10-19-08Fresno BeeAir board approves strict burning rulesFireplace regulations for the Valley are toughest in nation...By Pablo Lopezhttp://www.fresnobee.com/local/story/946491.htmlThe San Joaquin Valley Air Pollution Control District has adopted tighter restriction on fireplace burning starting Nov. 1.Under a rule adopted Thursday, wood burning is prohibited when pollution in the area reaches 30 micrograms per cubic meter. The former threshold was 65 micrograms per cubic meter. "We now have the strictest rule in the nation," said Seyed Sadredin, the district's executive director. The ban on wood burning is called on winter days when particle pollution hangs in the Valley's cold, hazy air. Restrictions on fireplace use are needed because the Valley's air quality is among the worst in the country, Sadredin said. Five years ago, the district banned fireplaces in new residential development and established the rule of 65 micrograms per cubic meter to determine when it is a bad air day. The rule prohibited burning wood in fireplaces about a dozen times a year, Sadredin said. The new rule will prohibit wood burning about 45 times a year, he said.The air board voted 6-4 for the new restrictions, which apply to indoor and outdoor fireplaces, or "chimineas." Some board members wanted the limit to be 35 micrograms per cubic meter, which is the EPA recommendation, Sadredin said. The wood burning season typically runs from November to February. The penalty for burning wood when there is a ban is a $50 fine. In lieu of the fine, violators can take a class about the health hazards associated with wood burning, Sadredin said.Sacramento BeeYosemite glacier on thin ice...Tom Knudsonhttp://www.sacbee.com/101/story/1325423.htmlhttp://www.sacbee.com/101/v-print/story/1325423.html   PrintON THE LYELL GLACIER – As melting water gushed off the ice in a tinseled maze of rivulets and tumbled through a gaping chasm, the hikers watched, wondered and worried.Unlike most backcountry travelers who pitch their tents along the John Muir Trail in the upper reaches of the Lyell Fork of the Tuolumne River, these visitors had not pushed on to scale the summit of Mount Lyell – Yosemite's highest peak.Instead, they scrambled up a ridge of rose-tinted granite and over a mound of dark, unstable boulders to tromp across this less well-known corner of the national park, a silvery-white sheet of ice fast becoming one of the first California landmarks to succumb to climate change. Later in the day, Pete Devine, a veteran glacier observer who manages educational programs for the nonprofit Yosemite Association, sat on a log and opened a notebook. "Gaunt remnant of what I saw 10, 20 years ago," he wrote in his journal. "Lots of large boulders dot the surface. Lots of melt water flow."As signals of climate change begin to come into focus in the Sierra Nevada, its melting glaciers spell trouble in bold font. Not only are they in-your-face barometers of global warming, they also reflect what scientists are beginning to uncover: that the Sierra snowpack – the source of 65 percent of California's water – is dwindling, too.More of the Sierra's precipitation is falling as rain instead of snow, studies show, and the snow that blankets the range in winter is running off earlier in the spring. And snow in the Sierra touches everything. Take it away and droughts deepen, ski areas go bust and fire seasons rage longer.Some glaciers already have melted away, including the first Sierra glacier discovered in Yosemite by John Muir in 1871. Today, the remaining 100 or so are withering, including Lyell, the second-largest, which could be gone inside a century."All across the Sierra, glaciers are transitioning into ice patches. Ice patches are transitioning to snow fields. And snow fields are transitioning into bedrock," said Greg Stock, a geologist with Yosemite National Park who joined Devine last month on an annual survey of the Lyell glacier.While this is not the first time glaciers have receded across the Sierra Nevada – they last did so about 20,000 years ago – this meltdown is more ominous, Stock said, because scientists increasingly believe it is sparked not by natural forces but by rising carbon dioxide levels from the burning of fossil fuels."We have entered new terrain with what's going on in the atmosphere," he said. "We haven't seen anything like this in tens of millions of years."Witnesses to a warming planet... Glacial history complex... Answers in the ancient ice... Carrying experience backFew people are better acquainted with the Sierra snow-pack than Klieforth, the meteorologist from Bishop, who has spent much of his life studying the range's climate, vegetation and weather patterns.As he sat on a rock, looking up at the receding glacier, his mind wandered back to prehistoric climatic changes that have swept across the Sierra, sometimes suddenly, including two massive droughts that lasted for generations."It does get you thinking about what is happening right now," he said. "You wonder if we are in one of those catastrophic times or not."...This trip, he said, was both professional – he still keeps track of weather patterns – and a personal challenge...On this journey to the Lyell glacier, Klieforth logged another 30 miles and spent a part of each day looking at grainy, black-and-white photographs he had taken of the glacier back in 1950 – pictures of a much bigger ice sheet than the one he was seeing today.No global warming skeptic, Klieforth is nonetheless a cautious man, careful about jumping to conclusions. He was moved by his trip to the glacier, calling it a watershed event."Climate change is sneaking up on us," he said. "And the rate of the sneaking is going from a slow walk to a sprint."He wanted to share the visit with some special friends: his old climbing buddies – now in their 80s – who had joined him on the original 1950 trip."I'm going to tell them that they can believe in global warming," Klieforth said. They can "take it to the bank." San Francisco ChroniclePublic lands development rush...Jodi Peterson, Emily Steinmetz, High Country News, hcn.orghttp://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/19/INQC13JBA0.DTL&type=printableDEVELOPMENT:Pro-development road access deal draws scrutiny WHAT IT MEANS:A secretive deal that could make it easier to develop remote forest lands has come under fire from enviros, counties and now congressional investigators. Plum Creek Timber Co. and the U.S. Forest Service have agreed to allow thousands of miles of old Forest Service logging roads in western Montana to double as driveways for second homes and cabins. The deal would also apply across the country - to the millions of acres of private timberlands that can be reached only by crossing national forest.But the agreement was reached without comment from the public or the counties that would have to provide services for all those new homes in the woods. And it contradicts Forest Service policy, which has long held that easements granted for timber-hauling do not automatically allow residential access. So Montana county commissioners and Sen. Jon Tester, a Democrat, asked the Government Accountability Office to investigate.Now, the federal watchdog has released a letter that raises major red flags about the plan, saying it may well be illegal. Plum Creek's sweet deal might just turn out to be plumb wrong.- Jodi PetersonMine, baby, mineDEVELOPMENT:Paving the way for uranium exploration near the Grand CanyonWHAT IT MEANS:The Bureau of Land Management is proposing to change a rule that allows the Department of Interior and Congress to protect public lands through an "emergency withdrawal."Congress used this rule when it called for an emergency withdrawal of land near the Grand Canyon that was slated for uranium exploration. But Interior Secretary Dirk Kempthorne ignored the withdrawal, and last month, environmental groups filed a lawsuit against him. The proposed rule change would prohibit such emergency interventions - and would let the Interior secretary off the hook for failing to act. And it would likely stymie efforts to slow or halt uranium exploration on about 1 million acres of public land near the Grand Canyon. The BLM opted for just a 15-day public comment period on the proposed change - more evidence, critics say, that energy and resource development plans are being rushed through before the next administration takes office.Emily SteinmetzConservationists nudge Feds to help save salmon...Michael Milstein, Associated Presshttp://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/19/MN2813G7KN.DTL&type=printableChinook salmon that evolved to migrate up the Willamette River during a narrow winter window when they could get over Willamette Falls are one of the most genetically unique salmon in the Columbia River system.But roughly 95 percent of their once-flourishing runs are gone, cut off from their spawning grounds by dams and their habitat in decline. Biologists say their risk of extinction is high.Now federal agencies, prodded by conservation groups, are moving to remedy the impacts of 13 dams on Oregon's largest interior river system that have pushed salmon and steelhead to the brink. Their goal: reconnect struggling salmon in the degraded lower river to pristine headwaters above the dams - while leaving the dams in place.Without helping fish reach those prime spawning streams, "there is just not enough habitat to produce enough fish to rebuild the run," said Stephanie Burchfield of NOAA-Fisheries, which oversees protected salmon.The work will extend multibillion-dollar efforts to offset the fish impacts of Columbia River dams to include the Willamette. It will take hundreds of millions of dollars worth of engineering, technology and habitat repair, nearly half funded by ratepayers who get hydroelectric power from the dams.Federal biologists are calling for systems that haven't been devised yet to shunt fish past dams twice as high as those on the Columbia River. The work mandated by the Endangered Species Act might require temporarily draining Detroit Lake, a recreational reservoir east of Salem, to install equipment that re-creates natural water temperatures for fish below the dam.The U.S. Army Corps of Engineers, which built the dams decades ago to control flooding, must try to provide the ecological benefits of floods and natural flows - without the damage floods can do.Among the changes during the coming decade:-- The corps must help young salmon and steelhead migrate down the river's tributaries past dams, especially Detroit, Cougar and Lookout Point. No one is sure how to do that; it may require expensive pumping facilities and chutes or lowered reservoir levels in spring.-- Dam operators must move migrating adult fish past dams 450 or more feet high to upstream spawning grounds. This may mean capturing fish below dams and trucking them uphill; one dam might use a kind of fish elevator system.-- Biologists are trying to devise a high-tech fish ladder east of Eugene that will automatically sort wild fish from hatchery-raised fish without them leaving the water. It will keep hatchery fish from diluting the wild fish genes by breeding with them along a stretch of the McKenzie River.-- Dam operators must re-create historical river temperatures below the dams, which have long thrown temperatures out of whack. A new intake system to do that below Cougar Reservoir east of Eugene cost about $52 million.-- Federal and state agencies and conservation groups will repair habitat below dams by re-creating side channels that floods used to fill with logs and other debris that provide crucial habitat for fish.-- Farmers will be required to screen irrigation diversions so they do not suck fish out of the river, and no new irrigation contracts will be issued on the North and South Santiam rivers to avoid reducing flows.The overhaul of the Willamette dams is required under a 1,300-page biological opinion completed by the National Marine Fisheries Service, which oversees protection of salmon. The upside is that efforts on the Willamette appear far less contentious than battles over the Columbia. Although Oregon Gov. Ted Kulongoski is fighting federal plans on the Columbia for not helping fish enough, his staff is working closely with federal officials on the Willamette."There is a lot of momentum, I think, going on on the Willamette," said Sue Knapp of the governor's natural resources office.The key will be funding. Some money will likely be diverted from efforts on the Columbia River to help the Willamette. The state will provide some lottery funds for habitat restoration. But Congress will also have to dedicate some money to repairing the river it once paid to dam, Knapp said.Massive flooding once defined the Willamette, which annually spilled over its banks into a lowland forest that hugged the river. But repeated damage to cities led the corps to rein in the waters with flood-control dams. Of the 13 corps dams in the system, 11 also generate hydroelectric power.Many of the dams are too high for conventional fish ladders, and systems to let fish pass downstream ended up killing many fish, said Greg Taylor, a Corps of Engineers fish biologist.The dams cut off salmon from as much as 90 percent of their spawning habitat on the Middle Fork of the Willamette, 70 percent on the North and South Santiam and about 20 percent on the Clackamas and McKenzie.Spring chinook salmon and winter steelhead are both protected by the Endangered Species Act, but Willamette chinook are the most threatened. The Willamette once supported about 300,000 wild chinook, but the number is now about 10,000 and is in danger of disappearing.The assumption when the dams were built was that wild fish, supplemented by hatchery fish, would spawn below the dams, Taylor said. But too little spawning habitat remains below the dams. Part of the problem is that water flowing from reservoirs throws river temperatures off.Historically, the rivers grew warmer in summer and turned colder in fall, along with air temperatures. But now waters released from deep in the reservoirs turn them frigid in summer and, as the reservoirs mix later in the year, unnaturally warm in the fall.The out-of-kilter temperatures cause eggs to hatch prematurely, Burchfield said.A key element of the new plan involves bringing the river temperatures back in line. The corps accomplished that at Cougar Reservoir with a tower that allows operators to draw water from various depths in the reservoir. A similar system may be needed at Detroit Dam.Perhaps the most challenging element will be finding a way to move young fish down through the reservoirs, where they may get eaten by predators or die on their way through turbines or spillways. The corps will examine systems for collecting fish above reservoirs and then trucking or piping them below dams.Many of the measures for salmon and steelhead also will benefit bull trout, a threatened species, said Chris Allen of the U.S. Fish and Wildlife Service. Bull trout also use the high, clean, cold headwater streams that probably will provide better refuge as the climate warms."These factors really make these strongholds for the fish," Allen said.Willamette fish historically spread their risk by spreading their young throughout the river system - some fry would remain high in tributary streams, while others moved down into the main river, hovering in calm side channels.So agencies will partner with groups such as the McKenzie River Trust, a Eugene nonprofit trying to rebuild habitat on the McKenzie and Willamette. It has used grants and donations to buy land along the river so the waterway can reclaim old ground.But all the pieces together are essential if fish are going to reclaim their place in the Willamette, officials said."If we can get these fish up there," Knapp said, "there's all sorts of room for them to come back."Pristine PG&E areas in Shasta to go public...Peter Fimritehttp://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/19/MNB813B23A.DTL&type=printableMcArthur Swamp, Shasta County -- Dale Glassburn wasn't looking for serenity on Big Lake, an isolated spring-fed body of water outside the town of Burney. A person doesn't have to search for that in this 7,596-acre haven for wildlife known as McArthur Swamp in the rugged Cascade Mountains of Northern California. Serenity is what you get on the lake and in the surrounding wildflower-strewn valley with a view of cloud-capped Mount Shasta. What Glassburn was after was what Native Americans sought in this former swamp until they were driven off their land: fish...The remote marshland - which, in addition to the rainbow trout, serves as the winter home to tens of thousands of migrating waterfowl - is a signature piece of one of the biggest, most elaborate public takeovers of hydropower lands in America. The Pacific Forest and Watershed Lands Stewardship Council, a nonprofit foundation, is drawing up plans to protect 140,000 acres of land owned by Pacific Gas and Electric Co. The plan, which is part of PG&E's 2003 bankruptcy reorganization settlement, is to donate half of the land to public trusts, parks, wildlife agencies and tribal organizations by 2013 and protect it all through conservation easements. The deal includes green forests, rolling oak savannahs, many sources of the state's drinking water and some of the best fly-fishing rivers and streams in 22 counties across California from Mount Shasta in the north to the Carrizo Plain in the south. Added together, it is an area almost twice the size of the Golden Gate National Recreation Area.The amount of land going into public hands is shy of the largest open space transaction in California, but it is clearly the most spread out and diverse. PG&E has agreed to pay $100 million in ratepayer funds to the various agencies that are selected to manage the lands, which were deemed unnecessary for hydroelectric power generation. McArthur Swamp was selected by the Stewardship Council as one of the first four properties to be given away. The others are Bucks Lake, a popular reservoir in Plumas County; Doyle Springs, a forested 43-acre site in Tulare County; and Kennedy Meadows, a scenic 244-acre high sierra meadow in Tuolumne County.Hat Creek, just down the road from McArthur Swamp, is another site that will be donated in the near future. The first four transactions are scheduled to be completed by mid- to late 2009. By then, the Stewardship Council will have begun preparing eight to 10 other sites for transfer, said Ric Notini, the council's director of land conservation."It is one of the most complex land conservation deals ever done in California, and the land is being donated to those organizations," Notini said. "In this case, PG&E is providing millions of dollars to the parties that receive the land."Slice of serenityMcArthur Swamp is one of the most intriguing sites because of its proximity to one of California's most isolated state parks. Ahjumawi Lava Springs was named for the 3,000 to 5,000 year old lava flows that mark its topography. It is one of the few places anywhere where fish traps left by Native Americans still exist... Fewer than 2,000 people a year visit this gem in the wilderness, which can be reached only by boat. The only boat ramp available to transport visitors is at McArthur Swamp. Once a large marsh with meadows on the fringes, it is now mostly meadow with 1,400 acres of open water around it. A system of levees and drainage canals were built starting in 1903, creating Big Lake. PG&E bought the land in 1925 to stop water diversions that were hurting their powerhouse operations downstream. A muskrat farm operated on the land for several years, but the animals were released when the farm ceased operations in the 1930s. The burrowing non-native muskrats have since caused bank erosion and flooding.The swamp area, which is now essentially seasonal wetlands, has been used for cattle grazing and periodic logging since 1944. The area, part of what is called the Fall River Valley, is the ancestral homeland of the Ahjumawi band of the Pit River Indian tribe, which is made up of 11 autonomous bands of local Indians. The 2,500 people in the tribe - 75 percent of whom live in Modoc, Lassen, Shasta and Siskiyou counties - consider McArthur Swamp an extremely important ancestral area. The tribe is one of seven bidders for the property, including California State Parks, Shasta County and several conservation groups. Historical significanceThe area is rich in history.The word Ahjumawi is said to have meant "where the waters come together." It perfectly describes the spot on state park land next to McArthur Swamp where Big Lake, Tule River, Ja-She Creek, Lava Creek and the Fall River come together. The Ahjumawi lived off the abundant food supply from these waters and called themselves river people.One of their techniques was to build elaborate walls out of lava rock on the local springs, which would concentrate the spring water and draw in suckers and trout. The natives would then trap the fish in these shallow areas and spear them.The remains of these fish traps still exist at the mouth of the springs. The Ahjumawi were apparently rivals of the nearby Modoc Indians, famous for waging the last great Indian war against United States troops in 1872 and 1873 under the direction of their chief, Captain Jack. The Modoc War stronghold was an intricate web of lava caves that are now called Lava Beds National Monument, in Siskiyou and Modoc counties.Chris Pirosko, director of natural resources for the Pit River tribe, said the Modocs used to raid Pit River camps, and the cavalry rode through their land during the war. "There are stories in the Pit River tribe of watching the cavalry chase Indians through the valleys," he said.The area became known as McArthur Swamp after John McArthur purchased the property in 1868. McArthur and the other settlers began calling the natives Pit River Indians because they would often dig pits and cover them along deer trails by the river. The deer would fall into these traps when they came down to the river for a drink.Six Native American archaeological sites have been recorded in the marsh area, but a comprehensive survey has never been done."There are probably many village sites that are scattered around the perimeter. There are probably prehistoric grave sites. We don't know, but we do know that this place is a part of history," Pirosko said. "The primary objective for the tribe is to enhance the swamp's ecological status and preserve the cultural resources. We intend to keep it as open space and provide access to the public." As in all of the various units of land that PG&E is donating, the bidders are being encouraged to work together. Ultimately, Notini said, the land steward that is selected may be a collaboration of groups that will take into account the desires of all the users. "We're looking at it from a long-term perspective," Notini said. "Our goal is to identify the organizations we think are best equipped to preserve these lands in perpetuity."Los Angeles TimesTough times put the squeeze on collegesSchools could be hard-pressed to meet demands during the financial crisis, but many say they will give grants higher priority than new buildings and more faculty...Larry Gordonhttp://www.latimes.com/news/local/la-me-collegeaid19-2008oct19,0,3179315,print.storyWith family investments and house values battered by the financial crisis, colleges and universities in California and around the nation are seeing an increase in students seeking financial aid and are bracing for even more.At the same time, higher education's ability to meet that extra need is in question because the value of many college endowments has dropped as well, experts say."It's putting more demands on the system when the system can least afford the new demands economically," said Phil Day, president of the National Assn. of Student Financial Aid Administrators. "It's going to be tight."Nationwide, applications for financial aid jumped 16% this fall compared to last year, said Day, a former chancellor of the City College of San Francisco. And that figure probably will rise again in the spring and next fall if Wall Street does not bounce back from its recent losses, he said.Some schools may need to cut back on other spending to fund extra scholarships, Day predicted. "What's more important than making sure the students have access?" he asked.Whittier College, Stanford University, Santa Clara University and many University of California campuses are among schools that have recently seen additional students asking for extra aid, officials said. They and others are expecting even more if the economy worsens."Like every individual American and every corporation, colleges are concerned about what is happening in the economy. We are well aware it might affect our enrollments," said Lisa Meyer, Whittier's vice president for enrollment.Meyer said her office is increasing grants and boosting staffing to help students find loans if their families' college savings accounts have been hit by Wall Street losses or if they can no longer borrow against their homes.But she said that Whittier, which enrolls about 1,300 students, cannot afford to meet all of the new need with grants. "There are fiscal realities we have to live within," she said. Whittier's relatively modest endowment was about $80 million on June 30, and officials there and at many other schools are awaiting figures on their portfolios' current, presumably lower, values.Stanford University, which enrolls about 15,000 undergraduate and graduate students, had a $17-billion endowment on June 30. That allowed Stanford this year to expand its undergraduate financial aid to offer free tuition to most students from families earning less than $100,000 a year. It joined a small number of affluent schools giving such breaks to students from middle- and lower-income families.In recent weeks, Stanford also has seen a hike in requests for additional help and anticipates more appeals when tuition bills are sent out for the winter quarter, said Karen Cooper, director of financial aid. "Some families are being impacted by the economy. We have examples of parents who have been laid off, small-business owners facing difficulties. All that is going on," she said.John Etchemendy, Stanford's provost, said any decline in the university's endowment would not alter the new aid plan. "Earlier this year, we made the largest financial aid increase in our history because we knew that lower- and middle-income families were already facing serious financial pressures," Etchemendy said in a statement.Before taking steps to reduce financial aid, schools will probably first postpone new construction and stop hiring faculty, several experts said. Boston University, for example, has announced a construction and hiring freeze, and other schools may follow suit if the situation does not improve."Is everybody worried about return on endowments with the market down so heavily? And are we worried that philanthropic giving will be diminished? Sure," said Molly Broad, the president of the American Council on Education, the research and lobbying organization for higher education.But she said: "Financial aid is the last place I could imagine they would cut back."In recent years, universities with significant endowments have faced pressure from Congress to spend more of the investment returns on scholarships or risk jeopardizing their tax-exempt status.Another concern this fall is that some financially stressed families may push current high school seniors to apply only to community colleges, which cost less than four-year public or private schools. "We are sure that's going on," said Nancy Coolidge, the University of California's systemwide coordinator of student financial support. In response, she said, UC would work hard to encourage students to apply for both admission and financial aid, and she predicted that many would be pleasantly surprised to learn how much aid was available.Several experts said steps taken by Congress this year to bolster the student loan market had succeeded in most cases in providing financing. Families that previously tapped home equity lines of credit are turning in higher numbers to federally backed student or parent loans, schools report. Some concerns persist about loan availability next year if the banking system remains unstable.Santa Clara University in Northern California has had a small increase in students seeking extra financial aid, but no one is in jeopardy of dropping out because of money worries, officials said. If the financial crisis continues into next year and layoffs rise, requests for aid will probably increase, and the university will try its best to accommodate the need, said Richard Toomey, associate vice provost for enrollment management.Santa Clara, which had a $697-million endowment in June, is among many schools using formulas that average their endowment returns over three years. That "evens out the hits and misses," Toomey said, and allows schools to maintain financial aid and other programs in bad years.In Claremont, Pomona College had, as of June 30, $1.79 billion in its endowment, a very large amount for a school that enrolls 1,520 students. Karen Sisson, Pomona's vice president and treasurer, said that a dip in the endowment's value would not lead the college to reduce aid. Pomona this year replaced student loans with grants."One of the blessings we have with our endowment is we do have the capacity to weather the storm," she said.At Northeastern University in Boston, about 10% more students than last year have asked for additional midyear aid, according to Anthony Erwin, financial aid director.His office also is fielding calls from parents asking "what if" questions about whether reduced investment values could make them eligible for more aid. So far, the university has been able to meet all legitimate needs."I think all of us in higher education are watching the financial markets and how families are going to react," said Ronne Turner, Northeastern's dean of admission.If the crisis had begun two months earlier, some colleges might have lost freshman enrollment, said Sarah Flanagan, vice president for policy development at the National Assn. of Independent Colleges and Universities. For now, she has not heard such stories, but "there is a lot of nervousness out there," she said.Washington PostBankrupt Calif. City May Be a HarbingerEconomic Decline Saps a Budget Already Stretched by Massive Payroll Costs...By Karl Vickhttp://www.washingtonpost.com/wp-dyn/content/article/2008/10/18/AR2008101801964_pf.htmlVALLEJO, Calif. -- When this city of 120,000 declared bankruptcy in May, the extraordinary step appeared to arise from an extraordinary circumstance: Vallejo's payroll largess. Police captains in this blue-collar town north of San Francisco make more than $200,000. The city manager's $338,000 salary is more than that of the vice president or anyone on the Supreme Court."I think it's fair to say everybody's here because the wages and benefits are very good," said city Finance Director Bob Stout, with a tight smile.But as the nation's financial system staggers and recession looms, officials across America's most populous state are nervously eyeing the other side of the equation that brought the City of Vallejo into the U.S. Bankruptcy Court for the Eastern District of California: tax revenue that sank with the economy while payroll and pension obligations continued their rise."Are they unique?" said Dwight Stenbakken, deputy executive director of the League of California Cities. "I think we may have some other cities that this whole economic downturn is going to test."Stockton, in the Central Valley, is furloughing city employees. Sacramento is slashing budgets to make up a $58 million shortfall in the capital city, where state lawmakers -- who under California law can reach down to "borrow" property tax receipts from cities and counties -- only recently finished a budget billions in the red.California was hit hardest by the crash of a housing market that, when it was hot, brought cities and counties fat transaction fees and a rare boost in property taxes. The follow-on credit crisis has only made matters worse, spreading trepidation and inhibiting the consumers whose purchases provide the sales taxes that drive many city, county and state budgets.The scale of California's exposure to the downturn was made vivid this month when Gov. Arnold Schwarzenegger (R) wrote to U.S. Treasury Secretary Henry M. Paulson Jr. to suggest that the state might need to borrow $7 billion because of the freeze-up in credit markets. Last week, however, the state succeeded in raising $3 billion itself, with the governor himself investing $100,000 in state-backed bonds.California's pain is unique -- for now. The Golden State has long been known for leading the way nationally."This is going to be a serious problem," said Max Neiman, associate director of the Public Policy Institute of California, a San Francisco think tank. "I think it just happens that it's hitting hard and fast in California because the system is set up to take a revenue stream out of the building and retail sectors. But as property values stagnate and if unemployment goes up, all of these things will broaden this problem across the country."In Vallejo, the catastrophe was a long time coming. Nestled below sun-splashed hills overlooking San Pablo Bay, this was a Navy town until the shipyard was shuttered in 1996. The city's failure to replace that income stream was masked for a time by the boom in housing values and by disarray in City Hall -- Vallejo had six city managers in four years.Employee unions, meanwhile, displayed impressive focus. They helped make the "City of Opportunity" the first in California to send arbitration issues to an outside party, which frequently ruled for the unions. Police and firefighters routinely won contracts so bountiful that in 1993 a panel of citizens predicted that, absent an interruption of the upward cycle of raises and benefits, Vallejo would go bankrupt in 2010.The reckoning was bumped forward two years by the housing crash and a dip in sales taxes that accompanied the closure of a car dealership and a Wal-Mart. Fiscal 2008 found the city with no reserves and 80 percent of the general fund obligated to police and fire services."They should be well paid. There's a risk to the job," said Marc Garman, a local watch repairman who, seeing what was coming, started a Web site called Vallejo Is Burning. "But there comes a point where it just becomes abusive."The salaries come with extravagant benefit packages. For every $100,000 paid in salary, the city must send $29,000 to California's public pension program. Firefighters earning any kind of degree -- literature, dietetics -- get a raise. Public safety personnel retire after 30 years with 90 percent pay. And after five years on the job, the employee has health coverage for life. So does every member of the employee's family."Unbelievably expensive benefit," said Stout, the finance director.The council's May vote to seek protection under Chapter 9 of the U.S. Bankruptcy Code was unanimous."When lemmings are marching to the sea, there's always got to be the first one," Neiman said.City officials agree. "We were just ahead of the game," council member Stephanie Gomes said. "With this economy going in the direction that it's been going, those reserves are going to be exhausted pretty quickly, as ours were."While the city awaits court permission to escape the union contracts, officials made "quality of life" cuts on street repairs and other nonessential services, contributing to a tattered feeling downtown. A recent story in the local newspaper urged residents to summon police if they see someone scavenging aluminum cans from recycling bins. To Victor Villanueva, it looks as if the city is competing with its homeless for pennies."Vallejo's lost its luster," said Villanueva, 45, sharing a box of glazed at Vallejo Jelly Donuts with his former wife, Donna Douthat. "This city was flourishing at one point. There was a time when San Francisco gay couples started moving here.""That's when our revenues were going up," Douthat said.A young man walked in, looked at the prices and walked out. "All my doughnuts are still here," said owner Tony Lim, with a dispirited wave toward the display case.Police and firefighters continue to battle the bankruptcy in court, calling Vallejo a chilling example. "Everybody's scared of what the ramifications are if a judge or a bankruptcy court were able to set aside fairly negotiated contracts because of mismanagement," said Jon Riley, vice president of the firefighter's union.Meanwhile, 21 police officers and 22 firefighters have left. Each departure depletes city coffers further, first for hefty separation payments, then for overtime to pick up the slack."We're getting paid the equivalent of two firefighters, and people look and say, 'Boy, these guys are getting astronomically overpaid,' " Riley said. "We're forced to work this overtime. We had guys who had tickets to go to Hawaii. Couldn't go.A Program to Keep the Roof Over Your Head -- but It Will Cost You in the Long Run...Michelle Singletaryhttp://www.washingtonpost.com/wp-dyn/content/article/2008/10/18/AR2008101800189_pf.htmlFor homeowners trying to renegotiate their loans under the government's new HOPE for Homeowners program, please read the paperwork carefully -- because once again, you'll be stuck with a costly mortgage deal.HOPE for Homeowners, nicknamed H4H, became law this summer to help keep homeowners from defaulting on their mortgages and going into foreclosure. Lenders who voluntarily allow borrowers to refinance under H4H are required to reduce the size of the mortgage to a maximum of 90 percent of the home's current appraised value. Additionally, they are only allowed to put people in 30-year, fixed-rate loans.The Federal Housing Administration will insure up to $300 billion of these new loans. As many as 400,000 homeowners could avoid foreclosure through H4H over the next three years.This program provides a last hope for homeowners by bringing in the federal government as their investment partner for as long as they own their homes.I know people are desperate to keep their homes, but they need to understand that H4H is an expensive rescue program. There is a great benefit upfront -- you get to keep your home.But there is a significant cost to homeowners at the back end. If you take this deal, you have to split the initial equity created by the write-down of the mortgage with the FHA. The government also gets a 50 percent cut of any appreciated value for as long as you own the home -- even after you pay off the mortgage."It's outrageous," says John E. Taylor, president of the National Community Reinvestment Coalition.For example, let's say your home has a current appraised value of $200,000. The lender would have to give you a 30-year, fixed-rate loan for $180,000, which is 90 percent of the appraised value.So at the start of the H4H loan, you have $20,000 in equity. If you sell the home in the first year after receiving the loan or you refinance, FHA gets 100 percent of that $20,000. If you sell after two years, FHA would get 90 percent of the equity, or $18,000. Each year up to year five, the share that FHA gets is decreased by 10 percent. After year five, you have to share 50 percent of the equity created with the new loan.In addition to this upfront equity-sharing, if your home increases in value between the time you receive your H4H mortgage and the time you sell the property, you will share the amount of this increase with the FHA minus any closing costs and a portion of any improvements you have made. This is a 50/50 split that does not change over time.So, staying with the previous example, if you sell your home for $250,000 in a few years, FHA would collect $25,000 (half of the appreciated value of $50,000).There are other rules worth noting. H4H participants are also barred from taking out second mortgages unless the money borrowed is used to maintain the property.Other costs include a 3 percent upfront mortgage insurance premium and a 1.5 percent annual premium based on the mortgage amount. Typically, FHA-backed loans carry a half-percentage point annual premium.With so many caveats to this program, many lenders will probably balk at participating. What's better for homeowners is for lenders to provide them with an affordable monthly mortgage payment through a loan modification.I'm troubled that many homeowners won't even realize the caveats of the H4H program because they won't pay attention to the details. They didn't before, when they got those nasty subprime loans that started this downward economic spiral. People were so focused on getting the lowest monthly mortgage payment starting out that they gave little, if any, consideration to how they could afford the loans once they reset to higher interest rates. Or they bet that refinancing would save the day. As we now know, that was a bad bet.I have compassion for the many borrowers who were duped by unscrupulous predatory lenders and mortgage brokers. Yes, they should have known better, but somebody got the better of them.For those homeowners scrambling to save their homes by any means necessary, I won't be so sympathetic years from now if they try to cry foul about having to give up so much of the appreciated value in the home to the federal government."If this is your only choice, take it," Taylor said. "But just know that you are giving up half of the accumulated wealth in the home."This time around, borrowers can't use ignorance as an excuse. All the funky particulars of this program are clear. H4H can save your home if you qualify, but pay attention to the details. Read the documents.Be sure that the deal you are willing to accept now is a deal you can live with later.