7-11-09

 
7-11-09
Merced Sun-Star
University chief proposes furloughs to cut costs...TERENCE CHEA, Associated Press Writer. Italic...Merced Sun-Star
http://www.mercedsunstar.com/109/v-print/story/944543.html
OAKLAND, Calif. Tens of thousands of University of California employees would be forced to take furloughs and lose pay under a plan proposed Friday to offset deep funding cuts to the 10-campus system.
UC President Mark Yudof proposed the furloughs for roughly 80 percent of the system's 180,000 employees as part of a broader plan to deal with an anticipated 20 percent reduction in state funding.
"There is no question that the cuts to come will hurt," Yudof said. "But we have worked hard to bring fairness to the process."
The UC Board of Regents is scheduled to discuss and vote on Yudof's plan when it meets in San Francisco next week. If approved, the furlough plan would go into effect Sept. 1.
Yudof's proposal could affect roughly 600 UC Merced staff workers and about 100 tenure-track professors.
Gov. Arnold Schwarzenegger and the Legislature are proposing unprecedented cuts to state colleges and universities to help close a $26 billion budget deficit.
Many state offices were closed Friday after the governor imposed furloughs for many state employees, effectively cutting their pay by 14 percent. Some offices will close three days a month.
The governing board of the 23-campus California State University system is also considering a plan to furlough nearly all of its employees for two days a month to offset a 20 percent cut in state funding.
Under Yudof's plan, UC employees would see pay reductions ranging from 4 percent to 10 percent, with higher paid workers taking bigger pay cuts and receiving more days off. Most furloughed employees would have flexibility in deciding when to take their days off.
The furlough plan would not apply to employees who receive funding from the federal government or other outside source or employees at Lawrence Berkeley National Laboratory.
UC officials would have to reach agreements on furloughs with unions that represent about 35 percent of university employees.
The University Professional and Technical Employees union, which represents more than 10,000 workers, issued a statement denouncing the furlough plan, saying UC should instead tap its reserves or find new ways to raise funds.
"For me, it's going to be devastating," said Elizabeth Wilks, an accountant at UC Santa Barbara who protested with other union members outside UC headquarters in downtown Oakland.
If approved, the furloughs would offset about a quarter of an anticipated $813 million reduction in state funding. The remainder of the funding shortfall would be made up by refinancing debt, a previously approved 10 percent student fee increase and about $300 million in cuts at individual campuses.
UC campuses are already taking action to cut costs. More than 700 employees have been laid off, and most campuses are deferring at least half of planned faculty hires, UC officials said.
In addition, UC Irvine has halted admissions to its education doctoral program, the UC Davis Medical Center has eliminated its liver transplant program, and UC San Francisco is closing its poison control center.
"There will be real pain on every campus," Yudof said. "There is no way that we are going to be able to look every student in the eye and say the University of California will be the same as it was yesterday."
Yudof unveiled the furlough plan after several weeks of consultations with UC employee groups. He said his office received thousands of letters and e-mails after he released his initial proposals for possible furloughs and salary reductions last month.
Furloughs were preferred over straight salary cuts because they are temporary, preserve pension benefits and give employees extra time off, Yudof said.
Mary Croughan, a UC San Francisco professor who heads the UC Academic Senate, said the furloughs would make it more difficult for the university to retain and recruit faculty.
"We're going to have to really work hard to come up with creative means to retain our exceptional faculty that we have now and to look forward on how to recruit people so we don't fall further behind," Croughan said.
Russell Gould, new chairman of the Board of Regents, said he was launching a new commission to explore new revenue sources and UC's future.
"We can't keep limping along like this from budget cycle to budget cycle," Gould said.
Our View:  Profs' letter means little to UC execs
UC Merced won't be boarded up to save paychecks at other campuses, Kang assures.
http://www.mercedsunstar.com/181/story/945883.html
Now that we've had a couple days to comment and blog on the front page story Thursday, "Profs target UC Merced," let's put this into perspective.
In a letter that 23 UC San Diego professors wrote to the UC Office of the President and the Board of Regents, the third of their suggestions to save money was shuttering either UC Merced, UC Santa Cruz or UC Riverside.
From the perspective of the professors, closing our campus and the two others is preferable to professors systemwide having to take an 8 percent pay cut. Can you imagine the mortgages the professors must have living in La Jolla, where their campus is?
But the professors' brainstorm was just the third of the three they offered up in a proposal authored by professor Andrew Scull, chairman of the sociology department. The other 22 signators only represent a fraction of the 111 departments UC San Diego has. So the other 89 distinguished professors didn't feel the need to join in.
So, this proposal is one of the 3,000 suggestions UC President Mark Yudof received. In the scheme of things, this suggestion represents 0.033 percent of all the suggestions.
And since it was only the third point that concerned shutting down another campus, that really is 0.011111 percent. Really not much to get excited about.
Friday, Yudof proposed furloughs and pay cuts for tens of thousands of UC employees, not just professors. The regents are to vote on Yudof's plan next week. The cuts would go into effect Sept. 1.
Through these tough times, as Sun-Star education writer Danielle Gaines wrote in her story Thursday, Yudof is "100 percent behind Merced, Riverside and Santa Cruz."
That makes it 100 percent compared to 0.011111 percent.
In a letter to the "campus community" Thursday, UC Chancellor Steve Kang wrote, "The letter was submitted independently and without the support of UC San Diego's Academic Senate or administration."
So, basically it carries no weight at all.
Kang goes on to predict a bright future for UC Merced. We have seen much progress at UC Merced since it opened in 2005. Bright, young high school graduates are discovering there is something nice about being part of something new.
The Valley has waited many years for its own UC. UC Merced isn't going anywhere but up.
Linda R. Torres: Valley more than equal. Torres is a lecturer at UC Merced and will receive her Ph.D. from UC San Diego in the fall.
http://www.mercedsunstar.com/177/v-print/story/945878.html
I am a lecturer teaching at UC Merced who will complete the doctorate of philosophy in literature this fall.
My graduate work was completed at UC San Diego where I studied for eight years, where I am still affiliated, where I earned my master's and candidate in philosophy degrees, and where I taught summer session last year.
I remain involved with the literature department at UCSD, which probably accounts for my visceral response to professor Andrew Scull's letter that was the subject of the story on the front page of the Sun-Star on Thursday.
I chose to accept the offer to teach at UC Merced as the Central Valley is where I grew up and was the best of possible options for me. As first lady Michelle Obama pointed out in her landmark graduation speech, the best use of a UC education is to stay local and utilize the myriad benefits to the community afforded by a UC education.
The claims and contentions put forth by professor Scull, et al, must not go unanswered, notwithstanding the fact that his proposals will most certainly not be enacted. The hubris in Scull's tone, to say nothing of his conclusions, are outrageous.
Scull laments that recent cuts "deprive the excellent along with the less so."
Scull uses the term "excellence" throughout. It is well- known that much of UCSD's "excellence" by Scull's definition is derived from the multimillion-dollar contracts it has historically won from government and corporate entities.
He evidences his argument by likening the current university crisis to the solutions arrived at by General Motors and Chrysler.
UC Merced is nothing if not an exciting, dynamic, albeit embryonic, example of the consequences of organizational action. Scull has done a great disservice to the students of UC Merced by designating their campus as "less equal." Apparently, he has not done his homework.
For instance, in the past year UC Merced students of the National Society of Black Engineers took first place at the Conference of Black Engineers held in Redmond, Wash. -- besting teams from Stanford, USC and Cal Poly.
Also, a team of UC Merced engineering students recently won Austria's International Robotics Rescue Simulation competition, which develops technology for disaster rescue and included teams from Germany, Spain, the Netherlands, Iran, China and Austria.
How dare Scull and his signatories deem this campus "less than equal?" Having taught at both campuses, I beg to differ.
Not one of my students has told me they are attending the university "because my parents want me to" as I heard repeatedly at UCSD, but many have voiced their desire to contribute in the fields of science, engineering, politics, and yes, the humanities.
Some specifically chose UC Merced with the foresight to see that they would receive a more individual educational experience and have the opportunity to emerge as leaders in such a new school.
They include brilliant students who might otherwise have not had the opportunity to attend a UC, not because they didn't "measure up" but because many of their parents could not afford to finance living expenses in such locales as La Jolla, and who work incredibly hard in their studies and outside jobs to foot the bill.
Many UC Merced students hail from the Central Valley, are first generation scholars and they will and have, despite Scull's cursory dismissal of their "equality," excel.
While UC Merced contracts may not approach the income generation afforded a school that is 45 years old and strategically placed in a part of the state that thrives on the military and industry, UC Merced graduates will contribute greatly to society, not in the least to the underserved Central Valley, a society that professor Scull so easily dismisses using corporate standards.
Letter: Yellow journalism...CATHERINE GILBERT, Merced
http://www.mercedsunstar.com/180/v-print/story/945874.html
Editor: Shame on you, Sun-Star, you have once again showing your yellow journalistic traits.
Those UC San Diego letter writers are selfish and arrogant. You just followed right along by publishing an article on the front page Thursday, "Profs target UC Merced," that was clearly not supportive of your local university or to its hard-working employees.
This is just another mark of you not supporting the community you serve. And you wonder why you're not selling papers? Could it be we are tired of your trash talk?
Letter: Here to stay...JACOB WILLIAMS, Fresno
http://www.mercedsunstar.com/180/v-print/story/945867.html
Editor: I was not surprised when I read the article, "UC San Diego profs come up with budget fixer: Close UC Merced."
Left and right, people are looking all over for a magical solution to the economic woes that threaten the lives of Californians.
What seems clear is this, UC San Diego professors are able to judge which universities are able to contribute something to research; and apparently, the campuses of UC Riverside, UC Santa Cruz, and UC Merced, the newest campus in the UC system, a campus that has not even been given a chance to wholly dedicate a good number of years on research, should have parts, or in UC Merced's case, the doors closed, displacing a large number of students.
The authors fail to mention where the students of these shutdown sections UCSC, UCR and the closed UC Merced will go, thus providing another problem for another group of individuals. It is apparent, however, that UC San Diego is not suffering and their paychecks remain the same.
Professor Andrew Scull, UC Merced has to start somewhere. Recession or not, it's here to stay. UCSC and UCR are here to stay. Rather than divide our schools and send a message to our students as to which schools you prefer over others, find a more productive way to insist on better budgeting for California.
Fresno Bee
Cantaloupe crop likely to match last year's supply...Robert Rodriguez
http://www.fresnobee.com/business/v-print/story/1528503.html
Despite water shortages in Fresno County, one of the state's top melon growing regions, cantaloupe production is expected to match last year's supply.
The California Cantaloupe Advisory Board estimates that the 2009 crop should reach about 20 million cartons.
"If the weather holds, we should be in good shape," said Jerry Munson, manager of the advisory board.
Munson and others in the melon industry said cantaloupe acreage has shifted to other areas of Fresno County and the San Joaquin Valley with a more stable water supply.
Fresno County is the No. 1 grower of cantaloupes in the state. Last year, farmers in the county grew cantaloupes on 18,700 acres for a crop valued at $95 million.
But farmers within the Westlands Water District -- a prime melon growing region -- are receiving just 10% of their federal water allocation this year, prompting farmers to plant elsewhere.
Atomic Torosian, a produce broker with Fresno-based Crown Jewels Marketing, said cantaloupes are being grown in several areas outside of Westlands, including Huron, Dos Palos and Los Banos.
"Without canal water or a good well, it was really tough for some cantaloupe growers this year," Torosian said. "There are some areas that are kind of like a dead zone."
The cantaloupe harvest in the region began last week and is expected to continue through the middle of October. Torosian said quality is good and shoppers can expect a steady supply in the coming months.
At Westside Produce in Firebaugh, Steve Patricio, company president, said that ironically some of the areas that are growing cantaloupes this summer used to produce them decades ago before production shifted to west Fresno County.
Fortunately for Westside Produce's work force, the cantaloupe harvest is expected to keep them employed for several months, picking and packing cantaloupes in the field. The produce company employs about 700.
The westside water shortage has forced farmers to fallow thousands of acres and let go of hundreds of workers.
"We have most of our people back, and that is a good thing, because there are a lot of people looking for work," Patricio said. "At this point, we have two people waiting for every job we have."
DAVID HOPELAIN: No water, no future for Valley...David Hopelain
http://www.fresnobee.com/opinion/valley_voices/v-print/story/1528353.html
The fate of the San Joaquin Valley is "on the line." Water, the principle raw material of the region's $25 billion agricultural economy, is being removed.
An often-heard rationale is "the San Joaquin Valley is really a desert and agriculture doesn't belong here." This statement is not true. The Valley's water comes from one of the largest snow packs in America -- the Sierra Nevada mountain range.
Agriculture is a natural part of the San Joaquin Valley economy producing one-third of the nation's food supply, and contributing to California's $12 billion food export.
It astonishes that elected officials are not protecting constituents operating this remarkable economic engine. Astonishment is compounded by the fact that the United States is suffering the worst economic downturn since the 1930s. If the raw materials necessary for any of the nation's other critical industries were similarly threatened, the response of politicians would be immediate and loud.
However, this has not been the case. For 14 years, conservative Republican George Radanovich, has represented the Valley's 19th Congressional District. He "talks the talk" but, he takes positions depriving his constituents of the water they need to produce their products.
His response to constituents is: "Your water is not protected and you should become more self reliant." His constituents must fend for themselves when their economic base is taken away.
Liberal Democrats take equally untenable positions. California Democratic Party Chairman John Burton has stated, "(Water) is a very complex issue ... and it just doesn't seem right for the party to get involved." As an alternative, he proposes the CDP organize food banks and other forms of government assistance.
Sen. Diane Feinstein is unwilling to release water from the San Joaquin-Sacramento Delta preferring to protect the smelt. However, she is willing to put those suffering financial hardship, as a consequence, on welfare.
The response of liberal Democrats, is "we won't restore your water but we'll put you on welfare." If water were maintained for the Central Valley's $25 billion economy, that promise would not be necessary.
It is reasonable to ask, "What is going on here -- a significant economy is being destroyed and no one is doing anything about it?" This is about gaining lost influence in national politics. Under a Republican administration, California's politicians lost national political influence. In order to regain national power and influence for California and themselves, the extreme left has now moved to fill the political vacuum.
Destroying Central California's agricultural economy is the tool for regaining that influence. First, it enables the extreme left to deliver badly needed water to densely populated and politically liberal areas of southern and northern California. Second, undermining the agricultural economy, displaces those dependent on that economy forcing them to seek employment elsewhere.
For those remaining, they offer welfare. Elimination of more reasonable centrist and conservative elements of the Valley -- Democrat and Republican -- removes the extreme left's last obstacle to complete domination of California politics.
Citizens of the Valley must organize around the reality that their way of life will be taken away, unless collectively, they stop "going along to get along." Putting aside partisan and ideological differences, a collective must develop, propose and promote an alternative water management plan reflecting the Valley's common economic interests.
The goal must be to preserve agriculture as the Valley's economic foundation. Success will restore the necessary balance between economic and political considerations in the national, state and local decision-making process. Failure will create a 21st century Owens Valley.
Exercising its economic power is the Central Valley's last chance to regain control of its own destiny.
Budget's impact on levees
A failure in Delta system would put entire state's water system at risk...Editorial
http://www.fresnobee.com/opinion/v-print/story/1528354.html
Massive program cuts, state worker salary reductions and IOUs aren't the only consequences of California's budget stalemate. The deadlock is also preventing the state from selling bonds needed to fund initiatives that have already been approved by voters.
A case in point is Proposition 1E, passed overwhelmingly in November 2006, which provided $4 billion for Delta levee repairs and Central Valley flood control.
In normal times, the levee repair projects that 1E was written to finance wouldn't be scrambling for funding. But these are unusual times and they are impacting Delta levees, as well as projects in the rest of the state.
New projects have stalled for lack of financing. Old projects, financed by private levee districts on the understanding that the state would reimburse half the costs, have had to wait five months longer than usual for reimbursements.
This may come as a surprise to those who recall the hoopla surrounding the state's sale of about $13 billion in infrastructure bonds last March and April.
The bond sale reportedly allowed the state to restart about 7,000 infrastructure projects that had been frozen by the 2008 cash crunch -- including making good on what was owed for completed Delta levee repairs. But new levee repair projects were all but shut out of that money.
That's very unfortunate. The levees don't just keep Delta farmland safe from flooding. They allow fresh water to flow south to cities and farms, and keep that water untainted by tidal saltwater.
A Delta levee failure wouldn't just create floods. It could put the state's water system at risk. With experts questioning the levees' capacity to survive a major earthquake or flood, that catastrophe is far from unimaginable.
Hopefully, neither disaster will arrive before a budget deal is reached. Because funding the levee repairs that Proposition 1E called for will require a new bond sale -- that sale won't happen unless the Legislature produces a budget balanced with more than smoke and mirrors.
With California's credit rating flirting with junk status, there's no guarantee that even that budget deal will be enough to attract the bond buyers needed to make the levees whole. But one thing is certain: A bad budget will keep the levees teetering on the brink.
Sacramento Bee
Mortgage defaults spread as even 'safe' borrowers falter...Jim Wasserman
http://www.sacbee.com/topstories/v-print/story/2017811.html
The mortgage default crisis has an ominous new face. It's your neighbor with a traditional fixed-rate loan.
No longer is the real estate bust simply the result of exotic, subprime loans that doubled payments and blew up in homeowners' faces. As the Sacramento economy buckles, even the safest mortgages have become part of a new wave of loan defaults, experts say.
With capital-area job losses reaching 45,000 in the past year and unemployment at 11.1 percent, lenders, bankruptcy attorneys and debt counselors all say they're seeing rising delinquencies among prime borrowers with fixed-rate loans and good credit. Many of those slipping into trouble are state workers, the mainstay of Sacramento's economy.
"The tide has definitely shifted," said Pam Canada, executive director of the Neighborworks Homeownership Center of Sacramento, a nonprofit loan counseling firm. "We're seeing more people with a loss of income."
Prime fixed-rate mortgages, with the most favorable interest rates and 15-, 20- or 30-year terms that guarantee the same monthly payment for the life of the loan, have long been the bulwark of American homeownership.
There are 3.3 million of them in California – 56 percent of all mortgages. But nearly 4 percent were delinquent in the first quarter, according to the Mortgage Bankers Association. That number was less than 1 percent two years ago, when the default crisis was dominated by subprime loans.
The MBA says layoffs are now hitting more educated borrowers.
"There tends to be a higher correlation there with having a fixed-rate mortgage," said Jay Brinkmann, chief economist of the lender trade group.
It's not just the layoffs creating trouble for traditionally safe loans. Many area workers have had to absorb wage cuts. Others who lost jobs have found new jobs that pay less. Or they have found only part-time work. Many workers who depend on overtime pay have also seen it disappear or dwindle.
Finally, in a capital region defined by a massive state government work force, furloughs have grown to three days monthly, approximating a 14 percent salary cut. Gov. Arnold Schwarzenegger is proposing still more pay cuts for an educated population that's increasingly showing up at nonprofit mortgage counseling centers.
This upheaval has had a ripple effect on small-business owners like Michael and Winnie Kyalwazi, owners of Cafe Le Monde at McClellan Business Park. They've fallen behind on their fixed-rate house payments because business is down 25 to 30 percent, said Michael Kyalwazi.
"This is a short setback, the way I look at it," he said. "We're viable. We just need some breathing room."
It's a familiar sentiment.
"Most want to pay, but they can't because they're underemployed and have cuts in income and cuts in commissions," said Paul Rigdon, vice president for lending at Sacramento's SAFE Credit Union. "We're seeing all kinds of income-related problems."
As the newest turn in a housing crisis that has seen 40,000 area foreclosures and heartbreak in thousands of other homes, trouble for prime borrowers is one more obstacle to a housing recovery any time soon.
Lending-industry officials say it's harder to restructure loans for jobless people who can barely afford any payment. Worse, economists say rising defaults and the foreclosures to come among these borrowers are likely to persist long after unemployment peaks sometime next year.
"Foreclosures and delinquencies have a long tail, and we will see that continue for several quarters after a turnaround in unemployment," said the MBA's Brinkmann.
Forecasters at Stockton's University of the Pacific predict unemployment in the capital region will peak late next year at 12.3 percent – and remain in double digits through 2011. If so, problems with prime loans are likely to linger in a region having a hard time catching a break.
Already in the foreclosure process is Ron McClure of Roseville. He bought a $600,000 house at Sun City Roseville in 2003, using a prime, fixed-rate loan that cost him $3,200 a month.
That worked until the housing market collapsed. McClure, partner in a small home-building business, saw his income collapse with it. Six months ago, he stopped making payments on the house.
"Right now I'm just talking to attorneys about bankruptcy options," he said. "Hopefully, I'll find a job and be able to save it."
McClure is working through a support organization, the Sacramento Professional Network, to find a job in his original line of work: information technology.
In Elk Grove, state employee Dwain Barefield believes he will soon miss his first fixed-rate mortgage payment. His finances were already complicated by $25,000 in legal bills he ran up from a divorce that took 10 years. But the bigger problem: refinancing in 2005 from a 30-year fixed-rate mortgage to a 15-year fixed-rate loan to pay it off faster.
That decision, made as the economy soared, doubled monthly payments to $1,850 on a house he bought in 1987.
Now come state furloughs.
A data processing manager at the Department of Motor Vehicles, Barefield said the first two furlough days starting in February cost him about $400 a month in take-home pay.
A third, which began this week, will take another $200.
"Two days was bad enough; three days is really going to make it bad. If I pay the mortgage, there is something (else) I won't be able to pay," he said. "Something's got to give."
Elk Grove bankruptcy attorney Jonathan Stein said Barefield's tale is becoming a norm.
"The majority of the people calling me now who are losing their homes are state workers," he said.
At SAFE Credit Union, Rigdon said most prime, fixed-rate borrowers can prevent foreclosure. He said SAFE has been extending the payoff terms of mortgages, cutting interest rates and even suspending payments temporarily to help borrowers cope.
"We're able to work with most people who want to work with us on that," he said.
So far, the conventional fixed-rate loan problem is mostly showing up in delinquency statistics. At the Bay Area foreclosure-tracking firm, ForeclosureRadar.com, president Sean O'Toole said it's not showing yet in foreclosures.
But it will. Said O'Toole: "The folks getting into trouble now are probably six months to a year from being reflected as foreclosure statistics."
New Trouble at home...Trouble at Work...Mortgage Banker's Association and Nam Nguyen
http://www.sacbee.com/topstories/story/2017811-a2017631-t46.html
Golden State exports plunge, but rice sales remain strong...Mark Glover
http://www.sacbee.com/business/v-print/story/2017538.html
Reflecting the depressed state of the worldwide economy, the quantity of goods flowing in and out of California ports continued to slow in May.
Merchandise exports from the Golden State have been dropping for seven months. In May, they fell 25.2 percent from their May 2008 levels, according to the University of California Center Sacramento. The center based its analysis on data released Friday by the U.S. Department of Commerce.
One bright spot: Exports of rice from the Central Valley were strong and expected to remain so due to factors that have reduced the supply coming from other nations.
The UC center said California exports totaled about $9.5 billion in May, down from nearly $12.7 billion in goods shipped abroad in May 2008.
Manufactured exports fell by 28 percent in May, while agricultural goods and other non-manufactured exports shrank by 23.3 percent. Re-exports of goods previously imported into the state were off by 15.4 percent.
"The May export numbers offer no encouragement that economic recovery will be a near-term thing," said Jock O'Connell, the UC center's international trade and economics adviser. "These were the lowest California export totals for the month of May since 2004."
The UC center said California's year-to-date exports of $46.4 billion are down 22.5 percent from $59.9 billion in the 2008 January-to-May period.
Import figures likewise were dismal.
The center said the value of foreign goods entering the United States through California dropped by 31.8 percent in May compared with 2008. May imports totaled $21.6 billion compared with $31.7 billion last year.
State-specific imports are not calculated. Because export figures represent California-produced goods, they are considered the key indicator of Golden State trade.
The UC center said California's struggling economy, high unemployment and struggling industries statewide are contributing to the export doldrums, but O'Connell said problems outside the state are likely to prolong the slump.
The economies of our trading partners will continue to contract," he said. " … Really, there's no expectation of this turning around in the next two or three months."
O'Connell cited a recent International Monetary Fund report predicting that, among California's leading trading partners, only China would see economic expansion this year.
The IMF predicted that the economy of Mexico – California's top export market in 2008 – would contract by 7.3 percent this year. Projected percentage declines among other trading partners included Canada, 2.3 percent; Japan, 6 percent; South Korea, 3 percent; and the European Union, 4.8 percent.
O'Connell noted that the state's May export figures reflect orders that were placed perhaps two or three months in advance. He said some California ports are now reporting slight gains in export tonnage, which might not necessarily produce increased value.
"Tonnage figures are not a good indicator of dollar figures," he said. "Rice, for example, has weight, but it's less valuable than computer equipment."
It does appear, however, that California rice exports will be fairly robust in the coming months.
Chris Crutchfield, president and CEO of Williams-based American Commodity Co., one of the largest rice handlers in California, said drought in Australia and an export ban in Egypt have increased international demand for California medium-grain rice among South Pacific nations and in the Middle East.
"It's the basic issue of supply and demand," Crutchfield said. "We've had a fairly substantial increase in our export markets both in volume and price.
"The entire industry has benefited from it. We used to talk about 50 percent for export and 50 percent domestic. Now, it's more like 65 percent export, 35 percent domestic."
Nationally, the Commerce Department said the U.S. trade deficit fell to its lowest level in more than nine years in May as exports posted a small gain and imports declined for a 10th straight month.
Stockton Record
Bullet train funds still on track...Zachary K. Johnson
http://www.recordnet.com/apps/pbcs.dll/article?AID=/20090711/A_NEWS/907110324
Despite the state's economic troubles, early funding for the California bullet train is on target, Assemblywoman Cathleen Galgiani said Friday in a meeting with The Record's editorial board.
The California High-Speed Rail Authority turned in an initial application for nearly $16 billion to build segments of the rail system touted as connecting Northern and Southern California with trains reaching speeds up to 220 mph. The request for federal stimulus dollars includes $400 million for pre-construction work, which includes two segments through Stockton. One is a leg of the main high-speed rail line connecting Sacramento to Merced; the other connects to the main branch and crosses the Altamont Pass.
Though California can't expect to get all the money it's qualified to receive, it's in a better position than other states to receive federal stimulus dollars and make the long-sought goal of high-speed rail a reality, said Galgiani, D-Livingston, a strong advocate for the rail system.
"It's real, and it's coming," she said, noting California voters passed a nearly $10 billion bond for high-speed rail in 2008. "We are the only state with a bond measure that's passed, and we are ready to go," she said.
Money spent means jobs, including for those in the Central Valley, she said. "This is a huge opportunity for us, and it's a huge opportunity to boost our economy," she said.
The proposed system includes more than 800 miles connecting Sacramento and San Francisco to points in Southern California, according to the California High-Speed Rail Authority. Though the main line of the proposed rail system passes through the Pacheco Pass farther south, the high-speed rail plans include providing a regional rail connection through the Altamont Pass.
The "pre-application" for federal funds includes requests to complete sections of the high-speed railway, a prospect that could be realized by 2017, Galgiani said. Those stretches are: Los Angeles to Anaheim, Merced to Bakersfield and San Jose to San Francisco.
Of the $787 billion in economic stimulus included in the American Recovery and Reinvestment Act that passed in February, $8 billion was slated for high-speed rail. That's in addition to $5 billion already available for high-speed rail funding nationwide, officials said.
Stimulus projects studying the Altamont corridor could begin right away, said Thomas Reeves, spokesman for the San Joaquin Regional Rail Commission, which operates the Altamont Commuter Express trains.
As far as service through San Joaquin County is concerned, the Altamont corridor segment is likely to be completed before the high-speed rail connection to Sacramento, said Andrew Chesley, executive director of the San Joaquin Council of Governments.
With the 2008 California bond, and support from the Obama administration in both the stimulus package and federal budget, signs are good for high-speed rail in the country, he said. "It's been very fortuitous lately."
San Francisco Chronicle
UC chief lays out 'draconian' budget cut plan...Nanette Asimov
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/07/11/BA5D18KG4E.DTL&type=printable
Facing a loss of $813 million from the state, University of California President Mark Yudof is proposing widespread cuts for UC, including imposing unpaid days off on employees, eliminating jobs and killing out courses.
Some campuses have already made cuts. UC Davis has already shut down its liver transplant program, and UC Santa Cruz has axed some science and music classes, for example.
"There's no way we'll be able to look students in the eye and say this will be the same university," Yudof said Friday as he laid out the plan he'll present to the Board of Regents next week in San Francisco.
UC gets about $3 billion of its $19 billion budget from the state, he said. The rest is largely from research grants and patient revenue from its hospitals.
As union representatives protested outside his Oakland office Friday, Yudof said the "draconian cuts" were unavoidable.
Forty percent of them would come from the 10 UC campuses - fewer courses and fewer employees. About a quarter would be made up from student fees that have already been raised twice this year (though no more hikes are planned). About 10 percent would come from restructuring debt and other systemic changes, Yudof said.
And then there are the furloughs, meant to close the final 25 percent of the $813 million gap and reduce the need for layoffs.
Yudof said he modified his plan after hearing from numerous employees and even the U.S. Department of Energy, which protested any cuts at Lawrence Berkeley National Laboratory. The lab would be exempted from Yudof's plan along with anyone in the university system whose salaries are funded entirely by grant money.
But Yudof will ask the regents to approve furloughs for almost all other UC employees except safety personnel.
Those paid the least - $40,000 or less - would have to take off 11 days from work, for a 4 percent pay cut. Those earning more than $240,000 would be furloughed 26 days, for a 10 percent cut. In between are five groups of employees who will take anywhere from 13 to 24 days off without pay, amounting to pay cuts between 5 percent and 9 percent.
Pay cuts of 5 percent already taken by executives, including Yudof, would count toward the new cut. Also, only base salaries would be affected- not total compensation, which is often far higher.
Prof. Mary Croughan, chair of the faculty advisory body known as the Academic Senate, reluctantly praised the plan because of its exemptions for grant recipients whose work stimulates the economy, and because the cuts won't impact pensions - at least not this year.
But she said the faculty will earn about 20 percent less than those at other prestigious universities like Harvard or Yale.
Other employees were less enamored with the plan.
"They do have the money to cover these cuts. That's the big lie," said Tanya Smith of the University Professional and Technical Employees union, who marched with union members outside Yudof's offices carrying signs reading "Chop from the top!" and other pointed phrases.
Over at UC Berkeley, evolutionary biologist Kevin Padian smirked at the idea that the cuts were distributed fairly.
"Just last year, state lawmakers passed legislation that gives major corporations another couple billion each year in tax breaks," he said, getting at what many employees said was the real problem: legislators unwilling to raise more revenue for the state.
The regents, who will vote on the plan Thursday, are expected to approve it.
Budget cut proposals
UC President Mark Yudof will propose that the governing Board of Regents close an $813 million gap as follows:
-- Campus reductions:(40 percent or $325 million) It will be up to the 10 campuses to decide how to cut. Some have already axed programs and courses. Layoffs are expected.
-- Furloughs/pay cuts:(25 percent or $203 million) 80 percent of employees would have to take unpaid time off. No furloughs during class time.
-- Student fee increases:(25 percent or $203 million) Although no new fee hikes are proposed, fees have been raised twice this year, 10 percent each time.
-- Systemwide belt tightening:(10 percent or $82 million) This would include debt restructuring and other adjustments.
The regents will meet from Tuesday through Thursday at UCSF-Mission Bay. They will vote on Thursday.
The Argonaut
Residents, community boards see no allowance for drought in plans for high density residential and commercial projects...GARY WALKER
http://www.argonautnewspaper.com/articles/2009/07/08/news_-_features/top_stories/2a.prt
Water may be in short supply, but there seems to be no shortage of development projects in the planning stages throughout Los Angeles.
Several large-scale initiatives, including the second phase of Playa Vista, the Howard Hughes Center in Westchester and proposed multi-story developments in Del
Rey and Venice are being considered, to the consternation of various neighborhood councils and residents.
They say that because the city government has moved to Phase III of the municipal water ordinance that includes mandatory conservation measures, high-density projects should be reexamined, scaled back or have water agencies and planners include the effects and consequences of the drought.
Westchester resident David Coffin thinks that city leaders have not taken the water shortage into account regarding large scale development, and he disagrees with those who suggest that state laws that direct cities and counties to request that developers obtain a water assessment prior to approval are sufficient.
“They are relying on water management plans that are four years old,” Coffin, who is a member of the Neighborhood Council of Westchester-Playa, asserted.
Coffin was referring to the Los Angeles Department of Water and Power’s (DWP) Urban Water Management Plan, which was written in 2005 and includes estimates of past, current and projected potable and recycled water use, identifies conservation and reclamation measures currently in place and provides an urban water contingency plan.
Joseph Reichenberger, a professor of civil engineering at Loyola Marymount University, noted that Senate Bill 610 mandates that a “city or county under certain circumstances that determines an environmental impact report is required in connection with a proj- ect, as defined, to request each public water system that supplies water for the project to access, among other things, whether its total projected water supplies will meet the projected water demand associated with the proposed project.”
Coffin says that he raised the specter of SB 610 with city planners and representatives from Equity Office Properties, the master developer for the Howard Hughes Center, where plans are underway to construct two towers that would house approximately 600 residential units and 487,000 square feet of commercial space.
“When I asked the Hughes Center planners if they needed a water assessment as noted by SB 610, they said that the DWP 2005 water assessment plan was their assessment and that it stated that it has sufficient water supplies to meet growth through 2020,” he said. “There’s a huge disconnect when we’re in Phase III of our city’s water ordinance and there is a statewide drought.
“So in this regard, SB 610 is not an effective tool in L.A.,” he added.
The Mar Vista Community Council has asked that a water assessment be reevaluated for a project within its jurisdiction. The council’s transportation and infrastructure committee issued this request on June 9th after reading the Draft Environmental Impact Report for the newly proposed Bundy Village.
“According to a water supply assessment performed for the proposed project, adequate water supplies would be available to meet the water demands of the proposed project,” the DEIR states.
“DWP anticipates that the projected water demands from the proposed project could be met during normal, single dry and multiple dry water years, in addition to the existing and planned future demands on (the agency). As such, no new or expanded water supplies would be necessary for the operation of the project and a less than significant impact would occur.”
Committee chair Albert Olson found it ironic that city officials are warning consumers of the consequences of not conserving water but are still considering large-scale mixed use projects.
“The concept of telling us that we are in a situation where there is a serious water shortage and then approving high-density projects that necessitate more water is ridiculous,” said Olson. “There needs to be a new discussion on how density increasing development is reviewed.”
Mark Redick, the president of the Del Rey Neighborhood Council, views the water shortage and how it may affect development in broader terms.
“The entire water system in California needs to reevaluated,” he told The Argonaut. “One or two large projects really isn’t the problem.”
Redick advocates having more water desalination projects and believes that initiatives that redirect and eventually reuse stormwater runoff should be implemented.
“Conservation only goes so far,” said the Del Rey Neighborhood Council president.
Reichenberger agrees.
“(City and county governments) are going to have to consider how to recharge aquifers and make better use of reusing water for landscaping and irrigation,” he said. “A lot has changed over the last several years, and that includes what to consider when new projects are being built.”
Citing the new rates due to the drought that the city implemented on June 1st, the Mar Vista council recommended that no density increasing development project be approved “so long as shortage year rates are in effect and unless the city has signed contracts guaranteeing at least a 20-year water supply for existing Los Angeles residents, plus the density increase effectuated by the proposed land development project.”
Playa Vista’s Phase II will feature a neighborhood retail center and 2,600 residential units over 111 acres. While residents from Playa Vista and neighboring communities are looking forward to the opening of the shopping center, Sabrina Venskus, a Venice attorney, believes that a new water assessment should be included in the EIR that the City Council will consider later this year.
“There are studies that indicate that due to global warming, parts of our coast will be underwater by the end of the century,” said Venskus, who was the attorney of record when an appeals court halted Phase II in 2007. “The city and the state should adopt policies to really look at development in coastal areas.”
City Councilman Bill Rosen- dahl, who represents Westchester, Del Rey, Venice and Mar Vista, says that all new projects should be reviewed with as much information as possible regarding the drought included in their planning documents.
“With the kind of population growth that we will be seeing, every project should be looked at from the perspective of water scarcity,” he said.
Despite what he says is inattention on the part of city officials to development and the water shortage, Coffin said he is pleased that the Mar Vista Community Council and other organizations and individuals have taken greater interest in how the drought can impact the city’s infrastructure.
“It’s very encouraging to see people finally starting to notice that we’re in a water crisis,” he said.
DWP officials did not return phone calls for comment as of Argonaut press time.
CNN Money
Small Wyoming bank fails
The closure of Bank of Wyoming brings this year's total number of failed banks to 53 -- more than double the number of institutions that failed in all of 2008...Ben Rooney
http://money.cnn.com/2009/07/10/news/economy/bank_failures/
index.htm?postversion=2009071019
NEW YORK (CNNMoney.com) -- Bank of Wyoming was closed Friday by state regulators, bringing the total number of failed banks this year to 53, the Federal Deposit Insurance Corporation said.
The Thermopolis, Wyo.-based bank has just one branch, which will reopen Monday as a branch of Central Bank & Trust, which is based in Lander, Wyoming. It was the first bank in that state to fail this year.
Central Bank & Trust agreed to assume all of Bank of Wyoming's $67 million in deposits and purchase $55 million of the failed bank's $70 million in assets. The remaining assets will be sold later by the FDIC.
The failed bank had about $8 million in brokered deposits, which the FDIC said it will pay directly to the brokers.
Today's failure will cost the FDIC $27 million,bringing the FDIC fund's total cost for failed banks to $12.33 billion this year. That compares with $17.6 billion in all of 2008.
The number of bank failures so far this year has more than doubled last year's total of 25, with an average of nearly 9 failures per month.
Over the next 5 years, the FDIC expects to incur roughly $70 billion in losses due to the failure of insured institutions.
Most of the banks that have failed so far this year were casualties of risky funding strategies, as well as losses on loans issued to local residential and commercial real estate developers, who were hit hard by the flagging economy.