Modesto Bee
What next for County Bank?...David W. Hill
The future of County Bank is clearly in doubt.
Shocking numbers detailing the bank's worsening financial position were fired off after business hours late Friday, but it didn't go unnoticed and shouldn't have come as a surprise.
County Bank, which is owned by Capital Corp of the West, has been reeling since the real estate market collapsed in the Northern San Joaquin Valley. It reported its first annual loss, $3.7 million, at the end of 2007. On Friday the bank reported the red ink had swelled to about $96 million.
The bank said it expects its capital ratios will fall into the "undercapitalized category" based on federal guidelines. It must raise $75 million "in the near future" to reach acceptable capitalization levels. Without it, regulators would step in.
Amid all the confusing language and multitude of numbers in County Bank's latest revelation, what was missing was a clear explanation of what happens next. No County Bank officials could be reached for comment Saturday.
Other bankers and analysts, though, said they expect the bank to open for business Monday. However, they didn't know if County Bank would be running under its own control with new restrictions or the control of regulators, most likely the Federal Deposit Insurance Corp.
They said there's also the possibility that regulators could have worked out a deal to sell County Bank to another financial institution, probably a banking company that wants to boost its presence in the valley. Merced-based County Bank has seven branches in Stanislaus County and 39 overall in the valley, Tuolumne County and the Bay Area.
At its peak it employed 600 but reportedly has been shedding workers as conditions deteriorated.
Richard Cupp, new chief executive officer of Capital Corp of the West, said in November that the bank was looking at options ranging from raising more capital by attracting new investors to selling County Bank. It also could file for bankruptcy, but regulators likely would step in before it could do that.
Few investors, no deals
Analysts said County Bank hasn't been able to find enough investors willing to pump more money into the hemorrhaging institution in today's dire economic climate.
There have been reports that other banks have looked at buying County Bank, but no deals were struck.
Analysts said there's little incentive for healthy banks to merge with those that are unhealthy, especially one with millions of dollars in bad loans like County Bank.
If a healthy bank waits for regulators to take control, experts said, it can acquire the best parts of the distressed institution, usually the deposits and branches, and avoid being saddled with the liabilities -- all those bad loans.
In County Bank's case, it has a strong network of branches and deposits of $1.43 billion as of Sept. 30, down from $1.67 billion at the end of 2007.
Cupp had hoped to get money from the federal government's banking rescue effort, known as the Troubled Asset Relief Program. But that hasn't materialized, and some bankers doubt whether County Bank would qualify.
Potentially the bank's strongest Washington ally for TARP money won't be much help. U.S. Rep. Dennis Cardoza, D-Merced, said during a recent visit to The Bee that he owns stock in County Bank, which severely limits his ability to advocate for it because of conflict of interest rules.
So with few options left, County Bank has acknowledged that it could no longer guarantee it would continue to be a "going concern."
But analysts insist the bank will continue operations, even if it's at the direction of regulators.
In an effort to avoid another IndyMac panic, regulators now typically conduct bank takeovers on the weekends so it's business as usual when doors open on Mondays.
Depositors are protected by the FDIC's general deposit insurance rules, under which coverage was raised to $250,000 per depositor (with separate coverage for joint accounts) per insured institution through Dec. 31, 2009.
The FDIC provides full coverage for noninterest-bearing transaction deposit accounts, including personal and business checking deposit accounts as well as attorney- client trust accounts.
Sacramento Bee
The Conversation: Placer County university plans are caught in opposing schools of thought...Hosted by Daniel Weintraub
Stand in the fields north of Sacramento and west of Roseville that have been targeted for a private university and thousands of new homes on land donated by one of the region's best-connected real estate developers and you almost get the feeling you are in the middle of nowhere. Surrounded by pasture land, farms and open space, you can barely see the fringe of urbanization on the horizon.
But if you could hop in a helicopter and hover above the same scene, you would get an entirely different picture. From that vantage point you would see a swath of land that sits just a few miles from the edge of town, and even closer to the line marked by housing subdivisions that have been approved but not yet built. A major power plant and a wastewater-treatment facility are nearby.
Those two views reflect the different outlooks that supporters and opponents of the university project bring to the issue.
The plan has been approved unanimously by the Placer County Board of Supervisors and has a wide base of support in the community. But the Sierra Club is suing to block the approval, contending that the project is "leapfrog" development that would lead to urban sprawl ill-served by the region's infrastructure.
The Sierra Club believes that the university project at the heart of the proposed development is a stalking horse for Angelo Tsakopoulos, one of Sacramento's most successful developers, an influential Democrat who repeatedly in recent years has tried to link land projects with other peoples' bigger causes.
Tsakopoulos, for example, proposed rezoning Natomas farmland for development as part of a scheme to raise money for a new arena for the NBA's Sacramento Kings. Later, he offered to donate land near Davis for a new stem cell research facility that he envisioned as the heart of a bio-tech center for the region. Neither plan got off the ground.
In this case, he and several other landowners have agreed to donate more than 1,100 acres for a regional university. The parcels stretch from just west of Roseville almost to the Sutter County line. About half the land, 600 acres, would be set aside for a university. Drexel University in Philadelphia is the prime candidate to build a campus there, and planners envision a school with room for 6,000 students.
The remaining 557 donated acres would be controlled by the university but developed to raise money for the construction of the school. The community would include 22 acres for commercial use, about 300 acres for residential and the remainder for parks, open space and public services. Together, the two sites would accommodate about 4,400 new housing units.
No one seems to question the wisdom of trying to attract a major private university to the area. The Sacramento region is the largest metropolitan area in the country without a major undergraduate private school. But why put it in a field on the edge of town?
One reason is that that's where Tsakopoulos and his partners own land they are willing to contribute to the cause. It would be far more difficult, and expensive, to assemble as much land in an urban area or even adjacent to existing development.
But the area in question is also within the urban-growth boundary envisioned by the region's land-use planning agency, the Sacramento Area Council of Governments. That group, known as SACOG, is famous for its "blueprint" for growth, which maps out a broad plan for the look of the region. The area between Roseville and the Placer County border with Sutter County, about 12 miles north of the Sacramento International Airport, is slated for development.
"This is a project that is consistent with the blueprint," Mike McKeever, SACOG's executive director, told me last week.
A university, McKeever notes, tends to be a low-polluting employer that attracts a population of students and faculty members who want to live nearby, reducing traffic and smog. The campus would probably also generate additional jobs around it that would also attract employees who would live in the area rather than commute. And the early design for the project includes a university village that is walkable and conducive to public transit and bikes.
But even if the project itself is a strong one, it sits in the middle of thousands of acres of undeveloped land, much of which is owned by the Tsakopoulos family and its partners. If approval for the university leads to acre after acre of tract homes on the surrounding land, the result could be clogged roads and freeways and more pollution.
So far, though, Tsakopoulos has no applications pending for developing his other holdings, and his representatives say he has no plans to proceed with any. If that changes, it will be up to the Placer County Board of Supervisors to ensure that development of the other parcels does not overwhelm the desirable elements of the university.
McKeever says he shares the Sierra Club's concern that the university might be "growth inducing." He said a comprehensive plan to lay out which parts of Placer County will be preserved forever as open space would do a lot to allay those concerns, and he has been pushing for just such a plan. In the meantime, though, he says he has no problem with the university project going forward.
"You cannot just ignore the fact that a national-caliber private university coming to our region would be a huge boon to the quality of life and economic development here," he said. "When you have got a potential employer like that, a potential game-changer for this region, you look for ways to make it work. You don't look for ways to not make it work."
The regional university plan creates a long peninsula of development; guess what will happen around it...Terry Davis
Would a new private university benefit the region? No doubt, but there are also benefits in doing responsible growth. The suburban sprawl model we followed for nearly two generations is finally in retreat. It thrived on developing cheap land beyond the urban fringe, burdening society with the high costs of ever-expanding road systems, and stretching utilities and services to meet sprawl's endless appetite for farmland and natural habitat.
The side effects included long and stressful commutes, polluted air and high greenhouse gas emissions. Today we recognize that our future lies with more compact and transit-friendly development, coupled with conservation of open space. When it comes to the Regional University project, the last thing we need is to take a step backward toward "leapfrog" development and runaway sprawl.
A visitor to the site of the proposed project may have difficulty picturing a campus, a 3,232-unit subdivision and 22 acres of shopping centers in this remote spot. There is no development of any kind in the vicinity – no improved roads, no utilities – just open land as far as the eye can see. That did not deter Placer 2780, a real estate investment partnership controlled by Angelo Tsakopoulos, from buying up most of the area. By donating a university site, his long-range plans to develop here are coming to fruition.
The project's distinctive long and narrow shape is no accident. The 1,157-acre project was pieced together from portions of many parcels that in aggregate total 3,026 acres. The result is to stretch development from east to west away from Roseville, knifing deeply into agricultural land, with a uniquely sprawl-inducing effect. It is not hard to anticipate what's in store for the land adjacent to this urban peninsula.
One justification for the university's location is that it is compatible with the area's development Blueprint. Created by the Sacramento Area Council of Governments to limit driving miles and encourage compact growth, the Blueprint's map offers a long-term development scenario for the region. While the Blueprint is undeniably a worthy effort, it has been criticized for providing too large a growth footprint. Regardless, it maps 40 years of growth; it was never intended to give license to local governments to ignore their responsibilities to develop in a logical, orderly manner.
Better management of growth is a key factor in meeting California's goals to reduce greenhouse gas emissions. Signed by the governor, Senate Bill 375 links future transportation funding to new development that is directed toward existing urban areas and transportation corridors that offer opportunities to use public transit. The Regional University, disconnected from existing development, far from a major transportation corridor and designed as an urban peninsula, takes us in the opposite direction. A university in this location demands too much: The sacrifice of our goal of creating a healthier environment.
The proposed Drexel site has long been tagged for development – and the Sierra Club helped with the plan...James Williams
James Williams is president of Williams and Paddon, Architects and Planners, co-chairman of the Sacramento Region Partnership for Prosperity, and a former Placer County supervisor.
Opportunities to attract a major new private university campus to one's community are rare. Land, facilities and start-up costs require major investments unachievable without major gifts.
Indeed, California's major private universities each tie their beginnings to major acts of philanthropy. Stanford University, where the campus is still referred to as "the Farm," came about because of a gift of land and funds from the Stanford family. The University of Southern California and Pepperdine both owe much of their success to philanthropic gifts of land from concerned and prominent citizens.
We in the Sacramento region are fortunate that we now have the offer of one of those rare gifts of endowment.
The donors – the Angelo K. and Sofia Tsakopolous family, William and Claudia Cummings, the Wayne L. Prim family and their partners – are giving the 600 acres and much more – 550 additional acres that can be sold to fund the initial construction of a university.
Importantly, the donors have identified one of the largest and most innovative private universities in our country – Drexel University – as a partner in this effort.
The land chosen for this gift is a place where a 21st century university can be built from the ground up. Nearly one-third of the 600 acres would be preserved as open space – an environmental laboratory for students – and the university itself could be built following the best sustainability practices.
Placer County in 1994 identified the land as an area for future growth. The Sacramento Regional Blueprint, a collaborative effort for smart-growth by local government agencies, environmental groups and concerned citizens, also identified the area as a place for growth.
It is no secret that the Sacramento region is one of the most underserved areas in the country in terms of number of opportunities for higher education offered locally. The Partnership for Prosperity identified higher education opportunities as one of our most important priorities for enhancing economic opportunity and quality of life in our region.
Placer County recently gave this important project its approval to proceed with the detailed work to make it a reality.
While this should be a time of community celebration, unfortunately the Sierra Club filed a lawsuit against Placer County. It is ironic on many fronts: the Sierra Club was involved in the Blueprint plan that recommends development for this area and even joined other environmental groups in a proposed plan for Placer County that also identified this area for development.
As a third-generation Placer County resident, I believe we should not be distracted or swayed by litigation that challenges community consensus and regional planning. Instead, we should welcome this great opportunity and encourage Drexel University to expand its unique style of education to our community as quickly as possible.
Editorial: How dry we are – and apparently will remain
February is here, and with it comes a double liquidity crisis.
In the Capitol, the state is just days away from running out of money.
In the Sierra, the bank account that holds California's water supply – the snowpack – is 61 percent of normal. Without major storms, the state will confront its third consecutive year of severe dryness.
Whether you blame it on climate change or natural variability, the jet stream this year is delivering the bulk of the West Coast's moisture to Washington and Oregon. The northern Sierra is particularly dry, according to the latest snow survey, with only 49 percent of the typical snowpack.
A third dry year will add to fire dangers statewide. Less water will flow down rivers, further endangering salmon and other fish.
Farmers in parts of the San Joaquin Valley are looking at zero water deliveries this year from federal reservoirs. Some farmers are tearing out orchards, or revving up pumps to tap depleted groundwater. Folsom Lake looks like a lunar landscape.
Some urban areas in California have already imposed mandatory conservation measures. Sacramento is not one those. Walk the streets and you can see businesses and households that haven't turned off their timed sprinklers, even during winter rains. Our city lives in a hydrological bubble.
Like the state's cash shortage, the full impact of the liquidity crisis has yet to be felt here, or across California.
But it's coming, and it could be here for a while. Are you ready?
Stockton Record
Peripheral canal surveyors seek entrance onto Delta farmers' land...Alex Breilter
STOCKTON - State water officials are seeking "permission slips" to step onto private land in the Delta for environmental surveys that could clear the way for a peripheral canal.
Allowing surveyors on their land would be a bitter pill indeed for Delta farmers, who widely oppose a canal for fear it will rob them of fresh water for their crops.
Some farm advocates call the scope of the work excessive, noting that the surveys could include digging pits up to 12 feet deep, drilling holes, netting fish from kayaks or boats and trapping animals.
These "temporary entry permits" would last three years, and for each landowner could mean anywhere from one to 60 nonconsecutive days of survey work.
It's unclear how many landowners in San Joaquin County have received these requests; Stockton water attorney Dante Nomellini said he'd heard of perhaps a half-dozen.
But the Department of Water Resources sent out another batch of permits in the past couple of weeks.
"The landowners are going to have people running around on their land, and it's hard enough to control trespassers," Nomellini said. "The people I've talked to don't want them on their property."
Data from the surveys will be used to analyze a canal and its possible route. The state maintains, however, that no definite decision has been made to build a canal.
The land surveys will be as painless as possible, a Water Resources spokesman said. Much data has already been collected so that as few landowners as possible will be involved, spokesman Matt Notley said.
"A lot of work went on behind the scenes" to minimize the disturbance, he said.
This all started last summer, when Water Resources sent about 1,000 letters to landowners near the proposed peripheral canal alignments, including possible routes on the west and east sides of the Delta.
The letters were followed in October with draft permits sent to owners of 126 parcels. Roughly half of the landowners would not sign the permits, and Water Resources is pursuing access to their land through the state Attorney General's office, Notley said.
A second batch of permits went out this month to the owners of 160 more parcels.
State officials have met with landowners in groups and one-on-one to explain the need for the survey work.
But farm advocates are unappeased.
Before signing anything, landowners should call the San Joaquin Farm Bureau Federation and consult an attorney, said bureau program director Katie Patterson.
We're not happy with the process at all," she said, calling the permits "excessive and obtrusive."
Barbara Barrigan-Parrilla heads the grass-roots campaign Restore the Delta, which includes farmers.
"(State officials) are asking for access at all hours of the day and all times to observe whatever it is they want to observe, ..." she said. " The answer is no."
Nomellini questions whether the state has the authority to force landowners to comply. He said his office will help defend those who deny access.
The attorney said he believes the decision to build a canal has already been made, making the environmental surveys moot; an attorney for Water Resources responded in a letter that the surveys will determine whether a canal will be the best way to convey Delta water to two-thirds of California in the future.
State comes knocking...Graphic
San Francisco Chronicle
Political pull helped fix Scouts' dam problem...Seth Rosenfeld
The Boy Scouts of America's Monterey Bay Area Council operated a summer dam on a pristine river and - despite official warnings - allegedly killed federally protected steelhead trout downstream.
And when state and federal regulators sought to have the council stop using the dam, Scout executives turned to politicians to whom they had given campaign contributions or with whom they had personal ties.
The Scout council avoided fines and quietly secured a favorable settlement agreement that, until now, has obscured a full account of their conduct at Camp Pico Blanco on the Little Sur River, north of the rugged Big Sur coast.
In interviews, Scout officials said they followed the rules in using the dam to create a lake for summertime swimming and boating. They denied seeking special treatment from regulators.
"We are good stewards" of the environment, said Ron Walsh, who was a top official at the camp. "But on the other hand, we recognized the value of the waterfront program to our kids, and we were not just going to sit idly by."
The Chronicle obtained details of the June 2002 fish kill and its aftermath from documents obtained under the California Public Records Act and the federal Freedom of Information Act and in more than two dozen interviews.
The imbroglio at the Scout camp began when state Fish and Game officials sought to halt use of the dam about 12 miles south of Carmel, off Highway 1, because it did not meet environmental standards.
But after the Scouts complained to then-state Sen. Bruce McPherson, R-Santa Cruz, officials agreed to let them continue using the dam.
The Scout council agreed to take precautions to protect the fish. But within weeks, agents of the National Marine Fisheries Service discovered evidence that camp staff had ignored the safeguards and - rushing to fill the lake in hot weather - "dewatered" the river below the dam, killing at least 30 threatened steelhead trout in violation of the Endangered Species Act. Concerned about future violations, the federal officials sought to stop the Scouts from damming the Little Sur until the dam met standards.
Scout executives again resisted, saying they needed to continue using the dam so Boy Scouts could use the lake to earn merit badges.
This time they enlisted help from Rep. Sam Farr, D-Carmel, who had attended the camp as a boy.
Ultimately, the council succeeded: The fisheries service backed off and the Scouts were allowed to continue using the dam on the condition that they substantially improve it.
In interviews, McPherson and Farr confirmed that they had contacted regulators at the request of Scout officials. They denied their actions were related to their personal ties or campaign contributions.
"Camp Pico Blanco is, if not the most, one of the best-recognized Scout camps in the state." said McPherson. "I think that's probably why it got extra attention."
Farr said he had done for the Scouts what he would have done for any constituent. He called the final result "a win-win," good for both the Scouts and the trout.
Pristine watershed
The Little Sur River winds some 23 miles down the slopes of the Santa Lucia Mountains in the Los Padres National Forest, passing through private land, including the Scout camp, before emptying into the Pacific. The river "is as close to a pristine watershed as is known to exist" in the area, according to a fisheries service report.
The river is especially important to the steelhead. The report says their numbers in the south central coast area have dwindled from about 4,750 fish in 1965 to about 800 in 2005, because of pollution, erosion that clogs streams and dams that dry up waterways.
Since 1955, the Monterey Bay Scouts had been using the summer dam on the Little Sur. The concrete dam had a spillway about 10 feet wide. Every May, the Scouts blocked the spillway with redwood "flash boards," damming the river and creating a lake.
Thousands of Scouts came from around the state to swim, boat and learn water safety. Each September, the boards were removed. The lake was a source of income to the council, since other councils paid for their Scouts to use it.
For decades the Scouts operated the dam with the state's knowledge.
But in 2001, state and federal wildlife officials began enforcing tougher rules for recreational summer dams. The steelhead had been listed as a threatened species and new laws protecting them had gone into effect.
That July, Jonathan Ambrose, a fisheries service biologist, visited Camp Pico Blanco and told Scout officials that if the dam provided insufficient flow downstream, it could harm the steelhead.
By April 2002, Ron Walsh, the assistant Scout executive at the council, had submitted only an incomplete application to operate the dam that summer. Yet he wanted a permit quickly, so the council could create the lake in time for the camp's traditional Memorial Day opening.
A Fish and Game official, Linda Hanson, told Walsh it was too late: Under the new regulations, the permit would require additional review, records show.
Walsh appealed to other Fish and Game officials, to no avail. In May, according to the records, Hanson explained that a quick turnaround wasn't possible "considering that this would need environmental review, the application was not complete and the site had not been visited."
Then Walsh phoned Hanson again, this time with his attorney on the line. Hanson told them that summer dams around the state also were being examined. The council would have to stop using the dam until it obtained a permit.
"The waterfront was one of the real highlights of the camp," Walsh said in an interview. "We were really between a rock and a hard place."
At this point, the Scouts contacted state Sen. McPherson "to see if he could at least facilitate some discussions" with Fish and Game officials, Walsh said. "We were not trying to get around anything."
Over the years, McPherson had received campaign donations from firms affiliated with men who were active in Scouting: $35,500 from Granite Construction, whose president was David H. Watts, a member of the council board; $5,000 from Chapin Construction, headed by Donald Chapin Jr., a longtime council supporter.
In interviews, both McPherson and the donors said the contributions had nothing to do with the Scouts or their problem at the camp.
McPherson recalled contacting the head of Fish and Game, Robert Hight. "It wasn't a pressure-point discussion that I had with him," McPherson said. "It was more, 'I know that you're in negotiations, can you get to a resolution and get specific as to what's needed and satisfy both parties?' "
A McPherson aide also phoned Fish and Game headquarters in Sacramento, and the agency's legislative office then queried Hanson about the project. She explained that the Scouts had yet to submit a completed application, she wrote.
Hanson held firm when the Scouts' Walsh phoned yet again. "It doesn't matter who you talk to in the department, the answer will be the same," she said, according to the record. "Basically the pressure being applied is asking us to do something we legally cannot do."
Then on June 3 a news story titled "Scouts' Summer Fun Dries Up" appeared in the Monterey Herald in which a council official complained that the state was unfairly forcing them to stop using the dam "at the last minute."
'Any way to fix this?!'
Later that day, Dirk Brazil, a deputy director of the Department of Fish and Game, faxed a copy of the Herald story to Robert Floerke, a Fish and Game manager and Hanson's superior.
"Any way to fix this?!" Brazil wrote on the cover sheet bearing the Director's Office letterhead.
Within weeks, the Scouts' problem was fixed.
Fish and Game reversed course and agreed to let the Scouts use the dam that summer without the standard permit. The department said this would allow the state to study the dam's potential harm to fish.
Hight said in an interview that he recalled nothing about the Pico Blanco issue. "It doesn't ring any bells," he said.
At Fish and Game, "we received political pressure from legislators all the time," said Hight, now a judge in Sacramento. "But we always did the right thing."
Brazil, now deputy Yolo County administrator, said in an interview that he did not recall how he learned of the Herald story. He said he did "lots of problem solving" at the department and that it was not unusual for him to send faxes like the one he sent Floerke, the Fish and Game manager.
"If anything, this was me looking at something in my old backyard and asking a very simple question," said Brazil, who grew up in Monterey County.
According to a federal report, Fish and Game officials were "concerned about the negative publicity."
Floerke recalled that other Scout councils around the state had complied with the new regulations on summer dams, but at Pico Blanco "it was resistance all the way."
He acknowledged that after Fish and Game headquarters intervened, his staff agreed to let the council keep using the dam.
"In a simplistic way, if you look at it, yeah, they backed down," said Floerke, who is now retired.
With the state's permission, the people who ran Camp Pico Blanco on July 8, 2002 began to install the flashboards to dam the Little Sur and create the lake.
The Scouts had promised to fill the lake slowly, ensuring that the river had sufficient flow to allow fish downstream to survive.
But when fisheries service special agent Roy Torres arrived with a video camera to monitor the installation, he discovered that the Scouts did not have a gauge to measure the water flow, as required. Nor had they retained a biologist to help with the installation.
Hot day
One camp staffer told Torres the council planned to take a week to fill the lake. But a Scout parent told Torres the job would be done in just one day, as always. It was a hot day, the parent said, and the Scouts wanted to go swimming.
Meanwhile, a camp staffer told Torres that "he has seen many trout in the river and did not see why there were so many regulations protecting them," according to the agent's report.
The agent explained that steelhead faced extinction and that was why he was videotaping, the report said.
Chastened, camp staff stopped installing the flashboards. The next day, when a state official visited, the lake was only a few inches deep.
The third day
But on the third day - when no state or federal officials were present - the lake was quickly filled to a depth of 6 feet.
When fisheries service Special Agent Thomas Gaffney arrived a few hours later, he found that the stream below the dam had been de-watered, according to a report. Caught among the rocks were 30 freshly killed steelhead, stranded and suffocated.
Gaffney believed more had been killed but had been swiftly devoured by raccoons and birds.
At the camp, Gaffney discovered that the "knife gate" - a slot at the foot of the dam that was supposed to remain open to permit stream flow - had been shut.
During the ensuing investigation, Kenneth W. Allen II, the council's executive, and his assistant, Walsh, failed to fully cooperate, according to a federal report. One Scout official suggested that unknown campers or "renegade" staff had filled the lake too fast.
In interviews, Allen and Walsh denied that any Scout officials failed to cooperate.
"As far as we know, we followed the protocol," Walsh said. "Why the fish died is anybody's guess."
In the end, the fisheries service concluded that the Scout council was responsible for the unauthorized killing of the steelhead: The lake was filled too fast, de-watering the stream and beaching the fish, said a report.
Lawyers for the National Oceanic and Atmospheric Administration, the parent agency of the fisheries service, threatened the Scouts with a fine, which by law could have reached $396,000. They asked the Scouts to stop using the dam until they obtained permits and modified it to meet current standards.
Council leaders protested, saying the dam was "an integral economic and educational feature" of the camp. They then turned to Rep. Farr.
An environmentalist, Farr last year received a Sierra Club award. He sponsored the Big Sur Wilderness and Conservation Act of 2002, which gave permanent protection to federal lands in the area.
As a former boy Scout, Farr also is a staunch supporter of Scouting - and Camp Pico Blanco.
"I was one of the first Scouts when it first opened" in the 1950s, he said in an interview, recalling that he earned his water safety merit badge in the lake created by the dam. "My nickname as a kid was Fisherman Farr," he added.
Scout officials have supported Farr, who had received at least $1,750 in donations from Granite Construction, where council board member Watts was president, and from another board member.
Farr then phoned NOAA on behalf of the Scouts. Assistant General Counsel Michele Kuruc, who was in charge of regional deputies around the country, said she took the call.
"He did certainly recall some of these memories of his own childhood and experiences at the camp," Kuruc said. "And he wanted to talk about that a little bit with me."
Negotiated settlement
Kuruc then phoned Amanda Wheeland, her subordinate handling the case.
"I was told I would be backing down and not be requiring as a condition of settlement that they stop operating the dam," said Wheeland, who has since retired from the agency.
Wheeland added, "They were able, because of who they were, to negotiate a settlement agreement for the interim operation period that not everyone would have been able to get."
Kuruc said the agency's decision was based on many factors. "It wasn't as a result of Rep. Farr's phone call," said Kuruc, who is now with the U.N. Food and Agriculture Program.
Farr denied the Scouts received special treatment. "Our constituents are treated all the same," he said.
In June 2003, the Scouts signed a settlement agreement with the fisheries service. Though it was never made public, The Chronicle obtained a copy.
Instead of a fine, the deal required the council to install a fish ladder; modify the dam's spillway to allow steelhead to migrate upstream; and enhance the stream bed habitat for fish.
The project cost more than $1 million, a council official said.
Although the settlement allowed council officials to operate the dam in the meantime, it required them to retain a qualified expert to monitor use of the dam to prevent fish kills and to educate campers about endangered species.
Scout officials admitted no wrongdoing in the agreement, which also shielded them from bad publicity: Neither the fisheries service nor the Scouts could issue a press release about the 2002 fish kill without letting the other party review it in advance.
The Scouts have complied with the settlement terms, said a fisheries official.
"My own experience of the Scouts is that they taught us to be good stewards of the land," Farr said. "Leave it better than you find it. It's been a motto that I've used in politics ever since. And I think frankly, the way this thing got worked out, it did do that."
UC Berkeley's eucalyptus removal plan stalled...Carolyn Jones
Pity anyone who tries to chop down a tree in Berkeley.
UC Berkeley has been haggling for four years with the federal government over a $5 million grant to remove eucalyptus, pine and acacia trees from the Berkeley and Oakland hills to reduce the threat of wildfire.
But a neighborhood group has stalled and possibly blocked the project, fearing it will leave the East Bay hills resembling a clear-cut moonscape.
"Those trees are beautiful, they smell good, they're habitats for raptors, they prevent landslides," said Dan Grassetti, member of the Hills Conservation Network. "What this comes down to is that there are people who, for aesthetic reasons, just don't like eucalyptus trees."
The controversy started in 2005, when UC Berkeley applied for a grant from the Federal Emergency Management Agency to remove about 12,000 non-native trees from Strawberry and Claremont canyons. A third area, near Frowning Ridge in the Oakland hills, was also included in the request. The city of Oakland, East Bay Regional Park District, East Bay Municipal Utility District, and the California Department of Forestry and Fire Protection were also part of the grant application.
But during the environmental review process, a neighborhood group called the Hills Conservation Network filed a complaint saying the project was actually a native-plant restoration plan and does little to curb the threat of fires.
Native trees, particularly bays, are just as likely to burn, and the chips from the felled eucalyptus are themselves a fire hazard, Grassetti said. Thinning the eucalyptus, instead of clear-cutting, is a more environmentally sound option, he said.
So far, FEMA agrees.
"If the university wants to clear-cut trees, there needs to be justification that it will reduce the fire hazard. So far, they've not proven that this is a viable fire hazard reduction," said Alessandro Amaglio, regional environmental officer for FEMA. "FEMA's mission is not to change landscapes, but to reduce hazards."
Meanwhile, many hills residents are furious about the delay, saying the drought has created lethal conditions in the steep canyons and ridges of the East Bay hills. For some, memories remain fresh of the 1991 firestorm that claimed more than 3,300 homes and killed 25 people.
Barry Pilger, a real estate broker, was among those who lost their homes in 1991.
"At the time, we thought it was nice to have a eucalyptus forest on our property," he said. "But my wife and I are here today because we happened to be away that weekend. There are those of us who've become relaxed about living with eucalyptus, and those of us who have not."
Pilger and his neighbors in the Claremont Canyon Conservancy are urging the university to continue fighting for the grant. Because of the economic downturn, none of the local agencies have the revenue to undertake the project without federal assistance.
"They think we're arbocidal maniacs," said Martin Holden of the Claremont Canyon Conservancy. "But to see this project balled up in a bureaucratic muddle is tragic, and worse, it's dangerous."
Complicating matters is the presence of several endangered species in the canyons, including the Alameda whip snake and the red-legged frog. The university needs federal cooperation in order to tamper with the habitat, which is more easily obtained if FEMA is involved.
Holden's group and the university would like to see the hills returned to their native state, with oak, bay and redwood trees and patches of chaparral. Not only would the fire hazard be reduced, but the local wildlife - including fox, deer, coyote and mountain lions - would thrive.
As it stands, the eucalyptus forest "is only good for koalas, and we don't have any koalas in the East Bay," Holden said.
Eucalyptus was originally planted in the hills a century ago as a windbreak and to replace the redwoods that had been logged from the area. They've been cleared numerous times over the decades, but have reseeded and grown back as fast as 15 feet a year.
UC's clear-cut plan would include the use of herbicides and five to seven years of pulling seedlings by hand to prevent the trees from returning.
"We've tried and failed for decades to remove these eucalyptus," said Tom Klatt, an environmental planner at UC Berkeley who has been working with FEMA on the grant. "Now it's being held up by a small opposition group who's thrown a wrench into the machinery."
The university would not remove the trees in a single undertaking, but take out small stands every year or so to reduce the appearance of clear-cutting and impact on the environment, Klatt said.
FEMA is waiting for the university to provide more evidence that clear-cutting the trees will reduce the fire hazard.
"The university needs to address these issues," Amaglio said. "The ball is in their court."