and near-invisible fluorocarbon leaders) 15-to-5. Here's my forecast for the best trout lakes in the mountains and in the Bay Area: Mountain lakes1. Lake Davis, Plumas County: All the planets seem aligned for a sensational bite at Lake Davis. Since being poisoned a year ago to rid it of pike, Lake Davis' aquatic food chain has been rebuilt and Fish and Game has stocked nearly a million trout. At 5,775 feet, the cool nights of late September and October will put those fish on the bite before winter takes over. I think it will be likely for skilled trollers to catch 20, 30 trout per day, catch-and-release. My favorite lures at Davis are the fire-tiger-colored Needlefish and Rapala, set to run 3 and 8 feet deep, respectively, off a downrigger, so it looks as if the Rapala is chasing the Needlefish (the cat-and-mouse technique). Grizzly Store, (530) 832-0270, dillardguidedfishing.com.  2. Eagle Lake, Lassen County: Trout averaging 16 to 20 inches, with a genuine sprinkling in the 4- to 6-pound class, make Eagle Lake the best bet for big trout in California in the fall. The colder it gets, the better it is. That brings the trout to shallow waters. The key here is that the big trout swim in and out of the tules along the shore. You can troll Needlefish, best in rainbow or bikini colors, with a red eye affixed at the head, along the tules near the landing strip, cinder area and northwest shore and north shore of the lake. Another trick is to use slip bobbers and a threaded nightcrawler for bait, then cast right breaks in the tules. Eagle Lake General Store, (530) 825-2191, eaglelakestore.com; Heritage cabin/house rentals, (530) 825-2131, eaglelakeheritage.com. 3. Convict Lake, Inyo County: This is my favorite lake in the Eastern Sierra. When the aspens turn, the granite slopes surrounding this lake turn yellow, gold and orange, a spectacular display of color. This beauty is almost as good as the fishing. A chance at some huge brown trout, and rainbow trout are the mix of a steady bite of 11- to 14-inchers. I used a gold/black-jointed Rebel and a gold/red Humdinger, set up and trolled with the cat-and-mouse technique. I've seen browns in the 10-pound class here in the fall, and landed a 24-inch rainbow that broke one of the hooks on my Rebel. Convict Lake Resort, (800) 992-2260 or convictlakeresort.com. 4. Lake Almanor, Plumas County: Most people do not catch a lot of trout here, but there is a chance at the biggest trout of your life. In one three-hour stretch, brother Rambob and I hooked five over five pounds, and then I lost a lake-record 24-pound brown trout at the boat that's had me howling at the moon (I know it was 24 pounds because field scout Hal Jansen caught, weighed and released the fish right near where I hooked it). On calm, cold mornings, what works best is to troll the eastern edge of the channel at the north end of the lake. On windy days, instead troll the channel adjacent to shore at Bailey Creek. The north shore of the Peninsula can be good, too. Plumas County Visitors Bureau (800) 326-2247, plumascounty.org; Sports Nut, Chester, (530) 258-3327. 5. Lake Crowley, Inyo County: If you make the long drive to fish Convict Lake, nearby Crowley is a must-do as well. When the nights turn cold, the lake's population of big brown trout will migrate to the head of the lake, just outside the mouth of the Owens River. Alligator Point, for instance, can be a good spot. We'll drift from the mouth of the Owens along the underwater river channel with a weighted nightcrawler (so it drifts near the bottom) or rainbow-trout-colored, jointed Rapala. This may sound crazy (and nobody else does it here), but I have caught some big browns by running large, fluorescent-colored Flatfish off a downrigger right on the edge of the river channel, near the bottom. Fish Camp is open through Oct. 31. Crowley Lake Fish Camp, (760) 935-4301, crowleylakefishcamp.com. Bay Area lakes1. Los Vaqueros, Livermore: Unlike other lakes in the Bay Area, Los Vaqueros is stocked year-round, with 2,500 pounds of trout planted every other week. To jump-start the fall season, the lake received a double stock at the beginning of September. The lake is 97 percent full and being dropped a bit to make space for fall rains. Surface temp is 70 degrees, so the start of the fall bite is only a few weeks off. (925) 371-2628, norcalfishing.com. 2. Del Valle Res., Livermore: Fish and Game stocked Del Valle this past week with a surprise plant of 1,000 pounds, all 12- to 14-inchers averaging a pound, on top of a park district plant of 1,000 pounds of catfish. The park district's bonus trout plants will start in mid-October. Water temp still warm, 74 degrees, and the lake is 80 percent full. (888) 327-2757, ebparks.org. 3. Lafayette Res., Lafayette: This lake has its own micro climate, and as a small lake, can cool quickly when the weather turns. That is what we're waiting for now, with the water temp quite warm, still in the mid-70s. For now, plants are projected to start the third or fourth week of October. (925) 284-9669, ebmud.com. 4. Lake Chabot, San Leandro: Fish and Game made its first trout plant of the season last week and the park district will start adding to that next week. The water temp is in the low 70s, so it will only get better. The lake is about 70 percent full. (510) 247-2526, norcalfishing.com. 5. San Pablo Res., El Sobrante: The first trout plants of the fall season are projected for the third week of the month, just prior to the state's free fishing day, Sept. 27, when no fishing license is required. The water temp is still in the low 70s and the lake is about 60 percent full. San Pablo, which closes in the offseason, will be open through Oct. 31. (510) 223-1661, norcalfishing.com.Weekly notebook online at sfgate.com/sports/outdoors. "The Great Outdoors With Tom Stienstra" airs Sundays at 10 a.m. on KMAX-31 Sacramento. E-mail Tom Stienstra at tstienstra@sfchronicle.com.#http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/14/SPON12SCET.DTL 4. Water Quality - Nothing Significant 5. Agencies, Programs, People -Smaller agency still fights plan - The San Bernardino Sun- 9/14/08Palmdale Water District approves rate study - The Antelope Valley Press- 9/13/08 Farmers water rates to rise : Cost-savings plan for farmers to be eliminated in next five years - North County Times- 9/12/08 Smaller agency still fights planThe San Bernardino Sun- 9/14/08…By Andrew Edwards, Staff WriterA small water agency continues to resist plans that would result in it being absorbed by a larger water provider.  At issue for the public is whether merging the agencies would lead to higher property taxes. Leaders of the two water districts disagree on the question of whether East Valley water users will get soaked.  The San Bernardino Valley Water Conservation District, with five employees and seven board members, is the agency resisting the merger with the larger San Bernardino Valley Municipal Water District.  The two agencies play different roles in the San Bernardino Valley's water system. The Conservation District is charged with storing clean Santa Ana River and Mill Creek water supplies, whereas the Municipal Water District imports water for sale to local water providers.  Officials in favor of consolidating the water agencies say a merger would simplify water management in the San Bernardino Valley, but the warning from the Conservation District is that combining the two agencies could result in higher property taxes around the East Valley.  "The public needs to be aware that there is more than just a small likelihood that this will cost them money," Conservation District general manager Robert Neufeld said.  Neufeld's counterpart at the Municipal Water District, Randy Van Gelder, disagrees. He replies that the consolidation will eliminate the Conservation District's fees and thus lead to overall savings for San Bernardino area water users.  Here's how the agencies' arguments break down: The Conservation District, with territory that roughly spans from San Bernardino to Mentone, collects revenue from groundwater fees when it sells water to other agencies. Neufeld said that in a given year, those fees tally to about $600,000, which is about one-third of the Conservation District's budget.  But mining operations within the Conservation District's territory are the agency's most significant money source. In 2005, the district collected about $1 million in mining revenues.  Neufeld said mining revenues are dwindling as demand for locally-extracted construction materials has diminished because of deflation in the real estate market.  In 2008, the Conservation District might only collect about $300,000 in mining revenues, Neufeld said.  If consolidation goes forward, Neufeld argues that the Municipal Water District - unable to charge groundwater fees - will have to make up for the lost revenue by hiking property taxes. He said Municipal may have to find about $300,000 in new revenues if the merger happens.  The Municipal Water District's area includes San Bernardino to the west and Yucaipa to the east. The agency has 21 employees and five board members.  Municipal imports State Water Project supplies from Northern California and sells it to retail agencies that pipe the liquid to homes and businesses in the San Bernardino Valley.  Property tax revenues are a key funding source for Municipal. For each $100,000 of assessed value, the district levies a $165 charge.  Van Gelder said that a merger with the Conservation District would not lead to a tax hike. He replied that the elimination of the smaller district's fees - he called them a "pump tax" - would lead to a reduction in the costs of delivering water throughout the East Valley.  "Overall, the water users and taxpayers would save money," he said.  Van Gelder predicted that merger-related cost savings could be as high as $700,000 to $1 million.  He also disagreed with Neufeld's claim that Municipal would sell the high-quality water now controlled by the Conservation District to out-of-county water districts.  "That's just simply not in the plan that has been adopted," Van Gelder said.  The Local Agency Formation Commission, or Lafco, is another out-of-the-spotlight agency with a big role in this process. Lafco oversees activity like the incorporation of new cities and merging of government districts, and its board may decide to merge the water districts.  The Conservation District has gone to court to prevent that from happening. Neufeld said his district has appealed a trial court ruling that upheld Lafco's authority to command a merger.  Kathleen Rollings-McDonald, Lafco's executive director, said Lafco staffers support a merger because it would create one agency that has the Conservation District's current job of storing local water in the area's groundwater basin with Municipal, which is responsible for keeping State Water Project supplies in the basin.  Rollings-McDonald said environmental documents prepared for the possible merger could be certified as early as November. The report can be viewed online at www.sbclafco.org.#http://www.sbsun.com/news/ci_10465890 Palmdale Water District approves rate studyThe Antelope Valley Press- 9/13/08…By ALISHA SEMCHUCK, Staff Writer PALMDALE - Water rates could change for customers of the Palmdale Water District once a study of the rate structure has been completed, but which way is unknown.  The district board, on a 5-0 vote on Wednesday night, approved an agreement with Raftelis Financial Consultants, Inc., a nationwide firm with an office in Pasadena. Raftelis will prepare a water rate study for the district at a cost not to exceed $136,000.  Among its services, the water and wastewater financial consulting firm, conducts studies of water rates and develops a model by which to calculate rates.  If implemented, a tiered rate structure would assign a water use budget to district customers based on the number of people living in a home, the amount of landscaped area on the property and daily evapotranspiration data - the amount of water needed to keep a lawn green during day-to-day weather changes.  Water district customers would be expected to stay within their allotted amount of water use as a means of conserving water - a resource currently in short supply because of a two-year drought compounded by pumping restrictions in the Sacramento-San Joaquin River Delta mandated by a U.S. District Court judge to save the delta smelt.  Curtis Paxton, the district's assistant general manager, told the board that two firms had been considered for the project, but the water district staff decided on Raftelis based on a recommendation from Tom Ash, director of conservation for HydroPoint, a Petaluma-based irrigation systems firm contracted by the district to install its WeatherTRAK evapotranspiration controllers in 210 Palmdale homes as a water-saving measure. The cost would be $246,421.  The contract for Ash's consulting advice is $10,000 at a rate of $125 per hour, "plus reasonable expenses," as the agreement states.  "What other water districts has Raftelis worked with?" water district Director Raul Figueroa asked.  Paxton named several, including Beverly Hills; Henderson, Nev.; San Diego; and the Casitas Water District.  The firm's Web site also lists Big Bear Municipal Water District; the city and county of Los Angeles; Metropolitan Water District of Southern California; San Bernardino County; and Victor Valley Water District.  Foreign clients include Bulgaria and Jamaica.  "Did we contact any of these cities - (verify) if they're satisfied?" Figueroa asked.  "Tom Ash has," Paxton said.  Paxton described Raftelis as a "nationally recognized firm. We believe we'll get good attention from them. We feel good about their capabilities."  A visit to the firm's Web site at www.raftelis.com indicates that in addition to studying water rates, it also explores conservation pricing and identifies costs associated with peak usage, then develops "appropriate consumption level cut-offs" and estimates the amount of excess consumption that will be subject to a surcharge - a fee imposed for using more water than the amount allotted for a household.  Raftelis offers its clients various resources. According to the Web site, those resources include a biennial rate survey and a book titled "A Comprehensive Guide to Water and Wastewater Finance and Pricing," written by George Raftelis, the firm's president and chief executive officer.  A date hasn't been set yet for Raftelis to begin the project, but Paxton said a "kick-off meeting will probably take place in a couple of weeks."  The study is expected to be completed by May, in time for the water district to conduct a public hearing on water rate changes, as required by Proposition 218.  Prop. 218 demands that local government agencies which provide potable water supplies and sewage services and receive a portion of property tax dollar set public hearings before raising rates.  The state Supreme Court ruled in 2006 that all proposed rate increases require government agencies to mail a notice of intent to all property owners who would be impacted.  Property owners could block a proposed rate hike if 51% object.  When the revised water rate structure surfaced in May, Paxton expressed confidence in Ash.  "This type of water rate structure was developed by Irvine Ranch Water District in the early 1990s," Paxton wrote in a board memo back then.  Ash was "an employee of Irvine Ranch Water District at that time, and played an integral role in the development of the rate structure," he said.  "We'll work primarily with Tom on developing the water budget," Paxton said Wednesday night.#http://www.avpress.com/n/13/0913_s5.hts Farmers water rates to rise : Cost-savings plan for farmers to be eliminated in next five yearsNorth County Times- 9/12/08…By NICOLE SACK, Staff Writer  After 50 years of providing agricultural customers with reduced rates, changes are coming down the pipeline that will likely force growers to pay rates that most homeowners experience.About 30 farming customers of the Rancho California Water District received news this week that their reduced water rates likely will be phased out by the main supplier of regional water ---- Metropolitan Water District ---- in the next five years.The change will almost certainly mean customers will see higher prices for regional produce, or a reduction of farming operations.From 1958 to 1994, Metropolitan Water District provided a 25 percent discount for agricultural customers.Then in 1994, the Interim Agricultural Water Program was established. That program extended lower rates to growers with the understanding that their water supply would come from "surplus" water and could be interrupted when the supplies tightened.Under the program, agricultural customers pay $394 per acre-foot of water ---- $132 less than municipal, industrial and residential customers for the same quantity and quality of water. One acre-foot is the volume of water sufficient to cover an acre of land to a depth of 1 foot ---- 325,851 gallons. On average, one acre-foot of water is enough to meet the needs of four people for a year.Metropolitan Water District provides the Rancho California district with 70 percent of its water. In 2006, more than 7 billion gallons of the lower-cost water were delivered to the local district's agricultural customers.That "surplus" water is dwindling, however, as Southern California water supplies continue to tighten due to drought and legislative decisions that will restrict the importation of water to regional customers.In response to the tightening supplies, farmers were notified of a mandatory 30 percent reduction in their water use. As a result, area avocado and citrus farmers have stumped their trees and taken other measures to adhere to the restrictions.Now a new kink is in the line for those same farmers as it appears Metropolitan will eliminate the agricultural rates entirely in the next five years. Rates will increase by $25 to $75 per acre-foot for those in the program, said Perry Louck, Rancho California Water District's director of planning.The local water district held a meeting Wednesday to inform growers about how the Metropolitan decision will trickle down to local customers, both inside and outside the Rancho California district's boundaries.Rick Opel, vice president of Henry's Avocado Corporation, based in Escondido, said he needs to "study and digest" the phase-out proposal after Wednesday's meeting. Opel's company has 2,200 acres of avocados.Opel said the company has had to stump trees and cap sprinklers to reduce their water use."We're operating our factory at 75 percent efficiency," he said. "This is going to make farming less profitable. The outlook is very bleak."Larry Libeu, a director on Rancho California Water District's board, said the five-year phase out period gives growers time to re-evaluate their growing future and possibly switch out their heavy water-drinking crops, like avocados and citrus, with less-water needy plants such as grapes."Instead of just cutting the water at once, the phase out will allow agricultural customers to create a business plan," he said.Libeu said there are two likely scenarios for area growers: face higher costs or cease operations. He said the region could see more agricultural jobs lost to foreign markets due to the water restrictions and rising rates.Len Francis noted it is really only a four-year phase out as 2009 is almost here. He said that by the time the phase out of the discounted agricultural water program is complete in 2013, he expects his water costs to be 50 percent more expensive.He said one positive aspect of the change is that while agricultural water customers will face a 30 percent reduction in the amount of water they can use, being lumped in with domestic customers the farmers will be able to use as water as they can pay for.Francis said he manages more than 600 acres of avocados, a crop he has had to cut back by 25 percent because of the restrictions. He said this water scenario is the most severe he has seen in his 30 years of growing."This is the first time we've ever had a 30 percent cutback in water allowances," he said.He says he doesn't know how the market will balance itself out. Changing what crops he grows is not an option, he said, and without avocado trees, his De Luz property will lose value."What else are you going to do with hilly land like that, if you're not growing avocados?" he asked.Contact staff writer Nicole Sack at (951) 676-4315, Ext. 2616 or nsack@californian.com.#http://www.northcountytimes.com/articles/2008/09/12/news/californian/temecula/zb2b459ee6e982772882574c0005c5c1a.txt ------------------------------------------------------------- DWR's California Water News is distributed to California Department of Water Resources management and staff, for information purposes, by the DWR Public Affairs Office. For reader's services, including new subscriptions, temporary cancellations and address changes, please use the online page: http://listhost2.water.ca.gov/mailman/listinfo/water_news. DWR operates and maintains the State Water Project, provides dam safety and flood control and inspection services, assists local water districts in water management and water conservation planning, and plans for future statewide water needs. Inclusion of materials is not to be construed as an endorsement of any programs, projects, or viewpoints by the Department or the State of California. -------------------------------------------------------------CENTRAL VALLEY SAFE ENVIRONMENT NETWORKMISSION STATEMENTCentral Valley Safe Environment Network is a coalition of organizations and individuals throughout the San Joaquin Valley that is committed to the concept of "Eco-Justice" -- the ecological defense of the natural resources and the people. To that end it is committed to the stewardship, and protection of the resources of the greater San Joaquin Valley, including air and water quality, the preservation of agricultural land, and the protection of wildlife and its habitat. In serving as a community resource and being action-oriented, CVSEN desires to continue to assure there will be a safe food chain, efficient use of natural resources and a healthy environment. CVSEN is also committed to public education regarding these various issues and it is committed to ensuring governmental compliance with federal and state law. CVSEN is composed of farmers, ranchers, city dwellers, environmentalists, ethnic, political,and religious groups, and other stakeholders.