Category: San Bernardino

Jul 26 2012

Flap’s California Morning Collection: July 26, 2012

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Audience watches the San Bernardino City Council on July 18 declare a fiscal emergency and begin preparations to file for bankruptcy protection. LA Times Photo

Good Thursday morning!

The California Legislature is not in session for a summer recess.

The California Assembly has adjourned until August 6, 2012 and the California State Senate is also in adjournment.

The California Assembly’s Daily File is here and the California State Senate’s here.

On to today’s California headlines:

There is a great deal of California Water news today, but I will NOT be covering it. My lovely wife works for a large, Southern California water company and anything I would write would be seen as a direct conflict to either her employer or us.

So, on to the other California headlines:

Bankrupt San Bernardino must cut spending by a third

San Bernardino must cut government spending by a third, almost assuredly resulting in widespread layoffs or pay reductions for city workers, as it prepares to officially file for bankruptcy protection, city officials said.

Interim City Manager Andrea Travis-Miller told the City Council that it must cut $45.8 million from the $166-million budget to ensure the city remains solvent throughout the current fiscal year, which runs through next June. Crafting the austerity plan will be required as part of the Chapter 9 municipal bankruptcy process.

“By any definition, a 30% budget cut in a single fiscal year is a severe haircut. Indeed, you might even call it a scalping,” Mayor Patrick Morris said at a special council meeting on the city’s fiscal crisis Tuesday evening.

At the meeting, the seven-member council voted unanimously to suspend debt payments and freeze staff vacancies, saving $5.4 million in July alone, the first and easiest step in what’s expected to be a budgetary bloodletting in the months ahead.

Death penalty repeal pits Mayor Villaraigosa vs. former Gov. Wilson

Los Angeles Mayor Antonio Villaraigosa goes up against former Gov. Pete Wilson in a debate over the death penalty that will be coming soon to mailboxes throughout California.

Villaraigosa signed the ballot argument to be included in the official state voter guide on Proposition 34, which would repeal the state’s death penalty if approved on the November ballot. Wilson signed the “no” argument.

“Proposition 34 lets serial killers, cop killers, child killers and those who kill the elderly, escape justice,” says the argument against the measure, also signed by Keith Royal, president of the California State Sheriffs’ Assn., and Marc Klaas, who became an advocate for crime victims after his 12-year-old daughter, Polly, was murdered.

Downtown L.A.’s Underwater Home Mortgage Crisis

In many movies, downtown Los Angeles is a stand-in for New York City. Its nooks and crannies mimic that most urban of American cities, and Ramon Garcia’s condo on Seventh and Spring streets is no exception. His seventh-floor window overlooks a courtyard in the Bartlett, a 1911 bank designed by the architects who planned City Hall, and his 550-square-foot residence is smaller than a racquetball court.

But one detail would be unthinkable in New York. If he sold it, Garcia estimates he’d get $105,000 — half what he paid in 2005. While 30 percent to 60 percent of the Inland Empire’s homes have “underwater mortgages,” making that region a national symbol of the nation’s housing crisis, rarely reported is that downtown L.A. is just as “underwater” as Riverside: Its residents owe far more than their homes are worth.

“It kind of sucks, because I don’t know if it will ever be worth what I paid for it,” Garcia says.

According to Zillow Real Estate Research, 31 percent of American homes are underwater, about like the city of L.A. (Other data peg the percentage lower.) But in 90014, Garcia’s ZIP code, an astonishing 78 percent of condos and lofts are underwater. Nearly four out of every five residents in the area roughly bounded by Sixth Street, Ninth Street, San Pedro Street and Grand Avenue own places worth far less than the loan they signed.

In the United States, ZIP code 90014 is in the top 1 percent of underwater mortgages.

And it’s bad all over downtown.

ZIP codes that extend from downtown north and south into other areas are underwater, by 66 percent (90017: part of the Financial District and part of Pico-Union), 64 percent (90021: part of Industrial District, Warehouse District and part of Skid Row), 51 percent (90012: City Hall, Civic Center, Chinatown), 44 percent (90013: site of Downtown Art Walk, part of Skid Row), and 36 percent (90015: South Park, L.A. Live, Fashion District).

Vallejo leaves bankruptcy period behind, charts new course

This hard-hit former Navy town, just up Interstate 80 from San Francisco’s glittering lights, weathered its humiliation long enough as California’s first sizable city to file for bankruptcy protection.

Now as Stockton, San Bernardino and perhaps other California cities head into their own bankruptcy proceedings, Vallejo wants people to know it’s on the mend.

It balanced its general fund budget last year and socked away nearly twice the reserves the bankruptcy judge ordered after the city nearly died – belly up and devastated – in 2008.

But its financial challenges aren’t over.

While Vallejo, population 118,000, emerged from bankruptcy protection in 2011, it continues to push for more benefit concessions from employees and retirees in the interest of long-term solvency.

“People ask whether it was worth it,” Vallejo Mayor Osby Davis said of the city’s slide into a bankruptcy filing and hard recovery since. “That question suggests we had an option. It was filing bankruptcy or not existing as a city any more.”

Enjoy your morning!

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Jul 19 2012

Flap’s California Morning Collection: July 19, 2012

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California Gov. Jerry Brown, center, displays signed legislation authorizing initial construction of California’s $68 billion high-speed rail line at Los Angeles’ Union Station Wednesday, July 18, 2012

The California Legislature is not in session for a summer recess.

The California Assembly has adjourned until August 6, 2012 and the California State Senate is also in adjournment.

The California Assembly’s Daily File is here and the California State Senate’s here.

On to today’s California headlines:

CA Senate announces plan to freeze pay — after awarding raises

Senate President Pro Tem Darrell Steinberg announced plans Wednesday for a one-year pay freeze for Senate employees, but the move comes in the wake of a recent pay hike for hundreds of the chamber’s aides.

The proposed Senate pay freeze also comes as most state workers are taking a nearly 5 percent pay cut as part of budget cuts designed to save the cash-starved state government billions of dollars.

Steinberg plans to ask the Senate Rules Committee to approve the pay freeze at its next meeting Aug. 1, said Rhys Williams, Steinberg spokesman. The action would take effect immediately. The freeze would not affect pay raises tied to promotions.

Assembly administrator Jon Waldie said that his chamber has no plans to announce a pay freeze, but it will continue to respond to California’s budget crisis by trimming and transferring 15 percent of its budget to other state agencies. This year, $22 million will be sent, Waldie said.

Assembly awards pay raises to more than 100 staffers

The California Assembly has awarded raises to roughly 150 legislative staffers this year, even as lawmakers voted to cut pay for most state workers to help balance the state budget.

Although officials declined to provide exact figures late Wednesday, they said the pay hikes affected about 60 Assembly employees who were reclassified and about 90 workers who had not received merit raises for at least three years.

Most of the increases were between 3% and 5%, with those on the lower end of the salary scale receiving the largest pay increases, said Jon Waldie, chief administrative officer of the Assembly.

A list of Assembly staffers’ salaries can be found on the chamber’s website.

The raises are part of a policy established by Assembly Speaker John A. Pérez (D-Los Angeles) in December, when roughly a quarter of the lower house’s employees received pay increases. Most of those workers had not received raises for at least three years. Lawmakers must request the raises for their employees and pay for the increases with their own office budgets.

“It’s a policy that’s sound,” Waldie said. The raises “are going to people who haven’t had increases in three years.”

San Bernardino declares fiscal emergency, approves bankruptcy

The City Council took what several members called the hardest decision of their professional lives Wednesday, formally declaring a state of fiscal emergency and directing staff to file for Chapter 9 bankruptcy protection.

The two votes, both 5-2, came eight days after the council first voted to allow City Attorney James F. Penman to file for bankruptcy protection to help it escape a $45million deficit and a shortage of cash on hand that officials said would leave them unable to pay employees Aug. 15.

The intervening week brought heavy attention to the issue from across the nation and particularly in San Bernardino, and council members said they had been flooded with messages.

The week of information and attention shifted two votes: Councilman Fred Shorett, who voted against filing last week, approved it Wednesday, while Councilman John Valdivia switched from abstaining to opposing. Councilman Chas Kelley continued to oppose bankruptcy.

“The horse is out of the barn – the whole world knows we’re insolvent,” Shorett said. “I will be supporting going forward with Chapter 9 and fiscal emergency.”

Many of those who spoke to the council said moving forward with bankruptcy was the only responsible position, but they criticized how the city has gotten to this point.

California’s ‘Charter’ Cities are Under the Microscope

The last three large California cities to seek bankruptcy protection or announce they plan to had seen their housing values, tax revenue and employment crumble. They also have something else in common: They all are so-called charter cities.

Now another California city, Compton, says it may have to file for bankruptcy by September. It, too, is a charter city. Some say that’s no coincidence.

Of the state’s 482 cities, 121 have their own constitutions, or charters. That gives them more leeway in governing their affairs, including the freedom to set their own rules about elections, salaries and contracts.


Governor signs funding for high-speed rail

At a ceremony in Los Angeles, Gov. Jerry Brown signed legislation Wednesday morning to allocate $7.9 billion to the California High-Speed Rail, committing the state to the project despite poor prospects for future funding.

This initial round of funding was in doubt up until the Legislature’s final vote this month. Critics of the high-speed rail plan have blasted it for rising costs, for unrealistic ridership projections and for barreling through homes, businesses and prime Central Valley farmland.

In the end, however, just enough legislative Democrats supported the plan, saying the state faced a greater risk if it didn’t move forward with construction, even though the state doesn’t know how it will pay for the entire project, which is now pegged at $68 billion. No Republicans in the Legislature supported the funding.

On Wednesday, Brown, a vocal supporter of the high-speed rail, praised the project for its economic impact.

“This legislation will help put thousands of people in California back to work,” Brown said in a prepared statement. “By improving regional transportation systems, we are investing in the future of our state and making California a better place to live and work.”

Enjoy your morning and Dan Walters Daily video: Jerry Brown taking a chance with bullet train

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