Merced County and Iceland…Badlands Journal editorial board
Badlands Journal, in its remorseless efforts to understand Merced County, has embarked on a series of comparative economic studies. In fact, in the hope of boosting sagging UC Merced enrollment, Badlands plans to endow a chair in comparative econometric modeling, complete with oodles of math and whirring computers, just as soon as it is solvent. Or is it liquid?
Imagine, the government of a nation with only 50,000 more people than Merced County is being held responsible for that nation's economic collapse!
At first glance, there does not seem to be much basis for comparison between Iceland and Merced County, but as all real good economists know, the poetry is in the numbers.
The population is basically the same and so is the economic condition -- disastrous.
Yet, Iceland has only 0.07-percent arable land and fishing is the basic industry. There are more whalers than farmers in Iceland, while the reverse is true in Merced County.
But, there is also extensive mining in Iceland, which offers some comparison with Merced County's endless stream of sand and gravel mines.
Iceland had begun to diversify into manufacturing and computer-related industries, the old high-tech, bio-tech engine of growth that UC Merced was supposed to instantly provide Merced County except that all the "money" (credit) was in real estate.
Iceland's now-collapsed banks got into international high finance, another point of comparison with Merced County, where no one quite knows who owns what slice of whose mortgage.
But Iceland, although a possession of larger states until 1944, boasts the oldest democratic legislative body in the world, the Althing, founded in the 10th century. Merced is located in California, where it is being reported for the first time since the last Jerry Brown administration that drums are beating audibly for a constitutional convention. The institute of governmental studies bearing Brown's father's name, has been describing the state as ungovernable for years, an opinion occasionally shared by the dean of state Capitol newsmen, Dan Walters and others. It has even now been suggested by our governor, the Hun, in his most recent State of Mess address. Perhaps, it will be a reprise of his famous Terminator role.
Hundreds of Icelanders, perhaps due to their ancient traditions, demonstrated in front of its parliament for months until the coalition government collapsed. Furthermore, they did this in the Icelandic winter, a very serious winter indeed, with only a few hours of daylight.
Gisladottir said yesterday: "We would become like a divorcing couple, shouting at each other, if we continued like this. That's not my style."
Imagine such a statement from the coalition of Republicans and Democrats that run Merced County.
Imagine more, as did a Merced County supervisor in a recent meeting, muttering darkly that, "There are people trying to take over this county":
"A new government should be formed by the end of the week," Baldur Thorhallsson, a political science professor from the University of Iceland, said.
"It seems most likely that we will have a minority government of the Alliance party and the left-greens."
Steingrimur Sigfusson, leader of the left-greens, offered a national government in October, when the collapse became apparent, which the government rejected. Sigfusson said that he is now considering all possibilities.
Iceland, where literacy has been universal since the 18th century, is a highly educated society. Merced County, on the other hand, is located in California, where K-12 education funding ranks 47th in the nation. That ranking may fall a notch or two as a result of the 2009 state budget because the California Legislature is dominated by finance, insurance and real estate special interests, who do not give a damn about public education, except as it might increase the price of a home product in a subdivision. In this economy, these special interests aren't especially interested in this issue this year.
Although Iceland's unemployment in 2008 is reported to have been 1 percent, in the last quarter and carrying through to January 2009, due to the economic crisis, the Icelandic unemployment rate has risen to around 6 percent. Merced County reported 15.5 percent unemployment last weekend.
Teams of Badlands' number crunchers are busy providing the editorial board with deeper insights into relationships between Merced County and Iceland. The whole meteriological issue, for example, must be quantified in light of global warming, officially called "climate change" at UC Merced. They ask no thanks from local government or the university for this service. It is enough, they report, to know that they are voluntarily performing their civic duty.
The Guardian (UK)
Icelandic PM becomes world's first leader to step down over banking system crisis• Geir Haarde calls for early elections amid protests
• Country faces economic contraction of up to 10%...Valur Gunnarsson in Reykjavik and Mark Tran
The global economic crisis claimed its first leader yesteday, as Iceland's prime minister announced the immediate resignation of his government following the collapse of the country's currency and banking system.
Geir Haarde said as recently as Friday that his coalition would remain in office until early elections, called for 9 May, after violent protests at its handling of Iceland's tottering economy.
Yesterday he threw in the towel, saying that his Independence party and its Social Democratic Alliance partners were quitting immediately as he could not accept a demand by the Alliance to take over the premiership.
"What I have feared the most has come to pass, we now have a governmental crisis on top of the economic one," Haarde said.
The prime minister told reporters that a continuing of the coalition would have been the best result. "We couldn't accept the Social Democratic demand that they would lead the government. That is not something we agreed on in 2007."
The government started with a famous kiss between Haarde and Ingibjorg Solrun Gisladottir, the head of the Alliance party, in the spring of 2007.
The government held a two-thirds parliamentary majority and would have remained in power until the spring of 2011 had it not been for the country's economic meltdown.
Gisladottir said yesterday: "We would become like a divorcing couple, shouting at each other, if we continued like this. That's not my style."
Iceland's president, Olafur Ragnar Grimsson, said he was unlikely to give any party a mandate to form a new government until today.
"It's very natural that the president will first sound out if there is a majority to be found in parliament," he said. "I have asked everyone in the current (administration) to continue to do their jobs until a new government has been formed."
Haarde has been in office since mid-2006. The 57-year-old has the dubious distinction of being the first world leader to leave office as a direct result of the world financial crisis. Last week, Haarde revealed he had been diagnosed with throat cancer and would not be seeking reelection anyway.
The prime minister's previous national popularity was obliterated in October when the global credit crisis ravaged Iceland's hugely indebted economy, leading to a collapse in the country's currency, the crown, and forcing the government to take control of its three major banks.
The population of 320,000 - who had enjoyed years of rising incomes and high growth rates, thanks in no small part to an economy burdened with a foreign debt that peaked at 10 times the annual national GDP - now face a potential economic contraction of up to 10% this year, with unemployment rising rapidly.
After months of rallies outside the parliament building, last week protesters pelted Haarde's car with eggs while riot police used teargas for the first time since 1949.
The protests continued at the weekend despite Haarde's announcement of the early election.
Yesterday the country's commerce minister, Bjorgvin Gudni Sigurdsson, resigned, apologising for the collapse.
"I accept my part of responsibility in the collapse of the banking sector even if numerous other people have their share of responsibility," Sigurdsson, a Social Democrat, told a press conference.
Who will take over from Haarde is unclear. Gisladottir, currently Iceland's foreign minister, immediately ruled herself out.
Gisladottir has only just returned to Reykjavik after undergoing treatment for a brain tumour in Sweden.
Gisladottir has called for another senior member of her party, Johanna Sigurdardottir, the social affairs minister, to lead a new government.
"A new government should be formed by the end of the week," Baldur Thorhallsson, a political science professor from the University of Iceland, said.
"It seems most likely that we will have a minority government of the Alliance party and the left-greens."
Steingrimur Sigfusson, leader of the left-greens, offered a national government in October, when the collapse became apparent, which the government rejected. Sigfusson said that he is now considering all possibilities.
Protesters celebrated the fall of the coalition government with a party outside the parliament building.
"I am proud of the Icelandic people to have driven this off their hands. Now that the suspect is leaving the scene of the crime, the investigation can begin," Illugi Jokulsson, a publisher, said.
"The Independence Party should not run anything except the transportation ministry at most," Erpur Eyvindarson, a rapper, said.
Eyvindarson continued: "They ignored us in 1949, they ignored us when they went to war in Iraq and when they dammed the highlands. They will ignore us no more."
Atwater road projects face budget hurdle...JONAH OWEN LAMB
A series of proposed and ongoing changes to roadways in and around Atwater may alter not only how you get around, but also the future shape of the city.
The Atwater-Merced Expressway and the expansion of Highway 99, which includes new Bellevue West and Applegate interchanges, all promise to affect how people get to and from Atwater.
And on Monday night, the City Council of Atwater was given an update on the progress of these road projects by engineers working on them as well as a representative from the Merced County Association of Governments.
"These are the many things that would make the city of Atwater grow," said Mayor Joan Faul, about the road building.
The only project discussed that is currently under way, the Bellevue West interchange, north of Atwater, is slated for completion in 2011. But because of the state budget crisis it may be slowed or stopped.
Scott Mcbride, Atwater's director of economic development, said that since the state has called for a stop to all capital projects there is an effort to try to get the contractors to continue the project.
The next project under way is far from the dirt-moving stage, but near the final stages of planning.
The roughly $300 million Atwater-Merced Expressway is moving closer to reality, said Jimmy Sims, an engineer working on the project.
"We are pretty far down the road on the Atwater-Merced Expressway," he said to the council.
The only steps needed to complete all of the environmental studies of the expressway's effects, said Sims, are responding to public comments on the project and then giving a final draft report to MCAG to vote on.
But the four-lane expressway's major hurdle prior to construction is money, said MCAG's executive director Jesse Brown. The hope is to find the missing funds for the expressway in developer fees and other sources, he said.
The final major project planned for Atwater is in the future in terms of actually being built. As part of the expansion of Highway 99, an improved interchange is planned for construction where the highway passes through downtown Atwater. The Applegate interchange is meant to quicken the flow of traffic on and off Highway 99 as well as ease crossing of the highway for locals.
Three versions of the planned Caltrans interchange were presented to the city council on Monday night.
The most expensive plan, and most drastic, would realign the highway by bending it slightly south so room for more efficient on- and off-ramps could be made.
"This is a modern freeway," said Brown of the third option.
All this planned roadwork for the next couple of years had city officials optimistic about the future.
"It looks like a very exciting three to four years ahead, even in a down economy," said Greg Wellman, Atwater's city manager.
And they say all roads lead to Rome?
Merced County supervisors may move Los Banos bypass one stripe closer to reality
Plan to reroute Highway 152 around Los Banos could enter general plan...CORINNE REILLY
More than 40 years after leaders in Los Banos began looking for a way to remove Highway 152 from the heart of their city, Merced County leaders will decide today whether to formally endorse a plan to do just that.
The board will vote this morning on whether to amend the county's general plan -- a long-range document that details how Merced County should develop in the coming decades -- to include a long-delayed project that would re-route Highway 152 around Los Banos.
Most of the land slated to be paved over to build the new stretch of road lies within county boundaries. A vote by the Board of Supervisors to include the project in its long-range plan would help preserve that land, which is now largely undeveloped, for the bypass.
It may be several years before the project breaks ground, and more than a decade before it's finished.
"This is a long-term project," said Bill Nicholson, the county's assistant planning director. "So it's important that we include it in our long-term planning. If someone came along in the next 10 years or so looking to build a dairy or houses there, we'd want them to find another location."
The board is expected to endorse the 10-mile bypass, which is projected to cost nearly $500 million. So far, finding money to fund it has been the project's biggest holdup.
Planned to start just west of Volta Road and end just east of the Santa Fe Grade, the new stretch of road would run in a large curve around the north of Los Banos, instead of down Pacheco Boulevard and through the city.
Efforts to re-route the highway, which provides a heavily used route for commuters to the Bay Area and truck drivers moving goods across California, have been in the works since the 1960s.
Officials in Los Banos have long said that rerouting 152 is vital to the city's future, pointing to the numerous wrecks that have occurred there in recent years, as well as regular, massive traffic backups.
The bypass will include several bridges over existing streets and railroad tracks so that drivers traveling on 152 won't have to stop at traffic lights as they do now.
Caltrans, one of several agencies involved in the project, is expected to begin acquiring land for the bypass as funding becomes available. Officials have said they're hoping to gather a combination of federal, state and local tax dollars to pay for construction.
Immediately before its vote today, the board will accept input from the public on the bypass project.
To attend the 10 a.m. meeting, go to the Board of Supervisors chambers on the third floor of the Merced County Administration Building, 2222 M St., Merced.
Most forum attendees vote for denser growth
Plan would put 31 people in 10 homes per acre on average...RUSSELL CLEMINGS, The Fresno Bee
FRESNO -- A public forum Monday narrowly endorsed tight limits on future urban sprawl in the Valley, setting the stage for a debate that culminates this spring with votes by government officials throughout the region.
Fifty-three percent of the nearly 600 people attending the San Joaquin Valley Blueprint Project's public summit at the downtown Fresno Convention Center said they preferred a plan that would put 31 people, or 10 homes, on an average acre of new development, compared with 13 people, or about four homes, under present trends.
The recommendation now goes to a panel consisting of elected officials from each of the eight Valley counties. Its fate there is uncertain. Many of those officials have already said they back a third option for 18 people, or about six homes, per acre.
"I'm worried that we'll come up with a great plan and then people will come out of the woodwork and start taking potshots at it," said Ed Thompson, California director for the American Farmland Trust, who spoke shortly before the vote.
The two-year-old state-funded Blueprint program is billed as an effort to sketch a broad vision of the Valley at midcentury. Its major goals are to preserve farms and wildlife by reducing sprawl, and to cut air pollution and greenhouse gas emissions by reducing the number of miles driven by the region's residents.
When completed, the Blueprint will not be binding on the region's cities and counties. But state transportation and affordable housing funds could be tied to how well a local agency follows the plan.
The significance of that wasn't lost on Madera County Supervisor Frank Bigelow, who also spoke.
"Cities will have have less control, counties will have less control, special districts will have less control" over the way they build, he said.
Moreover, the group attending the summit was largely white, about half older than 50 and skewed toward planners and other government officials, Bigelow noted, questioning whether those present represented a true cross-section of the increasingly Latino Valley.
Mike McCoy, co-director of the Information Center for the Environment at the University of California at Davis and a leader of the computer work that went into the future growth scenarios, cautioned against placing too much emphasis on the average housing densities in each version.
Small towns will likely have lower housing densities than the average. Part of cities like Fresno may be much higher than average.
Similarly, Keith Bergthold, Fresno's interim planning director, advocated looking at the scenarios in a broad rather than specific way. He described the Blueprint as "the first step of many steps" needed to define the Valley's future. But he said it is an important one.
"This is the beginning of a conversation we need to have," he said.
Our View: Obama sides with states
EPA ordered to re-examine tougher auto emission standards that were nixed by Bush.
After less than a week in office, President Barack Obama has moved aggressively to wipe away one of the most noxious anti-environmental policies of the Bush administration.
On Monday, the president ordered the Environmental Protection Agency to re-examine whether California and 13 other states should be allowed to impose tougher auto emission standards to combat global warming.
California clashed repeatedly with the Bush administration over this issue.
The state approved a historic greenhouse gas control measure in 2007 that required cars sold in this state to reduce the amount of planet-warming carbon dioxide they emitted.
The new standards would force car manufacturers to reduce emissions by 30 percent in new cars and trucks sold in California by 2016.
Other states followed California's lead.
But car manufacturers, with the backing of the Bush administration, sued, arguing in court that carbon dioxide was not a pollutant that could be regulated by the Clean Air Act. The courts backed California.
Nonetheless, to impose the new, tougher regulations, California still needed a waiver from the federal EPA.
Ignoring the advice of its agency scientists, the Bush administration consistently refused to grant it.
By ordering a review of that decision, Obama made clear he's ready to change the policy.
"The federal government must work with, not against, states to reduce greenhouse gas emissions," Obama said, "The days of Washington dragging its heels are over. My administration will not deny facts; we will be guided by them."
Obama Monday also ordered a speedup of new auto efficiency standards approved by Congress in 2007. The new rules would require new cars to achieve 35 miles per gallon on average beginning in 2020. Obama wants the guidelines to start affecting cars as early as 2011.
Bush administration officials had estimated it would cost the industry $100 billion to retool to meet the new standard. With two of the biggest car companies, General Motors and Chrysler, close to financial collapse, critics of the Obama orders say the companies cannot afford to comply.
When auto companies were flying high, producing behemoth gas-guzzling sport utility vehicles and trucks, they offered other excuses. The public, auto executives claimed, would not buy energy-efficient cars.
Now, with the big gas guzzlers languishing unsold on showroom floors, they claim they can't afford to retool.
In reality, they can't afford to do otherwise. If there is going to be an auto industry in this country, it must adapt to a much more energy-efficient future.
But the issue goes beyond the economic self-interest of car companies.
The nation cannot afford to continue to drive inefficient cars that require massive amounts of gasoline refined from oil that comes from countries that are hostile to us.
Such wastefulness threatens our security and our economy. It produces global warming greenhouse gases that threaten out planet.
"For the sake of our security, our economy and our planet, we must have the courage and commitment to change," Obama said.
Sadly, the change is coming much later than it needed to. That will make it harder for the car companies to adapt, but adapt they must.
Calif. scores vindication, environmental win...SAMANTHA YOUNG and ERICA WERNER, Associated Press Writers
SACRAMENTO -- President Barack Obama handed California a big environmental victory Monday by endorsing a key part of the state's greenhouse gas reduction plans.
He also gave a public shout-out to the Golden State, offering a clear sign that liberal-leaning California can expect a friendly relationship with his administration after eight years of clashes with former President George W. Bush.
"California has shown bold and bipartisan leadership through its effort to forge 21st century standards, and over a dozen states have followed its lead," Obama said at a news conference where he announced that his administration would revisit the Bush administration's controversial decision to deny California permission to control tailpipe emissions from cars and trucks.
"Instead of serving as a partner, Washington stood in their way," Obama said. "The federal government must work with, not against, states to reduce greenhouse gas emissions."
Obama's announcement on his seventh day in office delighted California officials who have criticized his predecessor for ignoring the state's long tradition of setting its own air standards.
"For too long, Washington has been asleep at the wheel when it comes to the environment," Republican Gov. Arnold Schwarzenegger said a news conference at the state capitol. "Now California finally has a partner and an ally in Washington, in the White House."
Because California began regulating vehicle pollution before the federal government did, the state has special status under the Clean Air Act to implement tougher emission standards than those promulgated by the federal government.
But the state must first get a waiver from the U.S. Environmental Protection Agency. California was granted about 50 such waivers - and never denied - before seeking a waiver in 2005 to implement a landmark state law that would force automakers to cut greenhouse gas emissions by 30 percent in new cars and light trucks by 2016.
The auto regulations were to have been a major part of California's first-in-the-nation global warming law that aims to reduce greenhouse gases economy-wide by 25 percent - to 1990 levels - by 2020. Air regulators are counting on the auto emission reductions to meet about 18 percent of the state's proposed reductions.
If California is granted an emissions waiver, other states can then choose to adopt California's standards or go with the federal ones. Thirteen states and the District of Columbia were ready to implement the California standards when, after months of delay and controversy, then-EPA Administrator Stephen Johnson announced in December 2007 that he was denying the waiver.
That sparked outrage, investigations and lawsuits from California officials. Congressional investigations led by Sen. Barbara Boxer and Rep. Henry Waxman, D-Los Angeles, found that Johnson had overruled the unanimous recommendations of career scientists at the agency.
Boxer said Obama's order was "a vindication for common sense."
"We need to mobilize for energy independence. We need to mobilize to fight global warming," Boxer said at a news conference in Washington. "It's as plain as the nose on your face. That's what we need to do. We're proving it in our state."
Although Obama's directive to his new EPA administrator Lisa Jackson - who began her first week on the job Monday - doesn't amount to giving the state the waiver, California officials were confident that would be the eventual outcome.
"It was a controversial decision by Steven Johnson. California has never been denied an application. This was the first. In my opinion it was transparently political," said state Sen. Fran Pavley, D-Agoura Hills, who authored the 2002 law that was the basis for California's waiver request to the federal government.
"What a difference a week makes," Pavley said.
California's proposed standards call for automakers to make cars and trucks that emit fewer greenhouses by improving the efficiency of the air conditioning, using different paint and materials to build the cars or improving fuel efficiency.
The improvements must equate to a fleetwide 35.7 miles per gallon in 2016 (cars are higher but larger trucks pull the figure down) and 42.5 miles per gallon in 2020. Those numbers are more aggressive than national fuel economy standards adopted by the federal government and relied upon by Johnson when he denied the California waiver and said a nationwide approach would be better.
Carmakers also opposed granting the waiver, contending they would face billions of dollars in new costs to meet the rules. In a statement released Monday, the National Association of Manufacturers said allowing California to implement its rules "would lead to a patchwork of greenhouse gas reduction laws when climate change is a global issue and should be addressed on a national level."
Mary Nichols, chairwoman of the California Air Resources Board, said car manufacturers are already meeting the 2010 standards.
"They just have to sell us cars that they are already making," Nichols said.
Schwarzenegger, who in a letter last week had asked Obama to revisit the matter, said he suggested the federal government adopt California's standards nationwide. He made that pitch in a phone call Monday to Carol Browner, who is assuming a new White House post to coordinate energy and climate-related issues.
"It would be great to actually do this nationwide so car that manufacturers don't just have two standards but that they only have one," Schwarzenegger said.
California, other states and environmental groups had sued over the Bush's administration's waiver denial.
Scott Gerber, spokesman for California Attorney General Jerry Brown, said Monday that once EPA takes action to reconsider the waiver denial, the state would ask the court to set the lawsuit aside.
According to the California Air Resources Board, California does not need to resubmit the waiver request, but instead will seek reconsideration based on the record already before EPA. Although the timeline is uncertain, Nichols said the state likely would have to wait until May or June before for a final decision.
Outdoor enthusiasts have much to celebrate if wilderness bill passes...Editorial
In these difficult economic times, Americans need places of solitude where they can get back to the basics. Our wilderness areas serve that purpose for much of the population. These are public lands that are free of roads and machinery and beckon to hikers, horseback riders and anglers.
Congress is close to passing legislation that would designate more than 2 million acres of new wilderness, including 700,000 acres in California. The result of years of hard negotiations, these wilderness designations are part of an omnibus lands bill the Senate passed two weeks ago. It now goes to the House, where lawmakers should quickly approve it and send it to President Obama for his signature.
Californians who cherish the outdoors will have much to celebrate if this package passes. Wildlands on the border of Yosemite, Sequoia and Kings Canyon national parks would all be protected. Some 105 miles of streams would become wild and scenic rivers.
This battle has not been easy, and the 79,000-acre addition to the Hoover Wilderness near Bridgeport in Mono County is an example of the various competing interests. This proposed addition includes dozens of alpine lakes and meadows, and is the product of a remarkable compromise.
For decades, conservationists had clashed with users of snowmobiles in this area. Environmentalists sought to ban snowmobiles from a wide expanse, but were unsuccessful.
Finally, in 2005, the groups hammered out a deal. As a result, snowmobile groups would get 11,000 acres of new winter recreation areas. Conservationists would realize their dream of permanently protecting meadows and lakes with an expansion of the Hoover Wilderness.
Such accommodations had to be worked out for many of the public lands in the omnibus package. Here in California, credit goes to a bipartisan group that includes U.S. Sen. Barbara Boxer and Reps. Howard "Buck" McKeon, R-Santa Clarita; Devin Nunes, R-Visalia; Jim Costa, D-Fresno, and Mary Bono Mack, R-Palm Springs.
With 160 separate bills, this omnibus package surely includes some pork and other lamentable projects, such as a road through a wildlife refuge in Alaska. But it also includes some vital investments, such as restoration of the San Joaquin River. That's another reason the House should send it to Obama with little delay.
For new levees, 900 trees must go...Matt Weiser
Sacramentans soon will understand just how massive the region's biggest modern levee project is as workers this week begin removing 900 trees to make way for construction along the Sacramento River.
About 800 of those trees are native oaks – mostly valley oaks – including some more than 60 inches in diameter.
They may come to symbolize the tightrope that California walks between flood safety and habitat protection.
The trees must go because they're in the footprint of a $619 million project to build giant new levees encircling the Natomas Basin. The project was required by a 2006 U.S. Army Corps ruling that existing levees don't adequately protect the basin's 70,000 residents.
The Sacramento Area Flood Control Agency designed new levees up to 300 feet wider to accommodate another Army Corps rule that forbids trees and structures on levees.
This "piggyback" levee design reinforces the existing levee from behind and effectively moves the regulatory profile of the levee away from the river, preserving thousands of trees and allowing more than 100 homes along the water to remain in place.
But because the new levee is so wide, trees must fall on its inland side: 900 in this first phase, stretching 4.5 miles south from the Natomas Cross Canal along Garden Highway; then perhaps 2,000 more as work continues on the remaining 37 miles of Natomas levees.
In effect, to preserve shade and habitat along the water-side of the levee, SAFCA had to sacrifice it on the other.
"Obviously, it's sad and it's difficult for us," said Ray Tretheway, Sacramento city councilman, SAFCA board member and executive director of the Sacramento Tree Foundation. "On the other hand, SAFCA is very progressive when it comes to public safety and balancing that with vegetation on or near levees."
The Garden Highway Community Association, however, may seek a court injunction to stop the tree removal. Its president, Doug Cummings, said SAFCA should not cut trees until it has the $90 million it needs to build the levee.
Most of that money is expected to come from the state, but has been delayed by California's budget woes.
Cummings said this means hundreds of mature oaks could be cut prematurely.
"I'm very opposed to taking any trees, especially when there's no good reason to do so at this point," Cummings said.
SAFCA aims to start building the new levee in April, assuming a funding deal with the state is in place by March 19 so it can hire a contractor.
City and county officials on SAFCA's board are under pressure to build the project quickly. Until the work is finished, a building moratorium has halted further development in Natomas, and residents must purchase flood insurance.
SAFCA has the money to remove the trees and build environmental improvements to atone for removing them. No matter when levee construction starts, said SAFCA Executive Director Stein Buer, the trees must be removed first.
The work will be disruptive to scenery and wildlife that depend on the trees, including the threatened Swainson's hawk.
But SAFCA maintains the end result will benefit wildlife.
"What we're trying to do here is create a woodland community as opposed to just a linear grove of trees," said Peter Buck, SAFCA's natural resources manager.
About 15 acres of tree canopy are being removed, and SAFCA aims to triple that number when finished.
This will be done by creating two woodland habitat sites, totaling 45 acres, near the north and south ends of the 4.5-mile project area. A woodland corridor, along the base of the new levee, will connect them.
The agency will plant as many as three new trees for every one it removes. And Buck said about 25 percent of the existing trees will be dug up and transplanted. It is paying Roseville contractor Trees on the Go $115,000 for the work.
Typically, only trees smaller than 10 inches in diameter can be successfully relocated, said Buck. But when SAFCA's board meets Thursday, it may hire another contractor with special equipment to move trees up to 20 inches in diameter. Larger trees will be cut.
Garden Highway resident Patricia Nealon said some of the oaks are among the state's largest because they've benefitted by living near the Sacramento River. Some sprouted long before the Gold Rush.
"I truly cannot imagine not having these trees as you drive along the Garden Highway," she said. "It's bothered me tremendously to think they would take these out."
Environmentalists push for massive north-state conservation area...M.S. Enkoji
Driving through the backyard of Yolo County, Bob Schneider seems to sense every plant, every animal and every nuance of the land here.
He can tell you how the tectonic plates of the Earth collided long ago and erupted upward into the Coast Ranges and its foothills creased with velvety folds.
"Change is coming to this area; there's going to be a lot more people here," said Schneider as he guided his Subaru Outback through the Capay Valley's prolific orchards and verdant farms.
He wants someone passing this same way 100, even 500 years from now to see the same stunning vista where tule elk roam and the finicky yellow-legged frog manages to thrive.
Without a monumental effort to preserve the diverse environment in a 100-mile swath of California's interior, buildings and roads could obliterate it acre by acre, he said.
Schneider is board president of Tuleyome, a Woodland-based environmental nonprofit organization working to establish a National Conservation Area – the third in California – encompassing nearly half a million acres in six counties.
The country's 13 existing National Conservation Areas create a single, cohesive plan to preserve and manage vast landscapes typically managed by a patchwork of public agencies, including counties.
The designation, which must be approved by Congress, provides a more logical way to properly care for an ecosystem, which doesn't acknowledge political boundaries, Schneider said. Even fire management would improve, he said.
What would be called the Berryessa Snow Mountain National Conservation Area stretches from the Lake Berryessa region through Solano, Napa, Yolo, Lake, Colusa and Glenn counties to Snow Mountain. No private land is included unless landowners opt in.
Representatives of Tuleyome, which means "deep home place" in Miwok, are appearing before county supervisors and appealing to environmentalists and recreation enthusiasts, including hunters, to form a consensus that would eventually become federal legislation later this year.
Some farmers and ranchers, particularly in Glenn and Colusa counties, oppose the conservation area because it could exacerbate existing problems, said Ashley Indrieri, executive director of the Family Water Alliance in Colusa County.
Public lands aren't adequately managed to curtail trespassing and other infringements that plague private property owners, she said. If the conservation area expands, so will the problem, Indrieri said.
Habitat restoration could also threaten adjacent agricultural land owners, she said.
"Restoring the land means increasing pest species," she said. "You bring these critters back to the land."
Schneider once led an effort to eradicate tamarisk, a non-native, water-sucking plant that sprouts along Cache Creek, depriving native plants. Volunteers cleaned a 20-mile stretch of Bureau of Land Management land, but to continue down the creek would have meant dealing with other agencies first. It hasn't happened.
The patchwork of agencies overseeing the land – all with different missions – also makes it confusing to figure out where recreation areas begin and end, Schneider said. He believes the Obama administration will be supportive of the new designation.
A massive preservation bill that combined dozens of other proposed bills – some that had languished for years in Congress – recently passed the U.S. Senate. The Omnibus Public Land Management Act of 2009 would create another 2 million acres of wilderness, including four new conservation areas in mostly Western states.
Land preservation and protection of natural resources are growing bipartisan concerns as population centers push farther out, said Kevin Mack, campaign director of the National Landscape Conservation System for The Wilderness Society.
In the past, the rally to save land usually centered on "special places," such as the Grand Canyon, Yosemite Valley or the Old Faithful geyser, Mack said. But now, preservation is tied less to visual appeal or attraction, he said.
"There's more attention to providing ecological boundaries," Mack said.
In the Berryessa Snow Mountain National Conservation Area, serpentine soils that once covered the ocean floor are now hills rippling through the region, supporting unique plant life, Schneider said.
"This part of California is really special with respect to the plants and animals who live here," Schneider said.
Editorial: UC regents should join trend on fees
Five years ago, Harvard University stunned the higher education world with an announcement that tuition, room and board would be free for families with incomes less than $40,000. This was changed to $60,000 in 2006.
Now California schools are following suit.
Stanford University made its announcement last February: Students from families earning less than $60,000 a year would pay no tuition or room and board; students from families earning less than $100,000 a year would pay no tuition.
Now University of California President Mark Yudof is proposing that students from families earning less than $60,000 a year pay no UC systemwide fees. The Board of Regents is expected to vote next week.
While Yudof's proposal is not as sweeping as the Harvard and Stanford offers, it is significant. Half of California families earn less than $60,000 a year. In UC's current undergraduate student body, 28 percent fit under that threshold and would benefit.
Systemwide fees total more than $7,000 a year. Families with income below $60,000 no longer would have to worry about those fees.
That doesn't end the story, of course. The average cost of a UC education for a student living on campus is $25,300 a year. A student from a family earning $60,000 could expect to pay the balance with $3,800 in grants, $5,000 in federal loans, $2,400 from a part-time work-study job, $2,000 in summer job savings and the rest from parents' savings.
Yudof's proposal comes as family college savings have disappeared with the stock market meltdown and the state budget crisis has forced higher education cuts. It comes as UC expects to increase student fees. Under Yudof's proposal, part of the increase in fees (36 percent) would be set aside to pay for the new "no-fee" program.
Yudof hopes this offer counters the misperception that UC is "financially inaccessible to students of modest means." The regents should approve this offer to California families of modest means.
Better late than never
It's long overdue, but Delta trustees are wise to pull back from Mountain House...Editorial...1-26-09
Halting the spending at the Mountain House campus of San Joaquin Delta College is something that should have been done months ago. In fact, Mountain House is simply the wrong place for a south county campus.
A majority of the college trustees, five of them new to the board this year, are concerned that projects at the main campus will suffer if the district continues to pour money into Mountain House.
Little of the $250 million Measure L bond money is left. And what is left of the bond, approved by voters four years ago, needs to be spent carefully.
A Mountain House campus, of course, has been controversial from the start. But an infrastructure offer from the developer of Mountain House swayed the board, which had been offered property by Tracy.
The complaint about Mountain House is that it is too far from the south county's population centers of Tracy and Manteca, and too close - only 11 miles - from a full-service community college, Las Positas College in Livermore. That has led many to ask: Why would anyone go to the remote Mountain House to attend limited classes in portable classrooms when Las Positas is so close?
That question came up again and again among a number of the candidates who sought election to the Delta board in November. Nearly all of those elected voiced considerable trepidation about the whole project.
That probably has much to do with last week's board decision, as do concerns about having money to finish the new library and a math and science facility at the Stockton campus.
Pulling out of Mountain House completely creates its own set of problems, not the least of which is that the district already has spent a decade and $22.6 million developing the site. Then there is the problem of Mountain House developer Gerry Kamilos, who has made it clear he would not be pleased if the college project was scuttled, given the millions he's spent to bring it along. A court fight is a real possibility, a Kamilos attorney warned the board last fall.
A commitment last week by some college trustees to find other ways to fund Mountain House seemed to have placated Kamilos. "My understanding is that they want to explore all funding possibilities," he said.
Perhaps. Clearly the district doesn't have money now. The economic downturn has further drained the district. And it is unlikely trustees would approach voters for new bonds given the controversy that has swirled around how the Measure L money was used.
Kamilos said he is encouraged that trustees seem dedicated to building someday at Mountain House. Someday may prove to be many years away.
Lake County News
Proposed septic tank rules raise concerns over costs, requirements...Elizabeth Larson
LAKE COUNTY – More than a million California homes – including tens of thousands in Lake County – could be impacted by a set of proposed state regulations governing septic tanks.LAKE COUNTY – More than a million California homes – including tens of thousands in Lake County – could be impacted by a set of proposed state regulations governing septic tanks.
The proposed regulations, stemming from the 2000 passage of AB 885, would require inspections of septic systems every five years and institute more stringent requirements that could require many homeowners and businesses to have to entirely replace their systems.
The State Water Resources Control Board crafted the proposed regulations, which are meant to protect groundwater and surface water quality from wastewater discharge.
Kathie Smith, a spokesperson for the State Water Resources Control Board, said the new regulations are supposed to be in place by Jan. 1, 2010, but AB 885 included an automatic six-month delay, making the regulations official by July 2010.
According to an environmental impact report prepared on the proposals, there are an estimated 1.2 million households statewide that would have to comply, including about 15,000 Lake County homes. Those estimates are based on the number of septic systems known to be in operation in 1999.
“Everyone will be impacted to some degree by the proposed regulations,” said Jim Hemminger, a staff consultant with the Regional Council of Rural Counties.
The council is especially concerned about the prospect of high costs for rural areas, where septic servicing may not be readily available and may becoming prohibitively expensive due to drive and transport time.
Hemminger said the council has been working with the state to come up with regional regulations that can be cost-effectively applied. “We don't feel we're anywhere close to being there right now,” he said.
He said AB 885 grew out of one area's specific problem – a pollution situation in Santa Monica Bay that was believed to have come from septic tanks in sandy soil along the beach.
Hemminger said the regulations originally were started along the state's coast, but since have spread to the entire state.
One of his biggest concerns is that he interprets the regulations to have no flexibility or room for variances regarding site- or region-specific impacts. There are a lot of variations in groundwater, geology and other natural features throughout the state, he explained.
They also won't allow much budge room for regional water boards, and could result in higher-than-anticipated costs, Hemminger suggests.
What the regulations would require
Those households with septic tanks – called on-site wastewater treatment systems (OWTS) in the environmental impact report – would expect to pay between $150 and $500 for the inspections at least once every five years.
If upgrades were required, the report states, “The cost to households and businesses that must install new OWTS with supplemental treatment units and to convert conventional OWTS to OWTS with supplemental treatment units would be substantial.”
By substantial, the report estimates the costs for installing new septic tanks with a supplemental treatment unit to be in the range of $25,000 to $45,000, or $13,900 to $23,300 for a conventional septic system.
Businesses using septic systems that are “high-strength waste dischargers” could expect to have to pay $100,000 to $400,000 to replace a system or install a new one with a supplemental treatment unit.
A Regional Council on Rural Counties comment letter on the draft regulations' environmental impact reports says AB 885 has no express mandate for creating regulations. The letter also faults the state's proposals for establishing “inflexible siting, construction and performance requirements.”
Debate over local impacts
Locally, Lake County Farm Bureau Executive Director Chuck March is concerned that residents could be facing additional regulations.
He pointed out that the proposed regulations have additional requirements for septic systems that will be located within 600 feet of a water body that is listed as “impaired” – or doesn't meet water quality standards – because of high nutrient levels.
Among those impaired water bodies is Clear Lake and its entire watershed, March explained.
“We're still trying to evaluate what the effects in Lake County will be,” said March.
March said Clear Lake's impairment is largely a matter of phosphorous loading, and isn't from septic tanks. But there are still “a whole lot of questions” about how the new rules might ultimately apply, and much clarification is needed.
The Lake County Farm Bureau is part of a monitoring program that is looking at the Big Valley Watershed. In that area, the only material noted to be exceeding acceptable levels is E. Coli, and they've not been able to track where it's coming from. However, 50 percent is believed to be coming from human sources, which makes septic tanks a possible source.
Ray Ruminski, director of Lake County Environmental Health, said he doesn't think there will be widespread impacts locally if the regulations become law.
Ruminski said Clear Lake is on a federal impairment list for mercury, which is not a septic issue. It's also listed as impaired because of nutrients, but again those may not be a result of septic tanks. The element of interests – phosphorous – is more an issue of stormwater drainage and erosion.
The Regional Council of Rural Counties' comment letter interprets the regulations as requiring every septic system within 600 feet of a water body with a total maximum daily load that has been approved “to be equipped with expensive advanced treatment systems” or to become part of a centralized treatment or collection system. Other council documents estimate the number of impaired water bodies in the state as 296.
However, Smith said that, under the proposed regulations' definition of impaired water bodies, Clear Lake – which falls into the water board's Region 5 – doesn't apply.
She said there are no such impaired bodies listed for Region 5 at all, said Smith, and only a few in the whole state, with most of them being located in Southern California.
Exploring the ramifications
Despite the state's estimate of the number of Lake County's septic tanks – slightly over 15,000 – Ruminski said his office actually does not have a precise count.
The agency's records go back to the 1960s, and track septic systems they've permitted. But that doesn't give an accurate picture of what's actually in use, Ruminski said.
“There's a lot more actually in use, constructed, than we have permits on,” he said.
Stopab885.org, which is advocating against the regulations in their current form, reports that many local jurisdictions and counties have adopted strict regulations of their own to address the concerns raised in the original legislation.
Similarly, Lake County already is taking an approach that Ruminski said “is not all that different in some respects” from what the State Water Resources Control Board is proposing.
Ruminski's take on the requirements is that existing septic systems would need to be sampled every five years if a well was on the property. The inspection would then make a recommendation regarding whether or not the tank needed to pumped, repaired or replaced.
“We think that's good practice, but we're not sure it needs to be in state law,” said Ruminski.
He said septic tanks are necessary because not every place in California can have a sewer system. However, he said there are some blank spaces around Clear Lake where sewer systems would, in his opinion, be a benefit.
Hemminger, who suggested the proposed regulations are a “solution looking for a problem to solve,” said he doesn't foresee them having a positive groundwater impact.
Rather than trying to create an ill-fitting set of blanket regulations, Hemminger suggested the water board should focus on problem areas, since most septic systems in the state are functioning as required.
To be imposing costs of hundreds of millions a year on the state's homeowners, said Hemminger, “just doesn't seem prudent.”
Smith said the water board's staff currently is in the process of hosting a series of public workshops around the state.
Of the 11 workshops, nine have taken place so far, said Smith. One is scheduled for Tuesday evening in Santa Rosa, with another set to take place on Wednesday in Eureka (see accompanying story, “Septic tank regulations: How to get involved” for times and locations.). The water board also will host a Feb. 9 public hearing in Sacramento.
“There's been a lot of public interest. It's kind of been building,” said Smith, noting that the Jan. 22 Fresno workshop was standing-room-only.
Smith said there have been a “range of concerns” over the proposals, especially the possible price tag.
“The cost is probably the thing that comes up the most often,” she said, adding there also have been concerns raised about having more government regulations.
She said the water board staff will take information submitted by the public at the workshops, digest it and come up with appropriate revisions to the regulations.
“This is not written in stone at this point, any of these regulations,” Smith added.
Septic tank regulations: How to get involved
There are two remaining public workshops on the proposed AB 885 regulations on septic tanks.
They will take place at 7 p.m. Tuesday, Jan. 27, at the Wells Fargo Center for the Arts Merlot Theater, 50 Mark West Springs Road, Santa Rosa; and 7 p.m. Wednesday, Jan. 28, at Eureka High School, 1915 J. St., Eureka.
Beginning at 1:30 p.m. on Monday, Feb. 9, the State Water Resources Control Board will host a public hearing in Sacramento at the Byron Sher Auditorium, Cal EPA Building, 1001 I St. Public input will then be used to adapt the proposed regulations.
To see the regulations, visit the State Water Resources Control Board's Web site, www.waterboards.ca.gov/water_issues/programs/septic_tanks/.
Submit written comments on the proposal's draft environmental impact report by Feb. 9 to AB885@waterboards.ca.gov , or mail them to the State Water Resources Control Board, Division of Water Quality, attn: Todd Thompson, P.E., 1001 I St., 15th floor, P.O.
Standing inventory down 75%
New home builders adjust to Manteca market...Dennis Wyatt
It was panic time in September 2007.
Manteca’s housing market had reached the proverbial cliff’s edge.
The number of existing homes available for sale had reached a record 651.
Builders were going full steam ahead even as sales dropped off drastically creating an inventory of nearly 100 unsold homes south of the Highway 120 Bypass promoting Anderson Homes to do what previously was unthinkable and announced they were planning to auction off 34 new homes to the highest bidders.
Today there are 374 existing homes for sale inside Manteca’s city limits.
And based on a windshield survey of subdivisions south of the Highway 120 Bypass conducted this week by Florsheim Homes chief executive officer Joseph Anfuso, the standing inventory of new homes in various stages of construction has dropped to 27 homes. That represents a drop in standing inventory of almost 75 percent.
Those numbers signal a distinctive shift in the Manteca housing market.
The lower inventory of new homes has essentially eliminated buyers pitting one builder against another to hammer them for the lowest possible price.
It is a good enough sign that Anfuso is re-emphasizing the prediction he made at the start of 2008 – look for the housing market to turn the corner by mid-2009 or shortly thereafter. Anfuso isn’t predicting wild gains in value and prices any time soon but he expects prices will stabilize as buyers grow in numbers.
Anfuso is probably the best positioned builder to compare new homes with the Manteca foreclosure market. All of the new homes Florsheim offers at Valley Park in southwest Manteca can qualify for FHA loans that max out at $353,000 for San Joaquin County.
“I’m sticking by my story,” Anfuso said Monday at the Florsheim neighborhood where homes start at $249,990.
One part of “that story” told in January 2007 was that most of the people buying Valley Park homes would have been drawn to the foreclosure market looking for bargains based on selling price only to end up convinced the best value could be found in a new home that cost a bit more at escrow.
“You won’t find any dead grass or abandoned homes here.” Anfuso said of the tidy Valley Park neighborhood.
Florsheim marketing director Brian Lange noted that unlike a foreclosure than can have things such as a $10,000 roof, electrical problems, dry rot, falling fences, cosmetic issues, and plumbing needs after escrow closes new homes such as Valley Park have a builder standing behind them.
Anfuso has definite views on what can be done to get housing coming back on a strong foundation. He gave his advice recently to Congressman Joe Baca who sits on the House Banking & Financing Committee chaired by Barney Frank. His advice? Stop trying to save those in over their heads and encourage those who can afford to buy to buy.
Anfuso embraces a move afoot to change the $7,500 tax “loan” for first-time buyers of homes – or those who haven’t owned a home in three years – after April 2008 into an actual $7,500 tax credit.
“Not very many people bit at a $7,500 loan from the federal government even if it was an interest free loans over a number of years,” Anfuso. “A $7,500 tax credit is virtually a down payment on an FFA loan for a $250,000 home.”
The FHA loan program requires 3.5 percent down. The biggest block for many who are qualified to buy isn’t being able to handle the payments but to come up with the down payment especially after the drop in stock prices and such have hit into 401Ks.
Anfuso noted that 37 percent of the loans of struggling mortgage holders had that were modified last year on homes facing foreclosure already have gone into default.
“Demand will come back when you get buyers buying,” Anfuso said.
At the same time, Anufso believes the cities that understand the importance of housing and how it impacts the overall economic vitality of a community and set about to rethink the planning process as well as fees and what level of services they want will end up leading the pack when the recovery hits.
That may also require rethinking what Anfuso calls “densification” or allowing more homes to an acre to reduce the costs of infrastructure such as sewer, water and storm lines per home. He also favors allowing developers to postpone paying growth-related fees until they are ready to request an occupancy permit.
That way builder won’t be crushed with heavy upfront costs that often force them to borrow.
“I’ve always said the city that figures it out first is going to come out of this the strongest,” Anfuso said.
San Francisco Chronicle
TV review: Water's role in the Western states...David Wiegand, Chronicle Staff Writer
American Plenty: Part 1 of "The American Future - A History by Simon Schama: A Country Remaking Itself." 9 tonight on KQED.
The first time you see Simon Schama traipsing through the American desert, you may find yourself thinking, "Dude, where's the castle?"
OK, well, I did anyway.
Schama, the historian best known for the superb "A History of Britain," skips across the pond with a new series, a bit too preciously titled "The American Future - A History by Simon Schama: A Country Remaking Itself," which has been airing on BBC America in recent weeks and makes its PBS premiere tonight.
Although filmed last year, tonight's episode couldn't be more timely as it echoes President Obama's sobering inauguration-speech call to renewed responsibility and sacrifice for the greater good.
"American Plenty" holds particular interest for Californians and residents of the West in general because it focuses on water, perhaps the one natural resource above all that has defined and shaped our history over the centuries. Did someone mention gold? Pshaw. It's all about water and always has been - how much there is, where it is, who's got it and who wants it. Didn't you see "Chinatown"?
Some viewers may feel that much of the detail Schama imparts in tonight's film is pretty familiar. For example: During the presidency of Andrew Jackson, the notion of "manifest destiny" took hold of the American consciousness, and the country began to expand toward its western extremity. With the discovery of gold in 1849, there was an even greater desire to tame the wilderness, and that couldn't be done without figuring out a way to control natural water flow to enable the growth of crops to feed the settlers.
The film gets interesting with the introduction of a one-armed galoot named John Wesley Powell, who became the first to navigate the Colorado River and soon concluded that if we messed around with rivers and water patterns too much, we'd eventually cause irreparable damage to the land.
But did anyone listen? Heck, no, as demonstrated by the construction of the Hoover Dam in the next century. The voraciousness and foolhardiness of the American appetite continued pretty much unabated until the presidency of Jimmy Carter, who, as a farmer himself, realized the dangers of exhausting natural resources. We all know what happened when Carter tried to get re-elected after warning the country that we did not, after all, have the right to unchecked depletion of our natural resources. His opponent, the cowboy actor Ronald Reagan from California, made it abundantly clear that he believed Americans had a right to use every available resource in order to remain economically bloated and financially competitive in the world market. So what if a bit of water gets used up today? It will surely rain tomorrow. And so what if we dam up a river here, redirect a stream there and draw water away from its natural sources? There's surely more where that came from.
In short, America has spent much of its history depleting for a rainy day, believing that water was a renewable resource.
And just how is that working out for us?
In the past few years, rainy days out West have been fewer and farther between, leading to a multiyear drought that's still going on. What drizzles down here and there isn't enough to even stop the depletion of water, much less restore it to anywhere near its former abundance. One pan shot of Lake Mead today, for example, shows how dramatically the water level has fallen in recent years.
Finally, and perhaps simplistically, Schama shows us that conservation doesn't have to be painful. As an example, he goes to Las Vegas, where there is continuing friction between the city and its rural surroundings over water rights. I don't know what else stays in Vegas, but as far as the city is concerned, there's a very logical and seemingly effective system to make sure water does, by monitoring its use.
Lessons of the West
It's a helpful lesson, but I can't help feeling that viewers in Massachusetts, say, will feel that it's not really their problem if a Nevada desert city needs to save a bit of water. What the film misses is a chance to explain to the rest of the country why it's important to pay attention to what's been happening out West.
Written by Schama and directed by Sam Hobkinson, "American Plenty" has an undeniably important and timely message. However, it doesn't always deliver it well enough. The documentary is a bit overstuffed with stock footage of wagon trains from old Hollywood Westerns of the '40s, and Hobkinson has an exasperating habit of interweaving historic images with contemporary images so rapidly and frequently throughout the film that you'll be needing some water yourself - to take a couple of aspirin.
Future films in the series will find Schama pondering how faith has affected American politics, how Americans' attitudes toward war might be different than what outsiders think it is and the battle over immigration rights.
Emissions rule waiver expected this spring...Matthew Yi, Wyatt Buchanan, Chronicle Sacramento Bureau
California officials say they plan to enforce the state's regulation requiring the nation's most fuel-efficient vehicles as soon as the federal government grants the state a waiver from less-stringent national standards.
The move is expected this spring.
The regulation would have the single largest impact on the state's ambitious goal to reduce greenhouse gas emissions by 30 percent by 2020 under the landmark legislation AB32.
Delayed by the Bush administration since 2005, the rule would require automakers to produce vehicles that cut greenhouse gas emissions by 30 percent by 2016, resulting in an average vehicle fuel-efficiency of 35.7 miles per gallon - far higher than the current federal standard of 27.5 mpg for cars and 22.3 mpg for SUVs and light trucks.
The rule would have wide-ranging impact on the types of cars, minivans, SUVs and trucks that consumers will see in California dealerships.
President Obama ordered his environmental officials on Monday to immediately review California's regulation, strongly hinting that he would like to allow the state and 13 others to move forward with stricter emissions standards. The federal government, under former President Bush, refused to grant the waiver in 2007 after two years of deliberation.
"The president's action is a great victory for California and for cleaning the air around the nation for generations to come," Gov. Arnold Schwarzenegger said at a state Capitol news conference. "Soon millions of Americans will be able to breathe easier and drive more fuel-efficient cars."
Automobile manufacturers, who have been lobbying heavily against the federal waiver, declined to criticize Obama's decision but argued that a nationwide standard is a better approach than allowing individual states to have separate vehicle-emissions standards.
"We are ready to work with the administration on developing a national approach," said Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers. The organization represents 11 manufacturers, including Ford, General Motors, Chrysler, Mazda and Toyota.
Environmental groups applauded the president's decision.
"What a difference an election makes," said Bernadette De Chiaro, a lobbyist for Environment California, a lobby group. "For the past eight years, America's engine for ingenuity and progress on the environment was stuck in reverse under the Bush administration. And today, President Obama has taken America from zero to 60 in six days."
Linda Adams, secretary of California's state Environmental Protection Agency, said she expects federal EPA officials to grant the waiver in the spring and the state to implement the new regulation immediately. The new rule would cover current 2009 model automobiles, some of which began appearing in dealerships in the fall.
Adams and state air board officials said they believe automakers should be able to meet the requirements of the new rule for this year's vehicles because automakers were alerted that the 2009-model engines would come under the new regulation within 45 days if a federal waiver were granted.
In addition, state officials believe most automakers have begun using many of the technologies that would make vehicles more fuel efficient, placing them on track to meet the requirements of the new rule.
Automakers would be required to annually report emissions figures on their vehicles to be sold in California, but the final determination of whether each company has met the requirements won't occur until 2016, said Tom Cackette, deputy director of the California Air Resources Board.
Edward B. Cohen, vice president of governmental and industry relations for Honda, said that if the new standards are adopted, "every single component of the vehicle is going to have to be examined to make sure the vehicle is more fuel-efficient." That will mean continued technological improvements on car engines as well as using lighter-weight steel, he said.
But state officials said automakers already have begun to use proven technologies to improve fuel efficiency. For example, the Honda Odyssey minivan's engine shuts down certain cylinders when cruising at high speeds on freeways, and Volkswagen's smaller, gas-sipping engines compensate for lower power by adding a turbo-charge, said Stanley Young, a spokesman for the state air board.
And while adding more hybrids and electric vehicles to the fleet would certainly help, automakers should be able to meet the requirements of the new regulation mostly by adopting smaller design changes in traditional, gas-powered automobiles, Young said.
But consumers are likely to have to pay higher prices on new vehicles, and dealers might not carry some automobiles in California, said Peter Welch, President and CEO of the California New Car Dealers Association. Welch added that higher prices could drive car-shoppers to purchase older vehicles that pollute more.
"You can mandate the manufacturer to make them, but you can't mandate that consumers buy them," he said.
Welch said California consumers also might be compelled to leave the state to buy cars.
"There's nothing stopping someone from San Francisco or Sacramento to drive to Reno to buy one," he said. That would end up hurting state and local governments, which collect sales taxes. New car sales have declined significantly, by 23 percent between 2007 and 2008, Welch said.
But state officials said the state's emissions rule would simply encourage automakers to innovate.
"This will result in better-engineered cars that use off-the-shelf technologies that are already available to get the reductions in emissions," Young said.
Cutting state's vehicle emissions
How California would regulate automakers if federal officials allow it to enforce the nation's strictest emissions rules:
New vehicles sold in California would have to reduce greenhouse gas emissions by 30 percent by 2016, resulting in an average vehicle fuel-efficiency of 35.7 miles per gallon. Federal fuel-efficiency standards are 27.5 mpg for cars and 22.3 mpg for light trucks.
Source: California Air Resources Board, Chronicle Research.
Contra Costa Times
Richmond, developer, tribe sued over Navy land deal for proposed casino complex...John Simerman
Critics of a proposed $1 billion shoreline mega-complex anchored by a Las Vegas-style casino sued Richmond, the developer and two American Indian tribes on Monday over the Navy's planned early transfer of the last 41 acres of the former Point Molate Naval Fuel Depot.
Two local environmental groups say the city violated a 2006 settlement when it moved forward in July on a deal with the Navy for the expedited transfer of the land, to clear the way for the developer, Upstream Investments, to clean it up. That settlement resolved lawsuits brought by the state attorney general, East Bay Regional Park District and Citizens for East Shore Parks. They challenged the city's $50 million sales agreement with Upstream and Harrah's Operating Company, which has since bowed out.
That settlement demanded that the city certify an environmental report before "any decision to pursue or approve" the casino project or transfer land to the developer, the lawsuit states.
"You've got the project cart before the environmental-review horse," said Stephan Volker, an attorney for Citizens for East Shore Parks and another group. "You've got them precommitting to the casino and going through the motions of an empty review process, knowing full well it's already given the green light to Upstream to develop the casino."
Volker said he sued because an environmental impact report that was expected to be released last month has been delayed, and the statute of limitations was about to preclude a challenge to the transfer.
Messages to City Manager Bill Lindsay and the city attorney's office were not returned Monday afternoon. Jim Levine of Upstream did not return a call to his office. Michael Derry, who heads the project for the Guidville Band of Pomo Indians, could not be reached.
Upstream and the tribe aim to turn about 85 acres by the Richmond-San Rafael Bridge into a major Bay Area tourist draw. Their plan calls for 1,100 hotel rooms, shops and restaurants, waterside housing, a conference center and tribal facilities — all anchored by the economic engine of a casino to rival the biggest in Las Vegas. The project promises to bring the city $20 million in annual revenue, and the developer touts its potential for thousands of local jobs.
Critics say they fear a rise in local traffic, crime and gambling addiction, along with overdevelopment of one of the few remaining pieces of prime bayshore real estate.
The lawsuit also names the Rumsey Band of Wintun Indians, which owns the Cache Creek Casino Resort in Yolo County and has agreed to bankroll the development.
For the casino project to move forward, the Department of Interior must first agree to take the land into federal trust for the tribe under a rarely granted exemption to a 20-year-old law that bars tribes from running casinos on land acquired after 1988.
Citizens for East Shore Parks also led a challenge last year to Richmond's deal with the Scotts Valley Band of Pomo Indians, which seeks a big casino along Richmond Parkway in unincorporated North Richmond. In that lawsuit, a Contra Costa judge ruled that the city violated state environmental laws when it agreed to a 20-year, $335 million pact with Scotts Valley to provide emergency services, roadwork and political support for the casino. The city is now appealing.
State denies request to ban Klamath suction mining, The Associated Press
REDDING, Calif.—The state has denied an American Indian tribe's petition to immediately ban a type of gold mining on parts of the Klamath River.
The Karuk Tribe and environmental groups say suction dredging on the Klamath and its tributaries is contributing to a declining salmon population.
The state Department of Fish and Game says it is reviewing the matter, but spokesman Jordan Traverso says no immediate change is warranted.
In suction dredging, miners use pumps to suck gravel from the bottom of streams and rivers, then run it through sluice boxes, which collect the gold.
Critics say the practice is harmful to fish because it clouds the water with sediment and stirs up mercury.
Los Angeles Times
California homeowner defaults slow as new law kicks in
Requirements that lenders reach out to borrowers are credited with a drop in the last quarter of 2008. But job losses and shaky mortgages are expected to lead to high foreclosures in 2009...William Heisel
A new California law meant to slow down the foreclosure process seems to be doing the trick.
Notices of default against homeowners in the state -- the first step toward foreclosure -- dropped to the lowest level in more than a year between October and December, down 20% from the previous quarter and 7.7% from the same period in 2007 to a total of 75,230, according to MDA DataQuick.
But 2008 ended with a sharp uptick in defaults, and market watchers are predicting a high number of foreclosures throughout 2009 and perhaps for as long as the next four years because of the combination of exotic mortgages that are coming back to haunt borrowers and job losses resulting from the downturn in the economy.
In September, the number of default notices dropped for the first time in three years, and housing experts credited a new state law that took effect that month and forced lenders to make more efforts to contact borrowers before initiating foreclosure proceedings.
By December, though, the default notices were back on the rise, nearing 40,000, where they were before the law.
"The law in California briefly slowed it down. Now you are going to see an echo effect where those homes that were in default are now in foreclosure," said Dean Baker, the co-director of the Center for Economic and Policy Research in Washington, D.C. "On top of that, people have been losing jobs at an incredible rate. That's going to create more foreclosures."
Typically, foreclosures follow job losses. In this economic cycle, the rise in foreclosures has resulted from inflated home prices falling dramatically and from borrowers who suddenly owe more than their homes are worth struggling to deal with low-cost, short-term loans that have reset at higher rates.
Now rising unemployment, which some economists predict could affect one out of every 10 people in 2009, threatens to undermine a new wave of borrowers who, until now, were able to make their mortgage payments. On Monday, Home Depot, Caterpillar, Pfizer and other major companies announced a combined 60,000 in job cuts.
Climate change has a firm grip
Researchers say that even if nations can get carbon dioxide levels under control, it would take 1,000 years or longer for the climate changes already triggered to be reversed...Thomas H. Maugh II
Even if by some miracle the nations of the world could bring carbon dioxide levels back to those of the pre-industrial era, it would still take 1,000 years or longer for the climate changes already triggered to be reversed, scientists said Monday.
The gas already here and the heat that has been absorbed by the ocean will exert their effects for centuries, according to an analysis published in the Proceedings of the National Academy of Sciences.
Over the long haul, the warming will melt the polar icecaps more than had previously been estimated, raising ocean levels substantially, the report said.
And changes in rainfall patterns will bring droughts to the American Southwest, southern Europe, northern Africa and western Australia comparable to those that caused the 1930s Dust Bowl in the U.S.
"People have imagined that if we stopped emitting carbon dioxide, the climate would go back to normal in 100 years, 200 years," lead author Susan Solomon, a senior scientist at the National Oceanic and Atmospheric Administration, said in a telephone news conference. "That's not true."
The changes will persist until at least the year 3000, said Solomon, who conducted the study with colleagues in Switzerland and France.
Scientists familiar with the report said it emphasized the need for immediate action to control emissions.
"As a climate scientist, this was my intuition," said geoscientist Jonathan T. Overpeck of the University of Arizona. "But they have done a really good job of working through the details and . . . make a case that the situation is more dire than we thought if we don't act quickly and aggressively to curb carbon dioxide emissions."
Kevin Trenberth, head of climate analysis at the National Center for Atmospheric Research in Boulder, Colo., said the persistence of climate change caused by global warming was "poorly appreciated by policymakers and the general public, and it is real."
"The policy relevance is clear: We need to act sooner, even if there is some doubt about exactly what will happen, because by the time the public and policymakers really realize the changes are here, it is far too late to do anything about it," Trenberth said.
The report came as President Obama ordered the Environmental Protection Agency to consider allowing states the right to enact auto emission standards stricter than federal rules.
Secretary of State Hillary Rodham Clinton also is expected to appoint a new envoy for climate change to bolster the administration's credentials in environmental policy.
The slowness with which ocean water circulates is central to the new findings. Carbon dioxide is primarily removed from the atmosphere through absorption into seawater, an incredibly slow process because of the time it takes for surface water saturated with the gas to be replaced by deeper water that can further absorb carbon dioxide.
That gas accounts for about half of the global warming caused by greenhouse gases, but the other gases are removed from the atmosphere more quickly. Thus, the long-term influence of carbon dioxide will have the greatest effect on climate change, the report said.
Moreover, heat absorbed by the ocean is released slowly, and will continue to contribute to global warming even if the concentration of greenhouse gases should decline, the authors said.
Solomon said in a statement that absorption of carbon dioxide and release of heat -- one acting to cool the Earth and the other to warm it -- would "work against each other to keep temperatures almost constant for more than 1,000 years."
Geoscientist Jorge L. Sarmiento of Princeton University said, "This is really a wake-up call about the seriousness of this issue."
The study looked particularly at ocean levels and rainfall. The team found that by thermal expansion of ocean water alone, sea levels will rise from 1.3 to 3.2 feet if carbon dioxide climbs from the current level of 385 parts per million to 600 parts per million, and twice that if it peaks at 1,000 parts per million.
Melting of the icecaps could increase sea levels even more, inundating low-lying islands and continental shorelines, but the effects are too uncertain to quantify, Solomon said.
Reductions in rainfall would also last centuries, the report said, decreasing drinking water supplies, increasing fire frequency and devastating dry-season farming of wheat and maize.
Wily in the pursuit of coyotes
Jimmie Rizzo traps coyotes throughout the Southland. The practice is controversial, with homeowners saying it protects their pets and animal advocates saying it's cruel and indiscriminate...Joe Mozingo
Jimmie Rizzo puts a lump of chaw in his lip and picks his way into a ravine below a home in Redlands. Through a wrought-iron fence, a French bulldog named Phoebe yips, snorts and wheezes in her rhinestone collar. Rizzo tells her to shut up. He's here to help.
For years, coyotes have fed on pets in this hilltop neighborhood. When residents complain to the county, the county calls Rizzo.
The trapper, born and raised in the hardwood forests of the Mississippi Delta, specializes in California's big predators: coyotes, bears and mountain lions.
Bear and lion problems make news. Coyotes make business. Rizzo spends about 80% of his time tracking, trapping and putting down wild canids from Pacific Palisades to Twentynine Palms.
His services are at once widely sought and controversial, reflecting suburbia's conflicted relationship with its wildlife.
This month, animal rights groups demanded the Huntington Library halt Rizzo's trapping of coyotes in the botanical gardens, threatening in a letter to make a "broader public issue of the case." At the same time, neighbors in San Marino have demanded the library do more to cull the coyotes living on the 207-acre property and feeding on their pets. One woman even sued the Huntington after her Pomeranian was killed a couple of blocks away.
Coyotes have adapted to civilization like no other predator, often breeding for generations completely detached from the wilderness.
Cities and suburbs offer much more sustenance than dry scrubland -- with little of the risk coyotesonce encountered when ranchers and hunters shot them as a matter of course. Coyotes sleep in hedges and drainages. They migrate along storm channels and miles of Southern California Edison easements. They drink from pools and pet bowls. They prey on cats and small dogs. They eat fallen fruit, dig scraps from compost heaps and raid bird feeders, trash cans and bags of pet food.
Rizzo, 45, has seen coyotes stalking along the 6-foot block walls between homes in Orange County, hunting for pets below. He's come upon a sobbing man who had let his Doberman out to fight off a coyote who had jumped into the backyard -- only to see his pet killed within seconds.
A 25-pound coyote can kill a 70-pound dog and drag it over a 6-foot wall. Though coyotes do lose fights now and then, smaller, less ferocious dogs have no chance against them.
"Why are they going to go chase rabbits when you got Fifi locked up with a bowl of water to drink right next to her?" Rizzo asked.
A square mile of wilderness can support two to four coyotes, said Kevin Brennan, senior wildlife biologist for the California Department of Fish and Game. A square mile of suburbia might support a dozen coyotes or more, which has allowed them to expand well beyond their historical numbers.
"The situation is not natural," Brennan said. "These are not coyotes who have wandered out of the hills and are trapped in the city trying to make it."
Phoebe's owner, Dianne Crowther, 63, said few of her neighbors in Redlands, southeast of San Bernardino, have cats anymore. "We had a cat, and he became coyote sushi."
She said a pack of coyotes once even chased her when she went out to get the mail one night.
Crowther calls Rizzo a few times a year, when she says coyotes start lurking around her fence. She doesn't care if animal rights activists call this type of regular trapping ineffective and cruel. She wants them gone.
"We don't want to lose her," she said of Phoebe. "She's the light of our life."
Rizzo, who is licensed by the state, said he has trapped and killed more than two dozen coyotes next to Crowther's property in the last five years. This January morning, he studies the slopes for disturbed grass or subtle indentations in the clay soil, softened by recent rain. He finds two narrow animal trails threaded through the brush toward the house. He leans down to find a three-padded footprint.
He pulls a hammer from his bag and drives a steel anchor into the ground. Running from the anchor is 7 feet of cable with a loop at the end. Rizzo uses a stiff heavy-gauge wire to suspend the loop across the trail at the height of a coyote's head. The underbrush makes the snare difficult to see.
If a coyote walks into it, the loop will pull tight like a choke chain.
The snare will not loosen until Rizzo arrives -- with a needle full of sodium pentothal and a Hefty lawn-and-garden bag for the ride to the hereafter.
Rizzo learned to hunt and trap as a boy on a small farm in Cleveland, Miss. His grandmother taught him to call muskrat, deer, coon, mink, fox and beaver. After he moved to Orange County in 1986, he started guiding hunts for bear, deer and turkey in the San Bernardino Mountains.
Six years ago, he became a full-time trapper for Animal Pest Management -- one of a handful of companies in Southern California licensed to eradicate problem cougars, black bears, foxes, bobcats and coyotes.
He keeps a team of hounds at the office and travels the Southland in a full-size Ford pickup loaded with tools, snares, guns and ammunition. With his wide-brimmed hat, faded Wranglers and Delta drawl, he looks about as out of place and anachronistic in, say, Coto de Caza or Bradbury as the coyotes and mountain lions he's after. He's a man who calls Copenhagen chewing tobacco "nectar of the gods" and packs his own rifle bullets in his backyard.
Rizzo's company charges several thousand dollars for the average job, though the price can vary depending on the circumstances.
San Bernardino County contracts him to deal with the complaints it fields from residents about large predators. In other counties, homeowner and community associations hire him directly.
More and more, Rizzo is working in neighborhoods nowhere near the wild, like midcity Los Angeles, Garden Grove and Lakewood. "If you don't have coyotes in your neighborhood now, you will," he said.
Pete Immekus lobbied his City Council, in Walnut, to hire Rizzo for his coyote problems last month.
His family's dachshunds had already survived two attacks when his mother spotted a coyote in the backyard. She managed to chase it away, but the coyote was intent on the dogs. In the next two days, the family had to run it off three more times.
The next afternoon, Immekus looked out an upstairs window to see the same coyote pop up on the wall. He ran downstairs to the patio door. The coyote loped across the yard and leaped over a wall into the neighbor's property -- and, within seconds, was back on the wall. The dachshunds raced at it, barking as it paced along, almost playfully, drawing them to the back of the yard. Immekus dashed to get there, but the coyote pounced.
Both dogs sustained deep wounds in their necks and chests. By the time Immekus got there, one was in shock, with a torn ligament and a fractured shoulder. They would survive, but the vet bill would be more than $3,000.
The city agreed to hire Rizzo earlier this month. On Jan. 12, he quickly found where the coyotes were traveling down a drainage and set three traps in spots where their trails narrowed under bushes. On Jan. 20, he trapped and killed one. He wants to snare several more to drive home the message: They are not wanted here.
Mostly, coyotes live in suburbia without problems. But researchers say that as the animals have become more comfortable with humanity, they have become more aggressive.
A widely cited study by UC Davis in 2004 found that the first reported coyote attack in California not attributed to rabies occurred in 1978. In the next 25 years, there were 89 attacks on people or on pets in the presence of people. More than three-quarters of those came after 1994.
The biggest danger coyotes pose is to small children. The study's authors, Robert Timm and Rex Baker, reported 35 incidents in which coyotes stalked or attacked young children -- including a 3-year-old girl killed in front of her home in Glendale in 1981.
"They do see children as prey," Baker said. "There's no two ways about it."
He said the root of the problem is not with coyotes, but with humans. Too many people have a "Disney mentality" that prompts them to let the animals in their yards -- or even to leave food and water out for them.
"Our main thrust is to re-educate the public that wild animals are wild," Baker said. "Once a coyote loses its fear of man, you have to re-instill it."
Humans are not going to get rid of urban coyotes. Many appreciate the wildlife, and eradication efforts simply do not work.
"The coyote has been the most persecuted animal in North America," said Brennan of Fish and Game. "Every predator control method known to man -- aerial gunning, poisoning, trapping, shooting -- they've survived them all."
But he said that the targeted trapping practiced by Rizzo is effective -- and often residents' only option once coyotes have become aggressive. The snaring re-instills the fear of humans, he added. Because coyotes are so communicative, word gets out.
Brennan said people often ask him why trapped coyotes cannot be relocated. "They want it to go to wild animal nirvana," he said. "Unfortunately, nobody knows where that is. . . . You got two choices: Leave them alone or kill them."
Animal rights groups vehemently disagree. Sean Guinan, urban wildlife coordinator for the Humane Society of the United States, said snaring has little effect and is cruel and indiscriminate. The snares don't necessarily catch the problem coyote, might trap dogs and other animals and can cause an excruciating death by strangulation.
"It doesn't resolve conflicts," he said. "It's a knee-jerk reaction to a non-problem."
On Jan. 2, Guinan sent a letter to the Huntington Library demanding it stop its semiannual trapping or it would notify the media and the Humane Society's 1.2 million members in California. He said the library can take other measures: removing food, clearing brush, educating the public about coyotes and hazing troublesome animals with loud noises, aggressive behavior, even paint guns.
The Huntington said it is taking other measures. It is are also sticking with Rizzo.
Rizzo comes back to Redlands the next day to check his traps. Nothing.
He grabs a game call from the truck, stands on the ridge and lets out the staccato yelp of a wounded cottontail rabbit. The sound pierces the cold, crystalline air and reverberates off the canyon walls. If coyotes are around, they'll come running.
None do. Coyotes travel long distances and might vanish from a spot for a week at a time.
But they always come back.
A week after he set the traps, they do. He loads up his truck at his home in Lake Forest and rolls out. From the opposite side of the canyon, he can see his quarry. One dead coyote and one sitting -- panting and looking straight at Rizzo, very much aware of its predicament. It has dug deep holes trying to hide. It's got no chance.
Rizzo descends upon it as quiet and resolute as the Angel of Death.
The animal hisses and rears up as he approaches. Phoebe barks and wheezes behind the fence. The trapped coyote whips around violently on the 7 feet of cable. It is small and wiry, 25 pounds of gristle, fur and teeth. Rizzo strides up with a dog-catcher's pole and pins the writhing animal down. When Rizzo puts a blanket over its head, it stops moving. He takes a needle and injects it in a leg.
He walks over to the dead coyote, cuts it from the snare and hurls it into the canyon for the scavengers.
He returns to the other coyote, which is still breathing but no longer conscious. He cuts the snare off and admires the animal's thick coat.
"All that expensive dog food has the same effect on coyotes as it does on dogs," he says.
He puts the animal into the Hefty bag and heads off to the next call.
L.A. port's clean-truck program running on empty
Funding for a $20,000 incentive for buyers of clean-fuel trucks has dried up. Some trucking firms have spent millions of dollars on greener fleets, expecting the cash...Ronald D. White
It sounded like a good deal: The Port of Los Angeles offered to pay $20,000 incentives as part of its Clean Trucks Program, launched Oct. 1 in conjunction with the neighboring Long Beach port to reduce pollution from trucking fleets serving the harbor.
That sent Vic La Rosa into overdrive.
The owner of Total Transportation Services Inc. ordered 111 trucks, some powered by cleaner-burning diesel and some by liquefied natural gas, each eligible for the $20,000 because they meet 2007 emissions standards.
Then came the roadblocks.
Port officials were expecting only modest interest in the incentive program -- maybe 1,000 rigs -- because eligibility hinged on far surpassing the requirements of the Clean Trucks Program, which initially bans all trucks built before 1989. Instead, more than 100 large and small trucking companies turned out, with as many as 7,500 trucks requiring grant money over the course of the next year.
On top of that, state officials nixed funding assistance and a federal agency blocked the collection of fees to support the program, forcing the L.A. port to dip into its strained budget for $44 million to cover the first 2,200 trucks.
That's leaving Total Transportation Services of Rancho Dominguez and other motor carriers short of a full load.
"It's like no good deed goes unpunished," said La Rosa, who spent an average of $130,000 on his trucks. "We followed their directions and their plans. We felt it was the port's responsibility to follow through on this. We're out over $15 million on these truck purchases."
Some carriers are worried they could go under if they don't get all of the help they had anticipated.
Overseas Freight Inc. of Long Beach has committed to overhauling two-thirds of its 80-truck fleet and says it needs the $20,000 it expected for each new vehicle.
"Without the $20,000 promised by the Port of Los Angeles, it will be very difficult for us to get through the tough economic times ahead," Joseph Wang, president of Overseas Freight, said in a recent letter to S. David Freeman, president of L.A.'s Board of Harbor Commissioners. The family-owned business has ordered 54 clean trucks, Wang said.
Brian Griley, president of Southern Counties Express Inc., a Rancho Dominguez company, has purchased 50 LNG trucks and 55 new diesel trucks. Without the port's incentives, "my cash flow cannot support these start-up costs, and I fear we many not survive these ugly financial times," he said.
Experts said that the hiccups in the Clean Trucks Program might be only the first in a series of unanticipated problems that will result from the biggest and most controversial effort any seaport has made to clean the air. Other ports are also pursuing green goals -- such as the Northwest Ports Clean Air Strategy in Vancouver, Canada; Seattle and Tacoma, Wash. -- but nothing on the scale of that in Southern California.
"Everything you are seeing in Los Angeles and Long Beach you will see happening at every other port around the nation as they attempt to clean up their acts," said John Husing of consulting firm Economics & Politics Inc., an expert on goods movement. "But because they are the biggest, the busiest and most important ports, Los Angeles and Long Beach get to go first. They get to turn over all of the stones and find all the creepy crawly things hiding underneath."
Los Angeles and Long Beach port officials initially had planned to use an electronic system at terminal gates beginning Oct. 1 to assess a fee of $70 for every 40-foot container. The fees would be used to help finance the purchase of newer, cleaner trucks. Los Angeles came up with the additional incentive of $20,000 for each of the cleanest trucks and exempted them from the $70 container fee.
But the fees were blocked by the Federal Maritime Commission, which also has filed a federal lawsuit against parts of the clean-truck plan and has claimed that the ports have overreached their authority and are interfering with interstate commerce.
The commissioners have repeatedly made requests for more information from the ports, and each request begins a new 45-day period in which the ports are blocked from charging the fees.
In addition, the ports have been told not to count on the state for funding, given the swelling budget deficit.
Growing concern from La Rosa, Wang, Griley and seven other trucking company executives who had, in total, purchased $126.5 million in new trucks convinced port officials that their reputation was on the line. The worst thing they could do was tell the trucking companies that they would have to wait until they were able to collect the fees meant to fund the program.
"The impact on large companies that maintain fleets of several thousand trucks would not have been fatal," said John Holmes, deputy director of operations for the Port of Los Angeles, "but all some of the smaller companies do is drayage in and out of the ports. They have spent a lot of money procuring new trucks. If they don't get these incentives, particularly in this economy, they will be exposed."
Officials at both ports have decided to begin collecting the fees next month and are hoping that federal officials won't try to thwart them again.
"The fee collection is essential to fully realize the environmental benefits of the program," said Richard Steinke, executive director of the Port of Long Beach. Port of Los Angeles Executive Director Geraldine Knatz echoed that sentiment, saying: "It's imperative that we start the program."
With 2009 shaping up as an even slower year for trade at the ports than 2008 was, port officials are hoping that the Obama administration will fill the two vacancies at the five-member Federal Maritime Commission with appointees who are sympathetic to their efforts. But with so much more on the new administration's plate than the ports, it's not clear when or whether that will happen.
"We have to do everything we can to keep the clean-truck program going and everything we can to collect the fees for these incentives," Holmes said.
La Rosa is happy that some of the money is on the way. But even with the $20,000-a-truck incentive, he says it won't be easy to pay off and maintain the new fleet.
"Our business is down across the board from between 20% to 30% because of the economy. Our earnings have plummeted," La Rosa said.
"We are heavily committed to this clean-air program. We want this to work."
Regulators' order spurs First Federal Bank to quit lending
The action comes in response to the Los Angeles savings and loan's heavy losses on risky mortgages...E. Scott Reckard
Troubled by delinquent mortgages at First Federal Bank of California, regulators have prompted the L.A. savings and loan to quit lending and ordered it to submit a detailed plan for how it intended to remain well-capitalized for the next three years.
The cease-and-desist order, which parent company FirstFed Financial Corp. disclosed late Monday, also requires the Westside firm to stop making interest payments on $150 million in publicly held debt.
FirstFed said it would eliminate 62 jobs, mostly lending positions, to trim costs by more than $4 million a year.
The job cuts are being made with "deep regret," Babette E. Heimbuch, FirstFed's chief executive, said in a news release. "Given the economic pressures we are under, doing so has become necessary."
The collapse of big S&Ls such as Washington Mutual Inc. has left FirstFed as well as BankUnited Financial Corp. of Florida as the only remaining S&L operators that during the mortgage boom specialized in so-called option ARMs, variable-rate loans that allowed borrowers to pay so little that their balances rose.
Often made without documenting borrowers' incomes, option ARMs played a major part in the downfall of Countrywide Financial Corp., Washington Mutual Bank and Pasadena's IndyMac Bank. The Office of Thrift Supervision, the U.S. Treasury Department agency that regulates savings institutions, had given Newport Beach-based Downey Financial Corp. a cease-and-desist order before seizing its Downey Savings unit in November.
FirstFed began tightening its lending requirements in late 2005, before its rivals did so, improving its odds of survival, analysts said. Nonetheless, its ratio of nonperforming assets -- a measure of bad loans -- stood at 7.9% on Sept. 30, up from 1.4% a year earlier.
Deposit accounts at First Federal remain insured by the Federal Deposit Insurance Corp. for at least $250,000 per customer.
FirstFed recently had been reshaping itself into a more traditional lender, mainly making mortgages with an initial interest rate fixed for five years. The loans required borrowers to document that they could afford the payments.
The regulators' order would have allowed FirstFed to continue making only a trickle of loans, so the company decided to stop making them entirely, Heimbuch said.
It now will focus on raising additional capital -- a bank's financial cushion against losses -- or shrinking itself so the capital it has on hand will represent a greater percentage of its loans.
Heimbuch noted that the restrictions on FirstFed contrasted with the Treasury's program of injecting capital into stronger banks to encourage them to make more loans.
"We are disappointed that despite the fact that Treasury is trying to get banks to do more lending, this situation will take an institution that has been lending out of the market," she said in a telephone interview.
The regulatory definition of well-capitalized is 5% for so-called Tier 1 capital and 10% for "risk-based" capital. FirstFed, which hasn't yet released its fourth-quarter financial results, had Tier 1 of 8.4% at Sept. 30 and risk-based capital of 15.9%.
FirstFed announced the regulatory action and its cutbacks after the close of regular stock trading, during which its shares fell 2 cents to $1.57.
They are down 96% from a year ago.
The Press Enterprise
California politicians cannot prevent drought, but they can prepare the state to handle the inevitable dry spells. But legislative stalemate has left the state facing a drought with only limited access to a crucial water source -- and that failure may soon cost Californians extra at grocery stores.
The Legislature needs to ensure that water exports from Northern California continue to flow to cities and farms in the rest of the state. That task requires preventing the environmental threats in the Sacramento-San Joaquin Delta from shutting off a necessary water supply. And the state needs to prepare for a future where winter snowpack will no longer be a reliable source of water.
Current conditions offer a grim glimpse of what the state faces if it does not address water needs. Across the Central Valley, farmers are leaving fields empty because of a lack of sufficient water for irrigation. The loss of lettuce, tomatoes and other crops could drive up prices on store shelves, as California grows much of the nation's vegetable crops.
Two years of drought have strained water supplies, but politicians have also fed the shortage by failing to protect the state's primary water source. The delta provides water to two-thirds of Californians and irrigates a third of its cropland. Yet the estuary faces environmental collapse, and a federal judge in 2007 slashed exports from the delta to protect an endangered fish.
Drought and pumping cutbacks caused nearly $309 million in crop losses statewide last year. And reduced exports from the delta have many water agencies considering rationing.
The most reasonable delta solution involves channeling the water from Northern California around the estuary to farms and cities elsewhere in the state. That step would separate a crucial water source from the delta's environmental troubles. And much of that water now comes from mountain snow melt. With long-term forecasts predicting more rain in place of snow, the state needs more capacity to collect and store winter rains.
But the Legislature has made scant progress on those issues, thanks to an ideological stalemate which obscures the larger point: A large, arid state needs a comprehensive strategy to meet its water demands, not limited partisan approaches. California will need to boost water conservation, but that effort alone will not be enough. The state cannot thrive without continued water exports from the north.
California requires rational water policy, but instead gets partisan inflexibility -- a paltry and irresponsible substitute.
A Radical Makeover in Reston
Residents Say a Stream Restoration Project Is Damaging the Landscape...Sandhya Somashekhar...1-15-09
Some Fairfax County residents are calling for a halt to a major stream restoration project in Reston that they say has radically transformed the landscape and resulted in the felling of hundreds of trees.
Work began last year on the long-planned project to reverse years of damage and pollution caused by development. But residents said they were stunned in the fall when Wetland Studies and Solutions, the Gainesville company in charge, began using heavy construction equipment to reshape sections of stream and take down some of the community's signature mature hardwoods.
The project has been approved by the county, the Virginia Department of Environmental Quality and the U.S. Army Corps of Engineers. However, the Fairfax Board of Supervisors and two state lawmakers asked this month for another review from county and state environmental experts in response to the residents' concerns.
Michael S. Rolband, president of Wetland Studies and Solutions, said the work is necessary because of the extent of deterioration over the past three decades. But residents said the measures are extreme and are lobbying for a redesign of the project.
"Why did we have to lose all these trees?" said Marie Huhtala, pointing at a cluster of stumps about 35 feet from the water's edge near Soapstone Drive, between Glade and South Lakes drives. "We're not saying, 'Don't do anything.' It's just overkill."
The $70 million, 14-mile project is aimed at addressing a problem that has plagued waterways across the region. Runoff from parking lots and other impervious surfaces has sent polluted water surging into the waterways, causing erosion and depositing contaminants downstream in the Potomac River and Chesapeake Bay.
Reston's streams are in grave shape, Rolband said. Before his company began its work, raw sewage was seeping into the water in some areas, and phone lines ran exposed in other spots. The rushing water had carved deep ridges into the land, loosening tree roots and making the banks unsafe for walking.
Rolband has been rerouting the streams to avoid utility lines and changing their shape to slow the water and reduce erosion. That required removing trees. Then more trees had to be removed to park construction equipment. After the project is completed, native vegetation, including hundreds of saplings, will be planted, turning the area dense and lush again, Rolband said.
"What's disturbing to a lot of people is that the process of doing this involves heavy construction," Rolband said. "But people who study streams are already amazed at how good this is looking so quickly, and it is providing a dramatic water-quality improvement."
But some residents said that Rolband's approach has been heavy-handed and that they believe Rolband and the Reston Association -- the community-wide homeowners association that owns and maintains the town's lakes and streams -- are pursuing a more elaborate project for financial gain.
The price tag is being covered through a federally coordinated program in which developers can pay into a fund to offset the detrimental effects of their projects on waterways. Rolband's company is paid for every foot of stream it restores. The Reston Association is expected to receive about $450,000 as well.
Rolband and Reston Association officials said the scale of the project has nothing to do with profit. They said they were doing what needed to be done to improve the health of the Chesapeake Bay, the Potomac River and the community's waterways.
Among the supporters of the project is the Chesapeake Bay Foundation. In a Dec. 16 letter, Ann F. Jennings, the foundation's Virginia executive director, wrote that Rolband's company was being mindful of the impact of the construction. "Ultimately, these short-term construction activities will lead to many long-term environmental and public benefits," she wrote.
Chris Koerner, an environmental consultant who lives in Reston but not near the restoration site, said the Reston Association could achieve better results with a lighter touch, removing trees selectively and using smaller, more precise equipment. The heavy equipment compresses the soil, he said, making it difficult for young trees to take root and grow.
The result of the work is more reminiscent of a manicured park than a natural stream, Koerner said.
On a recent morning, Koerner and some local residents surveyed a completed portion of the project off Soapstone Drive. A large area around the stream, once crowded with hardwoods, is bare. Along some stretches of the stream, the banks are neatly lined with rectangular boulders, not the muddy, leaf-strewn shores often seen along suburban creeks in autumn and winter.
"You sort of think you're on a golf course," Koerner said.
FDIC proposes rate caps for troubled banks...ALAN ZIBEL
WASHINGTON -- Struggling banks would be banned from hiking interest rates above a national average under new government regulations proposed Tuesday that aim to halt such risky behavior.
The Federal Deposit Insurance Corp. wants to change the way it calculates limits on deposit interest rates for banks that are having financial problems. Banks that are trying to stay afloat often raise their interest rates far above national levels in an attempt to attract new money.
The FDIC's current limits on interest rates for institutions it defines as less than "well capitalized" are calculated using yields paid on government-issued Treasury bonds.
But the extraordinarily low Treasury rates of the past year have made such limits meaningless. The new rate would be calculated by the FDIC using an average of rates paid by banks nationwide.
The regulations would not affect healthy banks. Last fall, 154 out of the more than 8,300 banks nationally were classified as less than "well capitalized" according to the FDIC, which does not disclose the names of troubled institutions.
"We're moving toward a rule that is both more workable and reflective of the market rates that are being charged" Martin Gruenberg, the FDIC's vice chairman, said at a board meeting Tuesday.
The FDIC's regulations on interest rates are designed to prevent troubled banks from evading an existing ban that prevents teetering institutions from accepting high-rate "brokered deposits" sold by securities firms to customers outside of a bank's local area.
IndyMac Bank, which failed last summer, relied heavily on those brokered deposits that can carry higher interest rates but also can be riskier than traditional deposit accounts because they may not fall within the federal insurance limit of $250,000 per account.
The FDIC also finalized a new rule for how deposit accounts are processed if there is a bank failure.
This month alone, three banks have failed following 25 failures last year that were far more than in the previous five years combined. Only three banks failed in 2007. It's expected that many more banks won't survive this year's continued economic tumult.
Market Losses Tighten Screws On Colleges...Susan Kinzie
American colleges and universities lost an average of 23 percent on their endowment investments last semester, according to a national survey to be released today, a drop that is hurting the bottom line across the board, from major state institutions to the Ivy League.
Colleges are feeling financial pressure from all sides as the economic crisis deepens. State funding has dropped. Private donations are expected to decline. And with more families facing job losses and dwindling savings, some schools say they are reluctant to raise tuition or cut financial aid.
Instead, half of the private colleges taking part in a separate survey said they are freezing hiring, delaying building projects or restricting staff travel.
"This is the most challenging environment that any of us in higher education have seen in our professional lifetimes," said Molly Broad, president of the American Council on Education, "because of the combination of revenue declines from multiple sources and because of the continuing uncertainty."
For the fiscal year that ended June 30, investment returns -- a mix of interest, capital gains and dividends that is considered the best measure of an endowment's performance -- produced an average loss of 3 percent at U.S. colleges and universities, according to a voluntary survey of nearly 800 institutions with endowments of at least $1 million. The participating institutions are members of the National Association of College and University Business Officers, which released the survey results with the investment firm TIAA-CREF Asset Management.
A follow-up survey of more than 400 schools found that from July through the end of November, endowment investments fell an additional 23 percent on average, based on preliminary estimates.
For those schools that are highly dependent on endowment funds, the impact is profound, and the scramble to make cuts is well underway. Those that rely more on state funding and tuition income have seen those revenue sources shrink as well, and they are cutting back on some of the extras that make the schools more competitive, such as endowed professorships to lure top faculty.
They are all watching to see how the economic stimulus package fares in Congress. It could provide significant funding to higher education and help families pay for college,
Meanwhile, schools are making some tough choices.
Public colleges and universities in Virginia are considering raising tuition by as much as 10 percent. In a survey by the National Association of Independent Colleges and Universities, more than two-thirds of the schools that responded planned to raise tuition. Dartmouth College leaders announced last week that they would need to make $60 million in cuts. Brown University declared a hiring freeze.
"The budgets for the most part have a very thin margin," said Sanford J. Ungar, president of Goucher College, who has frozen hiring and instituted budget cuts. "Once something goes haywire, it's very hard to make up for it."
But even as they postpone hiring and construction, many schools have worked to minimize the effect on students and families by holding down tuition -- which has risen much faster than the general rate of inflation for years-- and increasing financial aid. More than 90 percent of colleges responding to the NAICU survey said they were increasing their financial-aid budgets.
In Maryland, Gov. Martin O'Malley (D) has proposed a budget that would continue a freeze on tuition for the state university system for the fourth year. Catholic University's tuition increase next year will be its smallest in years, even though the school has had to cut spending and freeze hiring. Princeton and Cornell universities announced their smallest increases in more than 40 years.
At George Mason University, school officials are deciding what to trim. But a university spokesman said officials would protect financial aid, which they increased from $2.1 million to $2.6 million over the past fiscal year.
Schools such as the University of Virginia and Harvard University are standing by their recent and expensive commitments to ensure that low-income students don't have to borrow money to attend.
The losses may be painful at schools such as U-Va., where the market value of the investment pool dropped more than $1 billion in the last six months of 2008. But higher education returns generally outperformed market indices. The 3 percent drop for the 2008 fiscal year compares with a 13 percent decline in the Standard & Poor's 500. And higher education's nearly 23 percent decline in the second half of last year compares with an S&P 500 drop of 43 percent.
Some schools, such as Harvard and Yale, have such huge endowments and had enjoyed such strong growth in the tax-exempt funds that they became targets for politicians, who urged them to spend a higher share of the money on financial aid.
On average, schools were spending nearly 5 percent of their endowments annually for capital and operating budgets. In the survey, nearly half of respondents said they did not know yet whether that would change in the next fiscal year.
The survey includes responses from 796 of the 1,028 public and private institutions that are members of the university business officers group;435 answered the follow-up questionnaire on which the more recent data are based. A smaller percentage of public institutions than private ones responded to the second survey.
Overall, fund managers said they are investing for the long term.
"We have every reason to be confident we can get through this . . . but it will take time," said Leonard Raley, president and chief executive of the University System of Maryland Foundation.
"No one knows," he added, "what's around the corner."
New York Times
Geography Is Dividing Democrats Over Energy ...JOHN M. BRODER
WASHINGTON — President Obama is moving quickly to act on the environmental promises that were a centerpiece of his campaign. But tackling global warming will be far more difficult — and more costly — than the new emissions standards for automobiles he ordered with the stroke of a pen on Monday.
Already, the Congressional Democrats Mr. Obama will need to carry out his mandate are feuding with one another.
By coincidence or design, most of the policy makers on Capitol Hill and in the administration charged with shaping legislation to address global warming come from California or the East Coast, regions that lead the country in environmental regulation and the push for renewable energy sources.
That is a problem, says a group of Democratic lawmakers from the Midwest and Plains States, which are heavily dependent on coal and manufacturing. The lawmakers have banded together to fight legislation they think might further damage their economies.
“There’s a bias in our Congress and government against manufacturing, or at least indifference to us, especially on the coasts,” said Senator Sherrod Brown, Democrat of Ohio. “It’s up to those of us in the Midwest to show how important manufacturing is. If we pass a climate bill the wrong way, it will hurt American jobs and the American economy, as more and more production jobs go to places like China, where it’s cheaper.”
This brown state-green state clash is likely to encumber any effort to set a mandatory ceiling on the carbon dioxide emissions blamed as the biggest contributor to global warming, something Mr. Obama has declared to be one of his highest priorities. Mr. Obama has said he intends to press ahead on such an initiative, despite opposition within his own party in Congress and divisions among some of his advisers over the timing, scope and cost of legislation to curb carbon emissions.
The centrist Democrats who urge a slower-paced approach represent states that are crucial electoral battlegrounds and that stand to lose the most from such regulation. They say they believe that global warming is a serious threat and they will support legislation to address the problem — but not at the expense of their already-strained workers and industries.
These Democrats are concerned, they say, that climate bills will be written by committees in the House and Senate led by two liberal California Democrats, Senator Barbara Boxer and Representative Henry A. Waxman, and shaped by Mr. Obama’s team of environmental and energy advisers, virtually all of whom are from California or the East Coast.
For decades, California has led the nation in environmental regulation, including the most sweeping effort to address global warming by imposing mandatory caps on greenhouse gas emissions starting in 2012.
Following California’s lead, a group of Northeastern States have created a partnership known as the Regional Greenhouse Gas Initiative to control carbon emissions.
But California and many East Coast States also differ sharply in the extent to which they depend on coal — a fossil fuel that is a major culprit in producing carbon emissions. California, for example, derived only 20.7 percent of its electricity from coal and 40 percent from hydroelectric power and renewable sources in 2005, while Ohio drew 86 percent of its electricity from coal that year, according to the Department of Energy. Other states of the Great Lakes and Plains are much more like Ohio than California in energy usage.
In the space of a single afternoon this month, Ms. Boxer, Mr. Waxman and the House speaker Nancy Pelosi, another California Democrat, issued statements declaring their intent to work with Mr. Obama to act quickly on comprehensive climate and energy legislation, with a goal of passage this year. Mr. Waxman said he expected to move a climate bill out of his Energy and Commerce Committee by Memorial Day. Ms. Boxer said “the writing is on the wall that legislation to combat global warming is coming soon.”
Rahm Emanuel, the new White House chief of staff, endorsed the lawmakers’ timetable and said he believed the goal of passage of a broad climate change bill this year was “realistic,” given the substantial Democratic majorities in the House and Senate.
Mr. Obama and leaders in Congress have endorsed a so-called cap-and-trade system in which power plant owners and other polluters could meet limits on heat-trapping gases like carbon dioxide by either reducing emissions on their own or buying credits from more efficient producers.
Mr. Obama’s energy and environmental advisers include Lisa P. Jackson, the former head of the New Jersey environmental agency who will head the Environmental Protection Agency; Steven Chu, former director of the Lawrence Berkeley National Laboratory in California, who is the new secretary of energy; and Nancy Sutley, former deputy mayor of Los Angeles for environmental affairs, the new chairwoman of the White House Council on Environmental Quality.
Carol M. Browner, who will occupy the new post of White House coordinator for climate and energy policy, is a former head of the E.P.A., a former director of Florida’s environmental agency and was a senior adviser to former Vice President Al Gore.
The appointees come to office with a mandate from the president to transform the nation’s energy economy and to lead the world in addressing climate change.
But their ambitions confront a brutal reality of a weak economy, fading public concern about climate change and serious qualms within their own party about the costs of taking on global warming and who will pay them.
They will also have to deal with bruised feelings among many Democrats over the coup Mr. Waxman mounted last November to wrest the gavel of the Energy and Commerce Committee from its longtime leader, Representative John D. Dingell, Democrat of Michigan and a longtime champion of the auto industry and other Midwest manufacturers.
“For us, it’s still a big disappointment,” said Senator Debbie Stabenow, Democrat of Michigan, referring to the unseating of Mr. Dingell, who was pursuing a more moderate climate proposal than those advocated by Ms. Boxer and Mr. Waxman.
“My message over all is that for us to support what needs to be done in addressing global warming we need to demonstrate that, in fact, jobs are created,” Ms. Stabenow said. “It’s not a theoretical argument. We have to come up with a policy that makes sense, that is manageable on the cost end, that creates new technology — and that treats states equitably and addresses regional differences.”
Ms. Stabenow is a leader of the so-called Gang of 10, representing the coal-dependent states in the middle of the country; the group was formed after the failure of a Senate global warming bill pushed by Ms. Boxer last June. The members’ goal is to assure that their concerns are met in any future legislation.
The other original members are Senators Brown of Ohio, John D. Rockefeller IV of West Virginia, Carl Levin of Michigan, Blanche Lincoln of Arkansas, Mark Pryor of Arkansas, Jim Webb of Virginia, Evan Bayh of Indiana, Claire McCaskill of Missouri, and Ben Nelson of Nebraska.
In the fall, six more Democratic senators joined the group: Jeff Bingaman of New Mexico, Kent Conrad and Byron L. Dorgan of North Dakota, Robert C. Byrd of West Virginia, Tim Johnson of South Dakota and Ken Salazar of Colorado.
Mr. Salazar has since left the Senate to become secretary of the interior.
“We will play an important role in the final bill,” Ms. Stabenow said.
Representative Edward J. Markey, the Massachusetts Democrat who has been a leader in Congress on environmental matters for three decades, has been assigned by Mr. Waxman to write the House’s version of global warming legislation. Mr. Markey said he was very aware of the concerns of coal-state Democrats.
He noted that Mr. Obama, who comes from Illinois, a coal-dependent state, had traveled to Ohio last week to speak at a factory that produces parts for wind turbines.
“Every single wind turbine takes 26 tons of steel to construct,” Mr. Markey said. “A lot of new jobs will be created if we craft a piece of global warming legislation correctly, and that is our intention.”
Climate: Not Red vs. Blue, but Fossil vs. Clean?...Andrew C. Revkin, Dto Earth
I’ve written off and on about how the divide in the United States over how quickly to curb carbon dioxide emissions has little to do with the now familiar red state versus blue state dynamic, and is more about which regions have grids and economies most wedded to coal and oil, and which don’t.
This fine graphic, accompanying a story on how fossil fuels divide Democrats, by John Broder, shows vividly the regional divisions that will add to President Obama’s challenge in trying to garner support for a stringent bill curbing greenhouse gases.
Do you live in a “brown state” or a “clean state”? If you’re outside the United States, is your region dependent on fossil fuels or not? Do you have friends in the opposite situation (with hydroelectric power, nuclear, or…)?Do you see regional energy sources or economic underpinnings shaping peoples’ thinking about climate science and policy?
A Divide: Brown-Green...map
Home prices fall at record pace
Index of 20 U.S. cities shows 18.2% annual drop, to the lowest levels since 2004...Les Christie
NEW YORK (CNNMoney.com) -- An index of home prices in 20 major metropolitan areas fell at a record annual pace in November, to levels not seen since 2004, according to a report released Tuesday.
The S&P Case-Shiller Home Price Index, a sampling of 20 cities from across the nation, fell a record 18.2% over the 12 months ended Nov. 30. That brought the index to its lowest point since February 2004. From its peak in mid-2006, the index has plunged a whopping 25.1%.
Eleven of the 20 cities showed record declines, and the 12-month price drop for 14 of the cities was a double-digit percentage.
"The freefall in residential real estate continued through November 2008," said David M. Blitzer, chairman of the Index Committee at Standard & Poor's, in a prepared statement. He said the 20-city index has fallen for every month since August 2006, a total of 28 consecutive months.
The decline was very broad, with prices down at least 1% in every region of the nation during the October-November period. Eight regions recorded record monthly declines, according to Blitzer.
As has become the norm, Southwest cities were the hardest hit, with Las Vegas prices dropping 3.9%, the nation's worst decline. Phoenix, at 3.4% was second. The Arizona metropolis recorded the worst 12-month decline, at 32.9%, followed by Las Vegas, at 31.6%.
New York and Cleveland prices fell by only 1% for the month, the smallest November drops. The best 12-month performer was Dallas, where prices slipped by 3.3%. Other 12-month, single-digit percentage drops were recorded by Denver, at 4.3%, Cleveland, at 5.2%, and Charlotte N.C., at 5.3%.
The Case-Shiller numbers just underscore how tough the market is for home sellers, according to Mike Larson, a real estate analyst with Weiss Research.
But there was some positive news in Monday's report from the National Association of Realtors, which showed a bump up in the number of existing homes sold during December.
"We're clearly seeing some of the impact of falling prices," said Larson. "But the problem is that many of those sales are made at the cheapest prices [often of bank repossessed properties], making it hard for normal homeowners to sell."
He does not foresee any swift improvement in housing markets - not as long as industries of all kinds keep announcing new layoffs, as several companies did Monday when more than 70,000 Americans learned they would lose their jobs.
"Home prices will likely decline, albeit at a slower pace, for the rest of 2009," said Larson
Unemployment sweeps nation
Deepening recession prompts firms to slash jobs. Rising unemployment in all states and D.C. in December wreaks havoc on state funds and budgets...Tami Luhby
NEW YORK (CNNMoney.com) -- Unemployment spiked in all states nationwide in December for the first time as companies shed hundreds of thousands of positions, federal data released Tuesday shows.
All 50 states and the District of Columbia recorded unemployment rate increases compared with the previous month and the year prior period, the Bureau of Labor Statistics of the U.S. Department of Labor reported.
The report marked the first time every state recorded a rise in monthly unemployment since the bureau began keeping such records in 1976.
"It's been very widespread across the country," said Tom Nardone, assistant commissioner for current employment analysis at the bureau, of the job losses.
Michigan and Rhode Island once again led the nation with the highest jobless rates at 10.6% and 10% respectively. Rhode Island's rate is the highest in more than three decades.
Wyoming had the lowest unemployment rate, at 3.4%, followed closely by North Dakota, at 3.5%. Both these states saw their rates inch up 0.2 percentage points, which the bureau does not consider statistically significant.
Jobs are disappearing at a rapid pace. Indiana and South Carolina recorded the largest monthly unemployment rate increase, at 1.1 percentage point each, while six other states had 1 percentage point jumps.
Several states saw their unemployment rates spike from a year ago. Idaho's rate jumped to 6.4%, from 2.7%, while Rhode Island's climbed to 10%, from 5.2% a year earlier.
Florida is another state that's had a rapid reverse of fortune. The Sunshine state had led the nation in job creation earlier this decade, but has now seen its employment market shrivel. The state's rate jumped to 8.1% in December, up from 7.4% a month earlier and 4.5% a year ago. It's now tied with Georgia for 10th highest unemployment rate in the nation.
"Virtually all industries are losing jobs except education and health care," said Rebecca Rust, Florida's chief economist.
The national unemployment rate rose to 7.2% in December, up from 6.8% the previous month and from 4.9% a year earlier.
More pain is in store in January. On Monday alone, companies announced more than 71,000 job cuts, bringing the total this year to more than 200,000.
Businesses in many fields with locations globally are downsizing. Home Depot (HD, Fortune 500) said Monday it would shed 7,000 positions, while Texas Instruments (TXN, Fortune 500) announced it was eliminating 3,400 jobs. Dutch financial firm ING, which has operations in the United States, said it would get rid of 7,000 positions.
Nearly 2.6 million jobs were lost during 2008, the highest yearly total since 1945.
President Barack Obama is pushing for quick passage of an $825 billion package he hopes will stimulate the economy and promote job growth.The infrastructure projects are being billed as creating three to four million jobs.
"Just this week, we saw more people file for unemployment than at any time in the last 26 years, and experts agree that if nothing is done, the unemployment rate could reach double digits," Obama said Saturday. "If we do not act boldly and swiftly, a bad situation could become dramatically worse."
However, some critics say the bill will not do enough to reverse the spike in unemployment.
"There is too much wasteful spending and the plan in our view won't do what it is intended to do -- create jobs and preserve jobs in America," said House Minority Leader John Boehner, R-Ohio.
Unemployment trust funds suffer
Swiftly rising unemployment claims are wreaking havoc on state unemployment trust funds. These accounts, which are funded by taxes levied on employers, are running dry.
Four more state funds -- Indiana, New York, South Carolina and Ohio -- have become insolvent in the last four months, according to a forthcoming report from the National Employment Law Project. They join Michigan in borrowing from the federal government to continue paying benefits.
Another 13 states are at "major risk" of insolvency, up from eight in September, according to the advocacy group. These states have eight months or less of average monthly benefits in their trust funds. These include: New Jersey, California, Kentucky, Missouri, Wisconsin, North Carolina, Rhode Island, Arkansas, Pennsylvania, Idaho, Minnesota, Connecticut and Illinois.
Some experts predict up to 30 states could see their funds become insolvent this year if the recession deepens.
While the jobless in these states will continue to get benefits, there are serious ramifications to having insolvent funds. State legislatures must bring the funds back into balance, which means either cutting benefits or raising taxes on employers. Neither option is palatable during a recession.
Faced with these funding shortfalls, states may make it harder for to collect unemployment. For instance, they might raise the minimum earnings needed to qualify for benefits or exclude certain groups, such as those seeking part-time work.
"It puts a lot of pressure on insolvent states to cut down on their eligibility criteria or increase disqualifications," said Rick McHugh, staff attorney at the National Employment Law Project.
Many states are loathe to put more pressure on employers at a time when their operations are already suffering. Companies aren't as quick to hire new workers if they have to pay higher unemployment taxes on each one, experts said.
"It does tend to slow down their rehiring," said Richard Hobbie, executive director of the National Association of State Workforce Agencies.
States may get a little relief in the stimulus package, which calls for temporarily waiving interest payments on federal loans to state unemployment trust funds. The rate is currently around 4%.
State budget woes
When people lose their jobs, they pay less in personal income taxes to their states. This -- combined with declining corporate tax payments and lower sales tax revenues -- has left many states scrambling to contain growing budget gaps.
At least 45 states faced or are facing shortfalls in their budgets for this and/or next year, according to the Center on Budget and Policy Priorities. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.
Bank bailout could cost $4 trillion
Banks don't have enough capital to fix their problems, which means the Obama administration may need a lot more money to clean up the financial mess...Colin Barr
NEW YORK (Fortune) -- The cost of the bank bailout is likely to be much higher than $700 billion.
While the Obama administration hasn't asked Congress for more money yet, some experts warn that government spending on support for struggling financial services companies will ultimately reach into the trillions of dollars.
The first half of the controversial $700 billion program to help banks has already been spent -- mostly on buying up preferred shares of troubled banks.
Part of the remaining $350 billion may be used to purchase troubled assets from bank balance sheets and place them in what Federal Deposit Insurance Corp. chief Sheila Bair has dubbed an "aggregator bank."
And while taxpayers will surely recover some of that sum eventually, more money is likely to be needed in order for the bank rescue to work.
"The amount of working capital you'd expect the government to take into this would be around $3 trillion to $4 trillion," said Simon Johnson, a senior fellow at the Peterson Institute for International Economics and author of its Baseline Scenario financial crisis blog.
Johnson, who until last year was the chief economist at the International Monetary Fund, said that banks will need more rounds of capital from the government because their cushion against losses is too thin. He also said that there is a need to get rid of some of the toxic assets weighing on financial institutions before they can recover.
With that in mind, he thinks that the net cost to U.S. taxpayers for a broadened bailout would be about $1 trillion to $2 trillion, or between 5% and 10% of U.S. gross domestic product. He said this figure is "in line with the experience" of other nations that have tried massive banking system restructuring.
Johnson isn't the first to estimate that the final cost of a bank bailout will be well north of $1 trillion. FBR Capital analyst Paul Miller said in November that just the top eight U.S. financial institutions alone needed at least $1 trillion in new common equity.
Plunging stocks increase the sense of urgency
But calls for a comprehensive response from the government have increased in recent weeks following the free fall of bank stocks.
The KBW Bank index has dropped 35% in January after a 50% plunge in 2008, as investors worry that the government may be forced to nationalize some banks -- and wipe out shareholders in the process. Shares of Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500) have been particularly hard hit.
"The big banks are a hope trade right now," Johnson said.
Though the Obama administration hasn't said it will need more money beyond the second $350 billion installment of the Troubled Asset Relief Program, or TARP, officials have not ruled out the possibility of asking Congress for further funds.
Vice President Joe Biden said on CBS' "Face the Nation" Sunday that the first task for the likely new Treasury secretary, Timothy Geithner, will be to assess whether the remaining $350 billion in funds available under TARP will be enough to stop the bleeding.
Geithner said last week that he didn't yet see the need for more money, but stressed that the Treasury may have to "act flexibly" if the problems in the economy and the financial sector deepen.
While officials will have to spend huge sums upfront to show the market that they won't let important institutions fail, Johnson said taxpayers won't have to end up on the hook for the entire amount of money that's being injected into banks.
Johnson said the government could get warrants in banks receiving assistance that would convert to common shares once the government sells them. He also said the government could hire private equity managers to oversee the assets the government takes on -- and sell them when the time is right.
These arrangements, he said, should allow the Treasury to extract some gains for taxpayers when the economic free fall ends and the banking system starts to recover.
Some observers believe asset values are so depressed right now that as long as the government has a well designed plan that restores investor confidence, taxpayers should profit from the financial bailout
"I think we have seen prices fall to a point where the government could very easily make money, though I'd be very happy if we end up breaking even," says Gary Hager, president of Integrated Wealth Management in Edison , N.J.
What could go wrong
If the history of previous banking system rescues is any guide though, there's also a good chance that removing toxic assets from bank balance sheets could leave taxpayers with a significant tab.
When Congress created the Resolution Trust Corp. in 1989 to clean up the mess left by the collapse of the savings and loan industry, legislators gave the RTC $50 billion to close or resolve troubled institutions.
But the RTC wound up needing three additional infusions of taxpayer funds over six years, as regulators confronted an industry whose health was much worse than feared.
In the end, taxpayers took a $124 billion loss on the RTC's operations, according to a 2000 study published by FDIC researchers Timothy Curry and Lynn Shibut.
The RTC resolved 747 institutions, with total assets of $394 billion, according to the study. That means taxpayers lost 31 cents on each dollar of assets handled by the RTC -- an institution that, because it was simply disposing of the property of failed institutions, didn't have to pay for assets it later sold.
In contrast, the widely discussed aggregator bank would be paying institutions that participate for their assets.
Details of how the aggregator bank would decide how much to pay for toxic assets have yet to be determined. But whatever method the aggregator bank uses, it could mean significantly higher startup costs than the RTC had.
So expect to see the Obama administration coming back to Congress for more money...soon.
Citi downplays nationalization fears
CEO Vikram Pandit says government could not seize just one bank, noting it would be too 'surgical'...David Ellis
NEW YORK (CNNMoney.com) -- Citigroup CEO Vikram Pandit downplayed the notion that his bank, or any other major financial institution for that matter, would be taken over the by the U.S. government.
Speaking at a Citigroup-sponsored conference about the financial services industry, Pandit cited regulators' commitment to a free-market financial system.
"You see that in every action they have taken so far," he said.
Pandit also suggested the government would have to act broadly if it attempted to seize control, or "nationalize", parts of the nation's banking system.
"I don't think you can just nationalize one bank," said Pandit. "You cannot be that surgical."
Nonetheless, Citigroup (C, Fortune 500) has been widely viewed as one of the leading candidates for nationalization.
The bank has been one of the biggest recipients of government aid during the current crisis, receiving $45 billion from the Treasury Department, in exchange for preferred stock and warrants.
In addition, the Federal Reserve, Treasury and FDIC agreed last November to backstop more than $300 billion in potential loan losses.
As such, regulators have been keeping a close eye on Citigroup's day-to-day activities as the government seeks to make banks that have received government funding more accountable for their spending.
On Monday, the company declined to take delivery of a new $45 million corporate jet, amid pressure from the Obama administration.
Citigroup has been one of the hardest hit banks during the recession, and it continues to hemorrhage money. Earlier this month, the New York City-based bank recorded its fifth-straight quarterly loss, losing roughly $8.3 billion.
The company also announced it would sell a 51% stake in its Smith Barney unit to Morgan Stanley (MS, Fortune 500), and unveiled plans to break up into two businesses - Citicorp and Citi Holdings. Pandit gave more details about the looming reorganization Tuesday.
Citigroup announced a series of key management changes as part of its broader restructuring program. Most notably, Citi tapped Mike Corbat as interim CEO of Citi Holdings, which would house Citigroup's pool of troubled assets. Corbat was previously the head of global wealth management at Citi.
The move follows a broader shake-up at the company's board in recent weeks. Richard Parsons, formerly the CEO of Time Warner, was named chairman, replacing Sir Win Bischoff. (Time Warner is the parent company of CNNMoney.com.)
Earlier this month, Robert Rubin stepped down as a director on Citigroup's board. Rubin, who was Treasury Secretary under President Clinton, was widely criticized for not doing enough to keep the bank from increasing its risk exposure, most notably to the U.S. housing market.
Shares of Citigroup were up about 7% Tuesday afternoon, but the stock has fallen nearly 90% from its 52-week high.
All eyes on Wells Fargo
The bank has held up much better than its rivals but analysts are growing worried about what impact the purchase of Wachovia will have on earnings...David Ellis
NEW YORK (CNNMoney.com) -- Nearly all of the nation's largest banks have reported dreary fourth-quarter results, and now investors are wondering if Wells Fargo will do the same.
Unlike many of its peers, the San Francisco-based bank is expected to remain profitable when it reports Wednesday. Analysts are forecasting that the company will report net income of $1.07 billion, or 33 cents a share, according to Thomson Reuters.
But investors are growing increasingly worried about the company's exposure to the devastated California housing market and other consumer-related areas such as credit cards. Shares of Wells Fargo (WFC, Fortune 500) have plunged nearly 50% so far this year.
Some analysts are estimating that loan loss provisions for the company could be somewhere in the neighborhood of $4.4 billion.
"The question this quarter will be what is the follow through on commercial and industrial [loans]," said Chris Mutascio, managing director at Stifel, Nicolaus & Co. in Baltimore. "We have been seeing some pressure as of late. That will be the wild card."
Worried about Wachovia
Wells Fargo's acquisition of Wachovia, which was completed late last year, appears to be troubling analysts and investors the most.
In early October, Wells moved to purchase the ailing Charlotte, N.C.-based bank for approximately $15.1 billion. The bid beat out an earlier government-supported offer by Citigroup (C, Fortune 500) for just Wachovia's banking assets.
When the tie-up was first announced, Howard Atkins, Wells Fargo's chief financial officer, warned that the company would take $74 billion in pre-tax losses and market adjustments on Wachovia's loan portfolio.
Some industry observers have feared that Wells Fargo may have to endure further writedowns on its books as it failed, like many others, to anticipate just how rapidly the U.S. economy would deteriorate since then.
That is what happened with Bank of America (BAC, Fortune 500) when it swallowed up brokerage giant Merrill Lynch.
Earlier this month, Bank of America revealed that it was forced to request an additional $20 billion in government funds to help complete its purchase of Merrill.
Still, as recently as three weeks ago, Wells Fargo CEO John Stumpf expressed confidence in how his firm's purchase was progressing.
"Yes, the economy has gotten more challenging in the last 90 days, but we still like the way we did the analysis," said Stumpf in an interview with the San Francisco Chronicle. "We were very conservative and are excited about putting these companies together."
Even though Wall Street may have growing concerns about the Wachovia deal, many analysts think Wells Fargo remains in much better shape than most other big banks, particularly Bank of America and Citigroup.
Wells, along with rival JPMorgan Chase (JPM, Fortune 500), has fared much better than peers in riding out the credit crunch and turmoil in the housing market.
In the past two quarters, Wells Fargo has not only remained profitable, but also reported better-than-expected results both times.
And while other competitors have tightened lending standards and become increasingly reluctant to extend credit, Wells Fargo has shown signs of expanding, according to Tom Mitchell, an analyst with Miller Tabak.
"Their credit results have actually been pretty good...and they are one of the few banks on a stand-alone basis that was showing lot of growth earlier in the year," he said.
That may help keep the firm safe from Congressional scrutiny as some big banks have come under fire for failing to extend credit after getting infusions of capital from the government. Wells Fargo received $25 billion under the Treasury Department's capital purchase program.
Yet, there is a growing consensus that Wells cannot remain untouchable for long given the scope of the problems affecting the entire sector.
Stumpf has said publicly that he anticipates job losses as a result of the tie-up with Wachovia. At the same time, there has been increasing speculation that the company may have to cut its dividend in order to reduce the capital strain on their balance sheet.
Some company observers suggest that Wells' management could announce a dividend cut or job cuts as soon as Wednesday.