Merced Sun-Star
Merced County leads state in 2008 foreclosures...The Associated Press
MERCED, Calif. A new report shows that Merced County has the dubious distinction of leading the state in the percentage of homes in foreclosure.
According to RealtyTrac Inc., one out of 10 houses in the county - or 8,291 homes - is in foreclosure, which was the highest rate in California in 2008.
Two other San Joaquin Valley counties rounded out the top three. San Joaquin County ranked second with 9.46 percent - or 21,127 - of its homes in foreclosure, and Stanislaus County was third with 8.9 percent of properties - 14,883 - owned by the bank.
In Merced County, the number of filings in 2008 jumped by 122 percent over 2007.
According to the report, 523,624 properties are in foreclosure statewide.
Letter: Legacy of unpaid bills...LOUIE BANDONI, Merced
Editor: Your article on Jan. 14 on Riverside Motorsports Park was interesting but came as no surprise. The taxpayers in this county will be stuck with John Condren's bills because our Board of Supervisors did not do its homework in 2006.
I am a Merced native and a farmer. I am a past president of the Merced County Farm Bureau, and was president during the RMP approval process that brought suit against RMP and Merced County.
I attended most of the supervisors' meetings and our subsequent successful trial. Condren came to the Farm Bureau to promote his project. After his presentation, I became very skeptical and felt his answers were fa from accurate.
The RMP approval process in my opinion was put on the fast-track by then-supervisors chairman Mike Nelson and was completed during his term that ended in December 2006. Hundreds of us had to crowd the supervisors' chambers during the very busy holiday season.
If more time was given to study this project, certainly the altered contract by Condren with Merced County and his lack of funds would have been discovered before any votes.
Unfortunately, the only legacy left behind is a trail of unpaid bills. Supervisor Deidre Kelsey was the only one on the board who saw the improprieties and inaccuracies and consequently voted consistently against it.
Supervisor Kelsey will be chairwoman this year, and I am confident under her leadership that the entire board and taxpayers of this county will benefit. I would also like to congratulate Hub Walsh as our newest supervisor and wish him the best.
Modesto Bee
State ag gets $11M for clean air efforts...Bee Staff Reports
A nearly $11 million influx of federal money will help California farmers and ranchers reduce air pollution.
The funding, announced Thursday, will cover part of the cost of efforts such as replacing old diesel engines, controlling dust from roads and fields, and shredding rather than burning limbs pruned in orchards.
"We all want the air to be clean enough so everyone can clearly see the full splendor of California's landscapes," said Ed Burton, state conservationist for the Natural Resources Conservation Service, in a news release.
The agency, part of the U.S. Department of Agriculture, provided the money under the farm bill passed by Congress last year. The bill, which lays out five years of farm and nutrition spending, has much more for California pollution control efforts than in the past.
The San Joaquin Valley fails to meet the requirements of the federal Clean Air Act, so the region has the most stringent air quality rules in the nation. Farmers are expected to do their part to reduce pollution caused by farm equipment and operations.
"Historically, there has been a serious lack of funding to assist agriculture operators with meeting the tough regulations," said Rep. Dennis Cardoza, D-Merced, in another news release. "We have unique challenges in preserving the economic viability of our region's No. 1 industry, while working to improve the air quality."
Cardoza and Sen. Barbara Boxer, D-Calif., worked to include air quality grant funding in the farm bill. California is getting $10,943,940, nearly a third of the total nationwide in the first round.
The money will be distributed through the Environmental Quality Incentives Program. It will be added to about $5 million already on hand for California air projects.
Paul Wenger, a Modesto-area nut grower and first vice president of the California Farm Bureau Federation, said the money is welcome but he would like to see more funding for research on pollution-control methods.
He noted, for example, that shredding tree limbs can provide nutrients for the orchard soil, but research is needed on increasing the decomposition rate.
Fresno Bee
EPA to regulate mercury from cement plants...JOHN FLESHER
TRAVERSE CITY, Mich. Federal regulators have settled a lawsuit with environmental activists and nine states over standards for mercury emissions from cement plants, the plaintiffs announced Friday.
Earthjustice, an environmental law firm based in Washington, sued the Environmental Protection Agency in 2007 on behalf of activist groups. The firm said existing federal regulations that exempted older cement kilns failed to impose adequate mercury pollution controls.
Nine states, including New York and Michigan, also joined the suit, contending the agency had not based its standards on the latest pollution control technology.
About 150 kilns around the nation generate nearly 23,000 pounds of airborne mercury a year, according to Earthjustice. Mercury, a toxic metal that can damage the brain and nervous system, is generated from the raw materials and some fuels used in cement-making.
The agency had issued mercury regulations for cement plants three years ago, but they applied only to kilns built after Dec. 2, 2005. Most operating kilns, however, were built earlier and were exempt.
Under the settlement, the agency will propose a mercury rule for all plants by March 31 and make a final decision within a year.
"EPA is carefully considering what an appropriate standard should be for mercury emissions from cement kilns," spokeswoman Cathy Milbourn said.
New York Attorney General Andrew Cuomo said the EPA "has made the right choice by going back to the drawing board and committing to adopt new hazardous air pollutant standards for cement plants that comply with the Clean Air Act."
Jim Pew, an attorney for Earthjustice, said the agency finally appeared to be taking the matter seriously.
"Cement plants are among the worst mercury polluters in this country," he said. "It's encouraging that there's been a change of heart."
The Portland Cement Association, which represents cement manufacturers, will ask the agency to make business-friendly demands, said Andy O'Hare, vice president of the association's regulatory affairs.
"The industry's not doing well right now," O'Hare said. "A good chunk of the U.S. cement production capacity is shut down because of market circumstances. We're certainly not looking to add to our costs."
Other states involved in the lawsuit are Connecticut, Delaware, Illinois, Maryland, Massachusetts, New Jersey and Pennsylvania.
Sacramento Bee
Highway 50 carpool lanes deal approved...Tony Bizjak
A Sacramento judge gave his OK Friday to what's being called a landmark agreement between state officials and environmentalists to allow carpool lanes on Highway 50 in Rancho Cordova.
The lawsuit settlement, brokered this week by Senate President Pro Tem Darrell Steinberg, clears a major sticking point in state budget negotiations, legislative leaders said.
Gov. Arnold Schwarzenegger has insisted the Highway 50 project and nine others statewide be fast-tracked as part of an economic stimulus package attached to a state budget agreement.
Legislative Democrats balked on Highway 50 in particular, saying the state should not pre-empt an ongoing environmental lawsuit.
With Superior Court Judge Timothy Frawley's signature in hand, state Transportation Department officials say they plan to start work late this summer on seven miles of carpool lanes between Sunrise Boulevard and Watt Avenue.
"The earlier the better," Caltrans head Will Kempton said. "It's a shot in the arm to the local economy."
Caltrans planners say the freeway widening will smooth traffic on what has been a troublesome corridor, where congestion occurs in both directions, morning and evening, as some commuters head to downtown Sacramento, others to Rancho Cordova's office parks.
In exchange, Caltrans has agreed to finance $7 million in improvements to the Sacramento Regional Transit light-rail line that parallels the freeway.
Caltrans also agreed to pay to make a pedestrian and bike crossing from an old railroad bridge over Highway 50 near Mather Field Road and a light-rail station.
"The agreement provides twice the number of jobs and economic stimulus as the initial highway-only project while also providing enormous environmental and community benefits by creating more transit on the Highway 50 corridor," Steinberg said.
The Sacramento Democrat said the deal removes a months-old stumbling block in the budget negotiations, but added, "we (still) have a lot of work to do."
Regional Transit executive Mike Wiley said the funding will allow his agency to introduce a limited-stop express train to and from downtown Sacramento, and to run trains to the Hazel Avenue light-rail station every 15 minutes instead of the current 30-minute arrivals.
RT also will receive funds that will make it easier to eventually bring trains into downtown Folsom every 15 minutes.
The original lawsuit calling for more environmental review was brought by the Environmental Council of Sacramento and the Neighbors Advocating Sustainable Transportation community group.
Environmentalists said the deal gives Highway 50 corridor travelers more choice and shows the state can respect environmental law and still create jobs.
"We are happy that improvements for the benefit of vehicle traffic in the Highway 50 corridor are now tied to improvements to transit service in the same area," ECOS spokesman Eric Davis said.
"We also hope that resolution of our lawsuit will help prevent the undermining of (state environmental review law) during the difficult budget negotiations that are under way."
State officials said similar talks are ongoing regarding another major transportation project subject to an environmental lawsuit – a fourth bore for the Caldecott Tunnel in the East Bay.
Caltrans Director Kempton said the $165 million Highway 50 project will be funded half by state bonds and half by Sacramento County sales taxes.
He pointed out that the state does not yet have the bond money and it needs a balanced budget soon before it can go to the financial markets to get that money.
California frees up $650 million to pay contractors...Andrew McIntosh
After hearing desperate pleas from contractors facing mounting piles of unpaid bills, California's top financial leaders voted Friday to free up $650 million so state agencies could pay some bills.
The California Pooled Money Investment Board, whose members include Treasurer Bill Lockyer and Department of Finance Director Michael Genest, voted to open the financial tap after several contractors told a packed meeting they hadn't seen payments for December work.
Their vote came after Sacramento contractor Norman "Skip" Brown politely blasted the state officials.
"You have to pay your bills," Brown admonished. "If you don't pay your bills, you won't have a contracting industry!"
Brown, president of Delta Construction, said his order book has plunged 55 percent in a year and he hasn't taken a paycheck in six months.
Contractor Phil George made light of his own company's declining fortunes.
"We didn't use to be a small business, but we're becoming one," George quipped.
His order book is down 40 percent in a year, he said, making it important that the state pay its bills in a timely way.
"Contractors need to know if they will be paid in February or they will decide to shut it down next week," he added.
The investment board's move allows the Department of Finance to pay bills for contract work already done, including $102.9 million owed for work on Department of Transportation highway and infrastructure projects.
Caltrans Director Will Kempton praised contractors for their patience, telling the board that none has dumped the state amid its budget and cash flow chaos.
Genest said Finance Department officials will allocate the bill payment money after deciding which bills are "the highest priority" and in the "best interests of the state" to pay.
About $500 million will be used to pay for already-performed contract work. The rest will cover bills relating to bond-funded administrative costs, officials said.
The news was worse for groups trying to learn when they'll get paid for grant work they've already done.
There is currently $2.6 billion worth of unpaid bills for work performed under various state grant programs run by departments, agencies and commissions, according to an investment board staff report.
Treasurer Lockyer warned anxious nonprofits that they are unlikely to see state grant money before spring or summer due to the budget impasse and credit market woes that have slowed state bond issues.
The board took no action after briefly discussing a list of 276 projects that have been exempted from the initial infrastructure stop work order that the state issued in December.
Lockyer and Genest said that if there is no budget by Feb. 1, those exempted projects – worth a total of $3.6 billion – will be stopped, too.
"There will no money to pay for them," Lockyer said.
Tracy Press
TRAQC suit
Tracy Region Alliance for a Quality Community has filed a lawsuit over the Ellis subdivision in hopes of blocking the housing development slotted for southwestern Tracy...Eric Firpo 
Tracy Region Alliance for a Quality Community has sued the city and The Surland Cos., hoping to overturn the approval of 2,250 homes in southwest Tracy and a developer deal that could bring an aquatics center to the city.
In a 40-page writ filed Wednesday, TRAQC raised many of the arguments critics used unsuccessfully to convince the City Council to reject the project, which was OK’d Dec. 16.
The lawsuit argues the city violated the California Environmental Quality Act because it failed to analyze or suggest ways to lessen the traffic, air pollution and many other anticipated impacts of the Ellis subdivision slated for about 300 acres on the northwest corner of Linne and Corral Hollow roads.
It charges the city failed to properly study how the project would affect the Tracy Municipal Airport because the subdivision sits underneath the approach for landings and take-offs of the airport’s main runway.
It also claims the city failed to account for how the homes would affect underground high-pressure natural gas and oil pipelines.
TRAQC also argues the city failed to follow the rules of its own general plan that governs future growth, as well as Measure A, the law passed by voters in 2000 that restricts homebuilding to an average of 600 a year.
And it argues there was a technical violation of the law because the city entered into agreement with The Surland Communities LLC, which was formed Nov. 7, 2008, a partnership that didn’t exist when project was being studied and debated.
The city OK’d a deal that will see Surland pay the city $10 million and hand over 16 acres for a water park in exchange for the right to build homes starting in 2012, when a de facto building moratorium ends.
The company has the right to take back the land slated for the aquatics center and build homes on it if the city fails to start construction of the water park within two years of the subdivision being annexed into the city. Annexation could happen this year.
TRAQC co-founder and attorney Mark Connolly predicts the water park will never get built because the city has no money to operate it and $10 million isn’t enough to build one.
He said that if the Ellis subdivision is built, the people of Tracy "will get all the burdens and none of the benefits."
It’s a similar comment to arguments he made during public hearings that led to the council’s approval of the Ellis subdivision, and many expected the lawsuit.
"It’s not surprising, but real disappointing and sad that he decided to sue," said Chris Long of The Surland Cos. "(Connolly’s) actions just slow down the swim center and cause more delays and expense to something the community wants."
Councilman Steve Abercrombie saw the lawsuit coming as well.
"It’s like other things in Tracy. We approve a project and a lawsuit gets filed," he said, referring to claims against the city over WinCo’s approval and an OK’d Wal-Mart expansion. "We may have to get judges to start showing up at our council meetings."
No regrets about bio-lab
Tracy missed an opportunity to have a federal bio-safety lab in the area — and it’s a good thing, too...Editorial
Two years ago — before our jobs, housing, stocks and the economy tanked — we debated the merits and menaces of having a Bio-safety Level 4 research lab built nearby to store and study incurable diseases, such as the Ebola virus and mad cow disease.
Public opinion weighed in, and so did molecular biologists, environmental activists and representatives from the Department of Homeland Security, University of California and Lawrence Livermore National Laboratory, who spoke about the pros or cons of having a 500,000-square-foot federal bio-lab on Department of Energy land a few miles southwest of Tracy at Site 300.
The proposal for the $450 million lab, to replace a research center in Plum Island, N.Y., drew plenty of naysayers. While San Joaquin County supervisors backed the project, the Tracy City Council directed the Tracy Tomorrow & Beyond advisory panel (which has since been disbanded) to study it. The group recommended the council hold back on weighing in until there was more information. Shortly afterward, the council voted 3-1 to oppose it, with Livermore lab employee Brent Ives abstaining.
The council’s stance — reflecting community sentiment — may well have deterred Department of Homeland Security officials from choosing Tracy, which was rejected as a finalist in 2007.
Fast forward to this week, when it was announced that Kansas State University, in Manhattan, Kan., won the bid for the new lab, beating out Georgia, Texas, Mississippi and North Carolina. The state of Kansas pledged more than $105 million to the project, as politicians raved and called it "one of the most significant investments to the Kansas economy in state history."
Meanwhile, Texas is threatening to sue over its losing bid.
Do we have any regrets that the bio-lab won’t come here, bringing potentially 300 new professional jobs?
Today’s City Council might have voted differently — except for Steve Abercrombie and Evelyn Tolbert, who say they’d still oppose it — but we’d still editorialize against it in 2009.
We still care about the safety of our city in case of an accident, the potential for disaster in case of a California earthquake, the proximity to explosives testing at Site 300, our economic development and the will of the people.
We have enough to worry about without losing all that.
San Francisco Chronicle
State to pay up on construction projects...Wyatt Buchanan, Michael Cabanatuan
California's financial leaders decided Friday to spend $650 million on unpaid bills for construction projects throughout the state, nearly one month after the same officials put a stop to financing on nearly 5,600 public works projects.
Also on Friday, the state's Department of Finance released a list of 276 of those projects that will be allowed to continue work because shutting them down would cost more than it would take to complete the jobs.
Those include large road construction projects in the Bay Area, like carpool lanes on the Sunol Grade and on Highway 101 and building improvements at UC Berkeley and UCSF.
But state officials warned that if the governor and the Legislature are unable to find a solution to California's $42 billion budget deficit by the end of this month, the remainder of the work could end.
"There will be a very abrupt stop on Feb. 2 if there is no budget," said state Treasurer Bill Lockyer, one of three members of the California Pooled Money Investment Board that controls financing for state-funded projects. He called the list of 276 the "keep hope alive list" of projects.
The state Department of Finance and the state controller will decide which bills get paid with the money approved Friday and there is no guarantee that the costs incurred by the projects allowed to move forward will be paid.
While some contracts will be funded, the state has stopped all money for projects funded through state grants and officials said those would not be paid until at least the summer.
Even with a budget solution, the state will have to wait for investors to return to the bond market before financing returns to normal, state officials warned. Included in the nearly 5,300 halted projects is San Quentin State Prison's new $356 million death row complex and parks throughout the Bay Area.
Contractors, nonprofit leaders and heads of state departments testified about the hardships the shutdown is creating. The number of speakers was so large that the board meeting was moved to a large auditorium from its usual conference room.
Board members were told that environmental laws and other regulations create strict timetables for construction to occur in some areas, like breeding grounds of sensitive species. Delays of weeks or months could easily turn into a year in those places, they said. Most conservation projects are paid with the grants that are not being funded.
They also heard about how the cash crisis is creating confusion, as some people stopped work on projects that were able to go forward, including a courthouse project nearing completion in Orange County. Also, officials said they feared some people might ignore state orders and still send in bills.
Will Kempton, director of Caltrans, said starting and stopping road projects across the state could end up costing taxpayers $350 million.
"You can't just walk away from a construction project," Kempton said, noting the need to "button it up" by closing trenches and securing sites.
Five Bay Area projects are being rescued for now. They include adding a carpool lane on Sunol Grade in the southbound direction. A related project would add equipment enabling it to become the first Bay Area toll lane offering solo drivers the chance to buy access to the fast lane.
The other carpool projects include eastbound Interstate 580 in eastern Alameda County; Interstate 80 at the I-680 junction in Solano County; and on Highway 101 between Santa Rosa and Windsor in Sonoma County.
Bay Area transportation officials said they were pleased with the decision to keep the projects rolling but were still waiting nervously for a longer-term solution.
John Goodwin, a spokesman for the Metropolitan Transportation Commission, said the board's decision was no guarantee that projects under construction will be able to be completed.
And it leaves in jeopardy three Bay Area projects ready for construction and eight scheduled to begin building later in the year - including the long-awaited fourth bore for the Caldecott Tunnel.
"It gets five projects out of jail," said Goodwin, "but it does not solve the real problem. Pursuit of a long-term solution will continue."
U.S. tells plan to drill off California coast...Jane Kay
The U.S. Interior Department, acting in President Bush's final days in office, proposed on Friday opening up 130 million acres off of California's coast to drilling for oil and natural gas, including areas off Humboldt and Mendocino counties and from San Luis Obispo south to San Diego.
After a hands-off policy for a quarter-century, the administration submitted plans to sell oil and gas leases for most of the U.S. coast, from the Gulf of Maine to Chesapeake Bay and the Outer Banks of North Carolina to the Gulf of Mexico and the Pacific Coast.
New drilling also was proposed in Alaska's Bristol Bay, one of the nation's most plentiful sources of fish, and the Arctic Ocean.
Washington, Oregon and protected parts of Florida were excluded along with waters off San Francisco Bay that lie within national marine sanctuaries.
On Friday, the American Petroleum Institute, the U.S. Chamber of Commerce and other business groups greeted the news with praise, saying it is time for domestic energy supplies to be released from the moratorium.
But environmental groups and some Democratic leaders who oppose California drilling criticized the 11th-hour move, vowing to work with the Obama administration to promote energy independence based on clean, renewable technologies.
"President Bush's last-ditch effort to open our coasts to new drilling is nothing more than a parting gift to his buddies in the oil and gas industry," said Lois Capps, D-Santa Barbara, a member of the House Natural Resources Committee.
On the eve of the 40th anniversary of the platform blowout that spilled 3 million gallons of black crude oil on 35 miles of beaches around Santa Barbara, Capps said, "New offshore drilling would not lower gas prices, make us more energy independent or get our economy back on track."
Richard Charter, a longtime environmental lobbyist who now works for the Defenders of Wildlife Action Fund, called the government's move "an extremist act."
"What we see today is the political equivalent of a rock star trashing the hotel room right before checkout," he said.
The Interior Department used a lapse in the congressional moratorium in October and a cancellation of a presidential prohibition in July to set in motion the lease-sale program - which the incoming administration of President-elect Barack Obama could cancel or proceed with.
Obama has said he would consider some offshore oil drilling as part of a comprehensive energy plan. Sen. Ken Salazar, D-Colo., Obama's pick for interior secretary, hasn't given his views on offshore drilling in California. He said in his confirmation hearings Thursday that he will confer with the administration's team.
Gov. Arnold Schwarzenegger, along with the governors of Oregon and Washington, opposes new offshore oil drilling despite the new revenue it would offer the cash-strapped state.
The federal government has failed to make a case for a new program because energy resources are insignificant in the Atlantic, Pacific and eastern Gulf of Mexico, already-sold leases aren't being used, and no protections are in place to protect the environment, the governors said.
In Friday's announcement, Interior Department officials proposed three new lease sales, one in Northern California and two in Southern California in "areas with known hydrocarbon potential." The proposals, which were based on requests from seven oil companies that weren't named, would include:
-- As many as 44 million acres of federal waters, which start 3 miles from the shoreline, off Humboldt and Mendocino counties.
-- As many as 89 million acres off of San Luis Obispo, Santa Barbara, Ventura, Los Angeles, Riverside and San Diego counties. One lease would require equipment operating at a diagonal to drill within the Santa Barbara Ecological Preserve. In Southern California, there are 79 existing leases with 43 producing and 36 undeveloped.
There will be a 60-day comment period, with hearings in Ukiah, Fort Bragg, Santa Barbara, Ventura and San Diego. Dates for the hearings have not been announced.
If sales are allowed, they could occur as soon as 2014.
About 60 percent of California citizens who commented on new oil-and-gas development were opposed to new drilling, according to the Interior Department's oil-drilling agency, the Minerals Management Service.
19 arrested at sit-in at UC regent's S.F. firm...Rachel Gordon
San Francisco police arrested at least 19 University of California service workers and their supporters who held a sit-in Friday morning in the private office of UC Regents Chairman Richard Blum to protest a protracted contract dispute.
UC service workers, represented by the American Federation of State, County and Municipal Workers, Local 3299, have been working without a contract for a year and have been fighting for a raise. The union held a five-day strike in July over the stalled contract negotiations.
"The UC executives get bonuses and raises while we're trying to move beyond poverty wages," said Kathryn Lybarger, a gardener at Cal who serves on the union's bargaining committee. She was one of those arrested, and then released, for allegedly trespassing.
Police at the scene reported 22 arrests. Lybarger, who helped organize the civil disobedience protest, put the number at 19. The demonstration inside Blum's investment firm office at Montgomery Street and Pacific Avenue was peaceful. No injury or property damage was reported.
Blum was not in his office at the time, and a request for comment from his firm went unanswered.
UC President Mark Yudof condemned the action.
"Today's intrusion into the personal offices of Regent Blum was not an exercise of free speech but an act of trespass, which was inappropriate, disrespectful and a violation of Regent Blum's privacy," Yudof said in a prepared statement.
"Such activity is not only uncalled for," he added, "it is also potentially damaging to constructive negotiations and to making progress toward an agreement for our service employees who have gone without a contract and the wage improvements we are offering for too long."
About 8,500 UC service employees, among them custodians, gardeners, cooks and parking attendants, are working without a contact.
DHS approves $450M biothreat lab at Kansas State...JOHN MILBURN, Associated Press Writer...1-12-09
(01-12) 19:03 PST Topeka, Kan. (AP) --
The Department of Homeland Security has approved a site at Kansas State University for a $450 million lab to study livestock diseases and some of the world's most dangerous biological threats.
The agency's final record of decision — a document obtained by The Associated Press — confirmed a decision announced in December to build the National Bio and Agro-Defense Facility at the Manhattan, Kan., campus to replace an aging lab at Plum Island, N.Y.
DHS spokeswoman Amy Kudwa said the document hasn't been publicly released and declined to comment further about the decision. But the state's two senators issued statements confirming that DHS Undersecretary Jay Cohen had signed it.
Sites in Georgia, Mississippi, North Carolina and Texas were also considered for the new lab, where animal diseases and other potential bioterrorism threats will be researched.
The federal agency said factors in its decision included the proximity of the site to Kansas State's research labs and its colleges of agriculture and veterinary medicine.
Kansas Sen. Sam Brownback, a member of the Senate Appropriations Committee, said he will work to ensure the project is fully funded. The state has agreed to provide more than $105 million in infrastructure improvements at the site to cover additional costs.
"This is great news. NBAF is a great win for Kansas and Kansas is a great win for NBAF," said Brownback, a Republican.
The laboratory is to be built on 59 acres at Kansas State near the Biosecurity Research Institute, where similar activities are conducted on plant and animal diseases.
University officials have said that the lab could conduct a portion of the research that will be done at NBAF until that facility is completed, which is expected to be by 2015.
The lab is expected to generate about 1,500 construction jobs and a payroll of $25 million to $30 million for more than 500 employees, including 300 researchers.
Republican Sen. Pat Roberts called the decision "one of the most significant investments to the Kansas economy in state history."
"With this new lab, Kansas will cement its reputation as the nation's leader in plant and animal health research and the biosciences," Roberts said. "We will reap the benefits of a cutting edge industry while protecting the nation's food supply and agricultural economy for years to come."
Critics of NBAF raised concerns about the safety of people living near the lab, including in on-campus housing. They also said thousands of head of livestock in the region would be vulnerable if pathogens escaped from the facility.
Officials in Texas and Mississippi have threatened litigation over the decision.
Last week, Texas Gov. Rick Perry called the selection process unfair because his state's legislators weren't in session in 2008 and unable to consider a financial package to augment the state's bid.
Mississippi Gov. Haley Barbour said last month when the initial recommendation was made that the process was flawed and that his state should have been awarded the project.
Sebelius said Barbour has since backed off his objection, but she expects Texas to challenge the decision.
Kansas State President Jon Wefald said the state's proposed investment and its united effort to land the project were factors in the final decision and that everyone knew the rules and deadlines throughout the process.
"We were always hoping they would make their final decision sooner rather than later," Wefald said.
Los Angeles Times
Transportation project may heighten cancer risk in select areas
Residents of 8 homes in Wilmington and 1 in Carson may face 1% higher cancer risk due to a public bridge-replacement and expressway project aimed at easing traffic from ports of L.A. and Long Beach...Louis Sahagun
For residents of eight modest houses on a lone block in Wilmington, a replacement bridge and truck expressway planned for construction nearby means a slightly elevated cancer risk.
The government agency that used computer modeling to assess this risk has proposed a solution: new air-conditioning filters to remove the project's toxic emissions.
"Installing and retrofitting ventilation systems with special filters is a proactive way in which we can mitigate against any potential effects of the proposed project," said David Gershwin, a spokesman for the Alameda Corridor Transportation Authority.
The situation on East Robidoux Street came to light with the release of the Transportation Authority's 600-page report on its planned $687-million Schuyler Heim Bridge Replacement and State Route 47 Expressway Project, a joint effort with Caltrans. Transportation officials are counting on the project to reduce traffic and pollution from trucks heading to and from the Los Angeles-Long Beach port complex, the nation's largest.
The news has upset residents and raised new questions about future stability in a place long decried by social justice groups as a "sacrifice zone" of commerce and toxic pollution.
"I'm not happy about this, and I'm very worried about what it means for my two young children and the value of our home," said Rosario Esparza, 37, speaking over a white wrought-iron gate at her home of nine years.
"We were just planning to move and lease the house," added Esparza, whose home is among those identified as facing a heightened cancer risk. "I'm going to talk to my husband about moving out faster."
Two doors down, Jesus and Theresa Fernandez, both 74, were stunned to learn that their home of 33 years was among those expected to experience elevated levels of cancer risk.
"Why our house? Who'd want to buy it now?" Theresa wondered aloud in Spanish. "Doesn't the same air cover the entire neighborhood?"
The impact zone includes the eight homes on the north side of the 1500 block of East Robidoux Street. Also included is a lone house in Carson, a few miles away, but officials declined to provide an address, citing privacy reasons.
Officials said the risk of cancer in these hot spots would increase by 1%.
Computer models of projected diesel truck traffic and prevailing winds showed "a 10 in a million cancer risk for a person who lives in the impact zone if that person is exposed 350 of 365 days a year, 24 hours a day for 70 years," said John Doherty, chief executive of the Transportation Authority.
At the other 16 homes on East Robidoux Street, as well as nearby schools, parks and commercial establishments, the health risk would be below the 10-in-a-million level, a threshold adopted by the Port of Los Angeles for future expansion projects, Doherty said.
In both tiny hot spots, Transportation Authority officials plan to offer to retrofit -- free of charge -- existing heating, ventilating and air conditioning systems with high-efficiency filters capable of removing 90% of the toxic diesel particulates in the air.
"We'll buy them new systems if none exists," Doherty said. "Later, we'll discuss operation costs, maintenance and eventual replacement costs with impacted homeowners. It may mean we give them a cash payment up front."
The project would replace the seismically deficient Schuyler Heim Bridge with a safer bridge over the Cerritos Channel. It would also construct a new four-lane elevated expressway to allow cars and about 15,000 diesel trucks per day to move from Terminal Island onto Alameda Street.
The goal is to provide an alternate route from Terminal Island, a major generator of big-rig traffic, to distribution centers and warehouse facilities in the South Bay area, eliminating about 8% of the port-related trucks on the Harbor and Long Beach freeways.
Officials plan to go door to door in the impact zones Monday to explain the situation. A public meeting on the project and its health risks has been scheduled for Jan. 27 at the Banning's Landing Community Center in Wilmington.
The agency's findings and mitigation plan drew fire from one environmental group.
"It's crazy to think a computer model is accurate enough to pinpoint a dangerous health risk in one house and not the one next-door," said David Pettit, senior attorney for the Natural Resources Defense Council. "Peoples' feelings, hopes and aspirations don't seem to matter to the planners who want to build a truck freeway through their neighborhoods."
A total of 24 homes and a Christian school and church are situated on the little street tucked in the crook of one of California's busiest transportation corridors, surrounded by refineries, auto salvage yards, rail lines, factories, warehouses and truck routes.
"We're not scientists, but common sense tells us that no one can say with certainty that there is a little bit of cancer over there but not here," said Pastor Alfred Carrillo, who has lived on Robidoux Street for nearly six decades.
"Why not just buy us out?" added Carrillo, who owns six lots on the block that he has long been interested in selling. "I think money is tight right now and they are doing everything possible to reduce costs."
Resident Jesus Fernandez raised a concern that air conditioners wouldn't solve: "What will protect us when we step outside?"
If Plan B to save banks fails, try Plan A again
Despite huge capital injections, banks still struggle with losses and lending is paralyzed. The bailout's next phase may be taking toxic loans off their hands...Tom Petruno
Meet the newest U.S. mega-bank: First National Toxic Loan.
The federal government appears to be turning back to Plan A in its efforts to bail out the financial system and get banks to lend again.
Plan A, as articulated by outgoing Treasury Secretary Henry M. Paulson in September, was to have the government buy bad loans from banks, ridding many institutions of much or most of their worst junk assets.
After Congress approved $700 billion for that program, however, Paulson shifted gears and decided to instead use the money to directly inject capital into banks.
"Here's a boatload of taxpayers' money. Now, lend!"
But Plan B hasn't worked. Banks still aren't lending -- even though they've sucked down $212 billion of Treasury's funds. And counting.
Investors aren't buying Plan B as a solution, either. An index of 24 major bank stocks has fallen every month since September and dived 29% just since year-end, to a 13-year low Friday. Confidence in the financial system remains fractured, at best.
So this week, Plan A was revived. Federal Reserve Chairman Ben S. Bernanke raised the issue Tuesday, saying in a speech that more aid for loss-racked financial companies was crucial. The government could reconsider the idea of buying bad assets for itself, he said, or it could set up "bad banks" that would make the purchases and give the selling banks equity stakes -- a way to potentially profit from a long-term workout of the assets.
On Friday, Federal Deposit Insurance Corp. Chairwoman Sheila C. Bair told the Wall Street Journal that the development of a revised Plan A was "beyond hypothetical. I think all of the agencies are committed to coming up with a program for troubled asset relief."
Importantly, former Fed Chairman Paul A. Volcker, now an advisor to President-elect Barack Obama, has backed the idea of creating a federal entity similar to the Resolution Trust Corp., which disposed of $520 billion worth of assets from failed savings and loans from 1989 to 1996.
The central idea is that the government would have the relative luxury of engineering long-term workouts of bad loans, including mortgages.
Why might Plan A work where Plan B has failed?
First, consider the ugly saga of Bank of America Corp.
The nation's biggest bank was considered a relatively healthy institution a year ago. Then it bought failing mortgage lender Countrywide Financial. And in September, amid the market panic that accompanied the collapse of brokerage Lehman Bros. Holdings, the bank sealed a deal to buy Merrill Lynch & Co.
Under Plan B, the Treasury pumped a total of $25 billion into the combined Bank of America/Merrill Lynch last fall.
Mission accomplished? Not hardly. Merrill's assets were more rotten than Bank of America had assumed. By late December the bank was ready to pull the plug on the merger unless Uncle Sam opened his wallet again.
On Friday, Uncle did just that, giving the bank $20 billion more of taxpayers' money as a capital boost, plus agreeing to swallow the vast majority of any future losses on $118 billion of the bank's loans.
The aid package was similar to one granted to Citigroup Inc. in November.
Yet investors have taken no comfort from the enhanced bailouts of Citigroup and Bank of America. Citigroup's shares slumped 48% this week, ending Friday at $3.50, a 16-year low. Bank of America's shares lost 45% for the week to $7.18 on Friday, an 18-year low.
"Hard-earned taxpayer money is being blown," said Campbell Harvey, a business professor at Duke University. Although he supported the capital-injection plan, Harvey asserted that the program should have been paired with one to get bad loans off banks' books once and for all.
As long as so much garbage remains with the banks, there's the risk that they'll keep coming back for more government capital to offset loan losses, particularly if the economy worsens.
And from the standpoint of current bank shareholders, the taxpayers' cash is becoming ever more expensive. The Obama administration has said that banks coming to the Treasury's trough must slash their dividends.
Bank of America on Friday agreed to reduce its quarterly dividend to a mere 1 cent a share, from 32 cents.
That may be a fair trade-off for taxpayers. But if the banks are to survive in the long run as private entities -- in other words, if we aren't intent on nationalizing them -- they'll need fresh capital from investors who also are in the private sector. Yet under Plan B, those investors are balking at buying bank stocks, fearing that their interests will be pushed aside in favor of the government's.
The continuing slide in bank shares shows that "investors are saying, 'This is not a game I want to play,' " said David Ellison, who invests in financial stocks for fund manager Friedman, Billings, Ramsey & Co. in Alexandria, Va.
If the government were to take away some chunk of bad assets, however, it might end the vicious circle of deepening bank losses, reluctant private investors and banks' need to ask for more U.S. help.
Of course, if creating Son of Resolution Trust Corp. was a simple matter, it already would have happened. The original RTC handled mostly buildings financed by failed S&Ls. A new version would be charged with taking over rotten loans of banks that the government wants to survive.
What price should the banks be paid for those loans? Ten cents on the dollar? Thirty cents? Seventy cents? Offer too little and the resulting accounting write-off at the selling bank could make it insolvent. Offer too much and you slash the odds of the taxpayers profiting as the assets are worked out or resold.
Still Volcker, for one, believes Plan A is worth a shot.
In a Wall Street Journal opinion piece he co-authored in mid-September, he wrote: "The pathology of this crisis is that unless you get ahead of it and deal with it from strength, it devours the weakest link in the chain and then moves on to devour the next weakest link. . . . RTC-like mechanisms have worked well in past crises. Now is the time to take a similarly forceful step."
CNN Money
Bank bailout: Get ready for next phase
Economy is getting worse and banks' books are still weighed down with junk. Washington is looking at new solutions that sound familiar...Tami Luhby. Fortune.com senior writer Colin Barr contributed to this report
NEW YORK (CNNMoney.com) -- It's back to square one.
The deepening financial crisis, which is undermining the government's rescue efforts so far, is prompting federal officials to revisit its original bailout measures. These include taking toxic assets off institutions' balance sheets by moving them into a so-called "bad bank", according to published reports.
As long as these assets remain on banks' books, there's no telling how long their losses will continue and how deep they will be.
Addressing these assets was the original purpose of the Troubled Asset Relief Program, the formal name of the $700 billion bailout plan the Bush administration unveiled as the credit crunch spun out of control. It was later abandoned in favor of taking equity stakes in banks, which was seen as a more direct and rapid way to help.
But as the economy worsens and banks continue to rack up multi-billion dollar losses, the incoming Obama administration will face tough choices in deciding what to do with the $350 billion remaining in the bailout plan. There are many who want a piece of the pie, and there may not be enough money to go around.
David Axelrod, a top adviser to Obama, told Reuters that the administration, which takes office Tuesday, would make an announcement in "the next few days."
Figuring out the next phase
Outgoing Treasury Secretary Henry Paulson said Friday that "a lot of work" has been done on creating a "aggregator bank" and other ideas to leverage the remaining bailout funds to deal with banks' illiquid assets, according to reports. Such a "bad bank" might buy up financial institutions' bad assets, such as mortgage-backed securities, which could stem losses and help rebuild confidence. This is how the federal government first intended to address the credit crisis in mid-September.
Paulson also talked of having the Federal Reserve expand a program to back consumer credit, scheduled to begin next month, and of letting the Fed accept riskier assets, such as commercial mortgage-backed securities. Also, the government could expand its backstop of bank assets as it did for Bank of America, as well as Citigroup.
Meanwhile, Sheila Bair, head of the Federal Deposit Insurance Corp. who will remain in office under Obama, told the Wall Street Journal that federal agencies would like to have "something in place in the not too distant future."
"Everybody agrees it's important to provide some troubled asset relief, because I think it's key to getting private equity capital bank into banks," she told the Journal. "They need to have some certainty about what the tail risk is on some of these assets."
The bank, which would be capitalized with TARP funds, would be similar to the Resolution Trust Corp., which liquidated hundreds of savings and loans in the late 1980s and 1990s, Bair said.
On Tuesday, Fed Vice Chairman Donald Kohn voiced a similar view. And the congressional panel overseeing the TARP wrote last Friday in a report to Congress that events such as November's federal bailout of Citigroup highlight how the toxic asset problem has continued to fester.
Government officials are coming under renewed pressure from financial industry lobbyists, who are pushing them to do more to help banks deal with their bad assets.
"We need to get the markets moving again," said Tim Ryan, head of the Securities Industry and Financial Markets Association. "We have no problem with capital injections, but if you do capital injections without taking care of the bad assets, it just causes the problem to go into hibernation."
Bank losses mounting
The weakening economy is throwing a wrench into the government's efforts to aid the banks. As job losses mount, a growing number of consumers are falling behind on their mortgages, credit cards and other loan payments.
On Friday, Bank of America (BAC, Fortune 500), the nation's largest bank, reported a net loss of $1.79 billion in the fourth quarter of 2008, compared to earnings of $268 million a year earlier. Analysts expected earnings of 8 cents per share.
The loss did not include Merrill Lynch's results. The recently acquired investment bank reported a loss of $15.31 billion, or $9.62 per share. Bank of America cited "severe capital markets dislocations" for Merrill's huge loss, especially late in the quarter.
Citigroup (C, Fortune 500), meanwhile, reported a much bigger-than-expected $8.3 billion quarterly loss Friday, while the beleaguered banking icon also revealed plans to split up into two businesses.
A day earlier, JPMorgan Chase (JPM, Fortune 500) reported net income fell 76% to $702 million, or 7 cents a share during the fourth quarter, from $2.97 billion, or 86 cents a share, during the same period a year ago.
Losing the public's support
Convincing the American public to support more rescue measures may be tough.
A majority of those polled say the government's financial bailout for troubled banks has not worked so far and six in 10 don't want Washington to spend more money on the rescue, according to a CNN/Opinion Research Corporation survey released Friday.
President-elect Barack Obama will have to decide how to parcel out the remaining $350 billion to all the jockeying interests.
In a nod to congressional Democrats, Obama's officials have already committed to spending up to $100 billion on assisting homeowners facing foreclosure, while Federal Reserve Chairman Ben Bernanke said Tuesday that banks will need more capital injections.
However, Obama said it's crucial to help the banks and get them lending to consumers and small businesses again.
"There's no doubt that we needed to stabilize the banking system," Obama told CNN's John King Friday.
First bank failures of '09
Two banks go under: National Bank of Commerce in Illinois and Bank of Clark County in Washington state...CNNMoney.com staff
NEW YORK (CNNMoney.com) -- The financial crisis has claimed its first two banks in 2009 at an approximate cost to the FDIC of more than $200 million.
The Federal Deposit Insurance Corp. announced Friday that the National Bank of Commerce in Berkeley, Ill., and Bank of Clark County in Vancouver, Wash., had been shuttered.
Bank of Clark County was the first bank in Washington state to fail since 1993.
Nationwide, as the economy's problems have deepened, the number of bank failures has risen dramatically. Last year, 25 banks closed, compared to only three in 2007 and none in 2006 and 2005.
On Friday, the FDIC said that it has entered into a purchase and assumption agreement with Republic Bank of Chicago in Oak Brook, Ill., to assume the deposits of National Bank of Commerce.
National Bank of Commerce had total assets of $430.9 million and total deposits of $402.1 million.
Republic Bank intends to purchase about $366.6 million of National Bank of Commerce's assets at a discount of $44.9 million, according to the FDIC, which will retain the rest for later distribution.
The FDIC said that the National Bank of Commerce's two branches will reopen Saturday as branches of Republic Bank of Chicago.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $97.1 million.
Separately, the FDIC said Friday that the FDIC entered into a purchase and assumption agreement with Umpqua Bank of Roseburg, Ore., to assume the insured deposits of the Bank of Clark County.
According to the FDIC, Bank of Clark County had total assets of $446.5 million and total deposits of $366.5 million. Uninsured deposits totaled $39.3 million.
Bank of Clark County will reopen on Tuesday as branches of Umpqua Bank.
The FDIC estimates the cost to its insurance fund will be between $120 million and $145 million.