4-15-09

 
4-15-09
Badlands Journal
Local currencies: an overview...Badlands Journal editorial board
http://www.badlandsjournal.com/2009-04-14/007184
One thing communities are doing and have in the past done to stimulate their own economies, is to create local currencies. This excellent article, written in 1995, was the best overview of the subject we could find. We plan to follow it with descriptions of existing local currency projects in the country. The movement is growing under the "stimulus" of economic depression, the last time local currencies were most widespread.  
Badlands Journal editorial board
February 1995
E.F. Schumacher Society
Local Currencies: Catalysts for Sustainable Regional Economies...Robert Swann and Susan Witt
http://www.smallisbeautiful.org/publications/essay_currency.html
E. F. Schumacher argued in Small is Beautiful: Economics as if People Mattered that from a truly economic point of view the most rational way to produce is "from local resources, for local needs." Jane Jacobs, one of today's foremost scholars on regional economies, emphasizes Schumacher's point through her analysis of a healthy region as one creating "import-replacing" industries on a continuing basis. A well-developed regional economy which produces for its own needs is possible only when control of its resources and finances lies within the region itself. At present, the ownership of land, natural resources, and industry and the determination of conditions for receiving credit have become increasingly centralized at the national level. Now all but a few large urban areas find that their economic resources are controlled from outside the area.
The banking system is one of the most centralized institutions of our economy and one of the major obstacles to strengthening regional economies and the communities within them. Yet centralized banking is only a recent development in the United States. The customs of borrowing and lending and money-printing grew up over generations in towns and rural communities to form what we now call our banking systems. These systems were small-scale, regional, and decentralized. Paper money was made standard, or national, in 1863 in order to raise funds for the fight against the Confederate States, but it was not until 1913 that a central system became formalized with the Federal Reserve Act. Centralized banking and control of money called for large banks and wealthy investors who could assemble huge, unprecedented sums of money. These banks in the money centers, with their industrial customers, could pay a higher interest rate to depositors than could the smaller banks, and these smaller, often rural banks began sending their deposits to the large cities. The national currency made money more fluid and allowed rural dollars to support urban industrial growth. Rural creditors were pleased with this arrangement until the first time a New York bank closed and carried off the savings of a small town or until a local farmer couldn't secure a loan because a Chicago bank was borrowing from his bank at a high rate of interest .
A national currency facilitated the industrialization of the United States, which in turn created many jobs; however, the centralization of the monetary system has served to centralize the benefits of the system as well.
The effect on small farmers and rural economies has been devastating. The on-going "farm crisis" is a dramatic manifestation of what is really a monetary crisis that began in the deep depression of the 1870s and 1880s and was later codified in the Federal Reserve Act. Credit for small-scale farming and the small rural businesses that are a part of the farm community had dried up long before the Depression of the 1930s, and the United States government had to create the Farmers Home Administration in order to help replace-with tax money-some of the rural capital that had been lost to the large cities.
The "housing crisis" is also in part a monetary crisis. Investors place money in land as a "hedge against inflation," which drives land and housing prices up. The high cost of land is a major factor in the present shortage of affordable housing, and it takes home ownership out of reach for the majority of Americans.
The local and decentralized banking systems of a hundred and fifty years ago had the advantage of diversity. The failure of a local bank-even a New York bank-was still a local failure, and its costs were internalized. But today we are facing the failure of an entire system. Consider the billions of tax dollars spent by the national deposit insurance system to bail out the Savings and Loan industry. And recall that billions were added to the national debt in order to bail out large banks when developing countries defaulted on their loans. These systemic failures are bound to occur if local economic control of banking customs and money supply is compromised by centralization and sacrificed to serve the heedless demands of growth.
This predicament calls for a reorganization of economic institutions so that they will be responsive to local and regional needs and conditions. These new institutions would decentralize the control of land, natural resources, industry, and financing to serve the people living in an area in an equitable way. We need to create an infrastructure that encourages local production for local needs. Community land trusts, worker-owned and worker-managed businesses, non-profit local banks, and regional currencies are some of the tools for building strong regional economies.
Because we have all learned to assume that national currencies are the norm, a regional currency is perhaps the least understood of these tools. Jane Jacobs, in her book Cities and the Wealth of Nations, views the economy of a region as a living entity in the process of expanding and contracting and a regional currency as the appropriate regulator of this ebbing and flowing life. Just like a nation, a region which does not produce enough of the goods it consumes comes to rely heavily on imports and finds that its currency is devalued. Import costs increase, the exchange of goods is reduced, and the region has to "borrow," which means that it exports its capital-dollars, not goods-and ends up importing nearly everything it needs. But if the region is supplying its own needs, then its currency "hardens" and holds its value relative to other currencies. Imports are cheaper, and trade is more equitable-or even skewed in favor of the self-reliant or "import-replacing" region.
Jacobs describes currencies as "powerful carriers of feedback information . . . and potent triggers of adjustments, but on their own terms. A national currency registers, above all, consolidated information of a nation's international trade." This feedback informs economic policymakers. But should the industrial Great Lakes region or the farm-belt states adjust their economies in the same manner as the Sunbelt states or the Silicon Valley of the West Coast? A very significant part of any region's economy is governed by a monetary and banking system over which members of a community have little or no control. The dependency on national currencies actually deprives regions of a very useful self-regulating tool and allows stagnant economic pockets to go unaided in a seemingly prosperous nation. What we propose instead is the establishment of a system with community accountability.
Regional currencies are not a recent invention-the practice is centuries old. The so-called free banking era of U.S. history, when many currencies circulated, contributed substantially to bringing about Thomas Jefferson's dream of a nation of small, independent, self-reliant farmers who found ready credit with community banks to produce and sell their goods. Even in the early years of this century local banks issued their own currency, which John Kenneth Galbraith says was important for the rapid development of the American economy.
How were these banks different from banks today? Because they were located in small towns, the bankers knew the people they were dealing with in a personal way and could make loans on the basis of "character," not strictly on the basis of how much collateral an individual had to secure the loan. A more striking difference is that each bank could issue a local scrip. Unlike a national currency, which easily leaves the region in which its value is created, the local currency could circulate only in a limited regional area; local currencies and local capital could not travel to the money centers to finance the operations of multinational corporations or interest payments on debt. Credit decisions were made by local bankers with particular personal knowledge not only of the borrowers but also of the needs of the region as a whole.
One of the major objections to "free banking" in the nineteenth and early twentieth centuries has been that some of these local banks failed and some printed money to speculate in land and to make unproductive loans. The argument is that such abuses can be controlled if money is issued centrally. But it was unity-a shared belief in communal responsibility and vigilance-rather than uniformity that was needed. Community development banks like Chicago's South Shore Bank and the Grameen Bank of Bangladesh make up an intellectual diaspora-they are decentralized and unified. The Savings and Loan industry is uniform.
Decentralization and diversity have the benefit of preventing large-scale failure. This is as true in banking as it is in the natural world. Think of seeds. If many different strains of corn are planted by different farmers and a disease hits the crop, some strains will resist and the corn will be harvested. But if all the farmers have shifted to a new hybrid seed and a blight hits the corn, the result can be widespread crop failure and disaster. How do we ensure diversity in banking? As the economist Frederick Hayek has pointed out, to keep banking honest it would be better to return to a banking system that utilizes competing currencies rather than to rely on a central system.
In the 1930s a worldwide deflation encouraged many new forms of exchange that competed with the national currencies. The town of Woergel in Austria created a scrip system that drew international attention. The people in this little town were able to trade in labor and materials, which they did have, rather than in Austrian shillings, which they didn't have, and they managed to pull themselves out of the Depression in a matter of months. Local scrip also sprang up around the United States. A former editor of The Springfield Union in Massachusetts told us the story of a scrip issued by his newspaper. He was just a copyboy at the paper during the bank failures of the 1930s; he remembers that the publisher, Samuel Bowles, paid his newspaper employees in scrip. It could be spent in the stores which advertised in the paper, and the stores would then pay for ads with the scrip, thus closing the circle. The scrip was so popular that customers began to ask for change in scrip-they would see Bowles around town and had more confidence in his local money than in the federal dollars. Newspaper money helped to keep the Springfield economy flowing during a period of bank closures, facilitating commercial transactions that went well beyond the original intent of the issue.
Forty years later in the town of Exeter, New Hampshire, the economist Ralph Borsodi and Robert Swann issued a currency that was based on a standard of value using thirty different commodities in an index similar to the Dow Jones Average. It was called the Constant because, unlike the national currency, it would hold its value over time. The Constant circulated in Exeter for more than a year, proving, as Borsodi had hoped, that people would use currency which was not the familiar greenback. At the time, it received national publicity in Time, Forbes, and other magazines. When asked by a reporter if his currency was legal, Borsodi suggested that the reporter check with the Treasury Department, which the reporter did. He was told, "We don't care if he issues pine cones, as long as it is exchangeable for dollars so that transactions can be recorded for tax purposes."
This is all that the government requires of a local currency, and all that a local currency requires of a community is trust. A currency is only as strong as the confidence that people have in one another to produce something of value. Trust is at the heart of the successes in Springfield and Woergel and Exeter.
Borsodi discontinued his experiment after a year, but he had accomplished his purpose: to demonstrate local acceptance and verify the legality of locally issued, non-governmental currencies.
The Southern Berkshire town of Great Barrington, home of the E. F. Schumacher Society, has made strides toward issuing a Berkshire currency. Our story will make plain the particulars of how local currency works and how it encourages economic self-reliance. In 1982 a discussion group on regional economies led to the incorporation of a non-profit organization called SHARE (Self-Help Association for a Regional Economy), with open membership and a board elected from its members. The intent was to establish an organizational base for a local currency.
SHARE's first objective was to make productive loans to people who were unable to secure normal bank financing but who had the kind of small, locally-owned enterprises that produced quality goods and services for local consumption. Some of these businesses could get bank loans but at rates of 15 or 18 per cent, and SHARE determined to make low-cost loans available. SHARE members open savings accounts at the First National Bank of the Berkshires, and these accounts are used by SHARE to collateralize loans. This kind of lending requires that the community separate the functions of banking. The bank makes the loans and handles the accounting, but the lending decisions, based on a unique set of social, ecological, and financial criteria established by SHARE, are made by the community of depositors.
Sue Sellew of Rawson Brook Farm makes a soft chevre cheese from the milk of her dairy goats and the herbs she grows on her organic farm. She borrowed $5,000 from SHARE to bring her milking parlor and cheese room up to state standards. This has enabled her to sell the cheese to stores and restaurants.
Jim Golden trained his two draft horses, Spike and Rosie, to haul timber and firewood from forests. Jim can assure his customers that their woods will be treated in an ecologically responsible manner and won't suffer the undue stress caused by heavy equipment. A SHARE loan was made to complete a barn for the team.
Bonnie Smith had never borrowed money, but she had a knitting machine which took bulk-weight yarn, and she had a talent for designing clothes. She knits sweaters, tights, leg-warmers, and scarves in whimsical, colorful designs. Her small SHARE loan bought a bulk supply of wool yarn, which lowered her overall costs and established credit with suppliers. She borrowed again for a second knitting machine when the first loan was repaid. Her business kept on growing, and she applied a third time to buy a machine for an employee. The first two loans had established bank credit for her business, so SHARE sent Bonnie directly to the bank's loan officer, who readily approved a loan.
The payback record on SHARE-collateralized loans has been 100 per cent, both because of their scale and because of community support for the loan recipients. SHARE members help maintain this perfect record by recommending these small businesses to their friends.
Most loans have been for start-up businesses requiring no more than $3,000. They are made for equipment or inventory but not for salary or advertising-productive loans, not consumer loans. A piano teacher purchased a piano with loan funds in order to provide lessons in her home, but an application to purchase a piano for private use was sent to the bank's consumer-loan officer.
The SHARE loan-collateralization program is simple to operate and easily copied. Similar programs have started around the United States, using the model created in the Berkshires. It is the "grandmother principal" which has made SHARE a success: When people without credit histories decide to go into business, they frequently turn to a family member, such as a grandmother, for help. Instead of lending directly the grandmother might offer a savings account as collateral for a bank loan. The SHARE program simply extends "the circle of grandmothers," creating a family of place.
SHARE puts a human scale and a human touch back into local economic transactions. A newsletter tells SHARE depositors "what your money is doing tonight"-it is working locally to make cheese or sweaters or to house two very big horses. On weekends SHARE members visit Sue Sellew's farm, where the baby goats nibble at the keys in their pockets. They come by the next weekend with their grandchildren and on the next weekend serve Monterey chevre at their dinner party. Monterey chevre is not just any cheese; it is a cheese with a story, and SHARE members are a part of that story. They ask for the cheese at local stores. They think of Bonnie's wool sweaters when contemplating a special gift. They root for Spike and Rosie at the draft-horse pulling contest. These local economic relationships encourage social patterns that in turn shape a uniquely local culture.
Frank Tortoriello is the owner of a popular deli on Main Street in Great Barrington. He turned to SHARE when the bank refused him a loan to move his restaurant to a new location. But Frank didn't need SHARE's circle of grandmothers; he already had a circle of his own in his customers. SHARE suggested that Frank issue Deli Dollars as a self-financing technique. The notes would be purchased during a month of sale and redeemed after the Deli had moved to its new location. A local artist, Martha Shaw, designed the note, which showed a host of people carrying Frank and his staff-all busy cooking-to their new location. The notes were marked "redeemable for meals up to a value of ten dollars." The Deli would not be able to redeem all the notes at once after the move, so SHARE advised Frank to stagger repayment over a year by placing a "valid after" date on each note. To discourage counterfeiting Frank signed every note individually like a check.
We recommended that the notes be sold for ten dollars each, but Frank thought that would be too good a deal for the Deli. With his customers in mind he sold ten-dollar notes for eight dollars and raised $5,000 in thirty days: contractors bought sets of Deli Dollars as Christmas presents for their construction crews; parents of students at nearby Simon's Rock College knew Deli Dollars would make a good gift for their kids; the bankers who turned down the original loan request supported Frank by buying Deli Dollars. The notes even showed up in the collection plate of the First Congregational Church because church-goers knew the minister ate breakfast at the Deli. Regular customers were pleased to help support what they saw was a sure thing-they knew firsthand how hard Frank worked and believed in his ability to make good on redemption. Frank repaid the loan, not in hard-to-come-by federal notes but in cheese-on-rye sandwiches.
Jennifer Tawczynski worked at the Main Street Deli and carried the idea home to her parents Dan and Martha Tawczynski, who own Taft Farm, one of two farm markets in the area. The Tawczynskis came to SHARE with the idea of issuing "greensbacks" to help them meet the high cost of heating their greenhouses through the winter. Customers would buy the notes in the late fall for redemption in plants and vegetables come spring and summer.
At around the same time the other farm market in town, the Corn Crib, was damaged by fire. Customers of the Corn Crib came to SHARE with the idea of issuing notes to help owners Don and Ruth Zeigler recover from the ravages of the fire. SHARE suggested that the two farms together issue a Berkshire Farm Preserve Note. Martha Shaw designed the note with a head of cabbage in the middle surrounded by a variety of other vegetables. The notes read "In Farms We Trust" and were sold for nine dollars each. The Massachusetts Commissioner of Agriculture traveled from Boston to purchase the first Berkshire Farm Preserve Note, and five national networks showed our farmers using Yankee ingenuity to survive a difficult winter. The Berkshire Women with Infants and Children (WIC) program purchased Berkshire Farm Preserve Notes in order to give them to families, part of a local initiative to supplement the federal food program. The notes do not carry the food-stamp stigma, and the Berkshire agency knows it is supporting local farmers at the same time it is supporting local families.
The notes could be purchased at either farm and were redeemable at either farm. At the end of the redemption period SHARE acted as the clearinghouse for the notes. The farmers received the income (ranging from $3,000 to $5,000 per farm per year) from the sale of the notes, and they found a committed base of customers who would travel out of their way to buy from their local farms rather than purchase the jet-lagged vegetables from supermarket chains. 
DELI DOLLARS STARTED A CONSUMER MOVEMENT IN THE BERKSHIRES. THE BERKSHIRE FARM PRESERVE NOTES, MONTEREY GENERAL STORE NOTES, AND KINTARO NOTES THAT FOLLOWED GAVE BERKSHIRE RESIDENTS A WAY TO VOTE FOR THE KIND OF SMALL INDEPENDENT BUSINESSES THAT HELP TO MAKE A LOCAL ECONOMY MORE SELF-RELIANT.
The popularity of the scrip inspired the Southern Berkshire Chamber of Commerce to work with the Schumacher Society staff to issue Berk-Shares as a summer promotion. Customers were given one Berk-Share for every ten dollars spent in a participating business over the six-week summer period. During a three-day redemption period customers could spend their Berk-Shares just like dollars in any of the seventy participating stores. The success of the Berk-Share program depended on the energy and cooperation of a small group of merchants and in large part on the sense of community among consumers. Of the seventy-five thousand Berk-Shares handed out (representing three-quarters of a million dollars in Berk-Share trade) twenty-eight thousand were spent during the three-day redemption period! Some families pooled their Berk-Shares for a gift for one member of the family. People who were going away over the redemption weekend were sure to give their Berk-Shares to a neighbor who would use them. A spirit of festivity and excitement filled Main Street that weekend as people chatted about how they planned to use their Berk-Shares.
Although the Berk-Shares and Deli Dollars and Farm Preserve Notes represented a major shift in local attitudes toward an alternative exchange and captured the imagination of both consumers and producers, they were not yet the year-round local currency the organizers had envisioned. A suggestion from several area banks pushed the effort forward to its next stage. The Berk-Share organizing committee proposed that the five local banks participate in a Berk-Shares zero percent loan program during the winter holidays. Spending that would normally flow to catalogue stores and malls would instead go to the locally owned stores that accepted Berk-Shares, helping to secure local jobs and keeping local dollars local. The committee presented the idea at a meeting with the bankers, who in turn proposed that the committee create a year-round Berk-Share which would be a 10 percent discount note. Customers would come to the banks and purchase one hundred Berk-Shares for ninety dollars and redeem them at local stores for one hundred dollars worth of goods and services. The merchants would then deposit their Berk-Shares at local banks at ninety cents per share.
But how to clear the Berk-Share accounts among the five banks? The Federal Reserve system moves dollars (checks) between the receiving bank and the issuing bank. This clearing system is automated and keeps the national currency moving. A local currency needs a local system. The bankers at the meeting came up with the solution. They said, "Well, we can just walk down the street to one another's banks and make the exchange, the way we used to with checks." It gave these individual bankers, who are caught up in a highly centralized and fast-paced system, great pleasure to imagine recapturing in a small way the early days of banking when transactions had a warmer, more community-spirited tone.
The Schumacher Society and the Main Street Action Association of the Southern Berkshire Chamber of Commerce are cooperatively seeking funds to staff the first year of issue. When the program is in place and local businesses and their customers are familiar with the Berk-Share as a year-round scrip, Main Street Action and the Schumacher Society will work with local businesses to develop a commodity backing for the Berk-Share. Eventually, loans can be made in Berk-Shares at an interest rate as low as 3 percent-the cost of servicing the loan. Unlike the current SHARE program, which relies on borrowed dollars, a loan in Berk-Shares would carry no profit costs. A 3 percent loan could encourage new business ventures like local food processing that otherwise couldn't compete because investment capital is too expensive. A local scrip can empower Berkshire residents to shape their own economic futures unfettered by high interest rates and credit decisions made in far-away money centers. Each town can be a money center, and local economic problems will have local solutions.
In the summer of 1991 Paul Glover heard a radio interview with Schumacher Society staff about the Deli Dollars and Berkshire Farm Preserve Notes. The story inspired him to issue Ithaca Hours in his hometown of Ithaca, New York, as a way to create more local jobs and more security for Ithacans who are underemployed. Ithaca Hours has grown from its small grass-roots beginning to include over a thousand individuals and stores. The scrip can buy food items, construction work, professional services, health care, and handicrafts. Each Ithaca Hour is worth ten dollars-the average hourly wage in Tompkins County-so the five thousand Ithaca Hours (or $50,000) in circulation have increased local economic transactions by several hundred thousand dollars annually.
Individuals and stores agreeing to accept Ithaca Hours notes are issued two free Hours to begin trading and are listed in the free monthly paper, Ithaca Money. This newspaper features articles about the local economy and tells the stories of small home-businesses that have prospered by accepting payment in scrip. Only Ithaca Hour vendors can advertise in Ithaca Money, and although the ad will run for two months, it costs only half an Hour (five dollars).
Consumers are led to shop locally because Ithaca Hours can be used only in Ithaca. One market farmer who had difficulty paying bills during the winter was able to secure a loan in Ithaca Hours from a customer who had accumulated more than she could use. She preferred to recirculate them rather than let them lie idle. The farmer's family paid for child care, movie tickets, and other goods and services in Ithaca Hours and then repaid the loan in produce in the summer. The Alternative Credit Union in Ithaca accepts partial repayment of mortgage loans in Hours because its employees have agreed to accept part of their salaries in scrip.
Paul Glover has opened a downtown Hours Bank in order to regulate circulation of the currency, provide visibility, and supply a diverse array of goods for purchase with Ithaca Hours. The organizers work with local businesses by tracking the goods that these businesses buy from outside the region and then connecting them with local producers of the same goods. This is the substance of an import-replacement program that will create sustainable jobs.
A local currency may be dollar-denominated or measured in chickens (as Wendell Berry once suggested for his part of Kentucky) or hours or cordwood, as long as people know they can spend that chicken cash, that cordwood note. Confidence in a currency requires that it be redeemable for some locally available commodity or service. The Schumacher Society recommends the following policies to maintain confidence over the long haul:
The issuing organization should be incorporated as a nonprofit so the public understands that providing access to credit is a service not linked to private gain. The organization should be democratic, with membership open to all area residents and with a board elected by the members.
Its policy should be to create new short-term credit for productive purposes. Such credit is normally provided for up to three months for goods or services that have already been produced and are on their way to market-credit for things which pay for themselves in a very short time.
The regional bank or currency organization should be free of governmental control-other than inspection-so that investment decisions are independent and are made by the community.
Social and ecological criteria should be introduced into loan-making. (Community investment funds also use a positive set of social criteria particular to their own region. These funds could join with hard-pressed local banks to initiate regional currencies.)
Loan programs and local currencies should support local production for local needs.
Local currencies can play a vital role in the development of stable, diversified regional economies, giving definition and identity to regions, encouraging face-to-face transactions between neighbors, and helping to revitalize local cultures. A local currency is not simply an economic tool; it is also a cultural tool.
Community groups in Kansas City, Eugene, Boulder, and in little Philmont, New York, are issuing their own currencies, and each is uniquely tailored to the people, culture, and products of the region. Each community has its own tale of how and why people first organized and what they hope to achieve by their efforts. A Schumacher Society member who was visiting Ithaca looked in Ithaca Money for a way to spend his scrip before leaving town. He decided on a craft item that a woman made and sold in her home. The daughter who answered the door understood that the visitor was not from Ithaca and asked, "What does your hometown currency look like?"
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A handbook of legal documents for starting a SHARE program may be accessed from the SHARE Micro-credit page.
An Ithaca Hours Starter Kit may be ordered from Paul Glover, Ithaca Hours, Box 365, Ithaca, NY 14851 or online at www.ithacahours.org/kit.html.
Prof. Lewis D. Solomon's book, Rethinking Our Centralized Monetary System: The Case for a System of Local Currencies, with a Foreword by Robert Swann (Westport, Ct.: Praeger Publishers, 1996) discusses the legal aspects of local currencies.
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Introduction
In 1974 E. F. Schumacher asked Robert Swann to start a sister organization to his own Intermediate Technology Development Group, but it was not until 1980 that Swann established the E. F. Schumacher Society in Great Barrington, Massachusetts. Its work constitutes a direct link with Schumacher's philosophy and is a tangible embodiment of his message. Schumacher chose wisely. Robert Swann brings the pragmatic skills of a builder to his lifelong commitment to both community and decentralized economics. Before founding the Society he worked with Ralph Borsodi to issue a commodity-backed currency on an experimental basis in Exeter, New Hampshire, a forerunner of today's local currencies. In 1978 he launched the Community Investment Fund, one of the first investment initiatives with socially responsible criteria, anticipating a national movement in social investment.
His 1960s civil rights work led to an effort to secure land for African-American farmers. With Slater King he founded New Communities in Albany, Georgia, using documents modeled on those of the Jewish National Fund. As founder of the Institute for Community Economics he helped other groups around the country form similar community land trusts, which earned him the title of father of the American land reform movement. He continues his innovative work at the Society, bringing Schumacherian concepts to life wherever he goes.
Susan Witt says that her background in literature gave her invaluable training for promoting community solutions to economic problems. Story-listening and story-telling are tools for sharing new ideas within community. Her talks to groups around the country are sprinkled with examples from her home area in the Berkshires. She has served as executive director of the Schumacher Society since its inception, leading its national educational programs and at the same time remaining deeply committed to implementing Schumacher's ideas at the local level. She is the founder of the SHARE micro-lending program, administrator of the Community Land Trust in the Southern Berkshires, and a board member of the Great Barrington Land Conservancy and other Berkshire organizations. In 1992 she was elected the first woman president of the Great Barrington Rotary Club. Her strong local roots have helped her to identify with the plight of indigenous peoples. She is the prime mover of the Society's work with the Buryat people on the western shore of Siberia's Lake Baikal as they struggle to develop a self-sufficient economy in keeping with their traditions.
The E. F. Schumacher Society has legal documents available for people who want to replicate its innovative projects in their own communities. This essay is based on one of the Eighth Annual E. F. Schumacher Lectures, presented by Robert Swann in 1988.
—Nancy Jack Todd
abc News
Communities print their own currency to keep cash flowing...Marisol Bello, USA TODAY...4-5-09
http://abcnews.go.com/Business/story?id=7288539&page=1
A small but growing number of cash-strapped communities are printing their own money.
Borrowing from a Depression-era idea, they are aiming to help consumers make ends meet and support struggling local businesses.
The systems generally work like this: Businesses and individuals form a network to print currency. Shoppers buy it at a discount say, 95 cents for $1 value and spend the full value at stores that accept the currency.
Workers with dwindling wages are paying for groceries, yoga classes and fuel with Detroit Cheers, Ithaca Hours in New York, Plenty in North Carolina or BerkShares in Massachusetts.
Ed Collom, a University of Southern Maine sociologist who has studied local currencies, says they encourage people to buy locally. Merchants, hurting because customers have cut back on spending, benefit as consumers spend the local cash.
"We wanted to make new options available," says Jackie Smith of South Bend, Ind., who is working to launch a local currency. "It reinforces the message that having more control of the economy in local hands can help you cushion yourself from the blows of the marketplace."
About a dozen communities have local currencies, says Susan Witt, founder of BerkShares in the Berkshires region of western Massachusetts. She expects more to do it.
Under the BerkShares system, a buyer goes to one of 12 banks and pays $95 for $100 worth of BerkShares, which can be spent in 370 local businesses. Since its start in 2006, the system, the largest of its kind in the country, has circulated $2.3 million worth of BerkShares. In Detroit, three business owners are printing $4,500 worth of Detroit Cheers, which they are handing out to customers to spend in one of 12 shops.
During the Depression, local governments, businesses and individuals issued currency, known as scrip, to keep commerce flowing when bank closings led to a cash shortage.
By law, local money may not resemble federal bills or be promoted as legal tender of the United States, says Claudia Dickens of the Bureau of Engraving and Printing.
"We print the real thing," she says.
The IRS gets its share. When someone pays for goods or services with local money, the income to the business is taxable, says Tom Ochsenschlager of the American Institute of Certified Public Accountants. "It's not a way to avoid income taxes, or we'd all be paying in Detroit dollars," he says.
Pittsboro, N.C., is reviving the Plenty, a defunct local currency created in 2002. It is being printed in denominations of $1, $5, $20 and $50. A local bank will exchange $9 for $10 worth of Plenty.
"We're a wiped-out small town in America," says Lyle Estill, president of Piedmont Biofuels, which accepts the Plenty. "This will strengthen the local economy. ... The nice thing about the Plenty is that it can't leave here."
Merced Sun-Star
Foreclosures still weigh heavily on Merced County real estate market...JONAH OWEN LAMB
http://www.mercedsunstar.com/167/v-print/story/791742.html
We're talking billions here.
The steep drop in Merced's real estate values continues to ripple across the local economy.
While low prices have attracted homebuyers picking up houses at rock-bottom prices, they have been poison for the county's shrinking coffers.
The accounts filled by property taxes have been hit hard -- into the billions of dollars -- say local real estate agents and the county's assessor.
Foreclosure rates in Merced County may be slightly down because of a federal moratorium that will end in mid-May, but a Tuesday morning presentation to the Merced County Board of Supervisors by Kent Christensen, the county assessor, showed just how hard Merced home prices have been hit.
Across the county from 2007 to 2008, home values dropped roughly 50 percent, said Christensen. In Merced, for instance, an average 1,600-square-foot home selling for $272,500 in 2008 now sells for $138,750. The picture is similar across the county.
Those two years' foreclosure rates may also indicate why there was such a drop in home values. In 2007, the county saw 1,534 foreclosures. In 2008, there were a whopping 5,929. These foreclosures and the declining value in homes may have reduced the county's total real estate value in 2009 by $3 billion to $4 billion. And, said Christensen, "it is continuing to drop."
As an example of how the market is being driven by foreclosures, Christensen referred to the increase in ownership changes. In 2008 there were 6,510 changes of ownership. This year --just over three months into the year -- there have been 12,365.
"Foreclosures are still continuing to drive the market -- it still hasn't slowed down any," said Christensen. Just this year there have already been 1,256.
But to local real estate agents the picture is much brighter. With a slew of cheap foreclosed homes still on the market at the beginning of 2009, the last couple of months have been anything but slow.
"I would say houses are selling faster today than in any other time I've been selling real estate," said Andy Krotik, manager of the Atwater office of Gonella Realty.
Because prices are so low, more and more people who could never have bought homes are buying right now, he said.
For a time in the beginning of the year, says Susan Erb, a Realtor who works for Salvadori Realty, there were lots of cheap houses for sale. But people just gobbled them up.
As of last Wednesday there were only 275 bank-owned homes listed in the county, she said.
But the next wave is on the way, she added. A bank foreclosure moratorium agreed upon in February will end in mid-May. In fact, there are empty homes that were foreclosed on that weren't even allowed onto the market. Erb has been told that there are about 1,000 empty homes in the county that will go on the market in May.
"We have been told by our manager, 'You'd better get ready for this wave,'" she said.
The county assessor's office better get ready too, ready to reduce the tax rolls -- again.
Valley march underscores importance of water...ROBERT RODRIGUEZ, The Fresno Bee
http://www.mercedsunstar.com/167/v-print/story/791747.html
More than 4,000 people braved blowing dust to march Tuesday from Mendota to Firebaugh, launching a four-day campaign to focus attention on the Valley's crippling water shortage.
The March for Water drew a diverse group of demonstrators, including farmers, farmworkers, business owners, politicians and actor-comedian Paul Rodriguez, chairman of the California Latino Water Coalition, one of the event's organizers.
"What we have not had in the past is unity -- but look at us, we share the same issues," said Rodriguez. "There is no reason this coalition should not have existed a long time ago."
Many of the marchers wore blue T-shirts that read: "No water, no work, no life." They walked on dusty roads that ran along Highway 33 on their eight-mile journey between the two farm towns. A parade of more than 50 farm vehicles and diesel trucks followed.
"Yes, it's cold and windy, but we have to let people hear us," said Maria Rodriguez, her face wrapped in a scarf.
Rodriguez and her husband Sixto Rodriguez have been farmworkers for more than 30 years.
"It has been our life, but now it feels like it is ending because the work is less and less," said Sixto Rodriguez of Mendota.
Organizers called the event historic and likened it to the the famed marches led by farm labor leader Cesar Chavez, who battled the agriculture industry and government for better working conditions in the fields.
But this new battle is about striking a balance between the water needs of the environment and agriculture, the San Joaquin Valley's economic engine and a multibillion-dollar industry.
March organizers say pumping restrictions at the Sacramento-San Joaquin Delta have pinched water supplies to farmers in the San Joaquin Valley. Many growers get their water from the delta, a 700-mile maze of rivers, tributaries and sloughs that is the hub of the state's complex water-delivery system.
Declining fish populations in the estuary have led to pumping cutbacks, leaving growers without their normal supply. And a three-year drought has made things worse.
This year, growers in west Fresno County have fallowed thousands of acres and laid off hundreds of workers because of a shortage of water.
Marchers called for the federal government to ease the Endangered Species Act to allow more water through the delta and to Valley farms.
They are also calling for a more comprehensive water plan and federal assistance to those in agriculture facing hardships.
Assemblyman Juan Arambula, D-Fresno, said that unless state and local government come up with a sensible plan, rural communities that depend on the farming economy will be in peril.
"The environmentalists are concerned about a fish because it is an endangered species," Arambula said before the march began. "But the people of Mendota are also an endangered species if we don't get any water." Farmworker Maria Ortiz of Mendota is among those having a tough time. She and her husband have worked sporadically in the last several months, and they have fallen behind on their monthly bills. She barely manages to make her $900 a month rent payment, leaving little money for anything else.
"I don't think people really know how hard it is for some of us right now," said Ortiz at the end of Tuesday's eight-mile march. "We marched today because we want people to know that the farmers need the water, and without it, no one will be able to survive."
Farmers who marched Tuesday say the issue of depending on an unstable water supply has been simmering for years, and they hope their combined voices of those involved in Tuesday's march will make a difference, before it's too late.
"It has to work, because things aren't getting any better," said Todd Diedrich, a west Fresno County farmer.
The march continues today and Thursday, heading north on Shields Avenue along Interstate 5 into Merced County. On Friday, the march will begin at the interchange of Highway 152 and 33, west of Los Banos and end near the San Luis Reservoir.
Gov. Arnold Schwarze-negger is scheduled to address the marchers at 10:45 a.m. Friday.
Today, the governor will join U.S. Interior Secretary Ken Salazar for a helicopter tour of the Sacramento-San Joaquin Delta. Afterwards Salazar is expected to detail water projects funded from the recently approved $787 billion economic stimulus package. The package includes $1 billion for Department of Interior water programs nationwide, including up to $50 million for ecosystem restoration in the delta and San Francisco Bay.
Also on Tuesday, the Fresno County Board of Supervisors approved a proclamation asking for Schwarzenegger and President Barack Obama to declare a state of emergency because of drought-related hardships.
Supervisors are looking for state and federal assistance for the Community Food Bank. In recent months, the Community Food Bank has given food to thousands of people hurt by the drought, but also has had turn away thousands of others who have lined up for food in Mendota and Fowler, county officials said.
Supervisors delayed the start of their meeting so they could attend the start of the March for Water rally in Mendota.
Supervisor Phil Larson said he, U.S. Rep. Jim Costa and a federal Bureau of Reclamation official were all moved by a long line of people recently waiting for free food in Mendota.
"You had three men in tears," Larson said. "I asked, 'Is this America?' "
Cheap water, crop subsidies getting closer scrutiny
Critics say farmers get too much federal assistance...The Associated Press
http://www.mercedsunstar.com/110/v-print/story/791845.html
FRESNO -- As drought forces families in the West to shorten their showers and let their lawns turn brown, two Depression-era government programs have been paying some of the nation's biggest farms hundreds of millions of dollars to grow water-thirsty crops in what was once desert.
Records obtained by The Associated Press show that the federal government handed out more than $687 million in subsidies over the past two years to hundreds of farmers in California and Arizona, the most seriously drought-stricken states in the West.
One program pays farmers for planting water-needy crops such as cotton and rice, which are largely grown by flooding the fields.
The other provides cut-rate water for irrigation.
Farmers and government officials strongly defend the double-dip subsidies, saying they produce an abundance of food and jobs.
But now, with the West booming in population and the region gripped by both recession and a dry spell, environmentalists, city dwellers and members of Congress are demanding the government end or scale back this decades-old practice that essentially rewards farms for using water, not conserving it.
"With our weather patterns, with climate change, and our population growth, we've got to look at how we use every drop," said Rep. George Miller, a Democrat who represents part of the Bay Area. "We need to take a serious look at policies that encourage economically inefficient and unsustainable uses of our limited clean water supplies."
Since the drought began in 2007, the government has steered about $79 million in water subsidies to California farms, according to an AP analysis of U.S. Bureau of Reclamation records. California cotton and rice farmers received an additional $439 million in subsidies doled out for commodity crops, according to an AP examination of U.S. Department of Agriculture data obtained through the Freedom of Information Act.
Arizona farmers have received nearly $170 million since 2007 in water and crop subsidies, mostly for cotton, records show.
Exactly how much California farmers will get in subsidies in 2009 is unclear, but it could be significantly less. Facing a third dry year and record-low reservoirs, the Bureau of Reclamation, which manages many dams and reservoirs in the West, announced major water cutbacks last month in California. For now, hundreds of farmers will get no irrigation water from the federal government, although they could get some later this year.
The cutbacks are leading some farmers to switch to less-thirsty crops or leave their fields fallow.
East of the Rockies, other rice- and cotton-growing states, such as Texas and Louisiana, get federal crop subsidies, too, but not cheap water through the Bureau of Reclamation, which operates only in the West. Also, the tug-of-war over water between the cities and the countryside is far more intense in booming California and Arizona.
President Barack Obama recently called some of the nation's crop programs unnecessary, and proposed cutting or capping them.
Over the past quarter-century, Congress has considered eight bills that would bar the double dipping practiced by California and Arizona. And federal budget analysts in 2006 questioned whether the government should be sending farms so much cheap water when endangered species and city dwellers need it, too.
Agriculture takes up to 79 percent of all water federal and state officials manage in California, although authorities say much of that irrigation water flows back into rivers and wetlands. The price many farmers have been paying for supplies from the federal Central Valley Project is less than half what some cities do.
USDA officials acknowledge that even during the drought, the system has encouraged farmers to sow cotton and rice, which require more water per acre than other major commodities grown in California and Arizona. For example, a California farmer uses a quarter more water to grow an acre of cotton than wheat. Rice, primarily grown in clay flood plains near Sacramento, needs almost twice as much water as wheat.
The USDA's chief economist, Larry Salathe, said a surging population and dry weather -- not the agency's programs -- are causing water shortages.
"We're concerned about the availability of water in the West, but we were growing rice and cotton in California long before this problem started," Salathe said. "We're trying to use our resources to produce the most food we can, and that by itself is not a bad objective."
Agriculture is a $36.6 billion industry in California, and the state's farms create thousands of rural jobs, contribute hundreds of millions in local taxes and grow most of the fruits and vegetables eaten in this country.
Police agencies drawing up plans for first lady's visit to UC Merced...DANIELLE GAINES
http://www.mercedsunstar.com/167/v-print/story/791749.html
Local law enforcement agencies are gearing up for first lady Michelle Obama's visit here next month.
The county sheriff will set up a command post at Lake Yosemite, next to the UC Merced campus, during the ceremony, the Merced County Board of Supervisors voted Tuesday.
UC Merced Police will be the lead agency for the event, bringing in other UC police officers from campuses across the state, said Campus Police Chief Rita Spaur.
Spaur added that she hadn't yet asked for assistance from the sheriff's department, and didn't know if she would need to in the future.
Sheriff's spokesman Tom MacKenzie said the sheriff's operation so far is planned only for a command post near the entrance of Lake Yosemite.
"We are establishing a command post on the lake to establish a clear perimeter around the UC," MacKenzie said. "There are several planned events out there already, and we are going to make sure that any access points to the UC from the lake are secure."
The sheriff's additional coverage of the area during the event is expected to have no staffing or financial impact, according to the supervisors' paperwork.
Some local agencies will be working together during the event, Spaur said, and the Secret Service is sure to be in contact with all local law agencies.
Spaur said California Highway Patrol officers will be around to control traffic.
"It will be a nice smooth ride in for everyone coming," Spaur assured.
The sheriff's request to the supervisors anticipated 25,000 spectators; The campus is printing only 9,000 tickets.
"We're always going to plan for more because some people will just show up on that day," MacKenzie said.
Merced to host big event for UC graduation...Sun-Star staff report
http://www.mercedsunstar.com/167/v-print/story/791740.html
The city of Merced said it will hold a two-day festival May 15-16 celebrating the UC Merced class of 2009 graduates and its commencement speaker, first lady Michelle Obama.
Cap&Town '09 will be a large street fair and festival focused in downtown Merced, with bands, games, activities and food. The goal is to provide a range of activities for the thousands of people expected for the May 16 graduation.
UC Merced officials estimate between 15,000 and 25,000 will come to Merced for the weekend because of the appearance of the first lady. The campus will be able to accommodate about 12,000 at the graduation.
The festival will be focused on Main Street, between M Street and Martin Luther King Jr. Way, and on Canal Street between Main and 18th streets. The event will run the evening of May 15. and the afternoon and evening of May 16.
A stage and screen will be set up in Bob Hart Square for entertainment and also to broadcast the first lady's speech live. Additional screens will be set up around town, including the Sam Pipes Room and the City Council Chambers in the Merced Civic Center. Arrangements are being made to set up screens in other locations so that the community will be able to share the experience.
Cap&Town organizers are encouraging local service clubs, schools and nonprofit groups with experience in feeding large groups to schedule a fundraising feed for the afternoon and evening of May 16.
A map will be printed and distributed throughout the city with a local restaurant guide on one side, and a listing of fundraising meals on the reverse.
Modesto Bee
AP IMPACT: Feds pay farmers to till arid land...GARANCE BURKE, Associated Press Writer
http://www.modbee.com/state/v-print/story/666387.html
FRESNO, Calif. -- As drought forces families in the West to shorten their showers and let their lawns turn brown, two Depression-era government programs have been paying some of the nation's biggest farms hundreds of millions of dollars to grow water-thirsty crops in what was once desert.
Records obtained by The Associated Press show that the federal government handed out more than $687 million in subsidies over the past two years to hundreds of farmers in California and Arizona, the most seriously drought-stricken states in the West.
One program pays farmers for planting water-needy crops such as cotton and rice, which are largely grown by flooding the fields. The other provides cut-rate water for irrigation.
Farmers and government officials strongly defend the double-dip subsidies, saying they produce an abundance of food and jobs.
But now, with the West booming in population and the region gripped by both recession and a dry spell, environmentalists, city dwellers and members of Congress are demanding the government end or scale back this decades-old practice that essentially rewards farms for using water, not conserving it.
"With our weather patterns, with climate change, and our population growth, we've got to look at how we use every drop," said Rep. George Miller, a Democrat who represents part of the San Francisco Bay area. "We need to take a serious look at policies that encourage economically inefficient and unsustainable uses of our limited clean water supplies."
Since the drought began in 2007, the government has steered about $79 million in water subsidies to California farms, according to an AP analysis of U.S. Bureau of Reclamation records. California cotton and rice farmers received an additional $439 million in subsidies doled out for commodity crops, according to an AP examination of U.S. Department of Agriculture data obtained through the Freedom of Information Act.
Arizona farmers have received nearly $170 million since 2007 in water and crop subsidies, mostly for cotton, records show.
Exactly how much California farmers will get in subsidies in 2009 is unclear, but it could be significantly less. Facing a third dry year and record-low reservoirs, the Bureau of Reclamation, which manages many dams and reservoirs in the West, announced major water cutbacks last month in California. For now, hundreds of farmers will get no irrigation water from the federal government, although they could get some later this year.
The cutbacks are leading some farmers to switch to less-thirsty crops or leave their fields fallow.
East of the Rockies, other rice- and cotton-growing states, such as Texas and Louisiana, get federal crop subsidies, too, but not cheap water through the Bureau of Reclamation, which operates only in the West. Also, the tug-of-war over water between the cities and the countryside is far more intense in booming California and Arizona.
President Barack Obama recently called some of the nation's crop programs unnecessary, and proposed cutting or capping them.
Over the past quarter-century, Congress has considered eight bills that would bar the double dipping practiced by California and Arizona. And federal budget analysts in 2006 questioned whether the government should be sending farms so much cheap water when endangered species and city dwellers need it, too.
Agriculture takes up to 79 percent of all water federal and state officials manage in California, although authorities say much of that irrigation water flows back into rivers and wetlands. The price many farmers have been paying for supplies from the federal Central Valley Project is less than half what some cities do.
USDA officials acknowledge that even during the drought, the system has encouraged farmers to sow cotton and rice, which require more water per acre than other major commodities grown in California and Arizona. For example, a California farmer uses a quarter more water to grow an acre of cotton than wheat. Rice, primarily grown in clay flood plains near Sacramento, needs almost twice as much water as wheat.
The USDA's chief economist, Larry Salathe, said a surging population and dry weather - not the agency's programs - are causing water shortages.
"We're concerned about the availability of water in the West, but we were growing rice and cotton in California long before this problem started," Salathe said. "We're trying to use our resources to produce the most food we can, and that by itself is not a bad objective."
Agriculture is a $36.6 billion industry in California, and the state's farms create thousands of rural jobs, contribute hundreds of millions in local taxes and grow most of the fruits and vegetables eaten in this country.
Jim Hansen, a 69-year-old cotton grower in California's Central Valley, said his family business would crumble if the government took away low-cost water and the nearly $1.7 million in crop payments he received in 2007 and 2008.
"Lots of farmers are already saying that these government programs aren't enough to make them stay in the business," said Hansen, co-owner of Hansen Ranches, the state's fourth-largest recipient of crop subsidies. "I just don't think that taking the No. 1 ag state and drying it up is a good long-term answer for our country. I mean, people need food."
But as the recession intensifies and mandatory water rationing hits some cities in the Bay Area and outside Sacramento, the issue is taking on new urgency.
"If farmers' business model depends on getting taxpayer-subsidized water to grow taxpayer-subsidized crops and they still say they have a hard time making it, there's something wrong," said Bill Walker, campaign director for the Oakland-based environmental law firm Earthjustice. "Why do we let them buy water so cheap?"
This summer, federal supplies are expected to run so low that officials in suburbs outside Sacramento said they may need to lower the pressure coming out of residents' taps for the second year in a row.
"We still haven't gotten into a situation where we're fighting directly with agricultural users over the same bucket of water, but I think we're going to see that in the future," said John Coppola, principal engineer for the Sacramento Water Agency.
Daniel Errotabere, a third-generation farmer in Fresno County, has been forced to leave 1,200 acres fallow and lay off seasonal workers, although he has installed efficient drip irrigation and is switching from cotton to pistachios and almonds. If farmers are stripped of their safety net, Errotabere warned, consumers will soon be paying more for food.
"Everyone is going to have to give something up," he said.
Patterson Irrigator
Sanders resigns from Diablo water district board...James Leonard
http://pattersonirrigator.com/pages/full_story?page_label=home&id=2310467-Sanders+resigns+from+Diablo+water+district+board-&article-Sanders%20resigns%20from%20Diablo%20water%20district%20board-%20=&widget=push&instance=home_news_bullets&open=&
Dwain Sanders, vice president of development at Diablo Grande, has resigned from his position on the board of the troubled Western Hills Water District.
Sanders will retain his position at the upscale golf resort and housing development in the hills west of Patterson but will no longer play a role with the district that provides its water — a district he was once president of — according a spokeswoman for Diablo Grande owner World International.
Sanders said in a prepared statement that he resigned in order to focus more of his time on the development itself, which is still aiming to create a high-end, country club-type of environment despite the struggling economy.
“World has many exciting plans for Diablo Grande in the near future that will require coordination and a schedule that will consume a great deal of time,” he said. “World is looking to identify concepts that have not been tried before in the current financial structure and housing market.”
Sanders came under fire last year, when — while Diablo Grande was embroiled in a long, contentious bankruptcy case — the water district consistently failed to meet state guidelines regarding the presence of trihalomethanes, a chemical compound that can lead to cancer or other serious health ailments if consumed over a period of many years.
Residents complained about discoloration of the water, and some claimed the water directly or indirectly caused physical ailments ranging from dry skin and hair to heart palpitations and migraines.
World spokeswoman Frederique C. Szita said Sanders was president of the water district until World took ownership of the struggling development October 2008. At that time, he was replaced as president by Guillermo Marrero — whom Szita said has a background is in business and real estate law — but remained on the board.
World acted on the water quickly after taking over, installing a powder activated carbon system to improve water quality in the short term and unveiling plans for a more effective and expensive chloramine treatment system that should be completed later this year.
Szita emphasized that Sanders’ resignation was not related to the water quality issues.
“Dwain resigned in order to focus more fully on the development as a whole on behalf of World International,” Szita wrote in an e-mail to the Irrigator. “The (water district) was pulling too much of his time away from the main goal of getting the development moving again.
“World has always supported and thought highly of the team that was in place at the time of acquisition, including Dwain Sanders.”
Not everyone has thought so highly of Sanders. Gary DeSantis, president of the Diablo Grande Legends West Board of Golfers and a longtime resident, said Sanders played a big role in the mismanagement of Diablo Grande that ultimately led to its bankruptcy.
DeSantis also said Sanders misled residents and golf members when he told them early last year that the golf courses were temporarily closing because of water issues and a lack of use, not for financial reasons. Shortly thereafter, Diablo Grande filed for bankruptcy.
“I think the project would be better off without Dwain Sanders involved in any way, shape or form,” DeSantis said. “Truthfully, I’m surprised World has kept him on this long. There’s nothing of importance that he could contribute to the future of this project, as far as I can see.”
Replacing Sanders on the water district board is Carmen Millan, the new controller for World International. Szita said Millan brings with her “a wealth of experience as an auditor from one of the most highly recognized real estate (certified public accountant) firms.”
Szita said Sanders’ resignation will have no effect on the company’s plans for improving the water quality at Diablo Grande.
“The water quality continues to be a central focus for World International, and priority No. 1 is providing sustainably clean water to the residents and for the development,” she said.
--In other news, Szita said a new name for Diablo Grande had been chosen, but significant challenges in the trademark process have forced the company to try a different one. She expects an announcement on the new name to be made soon.
Capital Press
Red Bluff Diversion Dam expected to remain until 2013...Tim Hearden
http://www.capitalpress.info/main.asp?SectionID=67&SubSectionID=616&ArticleID=50457&TM=49972.91
A seasonal dam that provides water to 150,000 agricultural acres in the northern Sacramento River will likely stay in place, at least for the next few years.
The local water agency that operates the Red Bluff Diversion Dam is planning to lower the gates June 15 and raise them Aug. 31, making for a shorter-than-normal season for taking water from the Sacramento River.
To serve irrigators while the dam is raised, the Tehama Colusa Canal Authority is building a temporary fish screen and pumping station near the dam. The $8.1 million project is funded through the federal Fish Passage Improvement Act, canal authority general manager Jeff Sutton said.
The dam and fish screens are expected to be in place until a new permanent pumping station is built in time for the 2013 irrigation season, Sutton said. The $165 million facility would replace the more than 40-year-old dam, which has been targeted by environmentalists.
The project must still be funded by Congress.
"Agriculture is the economic foundation of this region," Sutton said. "If we're not successful... the impacts to the four-county region will be disastrous."
If little or no water were allowed to be diverted, the devastation would be akin to what's happening with the auto industry in Detroit, Sutton said.
"These farms are our factories," he said.
The canal authority provides water to 17 different water districts in Tehama, Glenn, Colusa and Yolo counties, whose customers produce some $250 million in crops each year and contribute about $1 billion to the regional economy.
More than half the farmland served by the dam grows permanent crops, including 58,000 acres of almonds, Sutton said. The area also produces its share of pistachios, olives, walnuts and grapes.
Preserving this ag land is a primary goal for the canal authority as it pushes for the permanent pumping station, which would include fish screens.
"It's pretty important. There's a lot of ag depending on it," said Jason Larrabee, a consultant who helps the canal authority work with regulatory agencies. "I'd say it's one of the most important agricultural areas in California."
Built in the 1960s, the Red Bluff Diversion Dam has long been blamed for contributing to declines in salmon and steelhead trout populations. In 2005, the Pacific Coast Federation of Fishermen's Associations, the Natural Resources Defense Council and other groups sued federal authorities over the Central Valley Project's water diversion system.
U.S. District Judge Oliver Wanger ruled last summer that the Red Bluff dam and other diversions harm the state's salmon population. He ordered the U.S. Bureau of Reclamation and the National Marine Fisheries Service to seek ways to protect the fish. As a result of his ruling, diversions from the Red Bluff dam were cut short by two weeks last summer.
Officials had been worried about the dam's immediate fate in light of a biological opinion analyzing the Central Valley Project's impact on the imperiled green sturgeon. Due out in March, the opinion's publication has been delayed, but a draft version calls for the dam to remain in place but be lowered for shorter seasons until the permanent pumping facility is built, Sutton said.
The temporary pumps and an existing research pumping station will combine to divert about 965 cubic feet per second, a fraction of the canal's capacity of 2,500 cfs.
The water agency's plans were buoyed earlier this month when the city of Red Bluff dropped its lawsuit against the agency and the Bureau of Reclamation over the permanent pumping plant.
The city wanted compensation for the roughly $4 million a year it would lose by not having Lake Red Bluff, which is created by the lowered dam and provides recreation to the heart of town during the summer. The city has already lost the Nitro Nationals, a major Memorial Day weekend drag boat show, because of the uncertainty about the dam.
As part of a settlement, the canal authority agreed to put $30,000 toward the city's effort to identify public projects that would replace the revenue it is losing, Sutton said.
Like scores of other agencies that rely on Central Valley Project water, the districts served by the canal authority are affected by this year's severe drought-related cutbacks. The agencies now expect to receive between 5 percent and 15 percent of their normal allotments.
Sutton said 40,000 to 50,000 acres of annual crops watered by the canal authority could be left fallow because of Bureau of Reclamation cutbacks. The authority is seeking transfers from water rights holders to provide enough to keep permanent crops alive, he said.
San Francisco Chronicle
Don't hamstring the Endangered Species Act...Eric Biber. Eric Biber is an assistant professor at the UC Berkeley School of Law.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/15/ED0M172996.DTL&type=printable
The Endangered Species Act provides essential life support to a wide range of species on the edge of extinction, including native salmon, grizzly bears and California condors.
There are costs to the Endangered Species Act. We might lose economic development opportunities when we protect native habitat. The regulatory program has its share of paperwork and administrative costs. But when Congress passed the act in 1973, it concluded that species protection was worth these costs. Congress hasn't changed its mind since then.
One key provision of the act requires federal agencies, when they pursue development projects, to consult with the U.S. Fish and Wildlife Service. The goal is to help both sides work together to determine possible impacts of development on endangered species. If the proposed project might cause serious harm to the species - what the act calls "jeopardy" - it is prohibited unless it is changed to reduce or eliminate that harm.
Consultation ensures that both the development agency and the Fish and Wildlife Service gather relevant information about endangered species and potential impacts on those species; it ensures that the service - a disinterested agency not committed to the development project - looks over the data and draws reasonable conclusions from that data; and it ensures that if that data show serious harm to endangered species, the project is stopped or changed. The consultation process is particularly important because, in many cases, we know very little about why species are endangered, or what the impacts from development projects might be. By requiring the development and analysis of information by an outside agency, the consultation process gathers better information about endangered species. Better information means cheaper and more effective protection for endangered species.
Unfortunately, the Bush administration undermined the consultation process by introducing loopholes in the implementing regulations. These loopholes potentially exempt a wide range of development projects from consultation. But these exemptions generally include the very types of projects for which we lack information about potential effects on endangered species. Indeed, in some cases, projects would be exempt from consultation precisely because of the lack of information about impacts on endangered species. But if we are serious about protecting endangered species, we need more information, not less.
Congress has given the Obama administration authority to undo these regulatory changes. The Obama administration should use its authority to restore the role of high-quality information in endangered species protection.
Contra Costa Times
Editorial: Port of Oakland must get serious about cleaning the air...MediaNews editorial
http://www.contracostatimes.com/opinion/ci_12140510
THE PORT OF Oakland commissioners, after more than two years in the making, adopted a master plan for reducing the toxic pollution the port creates in a variety of ways. But at a time when residents of neighboring communities continue to become ill and die from the port's bad air, the commissioners ushered out a weak report that barely addresses the tough issues.
Years after numerous calls — ranging from residents to the state air board — for the Port of Oakland to cut emissions, what the commissioners gave us in response was a poor effort.
The report outlines a number of goals the port wants to reach, but there are no solid commitments as to how these goals will be achieved. And a decision on the worst polluters of them all — diesel emissions from trucks, ships and trains — has been put off.
Examples appear throughout the executive summary of the Maritime Air Quality Improvement Plan where the term "goals" appears several times, a clever disguise so port commissioners aren't on the hook for failing to reach commitments.
The summary delineates the role the port — with a collaboration of agencies, tenants, business and community stakeholders — "will play in achieving the plan's air emissions and health risk reduction goals."
For on or near shore the port sets a "goal" of reducing diesel particulate matter that causes cancer by 85 percent, a reduction of 85 percent of sulfur oxides, and 34 percent oxides of nitrogen between 2005 and 2020. "Goals" are also made for offshore emissions. But port commissioners are vague about how they will reach these goals and offer no clear-cut course. The port plans, for example, to combat diesel particulate matter and nitrogen through pilot projects and says there will be further monitoring and reporting.
Thankfully, the board commissioners put $5 million back in the mix to fund grants for trucks to install diesel soot filters. It is money that they should have never taken off the table in November (citing the poor economy).
Other than that, all this plan does is to buy more time for port tenants, ships and trucks as the air gets worse. The health impacts from truck pollution alone is $153 million a year, with 18 premature deaths annually.
The pollution problem is greatest in West Oakland, which registers scores of asthma and bronchitis cases. But other areas of Contra Costa and Alameda counties are being affected. We have to change course immediately.
Goals are not enough. The Port of Oakland commissioners need a clear-cut plan to cut emissions by 2020.
Like ports in Los Angeles and Long Beach, the Oakland port commissioners must enact container fees so freight owners can bear the cost.
Port commissioners need to get serious and clean up the air.
Los Angeles Times
Southern California water agency to cut supplies by 10%
It is the first time such action has been taken since the early 1990s drought. Statewide water conditions remain below average for the third consecutive year, officials say...Bettina Boxall
http://www.latimes.com/news/local/la-me-mwd-water15-2009apr15,0,3517309,print.story
The board of Southern California's major water wholesaler voted Tuesday to effectively cut water deliveries across the region by 10% this summer.
The Metropolitan Water District of Southern California has warned for months that the state's drought and environmentally driven cutbacks in water shipments from Northern California would leave demand higher than the supply.
"We're short," said Jeffrey Kightlinger, the water district's general manager.
The cuts are the agency's first since the early 1990s drought.
The Metropolitan Water District, which imports water from the Sacramento-San Joaquin delta and the Colorado River and sells it to local water districts, will achieve the reductions by imposing penalty rates. Local utilities that use more than their allocation will have to pay more.
In anticipation, Los Angeles is poised to adopt conservation rates aimed at getting residents to reduce their water use by 15%.
Statewide water conditions have improved in recent months but they remain below average for the third consecutive year.
Total storage in the Colorado River basin is also slightly better than last year. But a persistent drought in the basin has left the river's reservoirs at 54% of overall capacity. Lake Mead, which supplies Southern California, is 46% full, although it will get more water from upstream Lake Powell as the season progresses.
Last year, the Metropolitan Water District cut supplies to agricultural customers and it has suspended regional groundwater replenishment. All told, agency officials said they will deliver roughly 20% less water than three years ago.
The reduced deliveries have meant less sales revenue for the agency, which is also facing rising costs.
As a result, the agency will hike its prices by nearly 20% in September -- in addition to the penalty rates. The increase comes on top of a roughly 14% rate increase last year.
Environmental groups to seek congressional help on clean-truck program
Clean-air advocates will ask lawmakers for help in revising laws after a federal court ruled many of the provisions of the port cleanup plan unconstitutional...Louis Sahagun and Ronald D. White
http://www.latimes.com/news/local/la-me-clean-trucks-teamsters15-2009apr15,0,1005160,print.story
Only a month ago, officials at the nation's busiest port complex believed the landmark clean-truck program -- a $1.8-billion strategy to slash toxic diesel emissions by phasing out 17,000 old, dirty big rigs -- had survived its toughest challenges and was on its way to becoming a model for green growth.
But many of the program's key provisions were declared unconstitutional by a federal appeals court.
The ruling stunned a coalition of backers led by Los Angeles Mayor Antonio Villaraigosa, the Natural Resources Defense Council and the International Brotherhood of Teamsters.
Now, a week before a federal trial that will determine whether those provisions can be implemented, coalition leaders said they planned to seek congressional action -- regardless of what happens in court -- from potentially sympathetic lawmakers.
"If we lose the provisions, there won't be much of a clean-trucks program left," said Melissa Lin Perrella, a spokeswoman for the Natural Resources Defense Council. "So, Plan B is looking at legislative options."
Nick Wiener, a campaign coordinator for Change to Win, a Washington-based labor organization, agreed.
"We need to talk to our friends in Congress and see what our options are," he said. "We've come this far, and we are not going to give up because there are crummy laws."
The coalition has yet to meet with any member of Congress on the matter.
But options under consideration include seeking an amendment to the Federal Aviation Administration Act, which prohibits governments from regulating price, route or service of a motor carrier.
The American Trucking Assn. cited that federal law in its request for an injunction halting implementation of the clean-truck program provisions.
Of particular concern is a new rule at the Port of Los Angeles that prohibits drivers from being independent contractors, a provision sought by Villaraigosa and the Teamsters.
The rule was designed to place the burden of buying and maintaining the new trucks on companies instead of low-paid drivers.
But some maritime experts think the efforts of environmentalists, union leaders and the Port of Los Angeles went too far in demanding concessions that force companies to employ the formerly independent owner operators.
"They tried to unionize the system, basically," said Asaf Ashar, a research professor with the National Ports and Waterways Institute's Washington, D.C., office, which is affiliated with the University of New Orleans.
A three-judge panel of the U.S. 9th Circuit Court of Appeals urged U.S. District Judge Christina Snyder to grant the trucking association's request for an injunction halting implementation of that provision and others.
Snyder is expected to rule on the request April 27.
Meanwhile, the ports of Los Angeles and Long Beach and their smaller northern neighbor Port Hueneme on Tuesday became the last three ports in the nation to enforce a new ID card that everyone in the U.S. who has port business must show in order to get to work.
Port officials said the implementation of the federal Worker Identification Cards was launched smoothly, with cargo moving without delays.
David Freeman, president of the Los Angeles Board of Harbor Commissioners, offered a similar assessment of the 2-year-old clean-truck program, which he said was "far exceeding expectations."
He declined to comment on talk of seeking help from Congress to preserve the controversial provisions.
As for the impending court trial, he said: "Sure, we're concerned about possible injunctions on certain features of the program. But the heart of the program, which is to clean up the air, is already a roaring success."
Judge tosses out portions of L.A. housing density law
The ruling throws scores of proposed developments into doubt if the density is greater than authorized by state law, and might affect projects already approved or under construction...Jessica Garrison
http://www.latimes.com/news/local/la-me-housing-density15-2009apr15,0,1343163,print.story
A Los Angeles County Superior Court judge Tuesday tossed out portions of a city law approved last year that allows developers to build taller buildings in exchange for setting aside some units for affordable housing.
Judge Thomas McKnew's ruling throws scores of proposed developments into doubt because it prohibits the Planning Department from processing any project applications in which density would be greater than what is authorized by state law.
The ruling also might affect projects that already have been approved and are under construction, said Jan Chatten-Brown, a lawyer for the Environment and Housing Coalition, which brought suit against the city. "This ruling will force the developers and the city to go back to the drawing board," she said.
City officials could not immediately be reached for comment.
The Los Angeles ordinance was passed in 2008 following approval of state Senate Bill 1818, which required local governments to allow developers to build denser projects if they include affordable housing. But the lawsuit said that the city's law went far beyond the state mandate, in some cases allowing three times more density than what was intended.
A group of Los Angeles homeowners associations and other residents filed suit over the ordinance last year after the president of the city's Planning Commission sent them an e-mail informing them it would be vulnerable to a legal challenge. The opponents of the law claimed that it was hurting local communities by increasing traffic and creating parking shortages.
They also claimed that far from leading to more affordable housing, the law paradoxically was reducing the supply because developers would raze existing apartments for low- and moderate-income residents and replace them with condos, mostly selling at market prices.
McKnew's ruling can be appealed.
CNN Money
Homebuilder confidence jumps
Signs of recovery - and perhaps a bottom - emerge in housing market report; largest monthly increase since 2003...Aaron Smith
http://money.cnn.com/2009/04/15/news/economy/housing_market_
index/index.htm?postversion=2009041513
NEW YORK (CNNMoney.com) -- In a strong sign that the housing market may be picking up, builder confidence in April made its most dramatic increase in nearly seven years, according to an industry report.
The Housing Market Index, a survey-based measurement of sales, as well as sales expectations, rose by more than 50% in April, according to the National Association of Home Builders, which compiles the index with Wells Fargo.
The index rose to 14 from its prior level of 9, which was the biggest increase since May 2003.
"After a very long period of extreme distress, it's given the builders some sense of reaching a bottom," said David Crowe, chief economist for the association.
The index has had a volatile history. It was launched in January 1985 with a baseline level of 50. It fell to 20 in 1991 and then peaked above 70 in the bubble years of 1998 and 1999. The index fell below 50 again in 2001, then ascended gradually until June 2005, when it reached 72.
After that, the index fell into its most prolonged descent. There have been occasional lifts, but they have been temporary. Last April it was at 20 and then sank to the single digits in November, where it remained until this month's increase.
The survey is a composite of ratings, based on builders' perceptions of single-family home sales, their expectations for sales over the next six months and volume of prospective buyers.
Of these various components, the largest increase in April came from sales expectations for the next six months. According to Crowe, this is also the area that had suffered the steepest declines in recent months.
The market index rose in every region of the United States in April, with housing activity in the Northeast growing at twice the pace of the West. The index in the Northeast rose eight points, for a total of 16; the West gained four points, for a total of 9.
More housing reports on the way
Going forward, the government will release its monthly report on the construction market for residential housing on Thursday. The projections don't paint as optimistic a picture.
The U.S. Census Bureau is expected to announce that building permits totaled 550,000 in March, according to a consensus of economist estimates compiled by Briefing.com. This would be nearly unchanged from the prior month's tally of 547,000 permits.
The Census Bureau is also expected to report that housing starts totaled 550,000 in March, according to Briefing.com consensus. That would be a significant decline from 583,000 in the prior month. 
Mortgage applications dip
Even as U.S. home loan rates held steady, the MBA says applications to refinance and purchase homes fell in the week including Passover and Good Friday.
http://money.cnn.com/2009/04/15/real_estate/mortgage_
applications.reut/index.htm?postversion=2009041507
NEW YORK (Reuters) -- Mortgage applications to finance the purchase of homes and to refinance existing loans fell last week even as U.S. home loan rates treaded water just above record lows, the Mortgage Bankers Association said on Wednesday.
Requests for new loans dropped in the Good Friday holiday week after five straight weekly increases.
"The MBA does not provide a holiday adjustment for the Easter/Passover weekend, which may have contributed to this week's decrease in application volume," the trade group said in a statement.
During the prior five-week run, average 30-year mortgage rates sank by as much as a half percentage point before starting to trend up again.
The total mortgage applications index fell 11% in the week ended April 10 to a seasonally adjusted 1,113.2. The purchase index fell 11.3% to 264.1 and the refi index dropped 10.9% to 6,071.7.
After swiftly tumbling from interest rates as high as 6-1/2% in October on sweeping government actions to revive housing, home loan borrowing costs have stagnated over the past month.
In the week ended April 10, the average rate for fixed-rate 30-year mortgages dipped to 4.70% from 4.73% the prior week. It hit an all-time low 4.61% two weeks ago, the trade group said.
As the critical spring home selling season heats up, the response by home shoppers to current loan rates will be keenly monitored.
Existing owners looking to slice costs have been the biggest beneficiaries of falling rates, applying en masse to refinance loans to shave monthly payments and in some cases avert foreclosure.
Purchase demand has been lagging well behind but applications had also risen in the previous five weeks.
The main impediments to buy, even with affordability at a record high, are fears of job loss and hopes of greater bargains as prices sink.
Some potential homeowners may also be waiting for loan rates to ratchet down further.
The Federal Reserve's pledge to buy up to $1.45 trillion in mortgage-related securities and $300 billion of U.S. Treasuries this year has already tugged housing costs lower. The Fed is only about one-quarter of the way through these purchase programs, and the Treasury is also consistently buying mortgage bonds each month.
"We think the Fed and Treasury buying programs have produced mortgage rates that are significantly lower than they would have been otherwise," wrote Nancy Vanden Houten, analyst at Stone & McCarthy Research Associates in Princeton, New Jersey. "But given all of the variables at work, there are limits to the effectiveness of any program aimed at pushing mortgage rates lower still."
Still, there are signs that the array of government programs aimed at breathing life into the worst housing market since the Great Depression is gaining traction.
Nearly 568,000 of all 2008 tax returns filed as of March 6 claimed a first-time home buyer credit, the National Association of Home Builders said, citing data from the Treasury Inspector General for Tax Administration.
First-time buyers who purchase a home starting Jan. 1, 2009, and before Dec. 1, 2009, are eligible for up to an $8,000 tax credit as part of President Barack Obama's housing stimulus.
Also, while the MBA's refinancing index slipped last week it has nonetheless doubled since the end of February.
The index is approaching its previous peak of 7,400 from January 2009 though it is well below the 10,000 level it almost reached during the major refi wave of 2003, Barclays Capital wrote in a recent report. As the administration's Home Affordable Refinance Program gets fully underway, the refi index could take another leap in coming months.