Merced Sun-Star
Water: Cities, agriculture compete for precious, dwindling resource...JONAH OWEN LAMB
Draw a tall cool glass of water from the tap anywhere in this county, and you'll be drinking water that came out of the ground.
For cities and farms alike, most water comes from one source -- wells. Much of the water Merced County uses comes from a common groundwater basin pumped by thousands of wells that, for the last 30 years, have been sucking down that resource.
The communal depletion has taken a toll on the basin. In some areas of the county, wells are drying up.
For most of the county's history, each year the bucket of water the county drinks from has been replenished with every winter's rains. But a complex nexus of growth, drought and failure to plan may be changing the calculus of water use in California and Merced County.
Ever-expanding cities in Merced County -- still minor users in the broader picture -- are increasingly competing for water with farmers and the environment. This urban-rural-ecological division wouldn't be as much of an issue if climate change wasn't bearing down on the age-old weather pattern people have come to expect.
Less rain in the future will mean less water for more people, crops and local ecosystems.
In preparation for this looming shift, state and federal authorities are trying to lessen the effects of both climate change and its human causes.
But local land use, development and their impacts on water planning comprise another issue. Today, a collection of interests compete over the same sources of water. The success or failure of local preparations for the impending water crisis will make all the difference.
Some contend that unless cities,the county, water providers and farmers come together and plan intelligently for the future, the days to come will be ugly. If each local entity continues as before without regard to its neighbors, the basin may fall into legal infighting, governing water use through the courts -- or worse.
One alternative is to form an elected body that governs collective resources. A body that may fundamentally alter the pattern of development and governance in the county -- with limits.
And because water under the ground knows no jurisdictions, the extreme solution might be a super agency with power over all water resources in the state. That is a solution few local governments would be happy with.
"Everyone will have to make compromises in order for all of us to survive," said Hicham Eltal, the chairman of an outfit that may be the future of water planning in Merced County -- MAGPI (Merced Area Groundwater Pool Interests). He's now a senior official of the Merced Irrigation District, the organization historically charged with managing a huge chunk of water resources.
But to understand the future of water, you need to understand its present.
No one knows exactly how much water there is below the ground. But there is an idea of how much water the county uses.
A 2001 study, the Merced Water Supply Plan, illustrates the competing forces that use water in Merced, as well as the burden that humans put upon the Eastern Merced Basin. The study looked at eastern Merced County, which sucks roughly a million acre-feet out of the ground each year. An acre-foot is the equivalent to the yearly water use of one Valley family or 326,000 gallons.
It's no secret who uses the most water in Merced County -- farmers. In 2000, they collectively pumped 828,000 acre-feet from the ground just in the eastern half of the county. That number is projected to increase to 1,042,000 by 2040.
Urban pumping, the source of all urban water, only accounted for 39,000 acre-feet in that same period. But that number is projected to jump to 118,000 by 2040. The remaining water used comes from surface water, such as Lake McClure and the Merced River.
If you want a sense of how many pumps use the basin's water, the 16,000 or so well permits issued by the county since 1975 would illustrate part of the picture. In the last three years alone, the county issued 843 such permits; many of those -- 578 -- were domestic permits.
While there are far fewer urban wells, ag wells only pump during the growing season, while urban wells pump year-round. The city of Merced, for instance, has 21 wells that automatically pump water all year. Atwater pumps anything from 8 to 14 million gallons a day. Livingston pumps roughly 1 million gallons a day.
The implications of this increasing and varied demand are spelled out in the Merced Water Supply Plan: "Rapid population growth, changing agricultural practices, increased dependence on groundwater, and increased demands for water for environmental purposes have resulted in increased concern over the future of a reliable water supply"
That study is not alone in its concerns for the future.
A study by the nonpartisan Public Policy Institute of California, titled "Preparing California for Climate Change," points out that the average temperatures in the state will increase by 2 to 4 degrees by mid-century, much of which will occur in the summer months.
And the Central Valley will feel much more of the heat than other areas. The warming will mean less rain, the study speculates. The warmth will reduce the snowpack in the mountains that for centuries has been counted on to supplement water needs when the rains tail off in the spring. The study says that snowpack may be reduced by anywhere from 12 to 42 percent.
To further drive home the point, the California Department of Water Resources stated in the 2009 California Water Plan that "California is facing a significant water crisis in its history." That may address the current drought, but with the state's population projected to grow by more than 20 million people in the next 50 years, a water crisis may become the norm.
"We are seeing change, big change and we need to respond to it," said Deidre Kelsey, a Merced County supervisor.
On farms across Merced, water and its future are more than a topic of conversation or conservation. It's about economic survival.
Cindy and Bill Lashbrook count themselves lucky among Merced County farmers. They own a parcel on a Michigan-shaped bend in the Merced River north of Livingston. They have easy access to river water, a well and even a parcel with access to irrigation water if they need it.
But the relative liquid abundance that feeds their 74 acres of cherry, almond and blueberries hasn't prevented them from taking a number of steps to reduce their use of water. They use drip irrigation on their orchards and have spread mulch across the ground cover to keep the soil moist. "We are fairly lucky here on the east side," Cindy Lashbrook said. She also sits on the county planning commission.
But even as they try to reduce their farm's water use, they're aware of the stresses that collective use is putting on the basin. Bill Lashbrook said it takes twice as long as it once did for his well to cycle water up from underground. "This groundwater thing is scary," he said. "Everybody is saying it's dropping."
However painful, added Cindy Lashbrook, farming must make some changes to save water. Some marginal farmland may have to be retired. And some water-intensive crops, such as alfalfa, corn and cotton, may not have a future here. But, she added, cities will also have to make some sacrifices.
Aside from farmers like the Lashbrooks, conservation efforts by cities, farmers and water purveyors are either in the works or already being practiced.
Merced Irrigation District, according to Eltal, its chief engineer, has made meaningful leaps in conserving its water use. Over the last decade, besides increasing efficiency, the district has cut back its pumping. "We used to run wells even in normal years," he said. Now MID only pumps when its reservoir is running low. In 2008, MID pumped 100,000 acre-feet from the ground, for example.
Aside from drought years, by using more surface water, MID hopes to have less of an impact on the basin's health. One effort it has pushed is to get farmers to stop pumping and instead use surface water delivered by MID. This and other efforts have enabled the district to recharge the basin to the tune of 58,000 acre-feet a year.
Eltal notes that conservation of farm water is double-edged. Less water used by farmers may reduce pumping and the use of water, but it also means less water is cycling back down into the soil, then into the water table to be used again.
Cities, too, however late in the game, are increasing their conservation efforts.
Mike Wegley, the acting director of public works in Merced, contends that conservation can make an important difference. Besides looking to irrigate landscaping with reused water as well as encouraging more water-efficient landscaping, the city plans to mandate low flushing toilets and shower heads that use less water. The city also plans to meter new water hookups. "Once it is metered, people take more notice of their consumption," he says.
The same kinds of conservation ideas are emerging in other cities in the county too. Even businesses are pondering water.
Joseph Gallo Farms, owner of 12,000 acres in Merced County, has a fairly complicated water reuse and recycling program. Carl Morris, the dairy's general manager, says he does "a whole lot trying to reduce the amount of water our farming operation uses." Like others in the county, Gallo gets water from wells, MID and surface water. But it has set up a series of water reuse systems that not only saves water but money, said Morris.
An example is the reuse of their cooling system water to wash out cow pens. After the water is used to clean their premises, it is then used to irrigate fields for feed. The dairy also uses old water piped to one of its ranches from a cannery to irrigate fields. Morris calculates that these and other reuse measures save the dairy a million gallons a day.
Business and government aren't the only ones that recognize the need to use less water.
John Grant and his wife, Lisa Kayser-Grant, live in a house he built tucked behind a line of thick trees on Bear Creek Drive in Merced. It doesn't look like the other houses in the neighborhood, all with green lawns laid out before them.
The Grants' lawnless yard is just one sign of their consciousness about water. Everything they plant in the backyard, says Lisa Kayser-Grant, is something they can eat. They plan to put in a gray water system that will reuse their washing machine, shower and dish- water in the garden. They also plan to put in a composting toilet that uses no water.
Their tactics are partly driven by their desire to live off the grid, but also by the knowledge that easy access to clean drinking water is coming to an end. "We are very out of touch with our sources of water," Lisa Kayser-Grant suggests, about most policy makers.
"I don't think the leadership is knowledgeable of how critical this thing is," chimed in John Grant.
This sentiment is shared by others.
While there have been efforts to plan for water shortages, critics contend that the leadership across the county has failed to grasp the magnitude of the problem.
Diana Westmoreland Pedrozo, executive director of the Merced County Farm Bureau, said none of the county's leaders has been planning as they should about water. She admits that part of the blame lies with overlapping jurisdictions that make cooperation difficult.
But that doesn't excuse the rapid development the county has seen over the past decade. "We need to get away from the idea that all they have to do is drill a well and everything is going to be fine," she says. "That has been the attitude for all of this development that was overblown, and we have no idea what the implications are going to be."
Cities and the county haven't wanted to deal with the issue, she said: "If our leaders don't step up we are going to be in some real trouble."
Greg Wellman, Atwater's city manager, clearly sees the looming crisis. And he admits that cities haven't done as much as they could have. "Could local government have done more? Yes. But that doesn't mean we can't play catch-up now," he says.
County Supervisor Kelsey says that where the county is concerned there hasn't been adequate planing for water. But, she noted, since the county doesn't actually have authority over any water source, its officials have been limited in terms of planning. "We don't control water," she said. But she does recognize that the many interests in the county are going to have to join forces if a planned communal effort is going to work. "You have all these moving parts in the county, and they compete," she observes. "They must cooperate. When things don't work out collectively you'll see someone get sued."
The only such effort on the horizon -- MAGPI -- is in the embryonic stage.
Eltal says the hope is that MAGPI members will form a joint powers authority (JPA) that includes all the east side's players in an elected body that would govern water use. "We are trying to say, 'Let's work together so we are in sync,'" he proposes.
The first step, says Eltal, is to get an idea of how much water there is. In March, a groundwater study that will answer this question is slated to begin. Once the study is complete, there'll be real data on how much water there is under the ground.
Only then, says Eltal, can the basin start moving forward to some kind of agreement. The goal would be a regional body that governs water use. In a lot of ways, says Eltal, this would change how cities and local governments work. It would be government within limits -- ecological limits.
While so far there has been cooperation with MAGPI on the east side, some don't see it as a silver bullet for water cooperation.
County Supervisor Jerry O'Banion thinks the current structure of water management will be able to face the coming challenges. He isn't opposed to the idea of MAGPI, but he isn't assured that it will solve all the area's future water problems. "I question what would be the value of one additional level of government," he says.
Atwater's Wellman says there is definitely a need for cooperation when it comes to water planning, but a JPA may not be the only answer. "I think the issue is up for grabs," he says. "Given the magnitude of the problem, you may have some kind of state initiative."
Most experts agree that no matter what kind of body or law comes down the pipe, a limit on development is going to occur. And that may change fundamentally how the government and the economy work.
"We are going to have to change the economic paradigm," says Andrew Gutierrez, a systems analyst at UC Berkeley who was part of a study on climate change's effect on the state. "We can't continue to have this paradigm of unbridled growth as an indicator of economic health. There will be a conflict between economics and ecology."
For Sharon Hermosillo, who lives among almond orchards near Le Grand, such cosmic concerns are not as pressing as her tap failing to run after her well ran dry last year. "This summer toward the end of the summer, all of a sudden there was no water," she recalls. She went a month without water. Her neighbors' wells have been going dry too.
Hermosillo's new deeper well cost almost $20,000 to put in, she reckons. And like Hermosillo, everyone else in the area is sucking from the same sinking pool. Two orchards near her have also sunk new wells recently. "I don't know what I would do if it happened again," she said. "Maybe I should move?"
If local leadership fails to create workable strategies, what happens to Sharon Hermosillo may well portend what happens to many Mercedians in the future's water wars. 
Merced County unemployment jumps to 15.5 percent...CORINNE REILLY
Merced County's unemployment rate soared to 15.5 percent last month, the highest level in a decade, according to figures released Friday by the state's Employment Development Department.
That's up considerably from November's 13.3 percent and the county's year-ago jobless rate of 11.9 percent.
Merced's unemployment level also was far higher last month than both the state's 9.1 percent and the nation's 7.1 percent.
And only two California counties had higher unemployment than Merced in December: Colusa and Imperial.
"These certainly aren't good numbers, but we can't say we weren't expecting that," said Pedro Vargas, a state labor market consultant based in Merced. "With the economy the way it is, we were bracing for a pretty big jump."
Statewide last month, joblessness was the highest it's been in 15 years. Analysts expect unemployment to continue to climb across the nation as the U.S. heads into a second year of recession.
Like employers all over the country, countless local companies have laid off workers in recent months as they've closed their doors or attempted to stay afloat amid the downturn.
Merced County's unemployment rate has been climbing since September. The last time it rose above last month's rate was in 1999.
The majority of jobs lost in Merced last month were in the farming, manufacturing, financial and leisure and hospitality sectors, the EDD data show. No industries posted job gains locally in December.
Vargas said some losses in the agriculture sector are normal this time of year, though more jobs were lost in farming last month than analysts expected.
"It seems like it just gets harder and harder every month," said Kenneth Robinson, 47, who has been looking for a job since he moved to Merced from Tennessee four months ago. "So many people are getting laid off that the (job) market is just flooded right now, so it feels kind of impossible out there."
Robinson worked in real estate before he came to Merced. He figures that's the last industry where he'll find success at this point, so he's hoping for a job in sales or management.
But he's not too optimistic. "At this point I'll take anything I can get," he said. "Income is income, right?"
For information on how to file for unemployment benefits, go to www.edd.ca.gov.
Applications up only slightly at UC Merced...DANIELLE GAINES
The number of students applying to UC Merced this year remained steady.
Applicants for freshman positions fell slightly from last year, while transfer student applications rose. Overall, the campus received 10,296 applications, up slightly from 10,216 in 2008.
UC Merced officials said they were pleased to have topped the 10,000 mark for the second year in a row. The campus' slight boost came in the face of the economic crisis that led to a cut in the University of California systemwide projected enrollment for 2009.
UC Merced was spared from the enrollment cut and hopes to admit 1,080 freshmen next year, the largest class in the school's five-year history. Last year's freshman enrollment was 925.
"We are extremely pleased that our applications and the quality of our applicant pool remain strong, despite the well-documented budget difficulties we face throughout California," UC Merced Chancellor Steve Kang said in a press release.
"In the long run, the best hope for sustained economic growth and prosperity in the state is a highly educated populace," the statement continued.
The total number of students on campus at UC Merced next year is anticipated to be 3,200, up from 2,718 this year. The 15 percent increase is consistent with the college's expansion and available resources, the university said.
Kang's statement also guaranteed on-campus student housing for all incoming students who apply by the housing deadline.
Kevin Browne, UC Merced assistant vice chancellor for enrollment, said more than 50 percent of the school's freshman applicants come from families that meet the state definition of a low-income family.
About 53 percent of the freshman applicants were first-generation college students.
Both percentages are the highest in the University of California system, Browne said.
UC Merced also saw a higher percentage of Latino applicants than any other school in the system, with 34.1 percent. UC Riverside came in a close second with 32.3 percent Latino applicants.
The number of Latino applicants to UC Merced increased 10.4 percent this year. The number of applicants from every other ethnic subgroup fell.
"We are still, based on what I have seen, one of the most ethnically diverse universities in America, and certainly in California," Browne said. "We are pleased that our applicant pool still very accurately reflects the face of California."
Browne said UC Merced continues to draw students and applicants equally from among three regions in the state: Northern California and the Bay Area; the San Joaquin Valley; and Los Angeles, Orange County and San Diego.
The vast majority of UC Merced applicants applied to other schools in the system, Browne said. On average, each UC applicant applies to 3.3 campuses. Between 500-1,000 students applied only to UC Merced this year, Browne said.
UC Merced opened in 2005 with 875 students. The school hopes to post enrollment of 25,000 by 2035.
The first four-year attendees of the school will graduate this spring. There are 450 students in the class of 2009.
UC Merced application figures
2005 7,987 896 8,883
2006 7,961 805 8,766
2007 8,022 796 8,818
2008 9,105 1,111 10,216
2009 9,065 1,231 10,296
SOURCES: 2005-2007 provided by University of California Office of the President. 2008-2009 provided by UC Merced.
Letter: Hire very local...DAVID A. BULTENA, Merced
Editor:This issue with regard to Wal-Mart building its distribution center has to come to a head and the sooner, the better. We're all aware of the issues on both sides; someone will win and someone will lose.
Let me suggest that the side that should lose is the anti-Wal-Mart "Stop Wal-Mart Action Team." It's unknown what their private agenda is but their public position poses dire consequences for Merced's economic health.
The ball is now squarely in Wal-Mart's court. Their human resources department should make a commitment to filling all 600 jobs from an area bounded by 16th Street on the north, Kibby on the east and R Street on the west.
This area is impacted by foreclosures, unemployment and gang activity. It suffers the most and would have the most to gain by the Wal-Mart jobs. All the aforementioned problems are the result of a slow or poor economy. They would be corrected by the jobs provided and do more for Merced than all the combined social programs presently in place.
Let's stop Merced's slide into an economic abyss.
Modesto Bee
About 500 set for valley growth summit...Garth Stapley
About 500 people with hand-held clickers are expected to debate future growth patterns in the San Joaquin Valley on Monday.
Organizers of the eight-county Blueprint Regional Summit are jazzed that many people who care about the valley's well-being have signed up for the Fresno event, even if interest from Stanislaus County has been lukewarm.
"We hope this will motivate folks to move on with the blueprint and make it reality," said Marjie Kirn, who coordinates the effort from the Merced County Association of Governments. "What we're hearing is that people do want to see change and grow smarter."
Attendees, including business and government leaders as well as builders and environmentalists, will discuss four scenarios guiding growth for the next four decades, when the valley's population is expected to double. Eventually they'll be asked to value preferences using electronic voting clickers similar to those seen on "Jeopardy."
Hotly debated differences voiced at previous, lower-level meetings suggest that consensus at the summit is unlikely. But Great Valley Center President David Hosley, who will direct the clicking exercise, hopes to come away with some sense for what most people want.
The four options:
singletarym@washpost.com Scenario A: No change in trends that house an average of 13 people in a little more than four houses per acre.
Scenario C: More than doubling the historic density trend, to 31 people in 10 homes per acre. This aggressive scenario was embraced in November by members of the San Joaquin Valley Blueprint Advisory Committee.
Scenario B: A moderate density increase to 5.9 homes, or 18 people, per acre. This represents a cobbling of individual growth visions produced last year in each county, though San Joaquin never took a vote and Stanislaus' vote merely reflects what's in plans already adopted by the county and its nine cities. The others agreed to a range of higher densities, from 15 people per acre in Madera County to 28 in Merced, with Fresno, Kings, Kern and Tulare counties in between.
Scenario B+: Bickering over Scenarios B and C led the effort's policy council, the highest blueprint panel with two members from each of the eight counties, to suggest this alternative in December. Densities are identical to Scenario B, but it has more transit options and cooperation among counties on highways, railroads and such.
"It's a compromise, to get more discussion" at Monday's summit, Kirn said of the last option, only recently unveiled.
Results from the summit will join recommendations of the advisory committee and those gathered from an online survey. The Blueprint Policy Council will consider all three in March or April to produce a valleywide preference that would be sent back to each county and their 62 cities later for final review.
Ultimately, the valley growth plan won't bind any city or county. But since the blueprint process starting rolling a couple of years ago, state lawmakers have handed out new requirements on greenhouse gas emissions. Details have yet to be worked out, but it's clear that state officials will be more inclined to pass out housing and transportation funds to cities and counties with specific plans -- like the blueprint -- that encourage smart growth. Driving less, experts say, causes less climate-changing pollution.
"The parts of the valley that have come to agreement about how they want to grow will probably grow better, with less pain than places that have not been able to agree," Hosley said.
His think tank, the Great Valley Center, is headquartered in Modesto, where enthusiasm for the blueprint is weakest, with the possible exception of Stockton. Officials throughout Stanislaus County have regarded the blueprint as state meddling in land use, a power historically reserved to local agencies.
"We've had relatively light participation in Stanislaus County from the beginning in the outreach effort," Hosley acknowledged. Officials here dragged their feet on producing a countywide consensus that essentially represents the status quo, coming months after the others, except for San Joaquin County. And registration from Stanislaus County for Monday's summit is comparatively weak, Hosley said.
Oakdale Mayor Farrell Jackson, one of Stanislaus County's two members on the Blueprint Policy Council, said forcing each of the eight counties to shoehorn 31 people into an acre, when they're used to 13 per acre, isn't reasonable. "It would kill some of our small cities," Jackson said. Representatives from Tulare County have voiced the same reservation.
Hosley noted that higher density standards would not change existing homes and would apply only to a fraction of new growth over the next 40 years.
The other Blueprint Policy Council member, Stanislaus County Supervisor Jeff Grover, said he prefers "healthy skepticism" to accusations of "heel dragging." People here are "skittish on what's going to happen to us from Sacramento" on various levels, he said.
"We don't want to go so far, so fast into something without knowing what the tale might be from the state," Grover said.
Nathan Magsig, a Clovis city councilman and chairman of the Blueprint Regional Advisory Committee, said, "I'm a firm believer in autonomy. But I also believe we can't continue as we have (grown).
"I'm pleased with the fact that the eight counties have been communicating," Magsig continued. "Though our documents look different, we're still working together and that's something that's never taken place before on a scale this large."
On the Net:  www.valleyblueprint.org.
Unemployment hits keep on coming for Stanislaus County...Eve Hightower
The Northern San Joaquin Valley's unemployment rate is skyrocketing with no end in sight.
Stanislaus County's unemployment rate reached a sobering 13.6 percent in December, according to data released Friday by the state Employment Development Department.
It's been more than a decade since unemployment topped last month's rate in Stanislaus County, hitting 14.8 percent in March 1998.
Unemployment figures show the Northern San Joa-quin Valley reached 12.1 percent unemployment last month as layoffs continued to cascade from the construction and financial sectors to manufacturing, retail and restaurants. The region's six counties saw unemployment grow by at least 2.7 percentage points in December from the previous year.
Unemployment likely will continue to grow, according to a report released this week at a U.S. Conference of Mayors meeting. The report projects that Modesto's unemployment rate could reach 16.1 percent by year's end.
By the end of the year, jobless rates in every major metro area in the Central Valley, from Fresno to Sacramento, are expected to hit double digits, with more than 36,000 jobs lost over the next 12 months.
California's unemployment rate jumped to 9.3 percent in December, capping a tumultuous year of massive job losses and a housing slump that has struck most of the country. That's a jump from the 8.4 percent reported in November.
Excluding farmworkers, California lost 78,200 jobs in December as employers sliced payrolls to deal with the slowing economy.
California's unemployment rate hasn't been at this level since January 1994, when the state was coming out of its recession in the early part of that decade.
About 1.7 million Californians were looking for work last month, up by 166,000 since November and up 653,000 since December 2007.
Patterson Irrigator
Wal-Mart hopes to open Patterson store...John Saiz 
Representatives with Wal-Mart filed an application with City Hall on Friday to locate a store at Sperry and Las Palmas avenues.
Plans state the 158,173-square-foot facility would have a large area for groceries, space for a pharmacy and would be open 24/7. If built, the store would be the largest retail development in Patterson.
“We have continued to monitor Patterson for some time,” Wal-Mart spokesman Aaron Rios said. “We believe the population in the area would support it.”
Before the store becomes a reality, there are a series of hurdles to negotiate. City planners are reviewing the application and will eventually determine if the project requires an environmental impact report — a lengthy and often costly study that describes the project and its effects on issues like traffic, wildlife and air quality.
A project of this size would likely need an environmental impact report, though it won’t be known for certain until staff has time to review the application, said Rod Simpson, director of the Patterson Community Development Department.
The Wal-Mart would be adjacent to the recently constructed Taco Bell and Longs Drugs in the Patterson Plaza retail center. Plans indicate space for four other 5,000-square-foot buildings nearby, which could be used for other stores.
Sperry Commercial LP owns the land the store would go on. Joe Hollowell, a representative of Sperry Commercial, said they’ve been in talks with Wal-Mart since late 2007. In the fall of 2008, he said it looked like the company was serious about submitting an application. If plans continue to go forward, Wal-Mart intends to purchase the land, he said.
The Patterson Wal-Mart would be the largest in the county. Two Modesto stores tally in at 124,170 square feet and about 117,000 square feet; a Ceres store is 140,523 square feet; and a Turlock store is 135,351 square feet, according to the county assessor’s office.
The facility would also dwarf stores on the other side of Sperry Avenue. Save Mart Supermarkets is about 49,500 square feet, less than one-third the size of Wal-Mart. The portion of Wal-Mart dedicated to groceries alone would be almost that size, at 33,047 square feet.
Wal-Mart’s marketing campaign has already kicked off. Shortly after the Irrigator reported Tuesday on its Web site that a Wal-Mart application had been filed, a Patterson Wal-Mart Web site was unveiled.
Portions of the site are dedicated to generating support for the proposed project, including letter-writing campaigns to newspapers and city officials. Several people who visited the site reported they received e-mails from Wal-Mart shortly thereafter, even though they did not provide their addresses.
Fresno Bee     
Fresno Co.'s December jobless rate: 13.2%
Construction industry hit hardest; economists predict numbers will continue climb...Tim Sheehan
More than 59,000 people in Fresno County were out of work in December, pushing the county's unemployment rate to 13.2% last month -- the highest in about six years.
Figures released Friday by the state Employment Development Department show that employment slipped by about 1,800 jobs from November, when the county's unemployment rate was 12%.
A year ago, Fresno County's unemployment rate was 9.8%.
The biggest losses came in the construction industry, which saw 400 jobs disappear between November and December and a total of 1,600 jobs over the course of the entire year, said Steven Gutierrez, a Fresno labor market analyst for the state.
"It just keeps rolling downhill for construction," Gutierrez said. "It's not only new-home construction, but construction in general. ... Nationally we're seeing construction at an all-time low, and we're seeing that reflected here, as well."
About 18,500 people worked in construction in December -- the lowest number in that field since January 2004.
California lost 78,200 jobs in December and the statewide unemployment rate climbed to 9.1%, with nearly 1.7 million people out of work. That is up from about 8.3% in November. Nationally, the December jobless rate was 7.2%, up from 6.5% the previous month.
California's unemployment rate hasn't been at this level since January 1994, when the state was coming out of its recession in the early part of that decade, said Stephen Levy, senior economist for the Center for Continuing Study of the California Economy.
"California, like the nation, is in the midst of a terrible and deepening recession," Levy said. "We all expect the job losses to continue and unemployment rates to go higher."
Fresno County's jobless rate last reached this level in March 2003, when 14.1% of residents were unemployed.
The Valley's economy may continue to deteriorate, experts said.
"Without painting a really dark future, ... the situation in 2009 appears it will be a bit worse than 2008," said professor Antonio Avalos, chairman of the economics department at California State University, Fresno. "I wouldn't be surprised if the unemployment rate goes even higher."
Avalos said economists believe the unemployment rate nationally could reach 10% or more later this year, "and that would imply a really high rate for us."
For all of 2008, Fresno County employment in all nonfarm industries fell by 3,700 jobs. The losses, Gutierrez said, were spread through the economy.
"Basically, it started out just in the construction and financial sectors," Gutierrez said, "but now it's affecting just about everyone."
Fresno County's retail sector, slammed with declining sales at many stores, lost about 1,100 jobs between December 2007 and December 2008. Financial activities such as banking, insurance and real estate lost 900 jobs and manufacturing employment dipped by 300 jobs.
But there were isolated bright spots, Gutierrez said. Health care gained 800 jobs in 2008, and the hospitality industry saw a gain of 500 jobs during the year, most likely due to new hotels.
As dismal as the Valley figures are, they're not the worst in the state. That unfortunate distinction belongs to Imperial County, where the 22.6% unemployment rate ranks it the highest among California's 58 counties.
Sacramento Bee
Yolo, Davis officials wary of carcinogen at Target site...Hudson Sangree
Officials from Yolo County and Davis expressed concern Friday about pesticide contamination found near homes and the construction site of a Target store.
Testing in November revealed trichloropropane, or TCP, a known cancer-causing agent, in shallow groundwater about 100 feet east of the Target site on Second Street in Davis.
The chemical previously had been found nearby at what was the Frontier Fertilizer distribution yard, but is now a Superfund site – a toxic cleanup area administered by the U.S. Environmental Protection Agency.
Some residents of Mace Ranch subdivision, just to the north, are worried that TCP is migrating toward their homes.
They argued that pouring the store's concrete slab could impede further testing and cleanup, and wanted the EPA to delay Target's construction.
But EPA officials said construction could move ahead and their investigation could continue after the store was built.
On Friday, two Davis City Council members and two Yolo County supervisors discussed the issue at a public forum.
Supervisor Jim Provenza, a Mace Ranch resident, said it didn't appear that the TCP was an immediate threat to the public health.
If it migrates under the Target store or nearby homes, however, it could vaporize inside the buildings and pose a cancer risk with prolonged exposure, he said.
Chemicals such as TCP "tend to move," he said.
The involvement of city and county officials in the federal Superfund site has been inconsistent over the years, according to those at the meeting.
The important thing now, Provenza said, was to make sure the EPA didn't walk away from the site prematurely. Cash-strapped state and local governments are in no position to do toxic cleanup, he said.
"We need to be on top of the testing," he said. "It's in our interest to make sure (federal EPA officials do) everything they can before they're done."
He said he had asked the county's lawyers to review an agreement between Target Corp. and the EPA that allows for monitoring and other measures on the property even after the store is built.
Davis Mayor Ruth Asmundson said she was concerned that the plume of pesticide was moving north toward the Mace Ranch neighborhood, with its families, parks and elementary school.
"How do we assume that the kids are safe?" she asked.
The Davis City Council is set to discuss the matter at its Tuesday meeting.
Pam Nieberg is the liaison to the EPA for the Frontier Fertilizer Superfund Oversight Group, a Davis citizens' organization. She said EPA officials have not seemed to be taking the latest discovery of TCP seriously, but recently agreed to do more testing to determine the source and extent of the contamination
Provenza said he thought Target was taking a risk by building the store before the EPA completed its investigation.
City planners said Friday that the store's concrete slab would be poured next month.
But Anna Anderson, a Target spokeswoman, said the company had assessed the risks and was "excited" about the Davis store.
The company was putting a vapor-recovery system in place to protect its employees and customers from TCP fumes, she said.
"We'll continue to partner with EPA, should there be any questions moving forward," she said.
State suffers third biggest monthly job loss since end of WWII
Staggered by layoffs, store closings and other troubles, California's job market suffered through one of its worst months in history in December, pushing unemployment to 9.3 percent.
Some 78,200 jobs disappeared statewide, the Employment Development Department said Friday, as the recession swamped practically every sector of the economy: retailing, construction, manufacturing and more. It was the third biggest monthly job loss since the end of World War II, and the largest since the dot-com collapse wiped out 85,100 jobs in July 2001.
Statewide unemployment jumped nine-tenths of a point, the largest one-month leap in at least 33 years, said chief economist Howard Roth of the California Department of Finance. At 9.3 percent, unemployment is the highest it's been since 1994.
The numbers were poorer than most economists expected – and reinforced fears that even worse news is coming. Empty storefronts are multiplying, the tech sector is hurting, and construction continues to struggle. State government workers are facing furloughs and layoffs starting Feb. 6, although that could be forestalled by litigation or other factors.
"What we're looking at now is a recession that's getting stronger," Roth said. "We're probably going to see bad numbers predominantly for a while."
Greater Sacramento's unemployment rose six-tenths of a point to 8.7 percent, the highest since 1993. Some 4,700 jobs vanished across the four-county region, with major losses recorded in construction, finance and the wide-ranging sector known as professional and business services.
The Sacramento economy is so weak that area retailers added just 200 jobs in December. That's about one-tenth the usual number, said EDD labor market consultant Diane Patterson.
The anemic hiring was in line with one of the poorest holiday shopping seasons in decades. The month ended with the demise of Mervyns, erasing hundreds of jobs in Sacramento, and now Circuit City Stores is in liquidation, too. Fresno-based Gottschalks Inc. is fighting for survival in bankruptcy court.
In raw numbers, retailers added a mere 7,500 jobs across the state in December. Adjusted for seasonal expectations, as is customary with statewide numbers, retail employment fell by 21,600.
Technology is getting hit, too. Sacramento's fledgling green-tech sector just endured the loss of 105 jobs at OptiSolar Inc., a solar-energy company at McClellan Park. Xyratex Ltd., a data-storage company, plans to eliminate 300 jobs in West Sacramento in February, according to layoff notices filed with the state.
"There's nothing; the economy is too slow," said Herminio Ortiz, 47, a construction worker who was at EDD's main unemployment office in Sacramento earlier this week.
Sitting nearby, 51-year-old Harry Albino, who lost his job repairing medical equipment, said he's pessimistic about a quick economic recovery.
"It's going to take a couple of years … to get back on our feet," he said.
But former EDD director Mike Bernick, a senior fellow at the Milken Institute think tank in Santa Monica, said it's possible the recovery could be robust. That's because economic trends are more dynamic than before. Employers are imposing layoffs more quickly than in previous downturns; they might hire back just as quickly, he said.
Still, Gov. Arnold Schwarzenegger renewed his demand that a stimulus package be included in any resolution to the state's budget crisis. Democrats, who control the Legislature, have resisted Schwarzenegger's plan, which includes a relaxation of environmental regulation.
"We cannot solve our fiscal problems without working to stimulate our economy," the Republican governor said in a press release.
A new counting method probably worsened the gloom in the jobs report. The old system was often slow to capture dramatic swings in the economy; the new system is designed to capture those trends more quickly, said Steve Saxton, chief of EDD's labor market information division.
The new method also prompted EDD to revise November's job numbers. Instead of losing 41,700 jobs, it's now estimated the state lost 73,500 jobs. That was the fourth-highest job loss ever, ranking just behind the December numbers announced Friday.
Roth said California's single worst month for job loss on record came in December 1945, when the uncertain transition to a peacetime economy wiped out 108,700 jobs.
The population was much smaller then, and the loss came to nearly 4 percent of all jobs. The losses announced Friday totaled about one-half of 1 percent.
But there was no mistaking how bad the report was.
"This decline is really stunning," said Jeff Michael, director of business forecasting at the University of the Pacific.
The report showed misery spreading up and down the state, with unemployment hitting 22.6 percent in Imperial County and 14 percent in Siskiyou. Double-digit unemployment has returned to Fresno, Merced and other portions of the Central Valley.
Economists were forced to rethink earlier projections. Just a week ago, Suzanne O'Keefe of California State University, Sacramento, told a Sacramento audience that job growth could return to the region in September. Now she says she hopes the job market will merely stabilize by year's end.
"Things are getting worse, month by month by month," she said Friday.
The much-watched UCLA Anderson forecast had predicted that statewide unemployment would peak at 8.9 percent – a prognosis that's now been reduced to shambles.
UCLA economist Jerry Nickelsburg said Friday he wasn't shocked that unemployment surpassed his prediction, but "I guess I didn't expect it quite this soon."
His new prediction: "The mid-nines will not be a surprise, even a bit higher than that."
December was worse than predicted because of the collapse in retail spending and the downturn in commercial construction, which felt the effect of the credit squeeze, he said. Also, a weakened global economy curtailed the market for California's once-booming export industry, he said.
Stockton Record
EPA orders four port firms to clean up
Worries about runoff pollution prompt action...Reed Fujii...1-23-09
STOCKTON - Federal officials said Thursday they've ordered four companies at the Port of Stockton to do more to prevent pollution in stormwater runoff.
Rain can wash materials such as fuel, oil and debris from the operations - materials recyclers, a steel supplier and a power plant - and carry them into the nearby San Joaquin River, the U.S. Environmental Protection Agency said in a news release.
The orders stem from inspections in March that uncovered violations at four of about two dozen industrial operations that lease land at the port, officials said.
"I believe they made some corrections, but they didn't do everything we asked them to do, so we issued the orders to make sure they take all the actions they need to take," said Amy Miller, who helps lead stormwater wetlands enforcement at the EPA's San Francisco office.
No penalties have been levied in these cases, but the EPA noted violations of Clean Water Act stormwater protections carry potential fines of $32,500 a day.
While the actions have been pending for months, the companies under scrutiny - A-Plus Materials Recycling, Alco Iron and Metal Co., Macsteel Service Centers and POSDEF Power Co. LP - seemed caught by surprise.
Joe Simi, manager of Alco's Stockton operation, said Thursday morning he'd received no EPA order and asked The Record to forward a copy of the news release.
Eric Horton, vice president and co-owner of A Plus, said he was surprised to see the EPA order in his mail Tuesday so long after his last contact with the regulators.
"It just floored me," he said Thursday afternoon.
"They were out in March, and then it was July 17 or something before we heard anything from them," he recalled. "As soon as we heard from them - there were four or five items - I responded to them in writing.
"I felt we addressed their concerns with the correspondence in the time frame they asked for, and not hearing back from them, I thought everything was OK."
Macsteel and POSDEF offered no immediate response Thursday to a reporter's inquiries.
Port Director Rick Aschieris said his agency is aware of the EPA's concerns and that its own environmental experts will help bring the tenant companies comply with the orders.
"It is my understanding in many cases they have already made substantial improvements, and we will be working with them to ensure they do complete the projects and address the concerns as listed by the EPA," he said Thursday.
Aschieris said overall, the port and its tenants are doing well in preventing stormwater pollution.
But, he added, "While on one side I'm pleased that the majority of the facilities that were involved passed inspection, ... the port will remain highly focused on this and our responsibilities as the landlord."
With a focus on ports as a source of industrial water pollution, Miller said EPA inspectors previously had conducted similar surveys at both the ports of Long Beach and Los Angeles involving about the same number of industrial tenants at each facility.
"For Long Beach, we issued eight orders, and for L.A., we issued 10," she said. "Stockton had less significant issues."
S.J. jobless figures hit 13 percent...Bruce Spence
San Joaquin County unemployment jumped in tandem with the state of California last month - with jobless rates bounding upward from November.
Because of 2,000 lost jobs, the county's unemployment rate hit 13 percent in December, up 1.1 percent from November, according to data released Friday by California's Employment Development Department.
It is the highest rate in the county in 12 years.
The state's unemployment rate increased from 8.4 percent in November to 9.3 percent last month, with the loss of 78,200 jobs, the department reported.
Meanwhile, unemployment nationwide jumped a half point in December to 7.2 percent, from 6.7 percent the previous month, with the loss of 524,000 jobs.
"It's indicative of not just the state but the nation," agency market analyst Liz Baker said. "This economic downturn is affecting everyone everywhere. Jobs are being lost, and companies are closing."
Employment woes have spread to almost all sectors, said Jeff Michael, an economist who directs University of the Pacific's Business Forecasting Center.
"It's bad, and look for this for at least a few more months."
Baker said December's rate is the highest jobless level for the county since a 13.2 percent unemployment rate in February 1997.
"Because we're seeing so many reports on a daily basis of businesses closing or downsizing, it really wasn't a surprise," she said.
The retail sector particularly has been hard hit.
For consumers, that has meant Mervyns' bankruptcy and the shutdown of 25 distribution-center jobs lost at Cost Plus' Stockton mega distribution center. However, Cost Plus isn't touching its two World Market stores in San Joaquin County.
The monthly report showed that seasonal farm employment fell by about 500 jobs, while construction and manufacturing dropped by 400 jobs each. Leisure and hospitality dropped 200 jobs for the month as did government, with 100 jobs lost in city government and 100 in education.
Gabriel Hernandez, a Stockton electrician, has been feeling the pain of the slowdown in the region's economy in recent weeks.
After working steadily for most of last year, including a stint at the Toyota/General Motors NUMMI plant in Fremont, work completely evaporated in mid-December, he said.
"It's probably been the worst three months in my 10 years in the trade," he said.
Hernandez attributes the slowdown to a number of factors: consumers spending less, government crunches, foreclosure woes, worries about the stock market - and even uncertainty about future impacts on the economy from President Barack Obama's administration.
"Now that everybody's cutting back on stuff, they're not going to be putting a lot of work out to bid," he said. "That's scary."
School districts in the county have been making headlines in recent weeks as they struggle with huge budget problems because of declining revenues.
There has been job slippage, for example, even at Stockton Unified School District, which has had no layoffs or even a hiring freeze so far this school year as officials work on plans to deal with expected budget cuts.
But, district spokesman Rick Brewer said, there "certainly are some vacancies that we're not filling at this point."
In recent months, Michael had been saying that San Joaquin County employment numbers weren't as bleak as the national numbers and wondering whether that was a short-lived phenomenon.
"Pretty clearly it was a blip," he said. "My reaction to (the new employment report) was, 'Wow!' And the headline story is retail had a terrible December."
That's a month when retailers typically are still adding some employees for the holiday sales season, he said.
Instead, retail jobs fell by 200 to 27,200 in December. And that total was down about 900 jobs from December 2007.
If there's a plus side to that, it's that most of those hires would have been seasonal temporary employees, Michael said.
Bad retail news has piled on.
Fresno-based Gottschalks, which has two department stores in San Joaquin County, has filed for bankruptcy and has started seeking a buyer. And electronic giant Circuit City's decision to close all its U.S. stores will put more than 100 employees out of work when two stores go dark in the county.
In the financial sector, JP Morgan Chase Bank laid off 60 workers in the county last month in the continuing wake of its September buyout of Washington Mutual.
Baker said county unemployment numbers haven't been this high since the 1990s when seasonal farming dominated the economy before the county's business base began diversifying.
"It's unsettling," she said.
Stanislaus County saw a whopping unemployment increase last month as well. With the loss of 3,800 jobs, the county jobless rate jumped from 12.3 percent in November to 13.6 percent last month.
Not that there haven't been some bright spots. With foreclosure sales still booming month after month in the area, PMZ Real Estate has boosted staffing by 25 in 12 months to 90 employees in Stockton, said Ben Balsbaugh, residential sales manager for the office.
Because phone lines tend to get busy, the EDD encourages those who need to file for unemployment benefits to do so online at https://eapply4ui.edd.ca.gov.
San Francisco Chronicle
Cleanup continues despite transition at Hanford...SHANNON DININNY, Associated Press Writer
Richland, Wash. (AP) -- Each year, the federal government spends roughly $2 billion to rid the nation's most contaminated nuclear site of toxic and radioactive waste. Now, winds of change are blowing across southeast Washington's Hanford nuclear reservation.
Three new contractors won bids to handle some of the work. A new president and new Congress assumed office with their own ideas about how taxpayers' money should be spent. The state filed suit, charging the federal government with failing to meet its legal obligations there.
The changes mark a period of transition for everyone involved with cleaning up the sprawling 586-square-mile site, from pumping and treating miles of contaminated groundwater to building a massive plant to convert radioactive waste into a stable glass for long-term disposal.
But transition can't mean more long delays or a halt to the work, Gov. Chris Gregoire said in a phone interview with The Associated Press.
"The costs are too great," she said. "If we were to fail to clean up that site and contaminate the Columbia River, the costs would be way more than anything it would take us to clean up the site itself."
The federal government created Hanford in the 1940s as part of the top-secret Manhattan Project to build the atomic bomb. Cleanup costs are expected to top $50 billion.
That work is divided among five major contracts, three of which went out to bid last year.
Two of the companies that were awarded contracts — Washington River Protection Solutions LLC will retrieve tank waste and work to close the tanks, while CH2M Hill Plateau Remediation Co. will clean up the site's central plateau — assumed control in October. A contract to handle safety and security, information technology and road work, which was won by a group led by Lockheed Martin Corp., is on hold while the Energy Department resolves issues raised in protest of the contract award.
Federal contracts awarded today are far superior — and more substantive — to contracts in the past, but the process still causes delays in work, Gregoire said.
"I would prefer the contracts be longer than up for bid every five years," she said. "In addition to being disruptive to the work, there's clearly a degree of angst with the work force."
Energy Department managers say the changeover of contractors can result in delays while workers review projects and safety measures. But they say new contractors also bring fresh enthusiasm and ideas to what can be technologically challenging work.
For instance, tank waste retrieval stopped while workers and new managers were trained, said Shirley Olinger, an Energy Department manager overseeing Hanford cleanup as head of the Office of River Protection.
"But typically, what we find is that we're going to get a lot of innovative thinking," she said. "I think with new contractors, you go through short-term challenges, but in the long run, DOE gets new approaches to the job."
Even more challenging in recent months is finding the money to complete the work and meet legal deadlines for cleanup.
The Energy Department has said it will miss 23 deadlines this year, citing insufficient money in the 2009 budget. Now, some U.S. senators are pushing the Obama administration to spend stimulus money to clean up not just Hanford but all Cold War-era sites.
"A lot of the progress here is riding on the amount of dollars that are allocated," said Rod Lobos, a project manager for the Environmental Protection Agency. "The work force here is ready, willing and able to do the work. They just need to have those dollars there."
Lobos conceded that some projects are constrained by technology — workers either aren't yet sure how best to approach a project or technical problems have arisen during the cleanup. But more are constrained by limited money, he said.
David Brockman, the Energy Department's other manager overseeing Hanford cleanup from the Richland Operations Office, agreed some work could be accelerated with additional money. He cited work to pump and treat contaminated groundwater and efforts to retrieve highly radioactive waste from the site's central plateau, where work has been slowed because it is farther from the Columbia River.
For her part, Gregoire believes President Barack Obama and new Energy Secretary Steven Chu recognize the importance of cleaning up the site. She's also hopeful the new administration will work to resolve the state's recent lawsuit.
In 1989, the state and federal government signed the Tri-Party Agreement to establish legal deadlines for completing all phases of the cleanup. Twenty years later, the two sides are embroiled in a lawsuit over missed deadlines and inadequate funding.
"I don't think taxpayers should have to spend money to get the federal government to live up to its responsibilities," Gregoire said. "Having said that, I think it would be derelict in our responsibility not to have brought the lawsuit."
Through it all, work to clean up the toxic site continues.
"People might get the impression that work is slowing down because there's a lawsuit," Brockman said. "That couldn't be farther from the truth."
On the Net:  www.hanford.gov
Los Angeles Times
Federal report backs Tejon Ranch conservation plan...Louis Sahagun, Greenspace
The U.S. Fish and Wildlife Service on Friday released a long-awaited environmental impact statement that gives high marks to Tejon Ranch Co.’s controversial habitat conservation plan for building a master-planned resort complex in federally designated critical habitat for the endangered California condor.
The federal evaluation of the plan was required because the ranch is seeking a special permit to protect it from legal liability if any one of 26 sensitive species are injured or killed because of its business activities on the property. Under the plan, however, the ranch would be criminally liable if a condor is killed because of those activities.
The ranch’s plan aims to strike a balance between protection of the condor and development of Tejon Mountain Village, a complex of luxury homes, hotels and golf courses on 142,000 acres of pristine landscape in the Tehachapi Mountains about 60 miles north of Los Angeles.
Critics, however, believe the plan would harm condors by allowing development in their historic foraging grounds, and weaken the concept of federally designated critical habitat for endangered species.
“This plan is a disaster,” said Adam Keats, director of the urban wildlands program of the Center for Biological Diversity. “If it gets approved as written, I guarantee a lawsuit.”
“Contrary to Tejon’s assertions, this is not a conservation plan,” he said. “This is a permit to harm, displace, disturb, and in some cases, kill 27 endangered, threatened, or rare species that call Tejon home.”
The release of the 106-page statement late Friday afternoon surprised opponents and ranch officials alike. Keats, for example, said his group had been led to believe that the Obama administration wanted more time to review high-profile Fish and Wildlife Service reviews that had been shepherded by Bush officials.
“Something very strange happened today with the release of this document,” Keats said. “The signals we were getting from the Obama administration indicated that it had been put on hold. Then, to everyone’s surprise, there it was at 4 p.m.”
“It’s possible,” he added, “that the folks at USFWS are so embarrassed by the document, they decided to simply turned it loose without fanfare.”
Ranch officials, however, were pleased with the statement.
“We think the Fish and Wildlife Service evaluation of the effectiveness of our habitat plan is accurate,” said ranch spokesman Barry Zoeller. “We look forward to additional public comment.”
In the statement, federal authorities pointed out that most of the Village development “would be completed below ridgelines” frequented by condors, and condor feeding stations would be established in locations isolated from human activity. Overall, the Village complex, in addition to activities including mining and creation of a new national veterans cemetery, would impact about 8% of the federally designated critical condor habitat in the 142,000-acre area covered by the plan.
As a result, the statement determined that the Village “will not result in the destruction or adverse modification of designated condor habitat,” and “no nesting, roosting or airspace habitats will be directly affected."
In May, the ranch and a coalition of environmental groups agreed on a landmark strategy to preserve 90% of the entire 270,000-acre privately held spread encompassing four ecosystems: forests, desert, Sierra Nevada mountains and the Central Valley.
In exchange, environmental groups including the Natural Resources Defense Council, the Sierra Club and Audubon California will not oppose the company’s overall plans to build three major developments, including more than 26,000 homes at the western and southwestern edges of the ranch.
“As the condor goes, so goes what makes California special,” said Keats, whose group wants to see the Tejon Ranch preserved as a new national or state park. “We sincerely hope that the Fish and Wildlife Service comes to its senses and rejects this permit.”
1st Centennial Bank in Redlands is shut by state regulator
It is the third U.S. bank to fail this year and the first in California after it runs into trouble funding home builders. Its six branches will reopen Monday as part of First California Bank of Camari..E. Scott Reckard
The California Department of Financial Institutions closed Redlands-based 1st Centennial Bank late Friday, saying its six branches will reopen Monday as part of First California Bank of Camarillo.
Like many Inland Empire banks, 1st Centennial ran into trouble funding home builders. It was the third U.S. bank to fail this year and the first in California since Downey Savings of Newport Beach on Nov. 21.
The Federal Deposit Insurance Corp. estimated 1st Centennial's failure would cost the deposit insurance fund $227 million. The bank had $677 million in deposits as of Jan. 9. That included an estimated $12.8 million that exceeded insurance limits -- money that customers will lose access to, the agency said.
Insured deposits made through brokers will be paid back to customers through those intermediaries. First California is assuming all other insured deposits, with 1st Centennial accounts becoming First California accounts.
Customers who had more than $250,000 in deposits at 1st Centennial can call the FDIC at (800) 822-1918 starting today to set up appointments to discuss their funds. The FDIC website also has information about 1st Centennial's failure: www.fdic.gov/bank/individual/failed/centennial.html.
First California agreed to buy $293 million of the failed bank's $803 million in assets. The FDIC will eventually seek to sell the remaining assets.
New York Times
Third Bank Is Seized This Year...BLOOMBERG NEWS
First Centennial Bank of Redlands, Calif., was seized by a state regulator, the third bank in the nation to fail this year.
First Centennial, with $803.3 million in assets and $676.9 million in deposits, was shut by the California Department of Financial Institutions, and the Federal Deposit Insurance Corporation was named receiver.
First California Bank, based in Westlake Village, will assume deposits. The failed bank’s six offices will open on Monday as branches of First California, the F.D.I.C. said.
“Depositors of the failed bank will automatically become depositors of First California,” the F.D.I.C. said. “There is no need for customers to change their banking relationship to retain their deposit insurance coverage.”
Regulators closed 25 banks last year, the most since 1993, draining money from the F.D.I.C.’s deposit insurance fund, which had $34.6 billion as of Sept. 30. National Bank of Commerce in Berkeley, Ill., and the Bank of Clark County in Vancouver, Wash., were closed by regulators on Jan. 16.
First California will buy about $293 million in assets and will pay a premium of 5.3 percent to assume the failed bank’s insured deposits, the F.D.I.C. said. The cost to the deposit insurance fund, supported by fees on insured banks, will be an estimated $227 million, the agency said. First Centennial had about $12.8 million in deposits that exceeded insured limits, the F.D.I.C. said.
First Centennial Bancorp, the parent of the failed bank, lost 99 percent of its market value in the past year.
The F.D.I.C. approved a budget for the coming year last month that almost doubles spending, to $2.2 billion, from 2008 to hire staff for handling bank closures.