Merced Sun-Star
Taxpayers still on the hook for Riverside Motorsports Park bills
The plot of land at track site for sale for $16.5M...CORINNE REILLY
Riverside Motorsports Park still hasn't paid Merced County more than $300,000 in overdue planning and legal fees -- a sign that county taxpayers may end up stuck with RMP's bills.
The Sun-Star reported in early December that RMP was months late in paying the county about $330,000.
The company, which said it planned to build a massive, quarter-billion- dollar racetrack complex near Atwater, hasn't made any payments since then, a county spokeswoman, Katie Albertson, said Tuesday.
RMP has told the county it intends to make good on the debt, Albertson said. There is "a mutual sense of cooperation between RMP and the county" over settling the bill, she added.
If RMP doesn't pay, the county can try to recoup its losses by seizing RMP's assets. But it's uncertain whether the company has anything left to claim.
If that's the case, county taxpayers could end up with the debt.
"We're doing everything we can to protect taxpayers," Albertson said.
Most of what RMP owes the county stems from a lawsuit filed against the county over the Board of Supervisors' 2006 decision to approve the RMP project. RMP lost the suit and agreed under a September order to pay the plaintiffs $279,000 for their legal costs. The order stated that if RMP failed to pay within 60 days, Merced County would have to put up the money.
RMP defaulted, and in November the county cut two checks to the plaintiffs totaling $279,264.
RMP also owes $50,800 to the County Counsel's Office and the County Public Works Department for time they spent reviewing and processing the company's proposal.
RMP has other overdue bills, too.
A law firm that used to represent RMP sued the company in 2007 to collect on a months-overdue $143,000 legal bill. The firm, Sacramento-based Somach, Simmons & Dunn, won a judgment against RMP for that amount in August of last year.
The firm has recovered about $600 by levying and emptying an RMP bank account, said Michael Vergara, an attorney with Somach, Simmons & Dunn. But it hasn't found any more money in RMP's name to seize.
Vergara said the 1,200-acre property where RMP planned to build its project is now the company's only known asset.
That land was listed for sale Sept. 30 with an asking price of $16.5 million. It hasn't sold.
It's unclear how much equity RMP has in the property, if any. The company has at least one outstanding mortgage on the land. As of last month it was behind in paying its property taxes, public records show.
No one from RMP returned phone calls for comment Tuesday. Steve Nasser, an investment banker and shareholder in RMP who's working to find funders for the project, acknowledged last month that the company was out of cash.
But he said RMP still planned to build. On Dec. 4, he said RMP probably would announce major new financing deals within 30 days that would keep the company alive.
So far no public announcements have been made.
Nasser said RMP only put its land on the market as a backup measure in case the financing deals fell through and the company couldn't pay off its mortgage by the time the loan matured.
For more than a year, RMP officials have been saying they're close to finishing financing deals for the project.
Before that, John Condren, RMP's CEO, maintained that the money to build RMP had already been secured, some of his former business partners have said.
At this point there are no public documents that reveal how much RMP owes to all its creditors.
RMP still hasn't made any progress toward regaining its project approvals since they were canceled by a judge last February, Albertson said.
Condren first proposed plans in 2003 for what he has billed as the world's largest motorsports facility. He argued at the time that RMP would remake the county's struggling economy.
The project's initial blueprints called for a 1,200-acre, eight-racetrack motorsports park to be built on a patch of farmland near Castle Airport.
Over the past two years the Sun-Star has published several stories calling into question Condren's credibility and poking holes in RMP's claims that its project was on a sure path to success.
Wal-Mart environmental report should rekindle debate on distribution center
Merced expected to unveil the findings next month...SCOTT JASON
The report detailing how the proposed Wal-Mart distribution center will change Merced's landscape will probably be released next month.
It will end more than three years of speculation about the proposed 1.2-million-square-foot warehouse's impact on the city. It will also formally launch the debate about whether it'll be a much-needed economic boost or an environmental nightmare.
Both sides, gearing up for the report's release, will use it to further their cause. They hope to persuade the City Council, which will decide the project's fate.
City planner Kim Espinosa said Tuesday that she's giving the report, an inch-and-a-half thick with double-sided pages, one more look before sending it back to EDAW, the firm writing it.
A release date should be set within the next week, she said. A year ago, the city hired an outside second company to review the report to make sure it's bullet-proof and can be defended in court. Wal-Mart is reimbursing the city for the second review.
An environmental report with omissions or mistakes can stall a project in court for months or years.
The study, required under state law, analyzes how the center will affect the environment, which includes air quality, traffic and water.
Wal-Mart plans to build the center on 230 acres between Childs and Gerard avenues. At capacity, more than 450 trucks will come and go each day.
The center, set to employ 600 people and run day and night, takes on added importance, given the recession and Merced's rising unemployment rate.
In 2005, when Wal-Mart proposed the warehouse, 10,000 residents, or 10 percent of the population, couldn't get a job.
Four years later, 14,500 people, or 13.3 percent of the county, can't find work.
"People need jobs," said Doug Fluetsch, chairman of the Merced County Jobs Coalition. "There's no other way around it. If we don't have people employed, crime increases, graffiti increases."
The coalition, which includes business leaders, was formed to support the distribution center. He said he's seen broad support for the project from e-mails and phone calls, which he expects to show at public meetings.
Besides hundreds of jobs, Fluetsch said the city's economic future is on the line. If the project is turned down he believes the community will get tagged as anti-growth and unwilling to change.
"It would be very difficult, if Wal-Mart doesn't succeed, for other businesses to succeed," he said. "Unfortunately, a lot is riding on this decision."
The opposition, meantime, is hoping the council will listen to the voices of residents who would live near the center and the ones who believe it will ruin the environment.
The Stop Wal-Mart Action Team, which has collected close to 4,000 signatures from people opposing the center, has been surveying residents in Southeast Merced about the project. Among other questions: whether they feel that city leaders listen to their concerns and take them seriously.
"They feel like their interests aren't being taken to heart," SWAT leader Nick Robinson said.
The survey is halfway done, with the group planning to talk with another 200 residents.
Once the environmental report is released, the group plans to present the survey results and tell people about how they can speak out about the center.
Some residents, regardless of their take on the project, feel as if the city's forcing the project on the community.
"It's not so much that (supporters) want a distribution center," Robinson said, "it's that they don't have any other options."
And so another chapter in the familiar economy vs. ecology debate opens next month. This time, the stakes are higher than ever.
Modesto Bee
Gottschalks files for Chapter 11 protection...last updated: January 14, 2009 08:24:24 AM
Retailer Gottschalks Inc. says it put itself up for sale and has filed to reorganize in a Chapter 11 bankruptcy.
The regional department store chain, which operates two stores in Modesto and one each in Merced, Sonora, Tracy and Stockton, has negotiated a $125 million debtor-in-possession financing from a group of lenders led by GE Capital, it said in a statement Wednesday. The financing, if approved in bankruptcy court, will fund its employee wages and benefits, some vendor payments and other operating expenses while it reorganizes.
"Persistent challenges in the economy and recent unexpected reductions to our borrowing capacity as a result of tightening credit markets have left us with no other recourse," said Jim Famalette, chairman and chief executive, in a statement.
Gottschalks operates 58 department stores and three specialty clothing stores in California, Washington, Alaska, Oregon, Nevada and Idaho. Its largest market is California, where it has 38 stores.
Calls to the company, as well as the law firms representing it in bankruptcy court, its financial consultant and its public relations firm were not immediately returned.
Fresno Bee
Feds: Mexican gray wolf plan needs updating...SUSAN MONTOYA BRYAN - Associated Press Writer
ALBUQUERQUE, N.M. Federal wildlife officials admit in a new assessment that the plan guiding their efforts to return the endangered Mexican gray wolf to its former glory in the Southwest is nearly three decades old and in need of an update.
The U.S. Fish and Wildlife Service released a conservation assessment of the Mexican wolf on Friday. The public has until March 10 to review the draft document and submit comments.
The agency said litigation over the status of gray wolves in other parts of the country has prevented it from creating a new recovery plan for the Mexican wolf, a subspecies of the gray wolf.
However, Fish and Wildlife Service regional director Benjamin Tuggle said the assessment will provide the most up-to-date scientific information on the beleaguered wolf.
"It will help to inform the many other components of our conservation efforts for the Mexican wolf, including captive management, reintroduction and recovery planning and implementation," Tuggle said in a statement.
Environmentalists are calling the assessment "a substitute for action."
Michael Robinson of the Center for Biological Diversity, which has been pushing for reforms in wolf management for years, said Tuesday the report contains valuable information about the Mexican wolf but fails to set new policies.
"To think that this effort could have gone to something that helped the wolves, it's very frustrating," he said. "Frankly, I think it's one more step by the Fish and Wildlife Service that will continue to increase cynicism about the agency and its ability to rise above disfunction and actually recover the Mexican wolf."
The Mexican wolf was exterminated in the wild in the Southwest by the 1930s. In 1998, the government began reintroducing wolves along the Arizona-New Mexico line in a 4 million acre-plus territory interspersed with forests, private land and towns.
Biologists had hoped to have at least 100 wolves in the wild by now; the population is estimated at around 50.
The current recovery plan was completed in 1982 - 16 years before any wolves were released in the Southwest.
In the assessment, federal officials say that although the recovery plan was instrumental in guiding the inception of the wolf reintroduction, it does not provide any long-range guidance.
Environmentalists have petitioned the agency to revise the plan, saying it hampers recovery efforts by saying little about how to manage wolves in the wild.
The recovery program also has drawn criticism from the ranching community, which complains that the Fish and Wildlife Service isn't doing enough to protect livestock or to keep wolves from coming too close to homes and schools.
Despite the number of wolves in the wild, federal officials say they have had some success in securing the Mexican wolf from extinction.
But Robinson argued that the wolf is still in trouble.
"The question is how do we go forward," he said. "We hope we're going to see real action and not just more spinning of wheels."
Sacramento Bee
UC may admit 2,300 fewer freshmen...Laurel Rosenhall
High school seniors hoping to attend the University of California next year could get more grim news by the end of today.
During a special meeting by teleconference this afternoon, UC regents will consider a proposal to cut the number of freshmen the university will accept next year. They're looking at admitting 2,300 fewer freshmen for the fall of 2009, compared with fall 2008.
Coupled with preliminary numbers that show more students than ever have applied to attend UC in the fall, the plan means it's getting harder and harder for high school students to get in to California's most prestigious public colleges.
"Last year I had kids who only applied to UC," said Sandi Allen, a college counselor at Elk Grove's Franklin High. "This year, I can't think of one who only applied to UC. They definitely want other options in case they can't get in."
Allen said her students increasingly look at private schools or campuses in California's community college and state university systems.
UC officials say that's not necessary. They claim the university still will accommodate every student whose grades and test scores make them eligible to attend.
But there's a catch: More applicants likely will be rejected for their preferred UC campuses and instead be offered a spot at the least popular one, UC Merced.
The plan regents are considering calls for steering more freshmen to the Merced campus and reducing the number of freshmen at Davis, Irvine, Riverside, San Diego, Santa Barbara and Santa Cruz. Freshman enrollment at Berkeley and Los Angeles would remain the same as last year.
"Although we're reducing freshman enrollment, (systemwide) our intention is to meet that commitment to accept all eligible students," said university spokesman Ricardo Vazquez.
UC officials say they must cut back because funding from the state is shrinking. Already, they say, UC educates 11,000 California students for whom they receive no state funding.
Gov. Arnold Schwarzenegger's Dec. 31 budget proposal calls for cutting $131 million from the UC system by June 2010 and eliminating a planned budget increase of $210 million for 2009-10.
If the university accepted more students without more funding, Vazquez said, campuses wouldn't have the money to hire faculty and it would be difficult for students to get classes they need.
In addition to the proposal to reduce freshman enrollment, today regents will consider a plan to freeze salaries for the university's top managers.
All of it is likely just the beginning of the university's response to the state budget crisis. Schwarzenegger called for UC to raise student fees by about 9 percent, something regents will consider in the months ahead.
Today's decisions will shape how many students are allowed to flow through the university gates. And even though UC officials insist they'll admit all eligible students, observers say the university's plans will shrink enrollment.
That's because students who hoped to go to school by the beach may turn down a spot in rural, inland Merced.
Christine Brownfield, a college counselor at Sacramento's Rio Americano High School, said her students are not likely to accept an offer from UC Merced.
Instead, she said, "Some of them would opt to go to community college and then try again for their favored UC school as a transfer."
Community college students who want to transfer to UC are the only ones likely to be happy about the proposal regents are considering. It calls for increasing the number of transfer students by 500 this year and 250 in subsequent years.
"That principle of redirecting students has been around for many years," said Steve Boilard, director of higher education for the Legislative Analyst's Office.
"They're just going to do more of it than they have in the past."
Two C.C. Myers companies accept $43.9 million judgment...Denny Walsh
Two companies controlled by renowned road builder C.C. Myers have accepted a $43.9 million judgment against them to resolve a federal lawsuit over defaulted loans to a Placer County development.
U. S. District Judge John A. Mendez approved the deal last week.
"The summary judgment does not involve the finances of either Mr. Myers personally or the highway company, C.C. Myers Inc.," based in Rancho Cordova, Myers spokeswoman Beth Ruyak said.
In October 2005, Myers Homes of California, a real estate holding company, and Myers Homes Inc., a home builder, were guarantors on two loans totaling $65.7 million to develop Winchester, 1,100 acres of luxury residences and a country club off Interstate 80 north of Auburn.
Myers himself, as well as a family trust, were also guarantors, but he went into personal bankruptcy last year, putting an automatic stay on Wachovia Bank's suit as it pertained to him and the trust. The road construction company and the Myers Homes companies are not part of the bankruptcy.
Wachovia, based in North Carolina, lent the Winchester venture $30 million, and BankFirst of South Dakota lent $35.7 million. As plaintiff in the suit, Wachovia acted for both lenders.
Winchester fell into arrears on its payments in January 2007, and the suit was filed the following December.
On May 21, an entity set up by the two lenders to bid on the property bought it at a foreclosure sale for $25 million, which was deducted from the loan obligations.
Myers Homes companies agreed to the $43.9 judgment against them as of Dec. 19. That includes principal and interest on the loans and the lenders' attorneys' fees and costs. Interest will accrue at a daily rate of $9,831.89 after Dec. 19, until the judgment is paid off.
Mendez will maintain jurisdiction over the matter in the event Myers emerges from bankruptcy proceedings, causing a renegotiation.
Stockton Record
Testing the waters: Dangerous or not, agency would be wise to disclose contamination...Editorial
The disclosure that drinking water supplied to thousands of Stockton homes had been tainted naturally causes concern. What's important is keeping this incident in perspective.
The chemical, carbon tetrachloride, which is known to cause liver, kidney and nerve damage in high doses, was found in October in water supplied by the Stockton East Water District.
The amount detected - and these minute amounts are measured in parts per billion - was the equivalent of a half-teaspoon spilled into an Olympic-size swimming pool. It's an amount less than the federal safety standard and somewhat higher than the more stringent state standard.
It was determined that the chemical came from Stockton East's water plant. The carbon tetrachloride, or CCl4, came from 1-ton chlorine gas tanks. CCl4, a chlorine byproduct, escaped into the water as each tank approached empty.
Stockton East, which provides water to the city, which then sends it to homes and businesses in north and south Stockton, has taken steps to remedy the situation by changing how it uses the tanks. Switching to liquid chlorine might be a more permanent solution, district officials said. One company that gets some water from Stockton East, California Water Service Co., is increasing the amount of groundwater it pumps and decreasing the amount it takes from Stockton East. That reduces the possible contamination by diluting the water.
Ironically, the CCl4 might not have been discovered had it not been for an accident involving a Stockton East worker who drove a pickup into a canal near the treatment plant. Stockton East started tests to make sure the water hadn't been contaminated with gasoline or oil. That's when the CCl4 was detected.
Whenever the public hears about drinking water being contaminated, it is natural to be concerned. But it's important to keep things in perspective. High concentrations of CCl4 are needed to pose health risks. Of course, no CCl4 in the water would be the ideal level.
If there is a concern, it is the delay in making the information public. The CCl4 was detected in October, but it wasn't until this month that the information was made public. That decision came because the risk was considered small. State officials agreed notification was not necessary.
But immediate notification would have served two important functions:
First, a full and factual disclosure avoids the very real possibility that rumors supplant facts. Had that happened, there would have been considerably more danger of panic.
Second, an immediate disclosure would have reassured Stockton East customers that the water company is on top of things, constantly testing the water to make sure it is pure and safe. That's something water customers always need to know.
Cost Plus layoffs signal sea change
Downturn in retail sales hits distribution centers...Bruce Spence
Oakland-based Cost Plus Inc. has spared for now its two World Market stores in San Joaquin County as it closes 26 stores nationwide because of declining sales during the recession.
Those lagging sales are affecting this area in another way, though: Company layoffs at its corporate offices and two distribution centers means that at least two dozen midmanagement workers have lost their jobs in Stockton, and two shifts will be pared to one, according to two laid-off supervisors. That's reportedly about one-third of the work force there.
The company has generally announced only the store closures and 18 percent cutbacks of corporate office and distribution center staffing while otherwise declining comment.
Randy Zavala of Stockton and another "team leader," or supervisor, who asked not to be identified, said that they were among at least two dozen midmanagers laid off late last week and that two shifts would be cut back to one in two weeks.
"I knew it was just a matter of time," said Zavala, who worked for Cost Plus 11 years.
Staffing had been shrinking by at least a couple of dozen people in recent months through both attrition and firings, and were replaced by temporary workers, if they were replaced at all, he said.
The other supervisor, who didn't want to be identified because he wanted to avoid repercussions from the company, said he was shocked by being laid off.
"My whole life has been kind of turned upside down," he said. "I knew things were getting tight around there, but seeing as I had so much seniority, I thought I'd be all right."
He said he bore no hard feelings against the company.
"They're in a struggle to survive," he said. "That's what they had to do, and I had to be part of the hopeful solution."
Both said they had received about one week's severance pay for every year of employment.
According to the economic development group the San Joaquin Partnership, as of 2007, about 75 people were employed at the Cost Plus distribution center, which has total floor space of more than 1 million square feet. An initial structure of more than 500,000 square feet was approximately doubled in 2006.
The layoffs don't bode well for San Joaquin County, which has long been rich with distribution centers put in place by companies looking for cheaper and ample land, less costly employees and a central West Coast location with prime transportation arteries.
The city of Stockton's economic development specialist said this is part of the discouraging new reality.
Not only is it extremely tough to get new businesses to locate or expand in the county in this economic climate, but the job base of retail company suppliers likely will suffer at least through the rest of this year, said Steve Carrigan, the city's economic development director.
"The market is still contracting, and what you're seeing is the ripple effect," he said.
Feedback from retailers painted a pretty tough sales period after Thanksgiving - "a 21/2-reindeer holiday sales season," he said.
"What's happening here is now it's hitting the distribution part of the pipeline," he said. "It's very, very frustrating. We're trying to grow (economically), but a lot of this is out of our control. Hopefully by the end of '09, we'll be able to see the end of this. Certainly, we're going the wrong way now."
Partnership CEO Mike Locke said that in one sense, job losses because of the economic downturn are frustrating, but then again, "we anticipate this is not a permanent circumstance and that they will bring back that full work force as demand increases."
There haven't been massive company closures in the county, he said, because companies recognize the opportunities in the long-term future.
"At the end of the day, the diversification of the business mix will bode well for us in the long haul," Locke said.
He also said that even though contacts from companies sounding out this area are down by as much as 30 percent this year, there still are several major projects expected to unfold through this summer.
Cost Plus operates one other warehouse, of about the same size, in Windsor, Va. According to a company annual report, the Stockton site is the company's primary furniture distribution facility for its stores in the West.
Cost Plus, which sells mainly home decor, such as furniture, bedding and candles, operates 296 stores in 33 states. Upon completion of its plan to restructure operations, Cost Plus will operate 270 stores in 98 markets covering 30 states.
The company announced the store closings and staff cutbacks as part of a reorganization plan to save $21 million annually in fiscal 2009. For the nine-week holiday period, same-store sales decreased 6.6 percent year to year, the company recently reported.
Cost Plus has two World Market stores in San Joaquin County: one in Stockton at 660 W. March Lane and another in Tracy at 2530 N. Naglee Road. Neither of those is scheduled two close, but two California stores - one in Vallejo and another in Ontario - will be shuttered.
Lodi council overturns Wal-Mart vote
Tonight's planning meeting canceled...Daniel Thigpen
LODI - Hoping to avoid another costly court battle, the Lodi City Council decided Tuesday in closed session that it will rescind a December vote that kept a long-delayed Wal-Mart Supercenter proposal alive.
Council members also will schedule a redo of the public meeting where that key vote was taken, after opponents alleged the city broke state open meetings laws last month.
Mayor Larry Hansen said the decision Tuesday was not an admission of wrongdoing but a conscientious response to the allegations.
"We're not going to spend taxpayer dollars to fight this in court," he said.
An attorney for Citizens for Open Government, one of two groups against the Wal-Mart project, threatened in a letter to officials last week to sue the city, claiming officials suppressed public comment and attendance at a Dec. 10 City Council meeting.
The meeting attracted more people than could fit in the council chambers, and dozens of people were forced to stand outside for hours and listen to the proceedings over loudspeakers.
At that meeting, council members voted to overturn city planners' previous denial of Wal-Mart's environmental analysis, which studied impacts of the project planned for the southwest corner of Lower Sacramento Road and Kettleman Lane. That vote kept the Supercenter proposal moving forward but was not its final approval.
The City Council will formally rescind its Dec. 10 vote and reschedule the new hearing at a later meeting.
"Had we gone to court, ... that's what a court would have ordered them to do," said Donald Mooney, the attorney who challenged the council. "I think it's kind of a victory for open government in general."
A separate Planning Commission hearing on Wal-Mart, originally scheduled for tonight at Hutchins Street Square, has been canceled.
"It's disappointing to see special-interest groups ... really taking advantage of the process at the expense of customers," said Aaron Rios, a Wal-Mart spokesman.
Court rejects casino lawsuit
Hurdle cleared by rancheria in push for Ione facility...Dana M. Nichols
IONE - A federal court has dismissed Amador County's lawsuit over the legitimacy of a proposed casino 36 miles from Stockton, clearing one of the remaining hurdles for the Buena Vista Rancheria of Me-Wuk Indians to build a facility with 950 slot machines and 20 gaming tables just north of Camanche Reservoir.
The dismissal ends a four-year legal battle and is a blow to the hopes of many Amador County residents that their local government could stop a casino a majority of residents oppose. It also signals that by summer, construction crews could be at work on the 130,000-square-foot facility while tribe executives begin hiring managers and other casino employees.
"We are going to have about 800 permanent jobs," said John Tang, chief executive officer for the tribe.
The casino would be 10 miles closer to Stockton than the Jackson Rancheria Casino in Jackson.
The casino has been in the works for almost a decade, during which critics and the tribe have battled over such issues as the legitimacy of the tribe, whether the casino site has unmarked graves, the increase in crime and traffic the casino might bring, and how much the tribe should pay local governments for the impacts.
Talks between Amador County officials and the tribe stalled last year after the Amador County Board of Supervisors deadlocked on whether to approve a proposed intergovernmental services agreement. In the end, an arbitrator ordered an arrangement under which Amador County will receive $8million a year plus $18million upfront to improve roads, expand the jail and hire additional law enforcement officers.
With the start of construction, that money will begin flowing.
There are still hurdles, Tang said, including a wastewater permit the tribe must obtain from the U.S. Environmental Protection Agency.
Also, the tribe must soon find financing, which will be more difficult now than it would have been two years ago. Tang said he's confident of finding investors willing to finance the casino. "Indian gaming is attractive as an investment. We do have a very strong location," Tang said.
If all goes well, the casino will be open for business by the fall of 2010, Tang said.
Opponents are skeptical.
"'We are going to start in the spring': They have been saying that for nine years," said Jerry Cassesi, president of the Friends of Amador County, an Ione-based group opposing the casino.
Cassesi said his group soon expects to file its own lawsuit.
"We are not going to give up. Buena Vista is the poster child for everything that is wrong with Indian gaming in California."
Cassesi said the ruling filed Thursday in U.S. District Court for the District of Columbia did find in favor of Amador County on two issues - that the county has standing to sue and that the county will be harmed by the casino. But on a third, crucial factor - whether the county had a valid claim against the U.S. Interior Department - the court found against Amador County.
Amador County said Interior Secretary Dirk A. Kempthorne had approved a gaming compact for the tribe that violated the Indian Gaming Regulatory Act. Even that "approval," however, is disputed. Such gaming compacts between tribes and state governments become law within 45 days unless the interior secretary disapproves them.
In the case of the Buena Vista project, the secretary took no action in 2004, allowing it to become law. The court also ruled that the secretary has discretion to approve, disapprove or take no action on gaming compacts without being subject to judicial review.
Tracy Press
Stalled cleanup
Livermore lab fined by federal regulators for poisoned groundwater...Jennifer Wadsworth...1-13-09   
Federal regulators last week fined Lawrence Livermore National Laboratory for failing to clean up poisoned groundwater after Congress gave them money to do so last summer.
The U.S. Environmental Protection Agency demanded $105,000 from the Alameda County lab, about 15 miles west of Tracy, for the period between July and September last year when it was supposed to continue purifying toxic water and soil, but stopped. The agency will fine the lab an additional $10,000 for every week of delays since Oct. 1 and for every week from now until it starts cleaning up again.
The Department of Energy funds the nearly 60-year-old lab, which is owned jointly by the University of California, Berkeley, Bechtel Corp., Babcock and Wilcox, the URS Corporation and Battell Memorial Institute.
Energy officials called the fines against the lab unjust and said there is no risk of poisoned groundwater leaking outside lab property and causing harm.
The energy department “feels the fine unjustified and will appeal it,” said John Belluardo, spokesman for the department’s National Nuclear Security division.
Because the lab waited so long to get started, the poisoned groundwater has started to seep outside lab boundaries and could permeate the ground under some Livermore homes, warned Michael Montgomery, assistant director for the federal agency’s Superfund Division in the Pacific-Southwest region.
Taxpayers paid for the equipment to treat the groundwater contaminated with radioactive waste, solvents, heavy metals, polychlorinated biphenyls and fuel hydrocarbons, which the government says pose a health risk to nearby Livermore residents. But the lab shut down the machines designed to evaporate water from the chemical-infused soil because, it told federal environmental regulators, budget cuts made it no longer affordable to repair and run them.
The agency told the lab to ask Congress for more money. But even after that was granted, the lab never resumed cleanup and laid off 60 percent of the employees who ran the machines.
The energy department agreed more than 20 years ago to clean up extremely polluted parts of the 5,000 acre site in the hills between Tracy and Livermore to prevent toxic waste from leaking outside lab-owned land. Federal regulators deemed parts of the site some of the most polluted in the country. Part of the 1988 agreement was that the lab would continuously treat the contaminated groundwater, which regulators said would take several decades to purify.
Montgomery, in a letter to the lab, warned that the length of time required for cleaning the contaminated water and soil only increases the longer the machines stay in disrepair.
He chastised the lab for waiting several months after machines broke down in February 2008 to ask for more money to repair them. The agency official further chastised the lab for its tardiness, mentioning that the lab had in December written to Sen. Barbara Boxer claiming that the department would have to wait until 2011 to resume cleanup.
The department’s delay, Montgomery wrote, “has demonstrated a lack of diligence” on their part.
San Francisco Chronicle
Black abalone latest endangered species in Pacific...Tuesday, January 13, 2009
The federal government is giving endangered species protection to the black abalone, a Pacific Coast mollusk that is being pushed to extinction by overfishing, disease and changing ocean conditions.
The National Marine Fisheries Service on Tuesday listed the black abalone as an endangered species following a petition from the Center for Biological Diversity.
The black abalone was once one of the most common invertebrates on the Southern California coast and Channel Islands. But its population has declined steeply in most of its traditional habitat, which ranges from the Oregon border to Baja California.
The biggest threat to its existence is withering syndrome, a disease that becomes deadlier as ocean temperatures rise
Coastal power plants could face tougher rules...Jane Kay
San Francisco's Mirant Corp. power plant, under fire from the city attorney and environmental groups, is one of 19 power plants in California that could face tougher regulation under the Obama administration for killing billions of fish.
For now, state water regulators are allowing the Mirant plant in the city's Dogpatch neighborhood and the other power plants in California, including the huge Diablo Canyon Power Plant, to continue using a cooling system that sucks and grinds fish, flattens them on screens or boils them in hot water.
The coastal power plants withdraw cold water and discharge hot water at a rate of about 16.7 billion gallons per day, according to reports. The Mirant Potrero plant is blamed for killing hundreds of millions of fish larvae, including goby, northern anchovy, Pacific herring, California halibut and rockfishes.
Mirant also operates power plants in Antioch and Pittsburg. Dynergy of Houston runs the Moss Landing Power Plant, which takes and discharges water to the environmentally rich Elkhorn Slough on Monterey Bay.
California regulators could require the electric power plants to upgrade to fish-safe systems now under existing laws, environmental lawyers say, but instead are using legal questions over a 2004 U.S. EPA regulation to delay replacing the World War II-era technology, known as once-through cooling systems.
Two state agencies have objected to extending permits to operate the old systems, citing studies showing that 88 billion organisms are killed a year. Several of the state's power plants are moving ahead with projects to replace old systems - one on Humboldt Bay and others in Southern California. The technology at new power plants uses towers to cool boiling water and does not require cold seawater.
"We think California is long overdue for a state policy to phase out this antiquated, environmentally devastating technology," said Angela Haren, who works with the nonprofit California Coastkeeper Alliance. Studies show that larvae and small fish get pulled in with the water, while turtles, sea lions and seals get pulled onto the intake screens, she said.
Reid Cherlin, a spokesman for the Obama-Biden presidential transition, said the president-elect "has made it clear that his administration will uphold the principle of scientific integrity." Obama will work with his EPA administrator to "restore environmental protections ... and implement an aggressive agenda for clean water and healthy air," Cherlin said.
The federal regulation was adopted in 2004 and opens the way for 550 power plants nationwide to keep using the old system. Appearing in the Clean Water Act, it was partly struck down in court as a result of a lawsuit filed by national environmental groups led by Riverkeeper. The Stanford Environmental Law Clinic has a challenge pending in state court. The cases will be decided this year by the U.S. and California Supreme courts.
If the high courts rule to leave the matter to the EPA's discretion, the new EPA could rewrite the regulation or Congress could act, attorneys say.
EPA staff scientists wrote the regulation for the nation's 550 power plants, requiring for the first time those operating on sensitive estuaries and coastal waters to switch to a safer system. At the end of the rule-making, the White House removed that provision, and added a cost-benefit test, pitting the cost of upgrading systems against the worth of aquatic life destroyed.
Riverkeeper sued the EPA, charging that the added cost-benefit provision was illegal and that the EPA had to require a higher standard of "best available technology." The group won an appeal in federal court before an industry group brought the issue to the nation's high court.
In the meantime, the EPA advised local agencies to use "best professional judgment" when issuing individual permits on existing plants, EPA spokeswoman Enesta Jones said.
After negotiations, in 2006, the San Francisco Bay Regional Water Quality Control Board issued a permit to the Mirant power plant that lasted until Jan. 1 and said it was the intention of the board to prohibit the use of the harmful cooling system, unless Mirant demonstrated that it did no significant harm in San Francisco Bay.
Mirant has not demonstrated that in any study. Six months ago, it requested an extension of the permit, which the regional board granted. Bruce Wolfe, the regional water board's executive officer, said Tuesday that the pending Supreme Court decision has been slowing the regulation process.
He and other regional regulators are waiting for a policy clarification from the state water board, Wolfe said. The state water board is allowing most all of the state's electric power plants to keep operating the old cooling systems.
Chip Little, a Mirant spokesman, said the company will comply with its current permit, which allows it to use the same cooling system, until the water board issues a new permit.
San Francisco City Attorney Dennis Herrera said he was "extremely disappointed" in the regional board's response, adding: "I'm going to do everything in my power get this old, polluting power plant shut as quickly as possible."
Last week, state Sen. Ellen Corbett, D-San Leandro, introduced a bill aimed at phasing out old cooling technology.
Read more about cooling systems
-- California Energy Commission:  links.sfgate.com/ZFVV
-- Sen. Ellen Corbett's bill, SB 42: links.sfgate.com/ZFVU
Bill to regulate coal ash ponds introduced...DINA CAPPIELLO, Associated Press Writer
A West Virginia Democrat is introducing legislation that would set the first federal standards for coal ash ponds at power plants.
The legislation comes after two recent spills from coal waste ponds in Tennessee and Alabama highlighted the lack of federal regulation.
The bill introduced by Rep. Nick Rahall would direct the Interior Department to set uniform design and engineering standards for coal ash ponds at power plants. The agency already has similar regulations for coal slurry ponds at coal mines.
Other lawmakers are pushing the Environmental Protection Agency to develop standards for coal ash ponds. Obama's pick to head the EPA said Wednesday at a Senate hearing that she would take another look at setting federal standards.
Court: TVA must install pollution controls near NC...Tuesday, January 13, 2009
The Tennessee Valley Authority must install pollution controls at four coal-fired power plants that spit emissions into North Carolina, a federal judge ordered Tuesday, siding with the state in its lawsuit against the nation's largest public utility.
The lawsuit filed in January 2006 by North Carolina Attorney General Roy Cooper argued the TVA wasn't doing enough to control emissions of sulfur dioxide, nitrogen oxides and mercury that drift east into North Carolina's mountains.
"This will help our air, our health and our travel and tourism economy," Cooper said in a statement.
Cooper's lawsuit asked the court to order the TVA — a federally owned corporation that serves 9 million customers in seven Southeastern states — to lower emissions from 11 coal-fired plants in three states to levels that would meet North Carolina's Clean Smokestacks Act by 2013.
Doing so, the state argued, could reduce premature deaths by 1,400 annually across the region.
U.S. District Court Judge Lacy Thornburg, who heard testimony during a 12-day trial last summer, ordered the four plants closest to North Carolina — three in Tennessee and one in Alabama — to install scrubbers and other controls, as well meet specific emissions caps.
In his ruling, Thornburg detailed the pollution controls the TVA has already installed, or has plans to install, at the plants. He ordered the utility to complete those, then maintain them year-round.
"TVA is disappointed by the court's decision. We are continuing to analyze it. In the meantime, TVA is committed to continue its work to improve the region's air quality," TVA spokesman John Moulton said from agency headquarters in Knoxville, Tenn.
The cost for TVA to make the four plants comply with the ruling was not immediately known. At trial, experts from both sides pegged the cost of installing the requested pollution controls at all 11 plants between $3 and $5 billion.
Before the trial started, the TVA said it had already spent some $4.8 billion during the past few decades to improve air quality and emissions, with another $1 billion in the works and plans for $3 billion more in the next decade.
The four plants covered by the ruling are the closest to Great Smoky Mountains National Park, which straddles the Tennessee-North Carolina state line. The Bull Run plant now has a $277 million smokestack scrubber. Two scrubbers costing $500 million at the Kingston plant will come online later this year and in 2010. Engineering has begun on a $300 million scrubber to start in 2013 at its John Sevier plant.
The fourth plant, Widows Creek in Alabama, has had scrubbers in operation for about 20 years on the two largest of its eight boilers. There are no immediate plans to add more.
Thornburg denied the state's request to add controls and caps at the seven other plants cited in Cooper's lawsuit, finding North Carolina failed to prove emissions from those facilities hurt the state's air quality.
"We're thrilled," said Molly Diggins, the North Carolina director of the Sierra Club. "Certainly we would like all of the plants to have to reduce their emissions. But these four plants, the judge made a good case that these have the most impact on North Carolina's air quality."
The ruling is the latest environmental blow for TVA, which is still reeling from a major coal ash spill at one of the Tennessee power plants covered by Tuesday's court ruling.
More than 1 billion gallons of toxin-laden sludge spewed into a lakeside neighborhood on Dec. 22 after a coal ash pond breached at the Kingston plant. The spill covered nearly 300 acres several feet deep in grayish muck, destroying three homes and damaging others. The cleanup tab could reach hundreds of millions of dollars.
Then last Friday, waste leaked into a creek from a retention pond at a coal-burning plant in Stevenson, Ala. TVA officials said the discharge — water laced with calcium sulfate, a component of a material known as gypsum — presented no danger to people or the environment. But environmentalists and some lawmakers said it was more evidence Congress needs to overhaul coal waste regulations.
Watchdog calls for cleaning up solar industry...David R. Baker
Despite its reputation, solar power isn't completely clean.
Most solar cells are made of silicon, and the process of refining it produces waste that can damage the environment. Some newer solar cells use other materials that are themselves toxic and require proper handling.
Now an environmental watchdog group wants to make the industry cleaner.
The Silicon Valley Toxics Coalition will release a report today detailing the potential environmental problems facing the solar business, which has grown quickly as the world looks for alternatives to fossil fuels.
The report does not argue that sticking a solar panel on your home poses a health risk. Instead, it focuses on the environmental effects of manufacturing solar cells. And it calls for creating a recycling program for used solar panels so they don't end up in landfills.
The point is not to stifle the industry, said coalition Executive Director Sheila Davis. She wants the solar industry to make sure its entire supply chain is as clean as possible before the industry gets bigger.
"The fact is that solar is a very valuable technology that we hope will expand," Davis said. "There's a variety of different technologies that are emerging right now. And as companies drive down their costs and try to increase the efficiency of their panels, they should be trying to improve their environmental performance as well."
Solar industry representatives say they're well aware of many of the issues raised in the report and are taking steps to address them, such as requiring silicon producers to recycle their waste.
"The solar industry views its environmental stewardship very seriously," said Sue Kately, executive director of the California Solar Energy Industries Association. "That's a big part of who we are."
Many of the environmental issues raised in the report are similar to those faced by the computer industry as it grew. That's no accident, considering that silicon is vital to both industries. Demand for silicon exploded in recent years, fueled in large part by the growing popularity of solar power.
But the process of producing and refining silicon can produce toxic substances, such as silicon tetrachloride. A Washington Post story referenced in the coalition report found that a new silicon plant in China had been dumping waste on nearby farmland, killing the crops.
Not all solar cells use silicon. Some of the newer thin-film cells use a mixture of other materials deposited on ultra-thin sheets, a process that can dramatically lower production costs. But some of the materials used, such as cadmium telluride, are toxic.
Finally, some researchers are using nano-materials in solar cells, and the potential health effects of those tiny particles have not been thoroughly studied, according to the coalition.
Davis said solar companies need to examine the entire "life cycle" of their cells and panels, studying the health and environmental implications from the earliest stages of manufacturing to their eventual disposal.
"I'm hoping people will realize that not looking at the life cycle of their products is an old-school way of thinking," she said. "That's an archaic way of doing things."
Solar industry representatives say they're aware of that need.
San Jose's SunPower Corp., for example, manufactures its cells in the Philippines and buys silicon from "all over the world," said Julie Blunden, the company's vice president for public policy. But the company only buys silicon from producers who meet SunPower's standards. "We don't buy from any facility that doesn't have recycling. That's like missing an entire part of the plant," Blunden said.
She said the coalition's idea of recycling used solar panels would work. But she doubts the solar industry would produce a flood of e-waste, the way the consumer electronics industry has. Most solar panels are designed to last 25 to 30 years, and consumers won't discard them the way they toss out obsolete computers and cell phones, she said.
"It's entirely possible that we'll see the current generation of solar panels operating well beyond their expected life," Blunden said.
The report will be posted today on the coalition's Web site, www.etoxics.org.
Mercury News
California foreclosures set record in 2008; more on way...Sue McAllister
Nearly a quarter-million California properties were foreclosed upon in 2008, breaking a record set the year before, according to a report Tuesday from ForeclosureRadar, a Discovery Bay company.
And in December, following a short lull induced by new state legislation, the number of "notices of default" shot back up to levels reached last summer, indicating that more foreclosures are on the way, the company said.
Last year's statewide total of 249,940 foreclosures was up 158 percent from just under 97,000 in 2007, when total foreclosures barreled ahead of the former record-high year of 1996. That year, just over 58,000 California owners lost their properties to foreclosure, according to MDA DataQuick, another company that tracks such information.
The year-end foreclosure numbers are sobering, and so was the month of December, by at least one measure. After three months in which "notices of default" were far fewer than earlier in 2008, in December lenders filed 42,421 such notices statewide, nearly doubling the total number sent to California property owners in November. Default notices are the documents lenders send to late-paying homeowners to notify them that foreclosure proceedings are beginning.
Notices of default had dropped off steeply in September following the enactment of a new state law requiring mortgage companies to give delinquent homeowners 30 days' notice before beginning the foreclosure process with a notice of default.
But the rebound of default notices showed that the California Legislature's effort to reduce foreclosures by passing the law, known as SB 1137, has not been successful, said Sean O'Toole, founder of ForeclosureRadar.
Part of the problem, he said, is that most homeowners who default on their loans are badly "underwater," or owe much more on their homes than the homes are now worth. "Lenders simply don't have sufficient reserves to lower principal balances enough to help homeowners in foreclosure escape the prison of debt their home now represents," O'Toole said in statement released with the data.
He said the average foreclosed property has a market value $180,000 less than the owner's mortgage balance.
In Santa Clara County, there were 6,268 foreclosures last year, up 270 percent from 2007, the biggest increase for any large county in the state. Monterey County's trend was nearly as drastic, with foreclosures rising 262 percent, to a total of 3,760.
O'Toole said Santa Clara's increase in 2008 was steeper than those of other counties because "there was very little foreclosure activity in Santa Clara in 2007 compared to other places that got an earlier start."
For sheer number of foreclosures, however, Southern California counties suffered most last year.
The state's foreclosures last year represented nearly $108 billion worth of outstanding mortgages.
For more information, go to www.foreclosureradar.com
Santa Cruz Sentinel
State freeze could put UCSC's biomedical facility on ice...J.M. BROWN
SANTA CRUZ -- A planned $65.7 million biomedical research facility at UC Santa Cruz could be put on hold along with other campus projects already under way until a freeze on state-bonded projects is lifted, a top official said Tuesday.
Bids on construction of the 92,000-square-foot research center are due Feb. 3, but UCSC has asked firms to maintain their bids beyond the standard 60 days so the campus can award contracts as soon as the state lifts the moratorium, campus architect Frank Zwart. UCSC also has asked for extended bids from firms interested in working on a $4.5 million storm water drainage improvement project.
The state's Pooled Money Investment Board froze $4 billion in public works projects statewide Dec. 17 amid California's deepening financial crisis. The university has asked for an exemption for several projects already under way, including:
n $74 million in expansion and seismic upgrades to McHenry Library.
n Construction of a new $20.6 million Digital Arts Facility.
n Construction of a new $3.8 million, 5,600-ton cooling tower.
Zwart said he hoped UCSC could continue working for several months on the library and digital arts complex because they are partially funded by non-state money. He did not say when UCSC would be forced to terminate those projects if future state cash is withheld.
But the cooling tower, which is designed to better control temperatures in campus buildings, is bankrolled by the state.
The foundation is half-built, but Zwart said, "We are studying the implications of suspending or terminating the construction contract."
For the Biomedical Sciences Facility and other projects still in the bidding phase, Zwart said the worst-case scenario is that UCSC will have to rebid the plans after the state releases bonding.
"We're just starting that conversation with the bidders, in an effort to provide both them and us with as much flexibility as possible in these difficult circumstances," Zwart said, adding the university requested that construction firms submit bids that could be revisited after April.
Just four days before the state announced its funding freeze, the campus cut down 59 trees on Science Hill to make room for the biomedical facility. Tree sitters who occupied redwood platforms for 13 months in protest of campus growth voluntarily came down the day before in anticipation of the clearing operation.
A woman who once represented the tree-sit did not return a call seeking comment Tuesday about the possible stall in building the research center, a project tree sitters opposed because it required felling trees and would further the university's animal research activities.
Today, the UC Regents are scheduled to vote on President Mark Yudof's plan to trim freshman enrollment 6 percent next year and immediately freeze compensation for 285 senior managers across the 10-campus system as a way to cope with state cuts. The California State University system also has suspended construction projects bonded by the state and salary hikes for 150 administrators.
Judge throws out Pajaro Valley water lawsuit...Donna Jones - Sentinel Staff Writer
Put one in the win column for the beleaguered Pajaro Valley Water Management Agency.
Santa Cruz County Superior Court Judge Paul Burdick on Tuesday threw out a challenge to an $80 pumping fee critical to the agency's survival.
"Now we can focus on more important issues... establishing a new funding mechanism so we can continue the important work we do, trying to balance the overdraft of the groundwater basin," said interim general manager Mary Bannister.
Pajaro Sunny Mesa Community Services District filed the lawsuit in February, seeking to overturn what's known as the augmentation fee. The agency imposed the fee in 2002 to pay for water supply projects. Similar fees imposed by the agency in 2003 and 2004 were ruled invalid by a state appeals court in 2007 because they lacked voter approval.
The 2002 fee also was not approved by voters as mandated by state Proposition 218.
But Burdick ruled Pajaro Sunny Mesa's lawsuit was too late since litigation over the 2003 and 2004 fees had already resolved the issue, according to agency lawyer Anthony Condotti.
The consolidated lawsuits dealing with the 2003 and 2004 fees ended with a stipulated judgment that rolled back those fees, but left the 2002 fee intact, Condotti explained. Burdick ruled the agreement was binding on everyone who paid the charge, Condotti said.
Pajaro Sunny Mesa could have filed its own lawsuit or joined the consolidated actions during the years of litigation, but "having not done so they can't now come in and try to unravel the stipulated judgment," Condotti said.
Pajaro Sunny Mesa, which serves about 4,000 water customers in North Monterey County, could appeal the decision. District officials did not return calls Tuesday.
Bannister said the victory doesn't guarantee the agency's survival. The 2007 ruling cost the agency $4 million and it has struggled to stay afloat since. By 2010, the agency will be broke without a new revenue stream. Bannister said the agency hopes to gain community consensus for a new fee, which could come before voters in about six months.
The agency was founded in 1984 to manage the groundwater basin that forms the primary source of water for agricultural and residential use in the Pajaro Valley. The groundwater basin is in overdraft, meaning more water is being taken out each year than can be replenished. As a result, seawater has infiltrated underground freshwater supplies near the coast.
Los Angeles Times
Secrecy and the Bush administration
Even in its last months, the insulated Bush administration made it harder for the public to access records...Editorial
In the litany of violations of public trust and accountability by the Bush administration, a last round of restrictions on access to information under the Freedom of Information Act, or FOIA, hardly ranks with, say, warrantless wiretapping. But it is sadly characteristic of an administration that has insulated itself from scrutiny at every opportunity.
A recent report by ProPublica and the Columbia Journalism Review identified a host of ways in which the administration is making it harder for the public to access records heretofore more readily within reach. The Department of Energy wants to eliminate a rule that allowed it to release documents if it concluded that they would serve the public interest. The Department of Education has expanded its authority to refuse release of materials even after they are redacted to remove students' names and identifying information. Other agencies are raising fees for processing and copying. The Securities and Exchange Commission wants to charge $70 an hour for processing some requests -- not that anyone would want to study the efficacy of regulation and enforcement in the stock market.
From its first months, the Bush administration has encouraged bureaucrats to search for reasons to deny requests for information, directly reversing former Atty. Gen. Janet Reno's order to government workers during the Clinton years to opt for release whenever permitted by the FOIA. So the latest actions are best seen not as an epiphany by this administration but rather as mop-up after a long, determined effort to shut the public out of government.
The FOIA is an ungainly device for illuminating the workings of government. It forces agencies to spend time and energy reviewing requests, some frivolous or excessive. Still, it gives the public its clearest window into the actions of taxpayer-funded agencies. Curbs on the FOIA thus represent not just inconveniences for journalists and historians but restrictions on the rights of citizens to hold their elected leaders accountable; as such, they compromise a fundamental right of a democratic people. It is fitting, if dismaying, that the Bush administration should be making one last attempt to shield government from those it is intended to serve.
Solar energy's darker side stirs concern
Cells contain toxic materials that could end up in landfills. Some firms are taking steps to help keep the industry's reputation green...Marla Dickerson...1-13-09
Everybody loves solar, the shiny superstar of renewable energy.
But scratch the surface of the manufacturing process and the green sheen disappears. Vast amounts of fossil fuels are used to produce and transport panels. Solar cells contain toxic materials. Some components can't be easily recycled.
That has some environmentalists worried about a new tidal wave of hazardous waste headed for the nation's landfills when panels eventually wear out. A report to be released today by the Silicon Valley Toxics Coalition warns that the industry and lawmakers need to set policies now to ensure that a clean technology doesn't leave a dirty legacy.
"You can't just call your product green and close your eyes to what's happening in the supply chain," said Sheila Davis, executive director of the San Jose nonprofit group that pushes for green practices in the technology sector.
"The solar energy industry is running into some of the same problems . . . we've seen in the electronics industry," whose waste is polluting U.S. landfills and contaminating groundwater with harmful substances such as mercury and chromium, Davis said.
Solar energy supplies less than 1% of the nation's electricity at present. But the technology is poised for explosive growth. Much of the world's production is centered in Asia, where Davis said some disturbing trends were emerging.
China is major producer of polycrystalline silicon, a key component of solar cells. The Washington Post last year documented how at least one Chinese producer was dumping a toxic byproduct from that manufacturing process on nearby farmland. Experts suspect that firms in other developing countries are taking similar shortcuts.
Silicon isn't the only conductor that can be used to convert sunlight to electricity. Companies are developing cells using other materials. Still, virtually all of them utilize hazardous chemicals that pose potential risks to workers and the environment, according to the coalition's report.
Davis said developing benign substitutes for some of the most dangerous materials was essential for the solar industry to be truly sustainable.
Making the panels is just the beginning. Planning needs to begin now on what to do with millions of these heavy modules as they wear out in 20 to 25 years or are replaced with better technology, environmentalists say.
The high-tech industry generated more than 2.6 million tons of e-waste in the U.S. in 2005, about 87% of which ends up in landfills or incinerators, according to the report.
Most of the rest was exported to developing countries to be dismantled by low-wage workers, many of whom are exposed to dangerous substances lurking in the guts of personal computers and other electronics.
"We don't want solar to go down that path," Davis said.
She said local, state and national governments need to consider legislation to keep cleanup costs from falling to taxpayers. Conscious of protecting the industry's clean and green reputation -- and probably eager to avoid mandates they don't like -- some solar firms are taking action on their own.
In Europe, an industry group known as PV Cycle is pledging to collect and recycle its members' solar panels before they become a major environmental hazard. The 17 companies that signed the accord manufacture the majority of panels there.
In the U.S., First Solar Inc., a Tempe, Ariz., manufacturer of thin-film photovoltaic modules, has developed what many in the industry are calling a model for so-called extended producer responsibility. That's the notion that companies must take responsibility for the cradle-to-grave environmental effects of their products.
First Solar guarantees that it will take back all its solar panels from commercial customers at the end of the product's life, said Lisa Krueger, the company's vice president of sustainable development.
She said First Solar had made recycling those panels an integral part of its manufacturing process so very little material needs to go to a landfill. To back up its promise to customers, the company has funded an independent trust to handle the cost of the collection effort, ensuring that the panels would get recycled even if the company folds, Krueger said.
"We are in business to create environmental solutions," she said. "What good does it do if we create waste problems" in the process?
Washington Post
Government makes decision on gray wolf protection...MATTHEW BROWN and JOHN FLESHER, The Associated Press
BILLINGS, Mont. -- The Bush administration says it is removing gray wolves in the western Great Lakes and northern Rocky Mountains from the federal endangered species list.
But Deputy Interior Secretary Lynn Scarlett said Wednesday wolves in Wyoming will remain under federal jurisdiction because that state has not done enough to assure their survival.
The government has tried previously to remove wolves in both regions from the endangered list and return management authority to the states. But the efforts have been overruled by courts.
Last September, a federal judge sided with animal-rights groups that accused the government of misapplying the law when it lifted protections for about 4,000 wolves in Michigan, Minnesota and Wisconsin in 2007.
New York Times
Jackson Promises to Put Science First at E.P.A....John M. Broder  
Lisa P. Jackson, chosen to head the Environmental Protection Agency, said at her confirmation hearing Wednesday morning that she would assure that political appointees at the agency would not overrule scientists and other professionals to tilt policy decisions.
Her promise was an implicit rebuke of the management of the E.P.A. under President Bush, where career officials’ recommendations were at times ignored in decisions on lead in the air, arsenic in water, and carbon dioxide coming from tailpipes and smokestacks. Senator Barbara Boxer, chairman of the Environment and Public Works Committee, which is considering Ms. Jackson’s nomination, has regularly complained about alleged political interference in scientific and technical decisions on environmental matters.
“Science must be the backbone of what E.P.A. does,” Ms. Jackson said in her prepared opening statement. “If I am confirmed, I will administer with science as my guide. I understand the laws leave room for policy-makers to make policy judgments. But if I am confirmed, political appointees will not compromise the integrity of E.P.A.’s technical experts to advance particular regulatory outcomes.”
Ms. Jackson holds degrees in chemical engineering from Tulane University and Princeton University.
Senator Boxer, in her opening statement, said she had waited a long time for new leadership at the environmental agency. “E.P.A. works for the American people and in my view we have seen it hurt the American people these past eight years.” She said that the agency “needs to be awakened from a deep and nightmarish sleep.”Ms. Jackson, who worked as a career employee at E.P.A. 15 years and most recently served as head of New Jersey’s Department of Environmental Protection, said that President-elect Barack Obama believes that sound stewardship of the economy can co-exist with economic growth. “Done properly,” she said, “these goals can and should reinforce each other.”She said that the administration’s environmental priorities were curbing global warming, reducing air pollution, cleaning up hazardous waste sites, regulating toxic chemicals and protecting water quality.Her confirmation appears on track. The ranking Republican on the committee, Senator James Inhofe of Oklahoma, a skeptic on global warming, called her “accessible and reasonable” and said he planned to vote to confirm her.
Later on Wednesday, the committee was scheduled to consider the appointment of Nancy Sutley, currently deputy mayor of Los Angeles for energy and environment, to chair the White House Council on Environmental Quality
CNN Money
Fear is back on Wall Street
Stocks plunged Wednesday, raising concerns about how long the recession will last and adding to doubts about the effectiveness of the bank bailout...Colin Barr, senior writer
NEW YORK (Fortune) -- Fears about the health of big financial firms and the overall economy have roared back into play, sending the stock market tumbling toward its lowest levels since last November.
The Dow Jones Industrial Average dropped about 300 points one point Wednesday morning following the latest round of dark economic news. Retail sales fell 2.7% from a year ago in December, a decline twice as large as economists had expected.
Department store chain Gottschalks became the latest retailer to file for Chapter 11 bankruptcy protection, a victim of the disastrous holiday shopping season.
In the technology sector, Canadian telecom equipment vendor Nortel (NT) filed for bankruptcy after years of struggling to compete in a fast-changing communications market.
Making matters worse, all of these mounting problems in the economy only add to the worries about the health of balance sheets across the banking industry.
Despite the Bush administration's $250 billion infusion of capital into the banking system, investors continue to fear that big financial firms' capital - already pressured by souring mortgages and trading losses - will be eroded by rising defaults on credit cards, auto loans and other types of lending as people around the globe lose their jobs.
"The financial services group is just in free fall," said Bill Larkin, a fixed income portfolio manager at Cabot Money Management in Salem, Mass. "The scale of economic destruction we're seeing right now is going to take a long time to turn around."
Adding to the unease was the news of the latest restructuring effort at Citigroup (C, Fortune 500), the troubled New York financial giant that has received more than $300 billion in federal aid and loan guarantees in recent months. Citi said Tuesday it would spin off 51% of its Smith Barney brokerage arm into a joint venture with Morgan Stanley (MS, Fortune 500).
The move will help Citi to shrink its $2 trillion balance sheet and bring in $2.7 billion in cash, but investors weren't bowled over: Citi shares plunged nearly 20% Morgan Stanley dropped about 8% as well.
As go banks, so goes the market
Wednesday's banking-sector swoon extended a theme that has played out since 2009 began. The stock market has fallen steadily - the Dow is off 7% this year after posting a 38% plunge last year - but the shares of big financial firms have been among the hardest hit. The KBW Bank index, which fell more than 5% Wednesday, is off 19% for the year.
Among the many financial industry losers have been Bank of America (BAC, Fortune 500), which slid 5% in midday trading Wednesday to its lowest point since 1995.
Analysts expect the firm, which just completed its purchase of brokerage giant Merrill Lynch, to post a fourth-quarter loss next week and that it may cut its dividend for the second time in three months to preserve capital.
"One of the main concerns investors have with bank stocks is fear that the banks will be forced to raise equity capital that will lead to significant dilution to common shareholders," Citigroup Global Markets analyst Keith Horowitz wrote in a note Monday.
Bank stocks fell sharply in Europe as well, after Deutsche Bank (DB) said it would post a $6 billion fourth-quarter loss and Barclays (BCS) set plans to slash 2,000 jobs.
The unrest in the financial sector highlights one of the shortcomings of the official response to the panic that broke out last fall after Lehman Brothers failed, Larkin said.
"Part of the problem is that the companies that made mistakes and took on too much risk are being propped up," he said. "Normally, the competitors benefit when the poorly run companies fail, but now no one is able to benefit because there have been no failures."
Larkin said the unease in the financial sector now points to the need to let some troubled financial firms fail. Otherwise, he said banks will continue to hold back on lending, and the economy will continue to spiral downward.
"We've been saying around here we were going to get a dose of reality in the first quarter," Larkin said, noting that stocks posted a modest year-end rally even as economic data pointed to a deepening slump. "Now we're seeing that things are even worse than anticipated."
Citi plunges as investors brace for break-up
In the first step of an expected overhaul, the bruised bank is selling 51% of Smith Barney to Morgan Stanley; Citi bumps earnings release to Friday...David Ellis
NEW YORK (CNNMoney.com) -- Citigroup said late Tuesday that it plans to merge its Smith Barney brokerage division with that of peer Morgan Stanley, a move that is expected to mark the beginning of a break-up of the troubled banking giant.
A source close to the matter indicated that the company will unveil a reorganization plan in the coming weeks. The Wall Street Journal reported that the company could time the announcement to coincide with its fourth-quarter results.
Citigroup was originally expected to announce those results on Jan. 22. But the bank announced Wednesday morning that it was moving the release to this Friday.
A company spokesman declined to comment on speculation about a restructuring.
Investors, however, appeared little encouraged by the news. Citigroup shares plunged 16% in Wednesday morning trading. Morgan Stanley stock lost more than 8%.
Smith Barney deal to create brokerage giant
Under the terms of the Smith Barney agreement, Morgan Stanley (MS, Fortune 500) will take a 51% stake in the joint venture and pay Citigroup (C, Fortune 500) $2.7 billion for the stake.
In a statement released by both companies Tuesday, Morgan Stanley said it reserves the right to raise its stake in the joint venture over the next three to five years, before ultimately assuming control after five years.
The combined entity, which would be called Morgan Stanley Smith Barney, would be one of the nation's largest brokerages, with more than 20,000 financial advisors and $1.7 trillion in client assets.
"We are creating a new industry-leading wealth management franchise," said John Mack, Morgan Stanley's chairman and CEO, in a statement.
While the deal is expected to save the two firms a combined $1.1 billion, both appear poised to gain from the joint venture. Morgan Stanley would position itself to build its wealth management business, while Citigroup would generate some quick cash, and still maintain a sizeable stake in its reliable Smith Barney unit.
In a conference call following the announcement, Morgan Stanley co-president James Gorman, who will serve as chairman of the joint venture, and Mike Corbat, CEO of Citi's global wealth management division, said it was too early to tell how many jobs could be lost as a result of the tie-up.
They hinted that some of the top performers might receive retention bonuses to stay on, but could not indicate what it would cost the two firms.
Analysts characterized the move as necessary for Citigroup, as the company is expected to report a $3.8 billion loss for the fourth quarter.
"There is no other way to view this move, in our opinion, than as a way for Citigroup to raise cash prior to its 4Q earnings release," Oppenheimer analyst Meredith Whitney wrote in a note to clients Wednesday.
More moves ahead for Citi?
Tuesday's action, however, represents what some consider to be the first step by Citigroup to dismantle its so-called "universal banking" business model, offering all types of financial products to consumers and businesses.
Citigroup observers have speculated that any number of its different units could be shed as part of a restructuring plan, including international operations such as Banamex, one of Mexico's largest commercial banks.
Others have speculated that Citigroup might pursue a bolder approach by trying to sell other divisions, including its massive credit card unit.
Some analysts previously suggested that the company's transaction services business, which helps finance trade for large corporations, might also be on the block. However, a source close to the matter said that the company has no plans to sell that business.
A breakup of Citigroup, however, would represent a major departure from the company's so-called "universal bank" business model, which has been in place for more than a decade following the merger between Citicorp and insurance company Travelers in 1998.
Citigroup CEO Vikram Pandit had maintained his commitment to the company's position as a one-stop financial shop for businesses and individuals as recently as last fall.
But the New York City-based bank has come under increasing pressure to take drastic action in recent weeks.
The fourth-quarter of 2008 is not likely to be the end of Citi's profit woes either. Analysts widely expect the banking giant to finish 2009 in the red as well.
At the same time, regulators are anxious for Citigroup to get its affairs in order. The government brought the bank back from the brink of collapse in November by agreeing to absorb a portion of its future losses tied to more than $300 billion in assets.
In addition, Citigroup has received an investment of $45 billion from the Treasury Department as part of the government's controversial bank bailout program.
Taming inflated home appraisals
New guidelines aim to reduce the pressure that real estate appraisers feel to boost home values...Les Christie
NEW YORK (CNNMoney.com) -- Washington policy makers have taken aim at one of the main contributing causes to the housing crisis: inflated appraisals.
When home prices were soaring, one of the driving factors was that appraisers, pressured by loan officers and mortgage brokers, kept hyping home values. Not only did homebuyers wind up paying more, but the exotic mortgage products they needed to finance their purchases later exploded, setting off the financial and economic turmoil the nation is facing today.
Now, the Federal Housing Finance Agency (FHFA), the government agency created to oversee Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), has announced a plan to curb the influence that loan originators exert on appraisers to overvalue homes. A new Home Valuation Code of Conduct, which will take effect this May, is an attempt to improve the reliability of appraisals for mortgages sold to the two companies. The guidelines prohibit lenders from coercing, extorting, colluding with, intimidating or bribing appraisers into making inaccurate appraisals.
"It's a step in the right direction," said Tom Inserra, president of Pinnacle Peak Appraisers in Arizona, who has testified before Congress on appraisal issues. "Separating the lending function from the selling function had to be done."
Fannie and Freddie have a strong interest in ensuring the soundness of appraisal reports because they're the basis for the mortgage loans that they buy from lenders, according to James Lockhart, FHFA's director.
Most mortgages in the United States are now bought by Fannie and Freddie, who then securtitize them and resell them to investors.
High hopes
Appraisals get inflated because the incomes of mortgage brokers and loan officers depend on how many mortgage loans are approved. A high appraisal ensures that the house - the collateral backing the loan - is worth more than the amount of the loan, which reduce the bank's risk.
Inserra knows how intense the pressure to inflate values can get. Three years ago, he found himself battling one of his largest clients. The bank's senior vice president in charge of mortgage lending tried to get Inserra to "hit a number," industry parlance for inflating the appraisal. He wouldn't do it.
"The discussion got so heated," recalled Inserra, "that he threatened to do harm to my family if I didn't co-operate. I really thought he might do it. I got a restraining order from a judge."
In the end, the banker didn't hurt his family, but he did punish Inserra by depriving him of the $200,000 in annual business he had been getting from the bank.
That may be an extreme case, but it was not isolated. A 2007 survey by October Research found that 90% of appraisers said that they felt pressured to fudge figures.
Enforcement is key
Not everyone is convinced that the new guidelines will help.
"I'm very skeptical," said Elizabeth Kern, a past president of the National Association of Independent Fee Appraisers (NAIFA). "I think the only thing that will change is that we'll see the better appraisers, the more experienced ones, not getting the work."
Inserra wonders about enforcement of the rules.
"The concern is that, unless there's an enforcement mechanism that works better than what we have today, it won't do much good," he said.
Under the new rules, complaints from appraisers, consumers, or anyone else will be fielded by the "Independent Valuation Protection Institute," which FHFA will set up.
If a lender logs too many complaints, it may be prohibited from selling its loans to Fannie and Freddie. That should be enough to make lenders police their appraisals more carefully, since the government entities are virtually the only buyers left standing.
The National Association of Mortgage Brokers is not happy with the plan. According to its president Mark Savitt, mortgage brokers often work closely with appraisers to make sure applications are error free and accurate. That kind of co-operation may be construed as crossing over the line into trying to influence appraisals, even when it's not.
Savitt said increased enforcement of existing regulations is all that's needed to make the appraisal inflation problem disappear. "Beef up the penalties for the laws that we already have and enforce those laws."
Right now, few loan originators are held to account for pressuring appraisers. Bill Garber, director of government and external relations at the Appraisal Institute, reports that only about 15 states have any laws targeting loan officers and mortgage brokers, and these are not often enforced.
Appraisers themselves are more likely to get hit; more than 250 lost their licenses last year for hyping values, he said.
But if the new regulations help prevent some of the abuses, it could have a healthy impact on the housing market.
Lenders will have much more confidence that the home values are justified and that could make them more willing to lend.
Loss may loom for JPMorgan Chase
Despite managing to stay ahead of its peers over the past year, some analysts think the bank slipped into the red during the fourth quarter...David Ellis
NEW YORK (CNNMoney.com) -- JPMorgan Chase has so far avoided quarterly losses throughout the credit crisis. Those days may be over.
Earlier this week, the banking giant bumped up the release of its fourth-quarter results to this Thursday - a move viewed by some to get a negative quarterly report out of the way. The bank was originally scheduled to report results on Jan. 21.
Analysts have steadily lowered their expectations for JPMorgan Chase's results in recent weeks after chief executive officer Jamie Dimon suggested in mid-December that his company's quarterly performance would be dismal.
As of Wednesday afternoon, expectations were for the New York City-based bank to break even for the fourth quarter. But earlier Wednesday, the consensus estimate was for a loss of a penny per share. Forecasts range from a profit of 16 cents a share to a loss of 20 cents.
"It is all going to be bad," said Matt McCormick, analyst at Bahl & Gaynor Investment Counsel. "The fourth quarter was bad for all these guys."
But this wouldn't be the first time that analysts have feared the worst about JPMorgan Chase (JPM, Fortune 500) numbers, only to be proved wrong.
The New York City-based bank was widely expected to report a third-quarter loss in October, as a result of its purchase of the failed savings and loan giant Washington Mutual.
The company still managed to stay in the black, reporting net income of $527 million, or 11 cents a share.
But it's getting tougher to imagine how JPMorgan Chase can avoid a loss this time around.
Capital markets activity, which encompasses everything from underwriting to mergers and acquisitions, has been downright lousy in recent months. That is certain to take a bite out of the bottom line of JPMorgan's investment banking business, even though the unit has gained market share in recent months.
There is also the risk that the company will once again have to take additional writedowns on a variety of assets, including mortgage-related securities and its leveraged loan portfolio.
But some analysts argue that the biggest source of pain for the bank will be its loan loss provisioning.
With the economy continuing to deteriorate and unemployment expected to be on the rise throughout 2009, some analysts believe JPMorgan Chase and other large banks will have to aggressively set aside cash this quarter to cover future loan losses.
"There is a risk that they will have to take lot of provisions for further losses," said Henk Van Tulden, an analyst who tracks JPMorgan Chase for the Netherlands-based firm Financiele Diensten Amsterdam.
JPMorgan Chase may still be able to fare better than peers such as struggling Citigroup (C, Fortune 500), however.
The company's purchase of WaMu and its last-minute rescue of Bear Stearns last March may actually help boost profits. Some analysts anticipate the two deals could add several cents per share to the bank's earnings this quarter.
At the same time, the firm could report another surge in deposits. Big banks like JPMorgan Chase and Wells Fargo (WFC, Fortune 500) both said they attracted more deposits in the third quarter as consumers looked to put their savings with institutions that were perceived to be safe.
It is also likely that Dimon will remind investors that the bank remains flush with capital.
"They are going to look for small victories," McCormick said.
But with a rough year behind it and concerns growing that 2009 will not look much better for banks and the overall economy, don't expect Dimon to offer any sort of outlook that is much better than the well-worn line of "cautiously optimistic."