The mechanic's tale
May 29-31, 2009
A Short Chapter in the History of Foreclosures
The Mechanic's Tale...By BILL HATCH
In the late 1990s, an entrepreneurial mechanic with a wife and one child bought a house for $65,000 with a down payment of $1,500?and took a fixed-rate FHA mortgage. His wife, a beautician, got a job as a clerk at a discount store. In the midst of the speculative real estate boom in Merced six years later, now with three children and a warehouse job, he took out an equity loan for $126,000, did some remodeling on the exterior (new stucco, paint, new lawn turf, foam sculpture), bought furniture, a big-screen TV and a nearly new Escalade. It is estimated that about $35,000 went for the home improvements and goods. Where did the other $91,000 go? It didn’t go into the property. Why wasn’t the equity loan monitored for home improvements?
A year later, with four children and two big SUVs, the speculative real estate boom in full force, he took out a conventional variable equity loan on his house for $246,500. The paperwork doesn’t reveal if this was a wraparound loan, including the mortgage and the first equity loan. He bought a five-bedroom, two-story house for more than $300,000. He put about $160,000 down on the new house, bought $60,000 worth of new furniture and another used Escalade, and hoped to put a pool into the yard of the new house.
It can only be speculated if or when he got an equity loan on his new house.
He rented the old house to relatives, with an option to buy. The rent was based on the variable equity loan. It began in 2006, at about $500 a month. The relatives have two children. The husband built trailer homes; the wife had a good job in food service. In the next two years, they had another child and the husband lost his job and she quit her job to go to school –?while expecting to?buy this house.
In April 2008, payments on the variable loan of $246,500 increased to more than $2,500, and the owner informed the relatives with the option to buy that the rent had increased fivefold. The relatives had no clue that the loan was variable. It’s possible the owner didn’t quite grasp that either. In any event, the relatives went shopping for a loan, without success, as the boom was turning into a bust.
If the owner of the two houses, now with five children and a new custom Escalade including the latest in rims, had just stayed in his first house and not taken out two equity loans, he would have been paying between $400-$500 a month on his mortgage. Even if he had spent the entire $126,000 to expand his 900-square-foot house on a 10,000-square-foot lot and not borrowed another $246,500 – in part, to buy another house and more good-life toys he might have been able to survive.
Result: the relatives had to move out, the house is empty and in foreclosure, and the owner is months behind on his mortgage payments on his present house, and his variable on the new house will kick in next year.
Late last year someone seeking to buy the house contacted a realtor. The realtor, after examining the documents for a month or two, told the prospective buyer that it was extremely difficult to tell who actually owns this house, title being clouded by: 1) sloppy title company work to begin with; 2) the number and size of the various, variable loans; and 3) the mystery of who might possibly own those loans now.
So, here is an empty house worth between $50,000-$75,000 for cash, given that few if any will qualify for a loan on it in the present lending climate. Meanwhile, the grass has died in the front and back, junk was left behind, an old pickup stands in the driveway. It has joined that ever-growing number of residential properties in foreclosure, in decline and its title may be clouded by the different loans, all with different companies. Nor is it clear to realtors or prospective buyers whether there was a consolidation of loans or not. It will not be clear before the house goes through auction on the county courthouse steps.
What were the owner and his lenders thinking? At a broader level, what were all the Valley business and political leaders thinking, as they approved project after project, predicting the growth boom would go on forever and universal prosperity would come to the Valley without jobs to support the inflated prices of the real estate? The entrepreneurial warehouseman should not have been given the first equity loan on his first house. Politicians, from city councils to boards of supervisors to state legislators to members of Congress, and the media are blaming poor people for their irresponsibility.
Meanwhile, in Merced, the foreclosure section of the Merced Sun-Star announced in late October, 2008, that Hank Vander Veen, the publisher of the Merced Sun-Star, presumed to be far better educated, more worldly and wealthier than the warehouseman, walked away from a $507,000 house in suburban McSwain.
Bill Hatch lives in the Central Valley in California. He can be reached at: firstname.lastname@example.org.
Water, sewer hikes needed now, Livingston City Council told...JONAH OWEN LAMB
LIVINGSTON -- The sky may fall on Livingston if water and sewer rates are not hiked -- and soon.
If not, the city may have to start cutting the police and fire budgets, or worse.
Every month the city must take money from a dwindling general fund to pay for water and sewer services that are not paying for themselves.
At least that's the message City Manager Richard Warne has been drilling into the heads of the City Council and the citizens of Livingston as part of the justification for why water and sewer rates must be hiked more than 100 percent, and for the first time in more than a decade.
The rate hike needs the approval of four of the five City Council members, who will vote during tonight's meeting.
But confusion still reigns over almost every aspect of the new water rates, especially how long the city can remain on its current course before it runs ashore.
If the city keeps taking roughly $25,000 to $30,000 out of the general fund every month to pay for sewer and water funds in the red, the city's general fund -- today at approximately $1.5 million -- could carry the burden of both sewer and water for several years.
But that would only be possible if a bevy of variables -- from state raids on the city's budget to unforeseen catastrophes forcing the city to dip into these funds -- do not occur.
Trying to figure out how long the ever-changing general fund might be able to carry the loss for sewer and water is a dicey thing to do, said Victoria Lewis, the city's finance director.
"If you continue to contribute the $30,000 to $31,000 from the general fund that does not have a steady stream of revenues to support the activity it is responsible for taking care of, then you're going to be faced with serious issues down the road," said Lewis.
"I can say that within four to five years this city is going to have serious financial problems if these rate increases don't go into effect immediately."
Warne shared those sentiments, pointing out that something drastic may happen if the status quo isn't changed.
"Either (the city will) cut recreation and public safety, or they are going to have to raise the rates," he said.
Since there are to many factors that could change the financial landscape in the coming months, Warne would not venture to predict when the breaking point might come.
Letter: Cardoza, go home...PETE ROBINSON, Atwater
Editor: After leaving Alaska, I thought that my days of having an absentee congressman were all behind me.
Now I see where our very own Rep. Dennis Cardoza has moved his whole family to the East Coast.
I think that it's great that this man puts his personal needs above those of the people he's elected to represent.
Before being elected he should have counted the costs of being a public servant and planned accordingly.
With his family out there, how can he really gauge how life is back here in the Valley? He'll know a great deal about food and gas prices, schools and local issues in Maryland, but what about those in Atwater?
Having a staff back here or using electronic means to represent us is not the way the Founding Fathers envisioned representative government. And those visits that he says he'll make back here ... well, they'll be less and less of them over time.
As Cardoza's stature in his party grows, and with him being out East, our concerns and opinions will pale into insignificance -- we'll be a sideshow of his attention until election time.
The other politicians are all salivating with envy at our congressman's attempt to stay away from the people and govern from afar. Cardoza likes to tout that he's a blue dog Democrat, but he's House Speaker Nancy Pelosi's lap dog.
Congressman: Either represent us properly or go.
Letter: Fighting lawsuit abuse...TRACY LEACH, CALA regional director, Bakersfield
Editor: We were heartened to see the recent editorial highlighting the case of the group trying to derail the Wal-Mart distribution center led by their out-of-town attorney who, by his own admission, is intent on lining his own pockets.
The situation is yet another reminder of how the abuse of our legal system is costing all Californians in the form of lost jobs, higher costs and reduced opportunities for every one of us.
Even the well-intentioned California Environmental Quality Act has repeatedly been used as a hammer for a variety of "groups" abusing both the act and the taxpayer-funded legal system to advance unrelated agendas.
With false claims of environmental shortcomings, they engage in erroneous and costly mischief.
It is time for average citizens to say "enough."
Our organization, California Citizens Against Lawsuit Abuse, is a nonpartisan grassroots movement of concerned citizens and businesses who are fighting against lawsuit abuse in California.
Our newly reinvigorated CALA chapter in Central California (www.cala.com) serves as a watchdog to challenge the abuse of our civil justice system and we welcome the participation of every citizen interested in jobs, justice and prosperity for our Valley and our state.
Pending home sales rise 6.7 percent in April...ALAN ZIBEL, AP Real Estate Writer
WASHINGTON -- The number of U.S. homebuyers who agreed to purchase a previously occupied home in April posted the largest monthly jump in nearly eight years, a sign that sales are finally coming to life after a long and painful slump.
The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, far exceeding analysts' forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent.
Economists were encouraged by the report, and stock indexes advanced modestly.
"This is yet another positive indication that the bottoming process is forming," Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. "Now if only prices would stabilize."
Economists surveyed by Thomson Reuters expected the index would edge up to 85 from a reading of 84.6 in March. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing home sales.
In early trading, the Dow Jones industrial average added about 20 points to 8,741, and at times traded above 8,776.39, its finish for 2008.
Still, some economists wonder whether rising mortgage rates will dampen home sales. Nationwide average rates for 30-year-fixed rate mortgages are around 5.3 percent this week compared with about 5 percent a week earlier, according to Bankrate.com.
And analysts cautioned prices will take longer to stabilize, because of the glut of unsold properties on the market.
"Even if sales volumes rebound, home prices will keep falling under the weight of the massive inventory overhang," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.
The Realtors' index was 3.2 percent above last year's levels and has risen for three straight months after hitting a record low in January. A nearly 33 percent sales increase in the Northeast and a 9.8 percent jump in the Midwest led the overall surge. Sales contracts rose 1.8 percent in April from a month earlier in the West, but fell 0.2 percent in the South.
The big boost likely reflects the impact of a new $8,000 tax credit for first-time homebuyers that was included in the economic stimulus bill signed by President Barack Obama in February. Since buyers need to finish their purchases by Nov. 30 to claim the credit, "we expect greater activity in the months ahead," Lawrence Yun, the Realtors' chief economist, said in a statement.
Still, Yun cautioned that the pending sales data is more volatile than in the past because many sellers need banks to agree to take less than the original mortgage - a so-called "short sale." That process is often difficult, time-consuming and can wind up falling apart before the deal closes.
The Federal Housing Administration last week released details of a plan in which borrowers who use FHA loans can get advances from lenders that let them effectively receive the credit in advance, so they don't have to wait to get the money from the Internal Revenue Service.
Completed home sales rose 2.9 percent to an annual rate of 4.68 million in April from a downwardly revised pace of 4.55 million in March, the Realtors' group said last week.
Sales of inexpensive foreclosures and other distressed low-end properties have even sparked bidding wars in places like Las Vegas, Phoenix and Miami. But the market for high-end properties remains at a virtual standstill.
The national median sales price in April plunged more than 15 percent to $170,200, from $201,300 in the same month last year. That was the second largest yearly price drop on record, according to the Realtors' group.
Schwarzenegger cuts mean no college for thousands...STEVE LAWRENCE, Associated Press Writer. Associated Press Writer Judy Lin contributed to this report.
SACRAMENTO -- Budget cuts proposed by Gov. Arnold Schwarzenegger could prevent hundreds of thousands of Californians from attending college this fall, higher education officials told a legislative committee Monday.
The executive director of the California Student Aid Commission, Diana Fuentes-Michel, said the Republican governor's plan to phase out Cal Grant aid to lower income, college-bound students could keep more than 200,000 out of classes.
"If these students cannot afford to attend college, they will face the worst job market in decades," she told a two-house committee that is trying to eliminate a state budget deficit now pegged at $24.3 billion.
Karen Humphrey, executive director of the California Postsecondary Education Commission, urged lawmakers to scale back rather than eliminate Cal Grants. She suggested temporarily lowering grants for students attending private schools and raising the grade point average required to qualify for the aid.
She also suggested phasing in temporary fee increases at community colleges to ease some program cuts.
"CPEC doesn't normally recommend fee increases like this," she said. "But the other options on your table could be worse."
Schwarzenegger is proposing to cut $2.75 billion from higher education through June 30, 2010. That includes community colleges, University of California and California State University systems.
The state will get $537 million from the federal stimulus package to offset some of those cuts, and the administration anticipates California will receive more aid, said H.D Palmer, a spokesman for the Department of Finance.
Schwarzenegger is also proposing to save another $173 million in the coming fiscal year by eliminating new Cal Grants.
The California State University's chancellor, Charles Reed, said the cuts proposed for his 23-campus system were the equivalent of cutting its enrollment by 60,000.
"That is impossible," he told the committee.
He said student funding at CSU has dropped 25 percent over the last decade. The university has also frozen administrative salaries and limited travel and purchases to hold down expenses, he added.
"Now we have to do something about the number of faculty and staff we have," he said. "Our No. 1 goal is to offer as many classes and sections as we possibly can and secondly protect as many jobs as we can."
Reed and University of California President Mark Yudof urged lawmakers to let university officials figure out how to impose any cuts the Legislature adopts instead of mandating cuts in certain areas.
It's very important for us to have flexibility," Yudof said. "There are things we probably should have eliminated years ago. For a variety of reasons they have not been."
He said the cuts would force employee furloughs and the cancellation of some programs.
"We've got to arrest this race to the bottom...," he added. "This will be, in many ways, an unraveling of a master plan (for higher education) that California adopted about 50 years ago."
Jack Scott, a former state senator who now serves as chancellor of the California community college system, urged lawmakers to lower enrollment requirements, saying that forcing the system's 110 colleges to accept the same number of students while absorbing budget cuts could bankrupt some smaller schools.
He also urged lawmakers to keep community college budget cuts proportional to the schools' share of funding under Proposition 98, the minimum kindergarten-to-community-college funding requirements set by voters in 1988.
"When you look at Proposition 98, we normally get 11 percent of the revenue," he said. "I don't think we should get more than 11 percent of the cuts."
Leo Martinez, acting chancellor and dean at the University of California's Hastings College of Law, urged legislators to reject Schwarzenegger's proposal to cut off all state support for the 131-year-old school.
The state's investments in Hastings have been repaid many times over by the contributions made by its graduates, who include former Assembly Speaker and San Francisco Mayor Willie Brown, Martinez said.
"I am confident that in this year's entering class there are many other possible Willie Browns, and in coming years there will be many, many other possible Willie Browns," he said.
Dan Walters: California's health-welfare services vie with education
By happenstance, shortly after voters passed Proposition 98 – a constitutional guarantee of public school financing – in 1988, California's economy plummeted into a severe recession, creating a huge deficit in the state budget.
It quickly became evident, as this column noted at the time, that Proposition 98 and the recession created "a political contest pitting educators against advocates of other spending areas, especially the big-ticket health and welfare programs, and public employee unions" because the state budget is essentially a zero-sum game.
Then-Gov. Pete Wilson, acknowledging "clearly there is a competition," jousted with the Legislature on how deeply to cut school and health and welfare spending, as well as how much of the deficit should be covered by taxes.
California survived that crisis, but the underlying competition between the two largest segments of the state budget – together accounting for about 80 percent of general fund spending – lingered. And subsequent governors and legislatures fudged by deferring spending, borrowing money above and below the line and constructing fictional income and outgo data.
Twenty-one years after Proposition 98 was enacted, the state once again is mired in recession, the state's revenue stream is drying up, the gimmicks are no longer working, the state can't borrow any more money and the long-simmering competition between education and health and welfare programs has boiled to the surface again.
Last week, a two-house legislative budget committee confronting a 2009-10 deficit of at least $24.3 billion heard emotional pleas from dozens of health and welfare advocates to soften the governor's very sharp cuts in their services, including elimination of all welfare grants and children's health programs.
On Monday, educators, parents and students lined up in the same Capitol hearing room to complain that proposed education spending cuts would devastate the ability of the state's schools, whose per-pupil funding is already well below the national average, to educate California's 6 million very diverse students.
One of those who spoke exemplified, perhaps unwittingly, the conflict between schools and health and welfare programs. It was a representative of the Service Employees International Union, which represents not only some school workers but many local health care workers – and state employees whose jobs are also on the line.
Last week, Controller John Chiang warned that the state will run out of cash in July and he needs the budget to be enacted by June 15 so that he can ask lenders for short-term loans to cover the cash flow dilemma.
Without adding more taxes to those already enacted – and that's a virtual impossibility – the Legislature's liberal Democrats will be compelled to slash tens of billions of dollars from schools and health and welfare programs in the days ahead.
Their only issue, really, is how to allocate the pain.
College won't be an option...ADRIANA HERNANDEZ. Merced
Many students receive help from Cal Grant programs. By eliminating these programs, the governor is eliminating more than 200,000 students from continuing their studies. I'm one of those students. The Cal Grant is the only financial aid I receive. It has helped me pay my tuition. Without this money, I won't be able to go to school. If I can't go to school, I won't be able to find a job that will help me financially support my family.
If Cal Grant programs are eliminated, California's future is going to go downhill even more. It's already hard for people to find jobs. It seems like education is not important to the governor. This is causing many of us to think about moving out of California and continuing our studies in a state that does want its citizens to get an education.
If the governor doesn't want California to be abandoned, he should rethink eliminating Cal Grant Programs.
Cal Grants give hope to all...JAVIER MIRAMONTES, Merced
On May 28, Gov. Schwarzenegger's finance officials announced that they are considering eliminating the Cal Grant program and cutting another $600 million from the state's public universities. As a student at the University of California at Merced who receives financial aid, I am deeply concerned about this proposal.
Many low-income students are in college because of Cal Grants; eliminating this program will create a huge burden for students. I am the first person in my family to attend college, and this is something I am proud of. My most important issue is that people like me, who do not come from wealthy families, can have the opportunity to attend college and be able to better our living standards. We have dreams, we have goals, and we aspire to be great.
I understand that California is going through a tough time, but education should be a priority for all Californians; it is to our benefit that we educate the masses. In high school, I was told that attending a four-year university could be in my future if I received good grades despite my economic status. I'm wondering if we can still say that to the future college-bound students.
Maybe it's time for voters to 'scratch' Rep. Cardoza...Bill McEwen
If I lived in the 18th District, I'd be looking to replace my congressman, Dennis "Horse Track" Cardoza, in 2010.
I can think of only two reasons he has the job. First, his predecessor and former ally, Gary Condit, couldn't keep his pants zipped. And Cardoza didn't mind stabbing Condit in the back after Chandra Levy disappeared.
Now we know why Cardoza skipped commencement at UC Merced earlier this month. And we know that he'd rather hold a fundraiser for his political buddies than show a little respect for the school's first full graduating class.
Two weeks ago, when first lady Michelle Obama brought worldwide attention to Cardoza's district by giving the university's commencement address, Cardoza was schmoozing with fat-cat donors at the Preakness Stakes horse race in Baltimore.
Cardoza, in fact, was among five San Joaquin Valley congressmen who snubbed the first lady. But Cardoza's absence was the most glaring. One, he helped create UC Merced. Two, he belongs to the same political party as President Barack Obama. Three, when asked by The Bee's John Ellis why Cardoza wasn't attending the graduation ceremony, an aide to the congressman said that it was for "personal and professional reasons" and refused to reveal what Cardoza would be doing.
Believe me, there is nothing more personal and professional than a full day of racing with lobbyists, farmers, bankers and others who want you carrying their water.
In light of the Valley's economic meltdown and President Obama's deaf ear to our region's troubles, all of our congressional representatives should have used the commencement address to cultivate a relationship with the president through his wife.
But, given the realities of partisan politics, I'm not surprised that Republican Reps. George Radanovich, Devin Nunes and Kevin McCarthy didn't show up.
At least Nunes had the gumption to say he was steamed at the president and didn't want "to go there and make nice" with Michelle Obama. Others, including Democrat Jim Costa, offered weak excuses.
Cardoza refused to say what he was doing or where he was going instead.
When cornered by The Bee's Michael Doyle with the truth, Cardoza played the deflection game, pointing out that Sens. Dianne Feinstein and Barbara Boxer were no-shows, too.
In other words, he came off like a fifth-grader whose excuse for playing hookey is that "Dianne and Babs didn't go to school, either."
Cardoza's leadership political action committee, the Moderate Victory Fund, charged $5,000 a head to hang out with the congressman and root on the filly Rachel Alexandra in the second leg of racing's Triple Crown.
Proceeds will be spread like manure in the campaign chests of friendly politicians. The idea is that by helping his buddies, Cardoza amasses power. But despite handing out $104,500 in 2008 through the fund and being a member of Washington's ruling party, Cardoza has little clout.
It wasn't happenstance that Cardoza picked the Pimlico Race Course for his party.
Throughout his political career he made a habit of hanging around horse tracks and other gambling joints. For example: while in the state Assembly, Cardoza spent $10,800 in campaign funds on trips to the Kentucky Derby, the Del Mar race track, Lake Tahoe and Las Vegas in 2000.
That same year, while sitting on state committees with oversight of gambling and horse racing, he took more than than $30,000 in contributions and gifts from casinos and horse tracks.
Cardoza obviously loves horse racing.
Next year, 18th District voters can reward his passion by putting him to pasture.
Cardoza opts for fundraiser over grads, first lady...The Associated Press...6-1-09
MODESTO, Calif. -- The congressman who represents the district encompassing UC Merced missed the school's first graduation last month because he was fundraising at a horse race.
Rep. Dennis Cardoza, D-Merced, also missed welcoming first lady Michelle Obama, who gave the graduation address May 16.
Cardoza said he was at the Pimlico Race Course in Marylandat a $5,000-a-head fundraiser for his Moderate Victory Fund, a political action committee that funnels money to other candidates. Prior to the graduation he said there were "personal and professional" reasons for his not greeting the first lady or attending graduation.
Cardoza said he's unsure how much money the Pimlico fundraiser generated.
Department of Water Resources
DWR Releases Compliance Document for AB 1420 Grants and Schedules Public Workshops ...DWR News Release 6/01/09
The Department of Water Resources (DWR) has released the Compliance document detailing AB 1420 Eligibility Requirements for Urban Water Suppliers who may request water management project loan or grant funds.
Effective January 1, 2009, AB 1420 amended the Urban Water Management Planning Act. It requires that water management grants or loans made to Urban Water Suppliers and awarded or administered by DWR, the State Water Resources Control Board, or California Bay-Delta Authority or its successor agency be conditioned on implementation of the water Demand Management Measures (DMMs).
The DMMs correspond to the 14 Best Management Practices (BMPs) listed and described in the California Urban Water Conservation Council (CUWCC) Memorandum of Understanding (MOU). DWR has consulted with the CUWCC and appropriate funding agencies and will equate the DMMs with the BMPs described in the CUWCC MOU for loan and grant funding eligibility purposes.
Water management grants and loans include programs and projects for surface water or groundwater storage, recycling, desalination, water conservation, water supply reliability and water supply augmentation. This funding includes, but is not limited to, funds made available pursuant to Public Resources Code section 75026 (Integrated Regional Water Management Program).
The Compliance with AB 1420 Requirements & other Information is available online at: http://www.owue.water.ca.gov/finance/index.cfm.
DWR will conduct three public workshops to present information on the AB 1420 Compliance & eligibility process.
June 17, 2009
10 a.m. – 12:00 noon
Training Room 550
1001 I Street
Sacramento, CA 95814
Participants may join this workshop and ask questions by conference call. Call 1-877-468-2139, then enter the participant code, 953557, when prompted.
For directions to the Cal/EPA Building call (916) 323-2514
June 22, 2009
10:00 a.m. – 12:00 noon
Event Center, Building B
Inland Empire Water Agency
6075 Kimball Avenue, Chino, CA 91708
For directions call (909) 993-1600
For directions call (909) 993-1600
June 23, 2009
10:00 a.m. – 12:00 noon
Library Conference Room
San Diego County Water Authority
4677 Overland Avenue
San Diego, CA 92123
For directions call (858) 522-6568
Who should attend? Urban Water Suppliers (including agricultural water suppliers that provide water for urban uses) are subject to provisions of AB 1420.
All other potential applicants for loan and grant funds such as cities, counties, joint power authorities, public water districts, tribes, non-profit organizations (including watershed management groups), other political subdivisions of the State, regulated investor-owned utilities, incorporated mutual water companies, universities and colleges, and State and federal agencies are encouraged to attend.#
Delta Vision report criticizes water policy (11:38 p.m.)...The Record...6-1-09
SACRAMENTO — Members of a blue-ribbon task force charged with finding solutions to the Delta claim in a report issued today that the governor and legislators are not doing enough to fulfill their suggestions.
The Delta Vision Task Force finished its work last October, recommending — among other things — that officials build a peripheral canal while continuing to send some fresh water through the Delta.
The task force reformed earlier this year as a foundation, and its members are meeting today in Sacramento. While they say the governor supports a canal and additional dams and has pushed water conservation, he lacks an integrated water policy.
And while 16 bills pending in the state Legislature would advance some of the Delta Vision solutions, there appears “little chance of developing a coherent body of legislation,” the foundation says in its report.
“We have a long way to go,” the group’s chair, Phil Isenberg, said in a prepared statement.
Delta progress glacially slow, task force says...Alex Breitler
SACRAMENTO - A governor-appointed task force that spent 20 months studying the Delta says lawmakers are not moving fast enough to implement its suggestions, including construction of a peripheral canal.
The former Delta Vision Blue Ribbon Task Force - now an independent foundation - gave the governor and the Legislature a grade of "incomplete" in a report discussed Monday.
Little or no progress has been made on four of the task force's seven broad goals for the Delta, the foundation charged.
The governor has never directly responded to those goals and lacks an integrated water policy, while there seems little chance of developing "coherent" legislation to advance the goals, according to Monday's report.
"The problem is the choices are tough, painful and political," said Phil Isenberg, former Sacramento mayor and chairman of the task force. "If this were easy to solve, it would have been solved in the last 30 to 40 years."
But, he said, the urgency of the state's water woes call for a more aggressive approach.
The original task force recommended, among other things, that a canal be built to send water around the Delta, although freshwater flows through the estuary would also continue.
The task force also called for consideration of the Delta as a unique place, for a new governance structure and for treatment of water supply and the environment as coequal goals.
Joe Grindstaff, deputy secretary for water policy in the Schwarzenegger administration, said he's hopeful legislation will move forward this year. He acknowledged, though, that a large water bond to pay for new infrastructure might be a tough sell for 2010.
"We have been engaged in this from the beginning of this administration," he said. "The governor has been consistent about wanting comprehensive improvements, and what (the task force has) done has helped us on that path."
He said he believes the goal remains to break ground on a peripheral canal in 2011, a timeline some have called overly optimistic.
Monday's report also says that while many hours have been spent considering water policy, the 16 pending bills related to the task force's recommendations are inadequate.
Wanger rules again...Alex Breitler's Blog
U.S. District Court Judge Oliver Wanger has ordered the U.S. Fish and Wildlife Service to consider the effect on humans before "unnecessarily" restricting how much water can be exported from the Delta to cities and farms.
Fish and Wildlife must be able to explain why less restrictive actions would NOT protect smelt.
And for each decision affecting the flow in Old and Middle rivers, FIsh and Wildlife must provide a weekly written statement explaining its justifications.
Is Wanger, a conservative judge who threw out the original smelt rules, moving back toward the side of farmers and ranchers? Read his order here.
The California Sportfishing Protection Alliance claims the judge is "reverting to his historical form and demonstrating why water agencies have made every effort to ensure that cases involving exports and the pumps are before his court."
Gov. Schwarzenegger has weighed in on the decision, saying that it will "likely provide additional balance to the operation of the state and federal water projects in the Delta."
Look for more significant news on Thursday, when the feds are expected to release similar new export criteria to protect salmon and steelhead, which, of course, have much more aesthetic value than smelt.
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA
Case 1:09-cv-00407 - OWW-DLB Document 94...Filed 5-29-09
San Francisco Chronicle
State gets an 'incomplete' on delta progress...Kelly Zito
Sacramento -- A panel tapped two years ago by Gov. Arnold Schwarzenegger to revive the ailing Sacramento-San Joaquin River Delta issued the administration an "incomplete" grade Monday on the progress made in completing the group's list of recommendations.
The seven-member Delta Vision Foundation argued that, despite increasing pressures on the state's water system, the state has failed to start new water facilities, restore battered ecosystems or improve the 1,100 miles of earthen levees that protect scores of islands within the confluence of California's two largest rivers.
At Monday's meeting in Sacramento, the foundation said the state must move aggressively to solve the system's myriad problems.
"The economy and environment are on the brink of collapse," said Sunne Wright McPeak, a member of the panel and president of the California Emerging Technology Fund. "This crisis is so great it requires immediate action."
The governor has taken bold steps, namely by proposing a 20 percent reduction in statewide water use by 2020, and introducing a $9 billion-plus water bond, said Joe Grindstaff, deputy secretary for water policy.
"People don't recognize the significance of the progress we've made," he said.
Monday's discussion was unusual in that the Delta Vision Foundation has almost no real authority. In October, after releasing a two-years-in-the-making road map on the delta to a cabinet-level committee, the Delta Vision Blue Ribbon Task Force's work ended. In a twist, the seven members decided to continue pushing their recommendations as the Delta Vision Foundation, an independent, self-appointed "watchdog" funded through 2009 by a grant from the Packard Foundation. Even though the governor's cabinet committee agreed with many of the task force's proposals, six months have passed without substantive changes, the foundation said.
Among the task force's proposals:
-- Make water supply and delta ecosystem restoration equal in state laws;
-- Statewide target to recycle 1.5 million acre-feet of water annually by 2020;
-- Develop and construct new surface and groundwater storage and conveyance facilities by 2020; and
-- Enact legislation that would create a new oversight group for the delta.
The ad hoc group insists this latest round of goals cannot fall by the wayside, as have many others over the past four decades. Drought, legal restraints on delta pumping, crashing fish populations and worsening water quality lend more urgency to bolstering a system that delivers water to about two-thirds of California, they argue.
Some regional water officials, including Matt Moses of the Contra Costa Water District, praised the group's support of projects such as his agency's plan to expand the Los Vaqueros Reservoir.
But other attendees worried that changes in the delta are moving too quickly.
In addition to a controversial canal that would route water from the Sacramento River around the delta to giant pumps in the south delta, some studies suggest letting the estuary's waters reclaim some delta islands.
Barbara Daly of Clarksburg (Yolo County) worries her town may be one.
"The delta is a real region with churches, neighborhoods, long-term residents," she told the panel. "This process should be slowed down, not sped up."
Foundation: State moving too slow on water crisis...COURTENAY EDELHART
Members of a foundation concerned about competing water interests in the Sacramento-San Joaquin Delta issued a report Monday that accuses the state of moving too slowly to address a deepening water crisis.
In February 2007, Gov. Arnold Schwarzenegger created the Delta Vision Blue Ribbon Task Force to come up with recommendations that would lead to a sustainable delta. There isn't enough water to meet environmental, industrial, agricultural and residential water needs.
The task force disbanded after issuing a Delta Vision Strategic Plan in October 2008, but in March 2009 its members regrouped to form the independent Delta Vision Foundation to monitor progress.
Monday, the foundation slammed the state, calling for "a more aggressive, cohesive and integrated approach by the governor and the Legislature."
In the six months since the plan's release, the governor has not responded to the recommendations and strategies it contained even though his cabinet committee reviewed and largely supported them, the foundation charged in a so-called mid-term report card.
"The problems will not go away if you ignore them," said Phil Isenberg, former chairman of the Delta Vision Task Force, after a meeting in Sacramento Monday at which the foundation heard from water system stakeholders and the public.
The governor isn't ignoring them, said Joe Grindstaff, the state's deputy director for water policy and director of the CALFED Bay-Delta Program.
"There's a lot happening, but it's not always the kinds of things that everybody on the outside would see," Grindstaff said. "But (the delta) is something that the governor has been committed to for a long time."
The strategic plan called for investment in infrastructure and better planning to balance the needs of competing interests such as farmers already parched by a drought and environmentalists anxious to protect the delta smelt and other threatened species in the region.
There are at least 16 major bills working their way through the state Legislature that address components of the water system.
Isenberg said he's worried there will be a "30-hour frenzy at the end of the session to hammer out consensus and work out inconsistencies."
Isenberg added that he believes tangible steps can be taken now, despite the state budget crisis, because some of the infrastructure investments could be paid for with revenue bonds paid back by fees on water users, as opposed to general obligation bonds covered by the state's general fund.
A canal that would bypass environmentally fragile areas to deliver water from northern California to the Central Valley is one example. Such a canal has been studied for decades, but never seems to come to fruition.
Grindstaff, too, says the budget need not be a hindrance, at least for some recommendations, and he said work on a portion of the plan will happen this session.
"It's our objective to get agreement on a series of bills this year," he said. "These things needs to be a coordinated effort. Any one of them alone is not enough."
Goals in the Delta
Vision strategic plan
1. Make the co-equal goals of water supply reliability and ecosystem restoration the legal foundation of Delta and water policy making.
2. Recognize and enhance the unique cultural, recreational and agricultural values of the California Delta as an evolving place, an action critical to achieving the co-equal goals.
3. Restore the Delta ecosystem as the heart of a healthy estuary.
4. Promote statewide water conservation, efficiency and sustainable use.
5. Build facilities to improve the existing water conveyance system and expand statewide storage; operate both to achieve the co-equal goals.
6. Reduce risks to people, property and state interests in the Delta by effective emergency preparedness, appropriate land uses and strategic levee investments.
7. Establish a new governance structure with the authority, responsibility, accountability, science support and secure funding to achieve these goals.
View the Delta Vision Foundation report card at http://www.deltavisionfoundation.org/reports.php
Los Angeles Times
Flat-tailed horned lizard is between a rock and extinction
The rare reptile may have one more chance, thanks to the U.S. 9th Circuit Court of Appeals...Louis Sahagun
Reporting from Palm Springs — As the sun rose over a wind-swept stretch of desert just east of Palm Springs, Cameron Barrows tramped over a series of dunes, identifying animal tracks in the sand -- kangaroo rat, shovel-nosed snake, cottontail, pocket mouse, sidewinder rattlesnake.
It took nearly two hours to find what he was looking for in the desolate patch framed by Interstate 10, two golf courses, retirement homes, country clubs and stores: fresh tracks of a flat-tailed horned lizard, one of the rarest and most legally contested reptiles in the United States.
"This is the last corner in the Coachella Valley that still has a population of these lizards," said Barrows, a research ecologist at UC Riverside and an expert on the secretive creature with a face that resembles the parched and thorny landscape it prefers. "Nearly all of its habitat in this region has been lost since 1970."
In the latest chapter in a long-running battle to keep the lizard safe from urban encroachment, the U.S. 9th Circuit Court of Appeals recently ordered the U.S. Fish and Wildlife Service to reconsider its earlier decisions not to list it as an endangered species.
Environmentalists were elated by the ruling, which rejected a Bush administration policy they said favored development and corporate interests at the expense of the flat-tailed horned lizard and scores of other fragile plants and animals.
"This is the third time in 15 years since the lizard was first proposed for listing that a court has told the Fish and Wildlife Service to go back and review its refusal to protect it," Kara Gillon, senior staff attorney with Defenders of Wildlife, said in a statement. "We're hoping the third time is the charm. These lizards are running out of time."
The flat-tailed horned lizard is only the latest creature in recent weeks to be reconsidered for special federal protection. In response to lawsuits and petitions, the U.S. Fish and Wildlife Service has also agreed to reconsider the Tehachapi slender salamander and critical habitat for the Sonoma County population of California tiger salamander.
Over the years, federal wildlife authorities insisted that the flat-tailed horned lizard was simply hard to find and, as a result, difficult to classify as threatened by extinction.
But biologists contend the lizard continues to decline throughout its historic range in Arizona, California and Baja California. In the Coachella Valley, it has been pushed into the tiny refuge by the growing desert metropolis that stretches from Palm Springs to the Salton Sea.
A century ago, the lizard was widespread and dynamic, moving east and west with changes in climate and the availability of sand in what was then a wide-open, treeless landscape. The first waves of significant habitat loss occurred in the 1930s, '40s and '50s as a result of a boom in agriculture.
Later, its historic haunts were fragmented and destroyed by roads, off-road vehicles, light industry, suburban tracts, condominiums and commercial centers. In the Palm Springs area -- the western edges of its range -- some populations were stranded by development and disappeared.
Today, the sole remnant of the population clings to existence in a pocket of dunes, creosote and salt bush within the Coachella Valley National Wildlife Refuge, where a new, unanticipated danger threatens its future. Power poles and exotic palm trees favored by landscapers have become perches used by small falcons to spot prey and launch hunting sorties.
As a result, "flat-tailed horned lizards are no longer found on the edges of their last habitat," Barrows said. "I've suggested that the surrounding palm trees be trimmed in the spring to keep small predatory birds from nesting in them."
Striding across a trio of dunes while scanning the ground for signs of the lizard, he said, "This animal is hard to find even in the best of times. So we count their tracks, which requires a lot of patience and training."
A full day of searching on a recent Saturday yielded six tracks.
The lizard -- 3 1/2 inches long and a voracious consumer of harvester ants -- has been the focus of court battles since it was first proposed for listing in 1993.
Now, in response to legal challenges brought by a coalition of environmental groups -- the Tucson Herpetological Society, Defenders of Wildlife, the Center for Biological Diversity, the Horned Lizard Conservation Society and the Sierra Club -- the 9th Circuit Court has ordered the agency to think again about the lizard's survival.
In the meantime, it shares the sun-scorched refuge with another unique and controversial representative of Coachella Valley desert life also threatened with extinction: the fringe-toed lizard, a small reptile with a patchwork of brick-like markings and feet shaped so it can "swim" through loose sand.
Judging from the number of tracks the lizards leave etched in the sand, there many more fringe-toed lizards.
"Will the flat-tailed horned lizard survive? We don't know," said Allan Muth, a plaintiff in the lawsuit and director of the Boyd Deep Canyon Desert Research Center, south of Palm Desert.
"Small, isolated populations tend to wink out. That's why there is so much importance attached to this case."
Muzzling the Office of Environmental Health Hazard Assessment, a California pollution watchdog
The state's financial crisis is cited for plans to shut the small state office that gets big results -- perhaps too big...Gina M. Solomon. Gina M. Solomon is a physician and senior scientist at the Natural Resources Defense Council. She is also an associate clinical professor of medicine at UC San Francisco and director of its occupational and environmental medicine residency program.
Under the cloak of the budget crisis, the Schwarzenegger administration is proposing to eliminate an office that has effectively taken on some of California's most insidious polluters, the Office of Environmental Health Hazard Assessment, or OEHHA. This small, independent office of health scientists contained in the state's Environmental Protection Agency is a strange target if the goal is truly to save money. The total taxpayer bill for the scientists is only a few million dollars, which could easily be funded by tapping a small portion of unspent reserves from existing environmental fees.
So why, then, the proposal to eliminate the office? Here's my guess. The scientists at the OEHHA are charged with protecting, as their website puts it, "public health and the environment by scientific evaluation of risks posed by hazardous substances." In the past, that mission has pitted the OEHHA against a variety of powerful interests, including tobacco and chemical companies. In other words, the office has some powerful enemies.
Take Big Tobacco. The OEHHA was the first agency in the world to declare secondhand smoke to be a breast carcinogen, paving the way for stricter controls on secondhand smoke.
The diesel industry has its own reasons for being unhappy with the agency, which declared diesel exhaust to be a toxic air contaminant, forcing emission control measures that have cleared California's air.
Dow Chemical probably isn't too happy with the OEHHA either. The office is likely to propose listing bisphenol A, or BPA, as a chemical "known to cause birth defects or reproductive harm." Such a listing would mean that products containing BPA, which has been used widely in such things as baby bottles and food cans, would have to be labeled.
And then there is the issue of hexavalent chromium, or hex chrome, a potent human carcinogen. Last fall, the OEHHA finalized a proposal to set a lower safe drinking water level for hex chrome, but the new standard has been held up for months in the governor's office.
Hex chrome gained wide public attention in the 2000 movie "Erin Brockovich." The true story on which the film was based occurred in Hinkley, Calif., a town in the Mojave Desert with the highest U.S. levels of hex chrome in drinking water. The chemical fouling Hinkley's water came from a Pacific Gas & Electric facility that had contaminated the local groundwater. Brockovich's famous investigation of the high rates of cancer and other diseases in the town -- and the multimillion-dollar legal settlement it spawned -- have not resolved everything. The contaminated plume of groundwater is still there, and it's spreading. It would be expensive for PG&E to clean up this site to a more stringent standard. And because hex chrome is a national issue, polluters across the country would hate to see California adopt stringent regulations that could point the way for other states to take action.
Not all of the OEHHA's foes are external. Even other boards and departments at Cal/EPA might have a motive to see the agency's wings clipped. OEHHA scientists refused to sign off on the Department of Pesticide Regulation assessment of the notoriously toxic fumigant methyl bromide. When the pesticide regulators attempted to circumvent the OEHHA and set standards that wouldn't protect the health of residents living near agricultural fields, the state Court of Appeal ruled in July 2008 that the Department of Pesticide Regulation must consult with the OEHHA before making decisions.
So you get the idea. This is a feisty little office of scientists who conscientiously strive to do their job of scientifically assessing health risks in our air, water, food, soil and consumer products. Sometimes the little guy wins in these David-versus-Goliath fights. But more often he loses, and if the OEHHA gets eliminated, we all lose.
Fortunately, the fight's not over. The Legislature can fix the problem by preserving the OEHHA as an independent office inside Cal/EPA and strengthen it by consolidating other risk assessment functions there. The OEHHA should be funded by its fair share of fees. Polluters must pay, and science must prevail.
New York Times
Editorial: A Clearer Clean Water Act
The Obama administration has rightly declared its support for Congressional efforts to restore the broad reach of the Clean Water Act. The law, passed in 1972, was intended to protect all of the waters of the United States, large and small. That mission has since been muddied by two Supreme Court decisions that narrowed the law’s scope, weakened its safeguards against pollution and confused federal regulators.
The administration has written to Senate and House committees urging them to act on bills that would restore federal jurisdiction over all wetlands and streams. All of the environmental big guns signed: Nancy Sutley, the chairwoman of the White House Council on Environmental Quality; Lisa Jackson, the administrator of the Environmental Protection Agency; Ken Salazar, the interior secretary; Tom Vilsack, the agriculture secretary; and Terrence Salt, the acting chief of Army Corps of Engineers.
Their intervention is timely. Powerful commercial interests, including developers and big farming groups, have been pressuring Congress to keep things the way they are.
For nearly three decades, the Clean Water Act was broadly interpreted by the courts and federal regulators as shielding all the waters of the United States — seasonal streams and remote wetlands as well as lakes and large navigable rivers. The basic idea was that even the smallest waters have some connection to larger watersheds, and that they, too, need to be protected from pollution and development.
Unfortunately, the actual language of the act was less clear than its intent. For instance, the word “navigable” pops up from time to time, suggesting that the law only applied to waters capable of handling boat traffic. Pouncing on these ambiguities, the Supreme Court issued rulings in 2001 and 2006 that said, in effect, that only navigable, permanent water bodies merited federal protection. About 20 million acres of wetlands and more than half the country’s small streams were suddenly stripped of protections, and federal investigations into suspected violations were dropped or delayed.
The bills in Congress would, among other fixes, replace the troublesome word “navigable” wherever it appears in the law with the far more inclusive “waters of the United States.” Once Congress provides legal clarity, the administration’s letter says, vigorous enforcement will follow. The letter also warns, rightly, that “all of the environmental and economic benefits that these aquatic ecosystems provide are at risk if some elements are protected and others are not.”
In other words, the biggest beneficiary of a tighter, clearer law will be the environment — and the economy — as a whole.
Editorial: Foreclosures: No End in Sight
A continuing steep drop in home prices combined with rising unemployment is powering a new wave of foreclosures. Unfortunately, there’s little evidence, so far, that the Obama administration’s anti-foreclosure plan will be able to stop it.
The plan offers up to $75 billion in incentives to lenders to reduce loan payments for troubled borrowers. Since it went into effect in March, some 100,000 homeowners have been offered a modification, according to the Treasury Department, though a tally is not yet available on how many offers have been accepted.
That’s a slow start given the administration’s goal of preventing up to four million foreclosures. It is even more worrisome when one considers the size of the problem and the speed at which it is spreading. The Mortgage Bankers Association reported last week that in the first three months of the year, about 5.4 million mortgages were delinquent or in some stage of foreclosure.
Not all of those families will lose their homes. Some will find the money to catch up on their payments. Others will qualify for loan modifications that allow them to hang on. But as borrowers become more hard pressed, lenders — whose participation in the Obama plan is largely voluntary — may not be able or willing to keep up with the spiraling demand for relief.
One of the biggest problems is that the plan focuses almost entirely on lowering monthly payments. But overly onerous payments are only part of the problem. For 15.4 million “underwater” borrowers — those who owe more on their mortgages than their homes are worth — a lack of home equity puts them at risk of default, even if their monthly payments have been reduced. They have no cushion to fall back on in the event of a setback, like job loss or illness.
This page has long argued that a robust anti-foreclosure plan should directly address the plight of underwater homeowners by reducing the loans’ principal balance. That would restore some equity to borrowers — and give them a further incentive to hold on to their homes — in addition to lowering monthly payments. The mortgage industry has resisted this approach, and the Obama plan does not emphasize it.
With joblessness rising, lower monthly payments could quickly become unaffordable for many Americans. In a recent report, researchers at the Federal Reserve Bank of Boston argued that unemployment is driving foreclosures and to make a difference, anti-foreclosure policy should focus on helping unemployed homeowners. The report suggests a temporary program of loans or grants to help them pay their mortgages while they look for another job.
The government will also have to make far more aggressive efforts to create jobs. The federal stimulus plan will preserve and generate a few million jobs, but that will barely make a dent — in the overall economic crisis or the foreclosure disaster. Since the recession began in December 2007, nearly six million jobs have been lost, and millions more are bound to go missing before this downturn is over.
President Obama needs to put more effort and political capital into promoting the middle-class agenda that he outlined during the campaign, including a push for new jobs in new industries, expanded union membership and a fairer distribution of profits among shareholders, executives and employees.
There will be no recovery until there is a halt in the relentless rise in foreclosures. Foreclosures threaten millions of families with financial ruin. By driving prices down, they sap the wealth of all homeowners. They exacerbate bank losses, putting pressure on the still fragile financial system. Lower monthly payments are a balm, but they are no substitute for home equity. And until more Americans can find a good job and a steady paycheck, the number of foreclosures will continue to rise.