1-10-09Merced Sun-StarOnce San Joaquin River bill passes, work begins...MICHAEL DOYLE, Sun-Star Washington Bureau and MARK GROSSI, The Fresno Beehttp://www.mercedsunstar.com/268/v-print/story/631771.htmlWASHINGTON -- The turbulent life and times of the San Joaquin River will enter a daunting new stretch soon when the Senate passes a huge public lands bill.Then the hard work will really begin, at last.On Sunday afternoon, 20 years after a lawsuit got the ball rolling, the San Joaquin River restoration bill will almost certainly clear its last big Senate hurdle.Final approval could come by the end of next week, following Sunday's key procedural vote."We've had our hands full," said Ron Jacobsma, general manager of the Friant Water Users Authority. "This is one of the largest, most complex river restorations in the West. But we think it is moving ahead appropriately."Attorney Hal Candee, who represents environmentalists, said the effort has come far despite all the odds, having won support from state and federal officials as well as urban and rural communities."It couldn't come at a better time," Candee said.But not everyone thinks so."We're talking about a slow death for some farming," predicted former Friant Water Users Authority board president Kole Upton, a Madera and Merced county farmer.The San Joaquin River restoration effort has inspired some unexpected new alliances, and fractured some others. It has divided Valley lawmakers against each other. It has sorely tested everyone's legal, political and legislative acumen. And after two decades, it's still only getting started.The Natural Resources Defense Council first sued in December 1988, hoping to return water flows and a viable salmon population to the long-parched river channel below Friant Dam.In September 2006, facing courtroom defeat, the Friant farmers agreed to join their long-time environmental adversaries in settling the suit.Concerns over losing irrigation water prompted the Chowchilla Water District to back out of the Friant Users Authority. Similar concerns heightened tensions between bill skeptics like Rep. Devin Nunes, R-Visalia, and bill supporters like Rep. George Radanovich, R-Mariposa.Federal officials are now completing a big environmental study of the river restoration plan. No water can start flowing until the study is done, perhaps later this year. The timeline for the river work, under the guidance of a new "restoration administrator," extends beyond 2016.This restorative work includes building a bypass around the Mendota Pool in western Fresno and Madera counties, so migrating salmon won't get hung up on their way home.Gravel pits along the river will be filled in or isolated to protect juvenile salmon. Seasonal barriers will be installed to keep fish from getting lost near Los Banos. Outlook: Economy will worsen until 2010...SCOTT JASONhttp://www.mercedsunstar.com/167/v-print/story/631761.htmlFirst, the good news: Merced's economy will likely begin a recovery next year as job growth resumes, home building picks up and the recession tapers.Then the bad news: This year's going to hurt.The University of the Pacific's Eberhardt School of Business released its quarterly forecast for the next five years, predicting that there will be sharp job losses and continuing fallout from foreclosures in Merced.For city leaders, the recession means fostering the area's core economy -- agriculture and manufacturing -- rather than trying to lure new tech-based firms. There'll also be an emphasis on making business easier by reviewing entrepreneurial plans at City Hall quicker and by taking a look at lowering fees paid by developers.Strong growth last year in manufacturing and government jobs -- the top employers in the county -- helped soften the recession's impact, as Merced posted a job growth rate of 1 percent, one of the highest in the region, according to the report."A housing market collapse has induced recession in these regions, but the recession has been relatively mild up to now," the report reads.The Valley was buoyed by agriculture and food manufacturing because of strong prices and demand from other countries.Yet in a global recession, those industries are hurting -- and a drought looms.Job losses are expected to continue through the year with both government, manufacturing and service sectors in Merced County shedding a combined 1,000 workers. That's the largest loss in more than a decade."The result will be a stunning return of unemployment rates to the teens across all the Central Valley except Sacramento," the report reads.The national unemployment rate hit 7.2 percent last month, the highest in 16 years, according to figures released Friday. The county's unemployment rate, at 13.3 percent, is expected to climb to almost 16 percent mid-year, a rate not seen since Castle Air Force Base closed more than a decade ago. It's not expected to decline until mid-2010.Merced Economic Development Manager Frank Quintero said he's not sure whether the tough times predicted for manufacturers -- losing 120,000 jobs over the next two years -- will prove true.In general, he doesn't give much credence to forecasts. "If I read every report and absorbed what they said, I wouldn't come to work," he said.Government leaders, who often tout their area, should promote Merced as a whole, since the county shares the unemployment rate, he said. They're also going to need to put in some extra effort.Quintero's been in talks with one employer looking to open in Merced, though he declined to reveal any details. "We're past the wooing. We're rolling up our sleeves," he said. "We're playing poker right now."For all the gloom, the report's author remains bullish about the area's future. "After a tough 2009, the Valley is poised for a strong recovery as we begin the next decade," the authors write. They cite population and income growth as improving the quality of life and making the Valley more attractive to commuters and investors.Developers this year are predicted to start building 581 single-family homes in the county. By 2010, foundations will be poured for 1,000 homes.Jeff Michael, director of the Business Forecast Center, said Merced's challenge will be keeping job creation in line with population growth.The foreclosure crisis may be bottoming out, but now the Valley's troubles will mirror those of the nation. "You can't recover while the national economy is hurting," he said.How state legislators settle the multibillion-dollar budget deficit may have a strong impact on Merced because 15 percent of its workers employed by state and local government, he said.Despite the trying times, Councilman Bill Spriggs said the city must continue to market itself because businesses, even in a recession, never stop looking for new markets.The impact report about the Wal-Mart distribution center looks as if it will be released later this month. Spriggs said he won't be able to decide whether the project would be good for Merced until after he reads it. Still, it holds promise."If that project were to get the green light," Spriggs said, "it would have an enormous psychological impact on the community."And it is confidence, among all other economic indicators, that may need the biggest boost.Merced in a serious business slumpCommercial-space landlords cut deals but still struggle to fill storefronts...CORINNE REILLYhttp://www.mercedsunstar.com/167/v-print/story/631782.htmlTake a drive down North Highway 59 past Fahrens Park Plaza, one of Merced's newest shopping centers, and you'll learn all there is to know about the county's commercial real estate market. Nearly a year after the sprawling complex began taking tenants, just two businesses have moved in. Of Fahrens' 87,000 square feet of commercial space, 80,000 sit empty. "At least we never have to worry about running out of parking spots," joked Andrew Kahler, who manages the Play It Again Sports shop that opened at Fahrens last August. A Mexican restaurant followed a few months later, and a canvas sign hanging from a vacant suite nearby promises Italian food soon."Business is actually pretty steady, so it's not so bad," Kahler said. "But it'd be nice to have some neighbors."Fahrens Park is far from the only commercial center in Merced struggling to find tenants. Dozens of local businesses have closed their doors amid a worldwide economic downturn, and few are opening to take their places.Though it pales compared with the devastation wrought on Merced's residential real estate market, the commercial decline has been dramatic here. In recent months, vacancies have soared to all-time highs across the county, and the evidence -- shuttered businesses and half-empty shopping plazas -- is hard to miss. "This is the worst we've ever seen," said Robert Olzack, who has worked in Merced's market for more than two decades, most recently as commercial division manager for Coldwell Banker Commercial Gonella Realty. "There's always going to be ups and downs, but this is unprecedented."No one comprehensively tracks commercial real estate in Merced, so there are few data to shed light on exactly how far the local market has fallen. But by all accounts Olzack's assessment is accurate. Property owners and brokers say making deals to fill their industrial, office and retail space has become far tougher than ever before, and lease rates have tumbled considerably. "There are just very few commercial transactions taking place in Merced right now," said Cary Marsella, a partner at Colliers Tingey International in Fresno. "A lot has changed, and I don't see anything that makes me think it'll get better anytime soon."Vacancies drive down pricesThe problem exists nationwide. Commercial real estate sales are down across the U.S. Office building vacancy rates have risen dramatically all over the country in recent months, to more than 10 percent in almost every major city, according to market analysts. But the record-breaking collapse of Merced's housing market has created an especially grim reality locally. "It's just a terrible situation right now," said Leonard Oestreicher, co-owner of Moonlight Development and Investments, which owns and leases commercial space across Merced County. "Two years ago, it was totally different. "People wanted to start businesses, and they wanted to come here from other places. They thought the houses would all fill up, and I guess they thought the good times just wouldn't end."Oestreicher said he has several commercial properties that were vacated more than a year ago when their former tenants went out of business. They're still empty today. Lately, Olzack said, that's not unusual. He estimated that lease prices on light industrial and retail space have dropped by an average of 25 cents per square foot compared with rates three years ago, and by 50 cents for office space. A recently built office in North Merced priced three years ago at $2.20 a square foot. Today, it would be lucky to fetch $1.75, he said. Banks balk at riskThough Merced's housing bust is tightly connected to the commercial decline, it's far from the only factor at play. Problems on Wall Street, besieged credit markets, some overbuilding and fears that the worst is yet to come all have contributed. "I think a lot of people are still really scared," Olzack said. "People are afraid to take any risks. They're afraid to open businesses and they're afraid to spend money, so a lot of existing businesses are going under" or scaling back. Chuck McMahan, another co-owner at Moonlight Development, said lenders have become the biggest obstacle to filling his commercial properties, especially office space. "I've got dentists, medical professionals (and) lawyers interested in moving in, but they can't get credit," McMahan said. "It's just all dried up right now."Afraid to face even more vacancies, some owners are dropping lease rates for existing tenants. "If someone comes to us and they're struggling, of course we're going to work with them in a market like this," Oestreicher said. But that hasn't been enough for many businesses in the county. From tanning salons to title companies, dozens have gone under in recent months. Big boxes share struggleNational retailers have closed their doors in Merced, too. Kohl's has announced plans to take up the building left empty after the closing of Mervyn's in the Merced Mall. But other big-boxes that have left vacancies in Merced, such as the Circuit City and Linens 'N Things locations off Olive Avenue, probably won't be filled for a long time. "The Kohl's announcement has really been the only big thing in Merced," said Marsella, of Colliers Tingey. "What we're hearing from just about everybody is that there won't be any expansions until at least 2010. Everyone's just trying to hang in there."Frank Quintero, the city's economic development manager, said his office has stepped up its efforts to keep existing businesses open in Merced. "It's a national epidemic, so we're limited in what we can control," he said. "But we're spending more time reaching out to see what we can do to help," including connecting business owners with Small Business Administration loans and programs that offer tax benefits. Quintero praised commercial property owners who've given tenants leeway to keep them. But they need to do more to entice new ones, he said. "I think a lot of (owners) are still being somewhat unrealistic with their rates. To bring down these vacancies, we need to see a lot more being offered for less than a dollar (per square foot)."Jim Marks, who runs Heritage Property Development and Management, said his company now goes door to door, trying to convince local businesses to relocate to commercial spaces it manages, including the Promenade shopping center in North Merced."We never had to do things like that before," he said. "Two years ago we had people standing in line to get in. There's just no demand now."Much like its decline, analysts say the recovery of Merced's commercial real estate market will probably lag well behind the revival of its residential market. Olzack, of Coldwell Banker, said he doesn't expect to see a commercial turnaround for about two years. Besides an improved housing market, he said lenders will have to loosen up considerably and consumers will have to regain confidence before anything changes. "I think it's going to take a long time to get things sorted out," he said. "But we'll get there."Dire times for dairy farmersDepressed milk prices means it's difficult to make a living; some have even committed suicide...CAROL REITERhttp://www.mercedsunstar.com/167/v-print/story/631790.htmlAfter two years of booming prices for their liquid portfolio, dairymen have been hit with some of the lowest prices for milk in years.That has Rep. Dennis Cardoza, D-Merced, worried.Cardoza is concerned about his constituents, the dairymen working hard to make a living for their families. He has already heard about two dairy producers in the southern San Joaquin Valley who've committed suicide over financial problems."This is a very serious crisis," Cardoza said. He spoke with one woman in the dairy business who said she had lost $80,000 in the last six weeks.Because of the low price for milk, Cardoza has had meetings with incoming Secretary of Agriculture Tom Vilsack. He has also met with the secretary of ag for the state of California and is trying to figure out what the proper course of action will be to help local dairymen.Bill Schiek, an economics expert with the Dairy Institute of California, said milk producers have just come off of a period of unprecedented high prices. Between the spring of 2007 and the last quarter of 2008, dairymen enjoyed high prices for their product.Because of that, the production of milk went up. But then two things happened.First, the price of commodities went up, including the hay and grain that dairymen feed their milk cows. Then the price for milk dropped."By the middle of 2008, speculation caused a run-up of grain prices," Schiek said. Margins narrowed for dairymen, but efficient ones could still make good money.Schiek said the price collapse for milk happened because when prices are high, more people invest in cattle and in boosting their milk production. The typical cycle is good prices, expansion -- then a drop in prices because of overproduction, Schiek said."In the past, the price has been supply-driven," Schiek said. "This time there was the added complication of demand."The domestic milk market demand has fallen because of the overall economy, Schiek said. Add to that a decrease in the demand from foreign countries, and the result is a tanking of prices for milk.Part of the decrease in demand is because New Zealand and Australia, which both went through a drought in 2007 and a resulting decrease in their milk production, are back on track and competing aggressively in the world market."There are just fewer people out there looking for the milk product," Schiek said.Depending on what type of staying power local growers have, there could be a number of dairymen getting out of the business, Schiek said. That could mean a glut of cattle on the slaughter market, but that remains to be seen. Some of those cows could go to other dairies and not be taken out of production, meaning that the amount of milk produced won't go down.Some of the dairy producers facing financial problems are also the ones who are being hit hardest with trying to comply with environmental rules. Schiek thinks dairymen with a lot of equity in their land and without a lot of debt will be able to hang on through the tough times, but he's not sure about the rest of the producers."We are pretty sure that we'll be seeing a very bad first quarter of 2009," Schiek said. "If there will be recovery in the second half of the year, we just don't know."Meantime, Congressman Cardoza has one more issue on his already crowded Valley agenda.Our View: Garamendi plan worth a lookProposal would fast-track medical school planned for UC Merced.http://www.mercedsunstar.com/181/v-print/story/631751.htmlLt. Gov. John Garamendi has offered an intriguing proposal to fast-track the medical school planned for the University of California at Merced.Garamendi's option may make sense because the UC administration is considering a slowdown of the planning for the medical school because of the economic downturn.Garamendi, a member of the UC Board of Regents, thinks his plan will gain support because it's less expensive, and would turn out doctors much more quickly than the current medical proposal.He unveiled the revised plan this week, and was in Fresno on Thursday to discuss it with Valley leaders. Garamendi will ask that it be discussed at the regents' meeting next week.We have been longtime supporters of a medical school in the Valley, and we are concerned about UC's reported decision to pull back on the plan. A medical school will still be needed here long after the current economic troubles have passed. Delaying it will only make it more costly to build.UC has long neglected the Valley and regents built a campus in Merced only after intense pressure from those living in the region. But a partially built campus is not enough, and UC leaders must make a stronger commitment to funding ongoing operations and enhancing programs, including a medical school.It is not acceptable for UC to create roadblocks to building out the Merced campus. We are very troubled by the prospect of the Valley getting more broken promises from the UC administration and regents about their support of programs at the Merced campus.While we aren't ready to sign onto the Garamendi medical school plan, we think it's deserving of serious consideration. We'd like to hear more details, especially a firm commitment that the latest proposal would be of the highest quality.Garamendi wants to save money by eliminating the research portion of the medical school. He wants the university to develop a "fast-track" curriculum in which high school graduates could earn medical degrees in as little as five years. He said the program could be ready to go by the fall of 2010, which is three years sooner than the current plan.The Valley already faces critical shortages of doctors, particularly in specialty areas. Many Valley residents who need specialized care must travel to the Bay Area or Southern California to find it. Having a medical school in the Valley would help alleviate that costly and sometimes dangerous situation.There would also be an economic benefit to getting more doctors to serve the region. A UC study says the Valley has lost more than $845 million because insured patients living here were forced to go outside the area for medical care they couldn't get locally.If the Garamendi plan is the best one available, let's take a serious look at it. Letter: Lower UC standards...MARK MARTINEZ, Atwater http://www.mercedsunstar.com/180/v-print/story/631788.htmlEditor: I find it quite ironic that as an article is published titled, "More students compete for fewer UC slots," the UC Board of Regents is seeking to expand the pool of applicants by lowering the admission standards.They want to eliminate the SAT II subject tests because they see them as a "barrier" to admissions and create a more "holistic" admissions process.This year there are more applicants to the 10 UC campuses than ever, so there is no shortage of potential students, yet the proposal seeks to make it easier to get in, in order to have a more diverse student body.Being a part of the UC system caries a certain prestige with it because of how hard it is to get into.Only the top universities in the country require the SAT II and eliminating it as a requirement will most certainly hurt the reputation of many UC schools.UC Merced is in its infancy and building its own reputation with stellar students and graduates. We don't need to ruin its reputation and that of the other nine UC schools because some students have their feelings hurt who are not accepted or who are not smart enough to fulfill the requirements and take the SAT II.Let's tell the UC Board of Regents enough is enough; clearly there is an abundance of qualified applicants, we don't need to lower the standards to help more people qualify. The Regents are scheduled to vote the first weekend in February. Have your voice heard at www.saveucstandards.com.Modesto BeeJudge rejects Patterson's West Park challenge...Tim Moranhttp://www.modbee.com/local/v-print/story/559077.htmlA Fresno County Superior Court judge has ruled in favor of Stanislaus County, effectively dismissing a lawsuit filed by Patterson challenging the county's agreement with West Park developer Gerry Kamilos.The Patterson lawsuit, filed in May, contended that the county was required to file an environmental impact report under the California Environmental Quality Act before it approved an agreement with West Park to continue work on the project.The West Park proposal includes 4,800 acres of land in and around the county-owned Crows Landing Air Facility southeast of Patterson. The proposal calls for a business and industrial park anchored by a short-haul rail line and inland port linked to the Port of Oakland.The proposal has drawn widespread opposition on the West Side over concerns of lost farmland, increased air pollution, traffic congestion and train traffic.Patterson officials feel the additional trains coming through the city will pose public safety problems and increase air pollution.The lawsuit contended that the agreement with West Park, approved April 22 by the Board of Supervisors, constituted a commitment to the project that required the environmental report.A motion filed by the county and West Park contended that the issue was moot, because an environmental report on the project is under way, and that the agreement was not a binding commitment to the project.In a ruling issued Tuesday and made public Friday, Judge Tyler Tharpe said the issue is not moot, but the initial agreement does not require an environmental report.Tharpe cites language in the agreement stating that the county has not made a final commitment to West Park, and quotes supervisors saying that the project is not a "done deal."County officials and West Park representatives were pleased."The court felt this was not a project subject to CEQA," said county counsel John Doering. "We are glad to be able to move forward with the project. ... We feel it's the correct decision.""The ruling allows the county and West Park to continue with the EIR without a legal cloud hanging over it," said Sabrina Teller, an attorney representing West Park.Patterson can appeal the decision within 60 days after the judgment is entered. Attorneys for the city and Mayor Becky Campo did not return phone calls Friday.Another lawsuit, filed in September by WS-PACE.org, a group formed to oppose West Park, is pending in Stanislaus County Superior Court. The lawsuit is similar to the Patterson lawsuit, which was moved to the Fresno court to avoid conflicts with local judges.WS-PACE.org President Ron Swift said he felt there were significant differences in the two lawsuits and that his group would be making a decision on whether to continue its lawsuit next week.Teller and Doering disagreed with Swift's assessment of the two lawsuits."We think the Stanislaus courts will either take notice of this ruling or make a similar finding," Teller said.County deputy executive officer for economic development Keith Boggs said Friday that a draft environmental impact report on West Park should be completed by late summer or early fall. The public will have more opportunities to comment at that time, and a final EIR should be completed in the first quarter of 2010, Boggs said.The end of the lawsuit will allow Stanislaus County to enter negotiations with Union Pacific on the use of its railroad tracks for the short-haul rail line, Boggs said. Those talks were delayed because Patterson had named Union Pacific as a defendant along with the county and the county redevelopment agency.Patterson IrrigatorCity's suit against West Park dismissed...James Leonard http://pattersonirrigator.com/content/view/2740/42/The city of Patterson's lawsuit against Stanislaus County and West Park has been dismissed before making it to trial, Patterson city attorney George Logan confirmed Friday morning. For more on this story as it develops, visit the PI Connect blog.The full story will appear in Wednesday's IrrigatorCity's suit against West Park dismissed...James Leonard, PI Connecthttp://piconnect.blogspot.com/The city of Patterson's lawsuit against Stanislaus County and West Park has been dismissed before making it to trial, Patterson city attorney George Logan confirmed Friday morning.I'm not sure how big of a victory this is for the county and developer Gerry Kamilos — because I don't get the feeling they ever thought they might lose, and they seemed confident all along that the suit was without merit — but it's a pretty big loss for the city in its attempts to stop this project completely. A court has now ruled that the county so far has done nothing wrong in its dealings with Kamilos. The next major hurdle for the project will be the environmental review that is currently ongoing.Two questions are plaguing me at the moment, and I don't yet have an answer for either:1) How much money did the city spend on this case, and was it at all worth it? Could any result have made it worth it? That might be an unfair question.2) What, now, will become of WS-PACE.org's lawsuit against the county and developer — a lawsuit that, by my very cursory perusal, appeared quite similar to the city's?Hopefully I'll have some answers to these questions soon. I'll post here when I do.In the meantime, Saturday's paper needs to be put to bed. By the way, don't expect to see anything about this in Saturday's issue (we're past that deadline already). But definitely keep an eye out on the Web site and in Wednesday's paper.12:05 p.m. Update: Becky Campo says the City Council will likely have a special closed session meeting early next week to determine their next action, if there is any. They could appeal the ruling, or they could set their focus on the upcoming environmental review, or they could do some combination of the two, I imagine. Campo doesn't consider this a huge loss, because even though the city didn't accomplish everything it hoped, it at least made its concerns heard loud and clear. Gerry Kamilos declined to comment for now, saying he wants to wait until he's read the full ruling before saying anything about it (possibly later today). Fair enough. WS-PACE.org President Ron Swift said his group's lawsuit is "sufficiently different" from the city's, but the group will meet with its attorney before deciding whether to go forward with its case. He did say they had been waiting to see what would happen with the city's case, and it appears as though the Stanislaus County court was waiting as well, as no hearings had been scheduled since the lawsuit was filed in September. More to come, but perhaps not today. Fresno BeePM-10 ruling sparks another lawsuitThis one over EPA finding that Valley no longer recorded dangerous levels...John Ellishttp://www.fresnobee.com/local/v-print/story/1119936.htmlAir quality activists are again suing the U.S. Environmental Protection Agency over a ruling that the San Joaquin Valley has met the health standard for dust and soot.A lawsuit filed Friday in the 9th U.S. Circuit Court of Appeals in San Francisco seeks to overturn an October 2006 EPA finding that the Valley no longer recorded dangerous levels of the pollution, called PM-10.The action comes a little more than nine months after a similar lawsuit was filed with the 9th Circuit related to the same matter. That lawsuit challenged the data used to determine that the region met the PM-10 standard. Friday's action goes further, said Paul Cort, an attorney with Earthjustice, an Oakland watchdog group that filed the lawsuit on behalf of the Sierra Club, the Latino Issues Forum and the Fresno-based Medical Advocates for Healthy Air.Cort said it challenges findings that the Valley's air improvements stem from permanent pollution reductions -- not just a "fortunate weather pattern" -- and that there also is a plan to keep the Valley free of air pollution in the future."We have to challenge this every step of the way," Cort said.Sierra Club member Kevin Hall of Fresno said legal action is the only avenue or recourse to get cleaner air in the Valley."Any progress we've made on cleaning the Valley's air over the last decade has been the direct result of legal action," he said.Kerry Drake, associate director of the EPA's regional air division, said proper procedures were followed in finding that the Valley had met the PM-10 standards.He said the EPA's ruling was made after scientists reviewed data submitted by the state of California that said the Valley had met PM-10 standards. The EPA agreed based on analysis by its own scientists.In addition, Drake said, all measures to reduce PM-10 pollution are still in place, and there are contingency measures that can be implemented if pollution levels worsen."There was no going backward," Drake said. "The fact is, measures are in place [to] work to make the air even cleaner."The Valley is known for some of the country's worst summer ozone and winter fine-particle pollution, called PM-2.5.PM-10, a coarse particle prevalent in fall and winter, is about one-sixth the width of a human hair. It can trigger asthma attacks and heart problems, according to medical research.Since 2002, a number of Valley air rules have reduced such pollution. The rules included watering unpaved roads, reducing tilling on farm fields and cutting back on fireplace wood burning.Regional air officials have credited the rules with clearing much of the PM-10 problem.But environmentalists and health advocates say the problem has not gone away.The next step in the fight between the EPA and air-quality activists will be Feb. 10, when the 9th Circuit is scheduled to hear arguments on the lawsuit that challenged the data used to determine that the region met the PM-10 standard. Sacramento BeeSierra Club sues Placer over land approval for university...Bob Walterhttp://www.sacbee.com/ourregion/v-print/story/1528387.htmlThe Sierra Club filed suit Thursday seeking to overturn Placer County's approval last month of a plan to lure a university to 1,157 acres just west of Roseville.The suit claims the Board of Supervisors violated state law when it approved the plan by developers to donate the land to Drexel University of Philadelphia.The county's environmental impact report on the plan was inadequate, the suit alleges, and violated the California Environmental Quality Act. County Counsel Anthony La Bouff said the county was confident that its approval would be upheld.The plan would trigger urban sprawl, adding to traffic congestion and air pollution, said Terry Davis of the Mother Lode chapter of the Sierra Club. It also was approved without identifying an adequate water supply, said Davis and Marilyn Jasper of the club's Placer Group.The plan, approved Dec. 9, allows developers led by the Angelo K. Tsakopoulos family to donate land south of Pleasant Grove Creek and north of Baseline Road.About 600 acres would be used for the university campus, including faculty housing, sports facilities and open space.Diablo Grande revisited...Jim Wasserman, Dale Kasler, Home Fronthttp://www.sacbee.com/static/weblogs/real_estate/archives/018444.htmlHere at Home Front, we were amused to see this lengthy story in the New York Times about luxury golf communities going Chapter 11, featuring the Diablo Grande project in Stanislaus County (In the print version of the paper, there's a gorgeous, nearly half-page picture of two homeowners golfing). The story says World International, which bought Diablo Grande out of bankruptcy, will announce its plans for the big development soon.My fellow Fronter Jim Wasserman and I wrote about Diablo Grande and other golf-development bankruptcies last October. The Course That Got Away...KRISTINA SHEVORY, New York Times...1-9-09http://www.nytimes.com/2009/01/09/greathomesanddestinations/09golfhomes.html?pagewanted=printKAY AND SAM GARDALI spent so much time playing golf and visiting friends at a golf community outside Modesto, Calif., that the couple decided it would be better to buy a home there than to keep visiting their friends on weekends. Two years ago, they bought a three-bedroom house at the Diablo Grande Winery & Resort, a new luxury golf development in Patterson, Calif., a bit more than an hour and a half east of San Francisco. For $500,000, they got a home set on one of the resort’s two golf courses. Although the development was only about 45 minutes away from their main residence in the town of Turlock, they considered it a good investment and toyed with the idea of buying an additional house to rent out.It was good they didn’t. Over the last year, the winery shut, the two golf courses closed, if only temporarily, and home construction ground to a halt. The developer filed for bankruptcy and the development was sold at a court sale in October, leaving homeowners unsure about what would happen to their property values and membership fees.“We don’t know if the money we’ve paid to belong to the golf club will be honored or not,” Mrs. Gardali said. The couple paid $25,000, on top of the house price, to join.Many people have bought second and third homes in golf developments for the high-end courses designed by well-known professional golfers, the tight-knit community and the plush clubhouses. But now a number of owners across the country are finding closed clubhouses and courses, lost membership fees and a direct hit to their home values as developers file for bankruptcy and can no longer maintain their courses. Of course, the same problems that have pummeled the real estate business generally — recession, tight credit and plunging prices — have hurt the market in golf communities, leaving many developers unable to meet payments on their loans. The collapse last September of Lehman Brothers, a major investor in real estate deals and a backer of many golf communities, reduced the pool of buyers, according to Jeff Woolson, managing director and senior vice president for the golf and resort properties group at CB Richard Ellis in Carlsbad, Calif. In California alone, Lehman sank $2.5 billion into projects with the SunCal Companies, a community developer, many of which are now in bankruptcy proceedings. And institutional investors that would have bought an ailing golf course when the economy was good are no longer interested.“I’m spending hours a day speaking to appraisers, lenders, people who can’t make money and have to sell their course,” said Mr. Woolson, who once did roughly two golf course deals a year but now has at least seven listings on his books.The new owner at Diablo Grande, World International, a group of real estate investors, is still working on its official plan for the property but said this week that it expected to make some announcements soon. World International said it would probably maintain the original developer’s goal of 1,600 new houses — probably over five to seven years — in addition to the 400 or so that have already been completed. Golf memberships would somehow be grandfathered in, and plans for a hotel, possibly in a different location, would still be included. A name change is in the works, along with a long-term water-quality project.In Bonita Springs, Fla., the Ronto Group shut the golf course at the Palmira Golf and Country Club in late September because it could no longer pay for its upkeep.“It’s really a victim of the current climate. You can’t find any equity,” said Anthony Solomon, a vice president at Ronto, based in Naples, Fla. Ronto sent Palmira homeowners a letter in late September that said the course would be closed. Bernard Poirier, who owns a second home at Palmira, didn’t even get the letter and found out about the closing from friends who live there. The course had always been well managed, he said, and the developer never dropped any hints that it was having financial problems. Given the deep housing problems in Florida, with drooping prices and a glut of homes on the market, homeowners couldn’t afford to lose the 27-hole course. “If the golf course goes, my property value will drop even more than it already has,” said Mr. Poirier, a tax accountant in Warwick, R.I., who estimates that the value of his Palmira house has shrunk by 20 percent in the last two years.A group of homeowners is now fighting to save the course and has raised enough money to run it temporarily. They have negotiated a deal to buy the course outright from GMAC Financial Services and have lined up outside financing for an undisclosed amount. A deal should be signed by the end of the month, said one of the homeowners who helped negotiate the agreement.During the housing boom, golf courses were a well-tested way to sell homes at a hefty premium. Buyers would pay up to 25 percent more for a lot at a golf course community than for those at typical subdivisions, Mr. Woolson said. Golf also provided additional benefits: it allowed developers to use the courses to meet municipal drainage and open-space requirements, rather than simply having undeveloped land that does not produce revenue.“People are attracted to golf because it’s an embodiment of a lifestyle they want to live of fun,” said Henry DeLozier, a Phoenix-based principal at the consulting firm Global Golf Advisors. “Golf in America seems to have aspirational qualities that seem to affirm status achieved. Why else would someone pay a premium for the same house?”“They didn’t care how much they spent on the golf course because they were making so much money on lot sales,” said Michael Allan Wolf, a professor at the University of Florida Levin College of Law in Gainesville and a specialist in golf course property conversions.Many builders carved out space for golf courses and clubhouses even if they knew nothing about the sport. A course generally costs about $5.2 million to build, double if a clubhouse, restaurant and pro shop are included, according to a 2005 study by GOLF 20/20, a coalition of equipment manufacturers, course operators and golfing associations managed by the World Golf Foundation, a group founded 15 years ago to promote interest in golf. But courses aren’t cheap to operate, with maintenance costing $800,000 to $1.2 million a year.The National Golf Foundation, a separate industry group, says there are some 16,000 golf courses of every type in the United States, including more than 3,200 that are linked to residential real estate developments. Over 50 residential courses have closed since 2006.Even high-end fractionals, partial-ownership properties that generally attract wealthier buyers, have not been immune to the housing fallout. Last fall, Wasserman Real Estate Capital mothballed its project overlooking the Old Course at St. Andrews in Scotland, one of golf’s most famous sites, when it did not sell enough units. Only a third of the residences, priced at $1.8 million to $3.7 million, were sold. This year, the real estate group plans to remarket the residences as full-ownership units.“Many people wanted what I had, but they couldn’t pay what I was asking. Others wanted the entire units,” said David Wasserman, principal of the firm, based in Providence, R.I.Outside Las Vegas, developers are looking to abandon a golf course at a luxury resort development so they can stop losing millions on its upkeep. The Falls golf course, at the entrance to Lake Las Vegas, a luxury resort development with three golf courses, multimillion-dollar homes and upscale hotels, may be abandoned this month if a bankruptcy judge agrees. According to court filings, the championship course was expected to lose $1.9 million last year and $2.9 million in 2009.“We want the golf course to stay open because it helps the project. But we can’t afford to put down money on a course that’s not making money,” said Frederick Chin, president of the Nevada-based Atalon Group, which bought the resort after the original owner defaulted last year. A hearing next week may decide whether the course will be abandoned. If it goes into foreclosure, the creditor would gain ownership.“It’s extremely upsetting,” said Jerry McFarland, a real estate agent in San Diego who owns a home on the course. “Not only could our homes be worth less, but our golf club memberships of $21,000 would become worthless.”Troubled Developments...MapThree major golf and home projects have fallen into bankruptcy proceedings in the San Joaquin Valley since 2007http://www.sacbee.com/downturn/story/1307281-a1307674-t46.html3 posh projects go bust as Valley dreams bite the dust...Dale Kasler...10-12-08http://www.sacbee.com/downturn/v-print/story/1307281.htmlIn the Central Valley these days, the bankruptcies and foreclosures don't just affect individual homeowners.They swallow entire developments – and the people who conceive them.Winchester Country Club in rural Placer County, which went into foreclosure and sent legendary Sacramento highway contractor C.C. Myers into bankruptcy protection, isn't the only lavish golf-course housing development to fall on hard times. Three massive high-end projects in the San Joaquin Valley have fallen into bankruptcy proceedings in the past two years. The three insolvencies symbolize the California housing bubble at its most extreme. Combined, they have cost lenders and investors tens of millions of dollars – and offer clues about the roots of the financial crisis that has gripped Wall Street and the world's economies.Each is striking in its own way:• After Running Horse in Fresno collapsed, none other than Donald Trump jetted in with a possible rescue plan. He gave up months later. One of the original developers, accused of fraud, turned up dead in a Fresno motel last month.• Bakersfield's McAllister Ranch defaulted on a $235 million loan from Lehman Bros., the investment giant whose Chapter 11 bankruptcy filing helped heat Wall Street's woes to their current boil. McAllister's only occupants are a herd of sheep grazing on a golf course designed by Greg Norman.• Diablo Grande, in Patterson in Stanislaus County, is faring better. Like Myers' Winchester project, it's partly built out. But homeowners grumble about water-quality problems and plummeting values, and the project became a nightmare for original developer Donald Panoz, a pharmaceutical tycoon who made a fortune on the nicotine patch. He lost Diablo Grande after it filed for bankruptcy protection.All three developments were designed to bring the luxury life to the Valley, and that's where the problem lies. Their struggles illustrate how hard it is to transplant $800,000 homes and designer golf courses to California's chronically depressed midsection.Bakersfield boom turns to bluesWhile the housing boom brought money and diversification to a region too dependent on farming, the overall impact was somewhat hollow. The fundamentals of the economy didn't change. The Valley didn't generate nearly enough high-paying jobs needed to sustain such high-end developments as Running Horse."The markets were so overheated they were chasing any deal," said Fresno real estate consultant Robin Kane. "Part of the problem that always hurts us in the Valley, from Bakersfield to Stockton, is your employment and per capita income (are) not rising."With the boom a faded memory, unemployment is creeping back up to the 10 percent range in much of the Valley. The real estate market is a disaster: Stockton had the nation's highest foreclosure rate in August, according to researcher RealtyTrac, followed by Merced and Modesto.Developers of big projects are paying for what Kane and others said was a classic Valley mistake: They fell in love with the area's inexpensive land but ignored its troubling demographics. The Valley is still plagued by low incomes, a poorly educated work force and other ills."We're not another Silicon Valley," said Bakersfield real estate appraiser Gary Crabtree.That didn't seem to matter when McAllister Ranch was taking shape in southwest Bakersfield. The city in 2005 had become the nation's single hottest housing market, as measured by price growth, thanks to a stampede of homebuyers from Los Angeles.McAllister was going to be a big-time operation, with 6,000 homes and a host of amenities. Developer SunCal Cos. of Irvine borrowed $235 million from Lehman Bros. – part of a $2.2 billion war chest Lehman handed SunCal to develop properties throughout California and Nevada.SunCal had a grand vision for Bakersfield. After buying out the original developer, it doubled the asking price for individual lots, to $115,000.But once the market petered out, "those prices were no longer viable," said ex-project manager Darryl Tucker.Work halted months ago. The partly built golf course became a sheep pasture. SunCal defaulted on the Lehman loan, and contractors forced McAllister Ranch into involuntary bankruptcy."You've just got tumbleweeds growing, and that's about it," Tucker said.Trump can't save Fresno projectIt's a similar story at Running Horse, which was going to bring prosperity to Fresno's long-neglected west side.Homes would sell for up to $800,000. The PGA pledged to stage a tournament on the Jack Nicklaus-designed course.Instead, Running Horse became Fresno's longest-running soap opera. After years of promises, developers Scott Webb and Tom O'Meara – the latter a Fresno State grad living in Pebble Beach – ran out of cash. They sold out to a Ripon golf course builder in March 2007 for $200,000.A month later, the new owner put the property in Chapter 11. All that had been built were two holes of Nicklaus' course.Then came Trump. The brash developer arrived one afternoon in May 2007 in his jet. Emerging from a meeting with elected officials at the double-wide trailer serving as Running Horse's headquarters, Trump told reporters: "We're looking to try and save a very troubled situation."He was willing to buy, but only with a subsidy from the city. After months of negotiations, Trump bailed out. The property was taken over by its San Diego lenders.Recently the state Department of Real Estate accused O'Meara and Webb of defrauding investors out of more than $4 million. The duo allegedly sold the same lots to multiple buyers.The two were stripped of their real estate licenses in September. Two days later, Webb was found dead in a Fresno motel. Authorities said there was no foul play, but the case remains under investigation.The property sits idle."It would have been a big deal for Fresno," said Harlan Kelley Sr., 71, a west side resident who put $385,000 into the project and was among those allegedly defrauded. "We still got our fingers crossed that Donald Trump or someone else will come in and take over."Patterson project still strugglingAnother Donald built Diablo Grande. Donald Panoz – pharmaceutical executive, land developer and owner of an auto-racing business – endured eight years of environmental lawsuits and spent $120 million bringing Diablo Grande to life.His goal: a luxury hideaway in the dusty hills west of Patterson, the self-proclaimed "apricot capital of the world." A vineyard and winery, plus two 18-hole courses, became part of the vision.But the 33,000-acre site was also geared to the Bay Area transplants flocking to Valley towns in search of cheaper housing.That made it vulnerable. Once housing prices softened in the Bay Area, buying a home in the Valley made less sense, said Dean Wehrli of Sullivan Group Real Estate Advisors in Elk Grove.Diablo Grande "was absolutely ripe to be hit hard by the downturn," he said.More than 450 houses were built when the project sputtered earlier this year. Both golf courses closed temporarily. A Chapter 11 filing came in March.The project is trying to get back on its feet. A Los Angeles developer named World International LLC bought it for $20 million and pledged to build a resort spa, equestrian center and Spanish-style shopping village. It said last week it plans to rename the development to give it "a fresh start."Meanwhile, a rash of foreclosures among the finished houses lured bargain hunters.East Bay couple Karen Cinfio and David Rose bought a million-dollar home with panoramic views out of foreclosure for $375,000."I kind of refer to the people who lived here first, they were kind of like the Donner Party," Cinfio said as she stood by her backyard pool. "They paved the trail."Valley prices back to earthMany of the trailblazers still live at Diablo Grande, and they wonder when things are going to improve. A chemical problem has left the water undrinkable and prompted a $1,000 state fine. The plummeting home values are another cause for concern.Darcie Nessinger lives with her parents in a home valued at $275,000. They paid $534,000 three years ago."We expected the values of the houses to go up," said Nessinger, 33, an AT&T employee. "It's a resort area on a golf course."A quick return to 2005 pricing is unlikely, at Diablo Grande or anywhere else in the Valley. Steve Smiley, who tracks Valley trends for consulting firm Meyers Builder Advisors, said outrageous housing prices are gone for good. Taking their place: modest prices based on the Valley's economic fundamentals."I don't know if pricing is ever going to come back to that $800,000 house in Manteca," he said. "In my mind, it shouldn't." Stockton RecordEPA sued over Valley air ruling...Alex Breitlerhttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20090110/A_NEWS/901100328SAN FRANCISCO - Conservation and health groups on Friday sued the Environmental Protection Agency seeking to overturn its ruling that the San Joaquin Valley meets standards for particulate matter, just one kind of pollution plaguing our air.PM10, consisting of small pieces of dust, soot and smoke, is a bigger problem in the south Valley than in the north.But environmentalists argue that the EPA ignored certain days when monitors detected PM10 above acceptable levels, and, as a result, the Valley as a whole should not be classified as clean.The latest in a series of lawsuits was filed in the 9th Circuit Court of Appeals.In declaring that the Valley meets the standard, EPA didn't consider some PM10 violations that could be attributed to "exceptional" events, such as strong winds or even Fourth of July fireworks.Environmentalists argue that the winds occur often enough that they can hardly be considered "exceptional.""Here you have this pattern of recurring events, and you have steps that you could take to at least minimize them," such as mandatory speed limits on dirt roads, said Paul Cort, an attorney with Oakland-based Earthjustice, an environmental law firm."Their argument is not based on any kind of reflection of reality," he said.The dust problems occur chiefly between Bakersfield and Corcoran, he said.EPA in a statement Friday said the agency has shown consistent commitment to improving air quality in the Valley.In reaching its decision in November, EPA said in published statements that there has been "significant" improvement in PM10 since 1990. From 1990 to 1992 there were 33 days when the standards were exceeded in the Valley; from 2002 to 2004 there were fewer than 3.This improvement took place despite rapid economic growth in the Valley, including increases in miles driven on highways.In a separate action Friday, the EPA formally warned California that the Valley could lose federal highway funds if it fails to make progress on another pollution problem - ozone.However, a spokesman said that the Valley's air district is submitting a revised plan to EPA by this summer, and any sanctions are unlikely.Pacific Ethanol reduces productionCompany's Madera operation to be closed temporarily...Reed Fujiihttp://www.recordnet.com/apps/pbcs.dll/article?AID=/20090110/A_BIZ/901100311Pacific Ethanol Inc., which opened Stockton ethanol production plant in September, announced Friday it would temporarily suspend operations at a similar facility in Madera in the face of rising raw materials costs.The Sacramento-based company said it will continue to serve its customers with ethanol produced at its other plants and from market suppliers despite Monday's planned plant closure.Company spokesman Tim Raphael attributed the move to the "tumultuous commodities market and not getting an adequate ethanol price in the market."The squeeze is primarily due to a roughly 50 percent increase in the price of corn - the feedstock for ethanol production - since the beginning of December, with no corresponding rise in the price of ethanol, said Rick Kment, biofuels and dairy analyst for DTN, a business information company in Omaha, Neb."There will be a long-term demand for ethanol," Kment said Friday. "The challenge right now is corn prices have moved significantly higher."At the beginning of December, corn futures were trading at $2.73 per bushel, but by Tuesday closed above $4.25 a bushel, Kment said. That was more than $1.50 per bushel increase, although the futures price had eased to $4.09 a bushel in trading Friday.Kment noted all ethanol producers were seeing their profit margins pinched."The same issues Pacific Ethanol is dealing with at some level all other ethanol producers continue to deal with," he said.Ironically, the fact the industry is struggling is also a contributing factor."There are concerns with significant supply losses," Kment said, adding that as a result, ethanol futures prices are roughly 60 cents a gallon higher than gasoline.That is contributing to a drop in demand, as blending ethanol into a motor fuel makes it more expensive."Right now, it is not economical to blend ethanol in order to get a cheaper product," he said.Raphael said there was no outstanding reason company executives chose to suspend operations in Madera vs. plants in Stockton; Boardman, Ore.; or Burley, Idaho."It was a very hard call," he said. "We're just looking for the best way to operate in a very difficult environment."Pacific Ethanol's stock priced dropped Friday after the announcement. In trading on the Nasdaq market, the stock, which goes by the symbol PEIX, closed at 56 cents a share, down 4 cents from Thursday's close.While that was well above the 52-week low of 35 cents, recorded Dec. 30, the company's past year high was $8 a share as of Jan. 9, 2008.San Francisco ChronicleA look at key provisions in Senate lands bill...The Associated Presshttp://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/01/10/national/w080435S81.DTL&type=printableThe Senate planned to meet Sunday to consider legislation that would designate more than 2 million acres of wilderness across nine states, from California to Virginia. The bill, introduced by Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee, also would set aside former President Bill Clinton's childhood home in Hope, Ark., as a national historic site.Among the provisions, by state:California:_ Preserve nearly 470,00 acres of wilderness in the Eastern Sierra and San Gabriel Wilderness, including lands in the Angeles, Humboldt-Toiyabe and Inyo National Forests. Designates 74 miles of wild and scenic rivers along parts of the Amargosa River, Deadman Creek, the Upper Owens River, Glass Creek, Cottonwood Creek and Piru Creek._Protect some 190,000 acres in Riverside County as wilderness, including parts of Cleveland and San Bernardino National Forests and Joshua Tree National Park. Parts of the North Fork San Jacinto River and creeks in Riverside County receive scenic and wild designations._Protect about 70,000 acres of wilderness in Sequoia and Kings Canyon National Parks, including the new John Krebs Wilderness, named for the former congressman and conservationist who fought to protect these lands in the Mineral King Valley._ Implement a 2006 legal settlement to restore the San Joaquin River, bringing water and salmon back to a now-dry stretch of the waterway. The lawsuit stemmed from the opening of Friant Dam in 1949, which transformed the San Joaquin Valley's main artery from a river thick with salmon into an irrigation source for more than a million acres of farmland._ Approves a study to determine whether the Tule Lake Segregation Center in Modoc County should become a part of the National Park System. Japanese-Americans were interned at the center during World War II.Colorado:_Protect nearly 250,000 acres of Colorado's Rocky Mountain National Park._Protect 66,000 acres of red rock sandstone canyons, cliffs, streams and waterfalls in western Colorado.Idaho:_Protect as wilderness 517,000 acres in Idaho's Owyhee Canyonlands.Michigan:_Protect 11,739 acres of wilderness at Pictured Rocks National Lakeshore.New Mexico:_Protect more than 15,000 acres in San Miguel County as wilderness.Oregon:_Protect 13,700 acres of old-growth forest in Oregon's Siskiyou National Forest._Protect more than 128,000 acres of national forest on Mount Hood._Protect 23,000 acres in southeastern Oregon's Soda Mountain region._Protect nearly 31,000 acres of wilderness in the Badlands just east of Bend._Protect 8,600 acres of wilderness overlooking the John Day Wild and Scenic RiverUtah:_Protect more than 250,000 acres of wilderness in and near Zion National Park.Virginia:_Protect 43,000 acres of the Jefferson National Forest as wilderness, and 12,000 as a national scenic area.West Virginia:_Protect 37,000 acres in the Monongahela National Forest.'Crisis situation' for Marin's coho salmon...Peter Fimritehttp://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/10/BA4C155A50.DTL&type=printableThe lack of rain this winter has contributed to what fisheries biologists say is, so far, the worst return of coho salmon in the recorded history of Marin County's Lagunitas Creek watershed, one of California's most critical ecosystems for the endangered fish.Only a smattering ofcoho were spotted and only 20 egg nests, or redds, were seen in the two main tributaries - Lagunitas and San Geronimo creeks - during the annual winter survey of fish, watershed biologists said this week. The paltry showing of redds represents an 89 percent drop in the number of returning offspring of parents that gave birth in the lush western Marin watershed three years ago. Last year at this time, 148 redds had been counted, then the lowest number in the 14 years that records have been kept, said Paola Bouley, the conservation program director for the Salmon Protection and Watershed Network, or SPAWN. "It's just frightening, actually," Bouley said. "We were expecting 70 redds, which is still a 63 percent decline. It's definitely a crisis situation."The waterway, which winds its way through the picturesque San Geronimo Valley on the northwest side of Mount Tamalpais, typically supports the largest wild run of salmon left in the state, historically about 10 percent of California's coho population.During the first winter rains, the spawning fish swim 33 miles from the open ocean into Tomales Bay and up the creek through the redwood-studded valley to lay their eggs and die. The females lay their eggs only after they've found the place where they were born three years before. The decline this year is alarming given that 190 redds were counted in 2005 when the parents of these coho laid their eggs.The plummeting coho numbers exacerbate a near catastrophic decline in the overall population of salmon along the West Coast. So few chinook salmon returned to spawn in the Sacramento-San Joaquin river system last year that ocean fishing had to be banned in California and Oregon. The number of coho eggs throughout the state declined about 70 percent last year. The low number of coho in the Lagunitas watershed in 2007 was shocking given that a record 496 redds were counted in 2004, the year they were born. "We had our best year class in 2004," Bouley said. "What happened is our best year class turned into our worst year class."This year is looking even worse.Fisheries biologists believe the primary cause is the unusually dry weather in Northern California, which has prevented salmon from swimming up the creeks. The rains in December were barely enough to breach sandbars on most beaches, forcing salmon up and down the coast to circle in the open ocean where they are vulnerable to sea lions and other predators. "It's not looking good," said Sean Hayes, a National Marine Fisheries Service biologist who monitors salmon in Scott Creek, the southernmost coho run in California, north of Davenport (Santa Cruz County). "The fish have been hammered a couple of years in a row now. If it doesn't rain, there could be a spawning failure this year, which would be catastrophic."Threat of extinctionBouley said a big rainstorm could turn things around, but hardly any rain is expected in the next two weeks. If things don't improve, she said, this year's cycle of fish may go extinct. The lack of salmon in Lagunitas Creek is a major concern, she said, because the watershed is a statewide model for fisheries restoration. The first winter rains normally bring schools of coho wriggling up the creeks, drawing tourists, schoolchildren and naturalists to watch the fish leap from the foaming rapids. "The Lagunitas population is critical to the viability of the entire central California coho population. It is the keystone watershed along the coast," Bouley said. "Fisheries agencies look to Lagunitas as the key to the recovery for neighboring watersheds. We won't have any streams left to seed them if this one is gone."The watershed is unique in that the primary spawning grounds are in the middle of developed communities. Since coho were listed as endangered in 2005 under the Endangered Species Act, many residents have taken a proprietary interest in the fish. Schools have become involved, organizing work parties and teaching children about the historic coho migration. More than a century ago, about 6,000 coho spawned in the system of streams every year. At that time, the salmon swam from Tomales Bay virtually to the top of Mount Tamalpais, spawning in tributaries all along the way. But industry started taking a toll almost from the day Joseph Warren Revere spotted the valley in 1846 and saw "a copious stream, fed by mountain brooks." The redwood forests surrounding the creek were logged between 1860 and 1900. Subsequent homes and roads built along the waterway removed about 60 percent of the original riparian habitat.The first major dam, which created Lake Lagunitas, was built in 1873. Six more dams were constructed over the next century, the largest being Peter's Dam at Kent Lake, finished in 1953 and then raised 42 feet in 1982. The dams blocked 50 percent of the historic salmon habitat, reduced the amount of gravel and increased sedimentation in the creeks. But the decline was slow. Old-timers told how they used to spear fish from decks or garage hatches overlooking the creek. In 1959, when the habitat was already in serious decline, the largest recorded coho in state history, a 22-pounder, was fished out of Lagunitas Creek.Lobbying the countyThe restoration effort began in the early 1980s when a group called Trout Unlimited began lobbying the county to stop the decline of the fishery. SPAWN, which was created in 1996, sponsors salmon-watching creek walks during spawning season and has saved more than 15,000 juvenile salmon and steelhead from drying pools during the summer. The Marin Municipal Water District, which is required by the state to help the coho as mitigation for raising Peter's Dam, started counting coho redds in the early 1990s and now works with SPAWN to monitor releases from the dam, install woody debris in the creeks and replant vegetation."This is the beacon of hope for the California watershed," Bouley said, but "the fish are missing. They are gone."Yudof wants to freeze pay of top UC executives...Patricia Yollinhttp://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/10/BA1P156O0H.DTL&type=printableOAKLAND -- Faced with a state budget crisis that shows no sign of abating, University of California President Mark Yudof will ask the university's governing Board of Regents to consider freezing the salaries of top administrators and to limit freshman enrollment.However, he doesn't plan to follow Stanford University's recent example and cut anyone's pay - at least not yet."There's nothing that's not off the table," Yudof told The Chronicle on Friday.The proposal for the pay freeze, which the regents will tackle on Wednesday, would affect 285 high-level employees. Of those, 85 would be subject to the freeze in its most extreme form, and would not be able to get merit or equity increases, or more money to induce them to stay in the event of another job offer. That group would include chancellors of the 10-campus system, vice chancellors and Yudof, whose total compensation package this year is $828,000.Another 200 senior managers would see their salaries frozen and wouldn't be eligible for merit or equity hikes. But stipends and raises for promotions would be considered on a case-by-case basis, as well as increases to retain them at UC if they would otherwise leave for work elsewhere.UC spokesman Paul Schwartz said the university projects an estimated savings of at least $1.3 million per year for the piece of the proposal that concerns the elimination of annual merit and equity pay increases for senior managers.Looking ahead to the coming months, Yudof said, "There will be a lot of treacherously difficult decisions to make." One of those decisions will involve enrollment.UC currently has more students than it can handle. It has 11,000 students for whom it gets no state funding, creating a shortfall of about $122 million. To make things worse, the 2009-10 fiscal budget released by Gov. Schwarzenegger does not include money for growth in enrollment.As a result, Yudof will propose to the regents a reduction of 2,300 new California resident freshmen systemwide for the 2009-10 academic year - from a total of about 37,600 new freshmen this year to 35,300 next year. On the other hand, given the big jump in applications from California community college students, transfer enrollments would be allowed to rise by 500 students. If that happened, there would be 16,300 new transfer students in the fall.The curtailed enrollment would affect six UC campuses: Davis, Irvine, Riverside, Santa Cruz, Santa Barbara and San Diego. The number of freshmen would remain the same at UC Berkeley and UCLA and could grow at UC Merced. Graduate enrollment would stay at this year's levels, so UCSF-Medical Center would not be touched by the proposal."The problem is that we're supported by the taxpayers of California," Yudof said. "So I won't rule out anything."He hopes the cap on enrollment will send a "we can't afford this anymore" type of message, but he also hopes there will be light at the end of the economic tunnel.Yudof said he was pained to propose any kind of limit because he sees UC as being in the "opportunity business.""This is an enormous problem and I find it excruciating," he said.State's public universities face major cutbacks...Patricia Yollin, Jim Doylehttp://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/10/BA1P156T8O.DTL&type=printableReeling from a state budget crisis that shows no sign of abating, California's two premier public university systems are facing salary freezes, construction shutdowns and curbs on enrollment.The California State University system, the nation's largest, announced Friday that it would temporarily halt major construction projects and freeze the salaries of 133 top officials, including Chancellor Charles Reed and his 23 campus presidents. University of California President Mark Yudof said he will ask UC's governing Board of Regents on Wednesday to consider freezing the salaries of top administrators and to limit freshman enrollment.Yudof said he doesn't plan to follow Stanford University's recent example and cut anyone's pay - at least not yet."There's nothing that's not off the table," Yudof told The Chronicle on Friday.The Yudof proposal for the pay freeze would affect 285 employees, both at UC headquarters in Oakland and at its 10 campuses. Of those, 85 would be subject to the freeze in its most extreme form, and would not be able to get merit or equity increases, or more money to induce them to stay in the event of another job offer. That group would include chancellors, vice chancellors and Yudof, whose total compensation package this year is $828,000.An additional 200 senior managers would see their salaries frozen and wouldn't be eligible for merit or equity hikes. But stipends and raises for promotions would be considered on a case-by-case basis, as well as increases to retain employees.UC spokesman Paul Schwartz said the university projects an estimated savings of at least $1.3 million per year for the piece of the proposal that concerns the elimination of annual merit and equity pay increases for senior managers.Looking ahead to the coming months, Yudof said, "There will be a lot of treacherously difficult decisions to make." One will involve enrollment.UC has 11,000 students for whom it gets no state funding, creating a current shortfall of about $122 million. To make things worse, the 2009-10 fiscal budget recently released by Gov. Arnold Schwarzenegger does not include money for growth in enrollment.As a result, Yudof will propose to the regents a systemwide enrollment reduction of 2,300 new California resident freshmen for the 2009-10 academic year - from a total of about 37,600 new freshmen this year to 35,300 in the fall. On the other hand, given the big jump in applications from California community college students, transfer enrollments would be allowed to rise by 500, adding up to 16,300 new transfer students.The curtailed enrollment would affect six UC campuses: Davis, Irvine, Riverside, Santa Cruz, Santa Barbara and San Diego. 'I won't rule out anything'The number of enrolled freshmen would remain the same at UC Berkeley and UCLA and could grow at UC Merced. Graduate enrollment would stay at this year's levels, so UCSF Medical Center would not be touched."The problem is that we're supported by the taxpayers of California," Yudof said. "So I won't rule out anything."Yudof said he was pained to propose any kind of limit because he sees UC as being in the "opportunity business.""This is an enormous problem and I find it excruciating," he said.The CSU announced Friday that it was immediately instituting a salary freeze for its top executives and administrators. It would remain in effect through the 2009-10 budget year, according to Chancellor Reed's office. "The magnitude of the state's budget crisis continues to grow, along with the uncertainty of the future fiscal picture," Reed said. "We are instituting these cost-saving measures knowing that the state's fiscal situation worsens each day."According to the chancellor's office, the salary freeze would affect 105 vice presidents, 23 campus presidents, four vice chancellors and Reed. A first for CSUIt appears to be the first time ever that the CSU system has imposed a salary freeze for its top executives and administrators.CSU also announced an immediate hiring freeze on all but essential positions, cancellation of all noncritical equipment and supply purchases, and travel restrictions for employees.In addition, Reed said California's budget crisis has forced CSU to halt state-funded construction on projects for at least 90 days, and that hundreds of works could potentially be affected.Claudia Keith, a spokeswoman for Reed, said 41 projects are being shut down, including a $46 million library at Cal State Dominguez Hills in Carson (Los Angeles County), an $80 million science building at Cal State Long Beach, a $38 million science building at Cal State Los Angeles and a $90 million library at San Francisco State University.She said the value of the shutdown projects totals more than $1 billion.These actions follow Reed's decision in November to limit the number of new students entering the CSU system in fall 2009. The CSU also plans to raise student fees by 10 percent during the 2009-10 academic year. Cuts to state university systems...Jim Doylehttp://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/10/MNQV156Q4I.DTL&type=printableWhat's at stake: The state's two four-year university systems would halt enrollment growth to help save an estimated $427 million during the 2009-10 school year. Under the governor's proposed budget, the UC system would lose about $210 million, the California State University system about $217 million. Cal Grant monetary awards to help students pay for college would be reduced by about $89 million for fiscal 2009-10. UC plans to raise student fees 9.3 percent next fall; CSU plans to bump fees 10 percent.Reaction:CSU Chancellor Charles Reed said "the state's fiscal condition worsens each day," which has also resulted in a decision to freeze the salaries of the system's top executives and a systemwide hiring freeze on all but essential positions. Reed also said the crisis has forced CSU to halt work on state-funded construction projects for at least 90 days on hundreds of projects such as libraries and classrooms. UC President Mark Yudof has called for a cap on enrollment and a freeze on top executive salaries, among other things.Contra Costa TimesUC, Cal State to freeze top salaries, construction projects...Matt Krupnickhttp://www.contracostatimes.com/ci_11416237?nclick_check=1With the economy in crisis and the state's budget in tatters, California's public universities announced Friday that they will freeze salaries for hundreds of top administrators and halt construction projects.The University of California and California State University systems said they would not give raises to executives on campuses or at university headquarters this year, and the UC system — pending approval by the Board of Regents next week — will cancel some bonuses for the highest-paid administrators.The move affects hundreds of officials in the two systems: about 285 at UC and 150 at Cal State. Most of them have six-figure salaries.The Cal State system also announced that it had suspended bond-financed construction on all 23 campuses after a state board said it would withhold payments.And UC on Friday released details of a plan to trim freshman enrollment by 6 percent this year. Students will be less likely to be admitted to the campus of their choice, UC leaders said.Among the Cal State construction projects affected by the shutdown is a $47 million student-services and administration building on Cal State East Bay's Hayward campus.Construction on the 100,000-square-foot building, which is 65 percent complete, shut down last month, said university spokesman Kim Huggett. The delay is expected to last six months, he said, adding $1.5 million to the cost.Similar delays are likely in the 10-campus UC system, where more than 80 projects are being financed by voter-approved bonds. The university has asked the state to exempt 30 projects from the delay, including ongoing renovations of UC Berkeley's Birge and Durant halls. Planned renovation of UC Berkeley's athletic facilities, including Memorial Stadium, will not be affected by the construction hang-up.A delay of all 80 of the university's projects could cost the state at least $150 million, said Rick Keller, UC's interim capital-projects director."I think they have to be cognizant of the fact that it's not free to stop a project in the middle," Keller said.The Cal State system also has asked for fiscal mercy on 26 projects, but the universities will be competing with other state agencies pleading with the state for a reprieve. Agencies have requested "well over a billion dollars" in exemptions from the state's Pooled Money Investment Board, said Tom Dresslar, a spokesman for state Treasurer Bill Lockyer."We have to consider the state's cash-flow problem," he said.UC, which announced the proposed enrollment cut earlier this week, had warned of such a measure for several months. The university last year accepted 5,000 more students than the state budget paid for, and regents said UC would not be able to maintain enrollment without more state help.The plan, to be discussed by regents Wednesday, would reduce freshman enrollment by 2,300 — from 37,600 last year to 35,300 this year. UC would increase community-college transfers by 500 and hold steady on graduate enrollment.Freshman enrollment would remain steady at UC Berkeley and UCLA, and it would increase at UC Merced, which opened to undergraduates in 2005.The Cal State system had earlier announced it would cut enrollment by 10,000 this year.The universities' pay freezes follow criticism about perks and raises granted to top administrators in recent years. Education leaders should cut costs wherever possible to avoid student-fee hikes and enrollment cuts, said Assemblyman Anthony Portantino, D-La Canada Flintridge, who introduced a bill last month that would freeze all state salaries higher than $150,000 until 2012."After two years of asking them to do the right thing, UC and CSU finally took action," said Portantino, chairman of the Assembly Higher Education Committee. "I absolutely think they should go farther."Los Angeles TimesSchwarzenegger's effort to expedite highway projects angers environmentalistsStripping environmental protections could fast-track the work, give California a $1.2-billion boost and create 22,000 jobs, the governor says...Eric Bailey and Evan Halperhttp://www.latimes.com/news/local/la-me-enviro11-2009jan11,0,3770198,print.storyReporting from Sacramento — Efforts to bridge California's budget abyss collapsed last week as talks hit a formidable roadblock -- Gov. Arnold Schwarzenegger's demand that long-standing environmental protections be stripped from 10 big highway projects.The governor's aides say his plan would give the financially strained state a $1.2-billion economic boost and create 22,000 jobs over the next three years. Environmentalists say the governor is backpedaling from the heavily publicized push to curb global warming that landed him on magazine covers delicately balancing a globe on a beefy finger.Schwarzenegger is proposing that the California Department of Transportation forge ahead with some construction projects that are tied up in court over environmental issues. One is a $165-million carpool-lane expansion on U.S. 50 in Sacramento that a judge has delayed because of the amount of greenhouse gas emissions it could generate, among other concerns.Protections would also be lifted on a freeway-widening project through an ecologically sensitive area of coastal San Diego County and on a controversial plan to drill a tunnel into the Berkeley Hills. And Schwarzenegger wants to empower a panel of his appointees to waive environmental rules on other projects.Schwarzenegger has infuriated the Sierra Club and other groups with such proposals and with a letter he sent to President-elect Barack Obama last week asking that federal environmental reviews be waived on the highway projects."This is a stunning turnaround by the governor, and I am baffled by it," said Tom Adams, board president of the California League of Conservation Voters.Schwarzenegger says that the projects can be completed without environmental ruin and that with the incoming Obama administration proposing to pump huge sums into public-works projects, California needs to be ready to jump."What is important here is not to have projects ready in three years from now, which can happen with the environmental approvals and other kind of red tape that you go through," Schwarzenegger said in a conference call with reporters Thursday. "So I think it is important to see what projects you have ready to go now."Administration officials note that the state has waived environmental rules in the past, including for the reconstruction of two bridges on the 5 Freeway shattered by the Northridge earthquake -- a move that allowed rebuilding to be done in 66 days. It is appropriate to fast-track projects now, they say, because of the state's economic emergency.Schwarzenegger is proposing to largely exempt the 10 highway projects from the California Environmental Quality Act, a 1970 law requiring review of big projects and efforts to offset any deleterious effects on the surroundings.Under Schwarzenegger's plan, environmentalists would not be alone in losing influence over how projects are constructed. The power of the governor's own resource protection agencies to intervene would also be weakened: A panel of administration appointees would be able to waive state regulations.Among the projects at issue is a $102-million carpool lane on Interstate 805 in San Diego County. It still lacks a state Coastal Commission permit and must be reviewed to determine if endangered species would be harmed.Adams noted that several of the projects propose work on California 99 in the San Joaquin Valley, which environmentalists say has some of the worst air pollution in the nation. To Adams, it's a simple equation: More traffic equals more pollution.The most contentious projects are tangled in litigation, including the delayed Sacramento carpool lane project and a $420-million effort to bore a tunnel through the Berkeley Hills to ease heavy Bay Area traffic on California 24. A judge is expected to rule in the spring on a lawsuit over possible effects of noise and pollution from the tunnel project on two nearby schools.But if lawmakers eventually relent and agree to the governor's wishes, state legislation would trump those legal decisions and the projects could move ahead.The Democrats who dominate the Legislature have so far demurred.They are offering instead a fast-tracking process for the projects that conservationists find more acceptable. Administration officials say that will not get construction moving quickly enough.The standoff, which comes as the state is on the verge of running out of cash, has pitted two of the governor's core constituencies -- backers in big business and allies in the movement to protect the oceans and air -- against each other. Schwarzenegger has insisted he can balance the two and make California a model economy that is both green and prosperous.Environmentalists say he has lost that balance."The governor has a green streak, but it's in conflict with his desire to pour more concrete and build more highways," said Sierra Club California director Bill Magavern. "We don't buy the idea that to stimulate the economy, we need to weaken standards that protect the public health and environment."Magavern and others contend that the state has plenty of more ecologically friendly construction projects that should go to the front of the line. They point to a report last month by California's nonpartisan Legislative Analyst's Office, which suggested that the transportation projects spotlighted by Schwarzenegger face formidable odds even if the state's environmental rules are waived.The report noted that eight of them still face lengthy federal environmental reviews and design preparations that would delay construction. A better alternative, the report said, would be pressing ahead with 122 less contentious projects around the state involving rehabilitation of battered pavement, bridges and highway drainage.Environmentalists have a list of scores of other "green" projects -- mostly improvements to public bus and rail transit systems -- that are ready to go but lack funding."Nobody is opposed to getting good jobs on the ground now, but we can do that without circumventing environmental protections," said Kathryn Phillips, a policy advocate for the nonprofit group Environmental Defense.Waiving those protections could set a dangerous precedent, Adams and other environmentalists said.For years, Republican lawmakers have been trying to relax the state's environmental rules in budget negotiations, in which they hold enough votes to block the spending plan. If the governor wins exemptions for the 10 projects, GOP lawmakers will almost certainly push for more, said Adams."They want to hijack the budget process to enforce minority rule on the environment," he said.Republican lawmakers say they're trying to add a dose of common sense to a process that too often adds unnecessary delays to road-building and other work.As for Schwarzenegger, administration officials say he is merely trying to get shovels in the ground to stimulate the economy. They say he has no intention of dismantling the state's environmental laws."For anyone to challenge this governor's environmental credentials is beyond me," said Caltrans director Will Kempton. "What the governor is talking about is not doing away with environmental controls. . . . We think we have an economic emergency. We think that emergency requires we look for ways to create jobs."University of California officials urge 6% cut in freshmen for fallThe 2,300-student reduction would not affect UCLA, UC Berkeley or UC Merced. The number of applicants denied their first-choice campus would rise, but transfer slots would increase...Larry Gordonhttp://www.latimes.com/news/local/la-me-ucfreshmen10-2009jan10,0,6306648,print.storyUniversity of California officials on Friday proposed reducing freshman enrollment for next fall by 2,300 students, or about 6%, to cope with what they said is insufficient state funding.Enrollment would not be cut at UCLA and UC Berkeley, the most popular campuses, and expansion would continue at UC Merced, the newest school, according to the plan that is to be reviewed by the UC regents next week. The other six undergraduate campuses would have some freshman reductions, while overall slots for transfer students would rise."I don't like cutting out opportunities at all," UC President Mark G. Yudof said in a telephone interview from his Oakland office. But given expected steep state budget cuts, he said he reluctantly recommended the actions to protect UC's academic quality."These are very hard, difficult economic times. There will be sacrifices all around," Yudof said, adding that he has worked in recent weeks to minimize the enrollment reductions.UC leaders say the effect may be softened by a demographic shift, as the number of high school graduates starts to decline this year. However, other experts predict that the economic crisis will push more students to UC campuses and away from more expensive private schools. UC freshman applications are running about 3% higher than last year.Yudof emphasized that students whose high school grades and test scores meet UC eligibility standards would not be completely shut out of the system, although more would be denied a spot at their first-choice campus. As a result, enough students are expected to turn down a UC campus they never really wanted and instead attend a non-UC school.Under the proposal, the number of students who transfer as juniors to UC from community colleges would increase by about 500, or about 3%. Yudof said that during the economic downturn, "we need to keep open cost-effective paths to UC, such as the community college transfer route." The rolls of graduate students would not change. UC's total enrollment is about 226,000, and the state has not kept up with enrollment growth, leaving the system short of state funding for about 11,000 students, officials contend. Gov. Arnold Schwarzenegger's recent budget proposal again fails to provide enough money for growth and calls for significant cuts in other UC funding, they said. The state is facing a $41.6-billion deficit by mid-2010, and the governor has indicated that education is not exempt from sharing the burden of hard times.On Friday, Yudof also proposed a salary freeze and an end to some bonuses for 285 top UC administrators, although case-by-case exemptions might be allowed. Among employees affected by the freeze would be Yudof himself, who was hired last year with a $591,084 base salary and $237,000 in supplemental pension payments and other benefits.California's other public university system, the 23 Cal State campuses, also announced a salary freeze Friday -- affecting more than 125 top administrators -- as well as cuts in travel expenses and hiring.In November, Cal State took more dramatic action to limit enrollment than the UC plan. With earlier deadlines and some changes in entrance standards, Cal State seeks to cut its overall 450,000 student body by about 10,000 next fall.UC regents have scheduled a telephone conference meeting Wednesday to debate and vote on the enrollment plan and pay freeze.Later this year, they will have to decide on a tentative plan to raise basic fees 9.4%, or about $662, for most in-state undergraduates. That would bring the average UC bill to $8,670, not including housing, books and other expenses. Graduate and professional school fees would rise more steeply.Some regents have suggested boosting the number of out-of-state undergraduates as a way to raise revenue, since those students pay $20,000 more a year than state residents. On Friday, Yudof said he had no plans to seek such an increase, though he said that "nothing is off the table in these financially difficult times."UC student regent D'Artagnan Scorza said Friday that he wanted more data about how the freshman enrollment proposal might affect low-income, minority and rural students before deciding how to vote on it."I'm not happy at all about the idea of curtailing access, given the application increases this year," said Scorza, a UCLA graduate student. Yet he said he is concerned that UC does not have enough money to support more students.Patrick Callan, president of the San Jose-based National Center for Public Policy and Higher Education, was skeptical of Yudof's plan. Before cutting enrollment, UC should push research professors to teach more and should eliminate duplication systemwide in lightly enrolled graduate programs, he said.Instead of considering those fundamental issues, UC and state officials always "put the pain on the students with tuition increases and enrollment reductions," Callan said. UC's last attempt to reduce enrollment led to widespread confusion. Amid state budget problems in 2004, UC told about 5,800 eligible students in the spring that it could not admit them as freshmen but that they would be guaranteed transfers from community colleges when they were juniors. Then in the summer, the Legislature provided extra money to reverse that decision. By that point, many of those students had made other college plans.In other budget news, California's higher education systems were coping this week with a 90-day suspension in state financing for public works as a result of the state's inability to sell the bonds it uses to keep cash flowing. Cal State projects affected include a performing arts center at Cal State Northridge and a business administration building at Cal Poly Pomona, officials said.UC is seeking an exemption from the financing freeze for its stalled projects, including engineering, humanities and arts facilities at UC Irvine. Community colleges are soldiering on with construction projects in the hope the state will reimburse them.San Joaquin Valley groups fight dust pollution...Margot Roosevelt, Greenspacehttp://latimesblogs.latimes.com/greenspace/2009/01/san-joaquin-val.htmlIf the air in the San Joaquin Valley is clean, then what's that brown haze everywhere as you drive along Interstate 5?Community groups, public health advocates and environmentalists filed suit against the U.S. Environmental Protection Agency on Friday to overturn an October 2007 rule that allowed valley officials to declare victory in a long battle against the airborne dust technically known as coarse particulate matter (PM-10).According Earthjustice, the environmental law firm that filed the suit in the U.S. 9th Circuit Court of Appeals, air quality monitors in the valley show that federal standards are not being met. The EPA and the local air district say that the recurring violations are natural ones that do not need to be addressed through further controls."At the time of the finding, we said it was either a miracle or they were lying," said Kevin Hall of the Fresno Sierra Club. "As more data came in, we became convinced it was the latter."Much of the pollution in the valley is due to agricultural activity, such as plowing fields, harvesting crops and truck traffic along unpaved farm roads. Agribusiness, which has been chafing under air pollution rules, is the most politically influential industry in the valley. The region includes more than a thousand giant dairy farms, many of which house more than 1,500 cows each. Recently, the Bush administration exempted factory farms nationwide from some reporting requirements for ammonia, one of the precursors to fine particle pollution.CNN MoneyBad quarter for banks...but just how bad?Citigroup, JPMorgan Chase and other banks will take it on the chin when they report fourth-quarter results. But will results be worse than expected?...David Ellishttp://money.cnn.com/2009/01/09/news/companies/banks_fourth_quarter/index.htm?postversion=2009010915NEW YORK (CNNMoney.com) -- Call it the case of same story, different quarter for the nation's banks.Later this month, many big banks will report their results for the fourth quarter. And once again analysts are bracing for yet another bleak performance.Bank of America CEO Ken Lewis warned in an internal memo earlier this week that the company's 2008 performance fell short of expectations. And JPMorgan Chase chief Jamie Dimon sent financial stocks spiraling lower in mid-December when he suggested that his company's quarterly performance would be dismal.Both banks, which each made two major acquisitions last year as a result of the turmoil, are at least expected to remain in the black. But their earnings are likely to be far below the profits they enjoyed in recent years.Bank of America (BAC, Fortune 500), which will report its results on Jan. 20, is expected to report a profit of $1.39 billion, or 15 cents a share, up sharply from last year's grisly fourth quarter, according to consensus estimates by Thomson Reuters. But it's well below the results of $5.41 billion, or $1.19 a share, in the fourth quarter of 2006. Earnings at JPMorgan Chase (JPM, Fortune 500) are expected to plummet 83% to $482 million, or just 4 cents a share.And many other banks are also expected to take a hit.Profits at Wells Fargo (WFC, Fortune 500) will tumble 17% from a year ago, according to Thomson Reuters. And Citigroup (C, Fortune 500), which has been arguably the hardest hit among the group, is expected to book its fifth consecutive loss, this time hemorrhaging close to $3.8 billion, or $1.14 a share."It was always going to be a bad quarter," said Marshall Front, chairman of Chicago-based money management firm Front Barnett Associates. "The question is how bad is it going to be?" Fearing the worst, analysts have slashed their forecasts for several banks in recent months. At JPMorgan Chase, for example, current estimates are for the company to report a profit of 4 cents a share. Just a month ago, analysts were expecting a profit of 27 cents per share.Good credit, bad credit, no creditThe last three months of 2008 rank as one of the toughest periods on record for the nation's banking sector. Financial institutions were still coping with the collapse of Lehman Brothers and Washington Mutual in September, and banks faced heavy Congressional scrutiny over their lending practices after getting funds as part of the $700 billion rescue program.But deteriorating credit conditions, which took a severe turn for the worse during the quarter as the recession deepened and unemployment headed higher, was arguably the biggest challenge for banks. Analysts are now betting that banks will aggressively set aside cash this quarter to cover future loan losses as more consumers are likely come up short on their both home equity and credit card payments."Most of the stress will come from the consumer portfolio," said Chris Mutascio, managing director at Stifel, Nicolaus & Co. in Baltimore. He added that there could be more pressure on commercial loans, which have typically tended to be more stable.Oppenheimer analyst Meredith Whitney warned clients earlier this week that she expected Bank of America and JPMorgan Chase to double their loan loss reserves this quarter. Combined with Citigroup and Wells Fargo, she anticipated the group would add an additional $9.5 billion to their reserves.Banks with investment banking operations, most notably Citigroup and JPMorgan Chase, are also likely to feel an additional pinch as initial public offerings and merger activity remain at a standstill.Fortunately for them, these and other financial institutions appear to have enough cash to cope with the abysmal banking environment. Since Congress passed the massive rescue package in October, the nation's four largest banks by assets - Citigroup, JPMorgan Chase, Wells Fargo and Bank of America - have received $120 billion in government funds. Overall, the government has invested $187.5 billion in 215 banks so far.Nevertheless, industry observers including Marshall Front will be keeping a close eye on banks' capital levels. A dip in Tier 1 capital levels or tangible common equity, two closely-watched measures of a bank's ability to absorb losses, could signal that an institution may have to raise capital in the future, he said.Wild cardsBank of America and Wells Fargo will probably blame this quarter's lackluster results in part on costs related to their acquisitions of brokerage giant Merrill Lynch and Wachovia respectively.And the pain at Citigroup will certainly be tempered by its recent sale of its German retail banking operations for $6.6 billion, notes Joe Scott, a senior director at Fitch Ratings who tracks the company."That gives them a little more wiggle room," said Scott.Analysts also anticipate that leading banks should be able to attract more deposits as consumers flock to larger institutions that are perceived to be more stable as a place to park their cash. Both JPMorgan Chase and Bank of America reported a surge in deposit growth during the third quarter.And banks may even report improvement in their net interest margins, a measure of how profitable their deposits are, thanks to recent rate cuts by the Federal Reserve.But the biggest wild card for bank earnings could be how they value their assets after a brutal end to a difficult 2008. Aggressively clearing off their balance sheets from bad loans could help them start 2009 with a clean slate, notes Stifel's Mutascio. However, given next year's troubling economic outlook, Mutascio cautions that this quarter will not be the proverbial "kitchen sink" that investors have anticipated for so long, where banks flush their balance sheet clean. Given the state of the economy and credit-related issues, big banks are certain to face more tough quarters in the coming year, he said."You will see more [ugly numbers], no doubt about it."