Tag Archive: San Bernardino

Jan 22 2013

The California Flap: January 22, 2013

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The California Legislature is in session.

Today’s schedule is here.

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

Some important deadlines to remember:

  • January 25, 2013: Deadline to send bill ideas to the California Legislative Counsel for drafting.
  • February 22, 2013: Deadline to introduce bills.

Each member of the Assembly and State Senate are allowed to introduce up to 40 bills in this two year legislative session.

On to the morning’s California headlines:

  • California engineers question high-speed rail oversight – As California prepares to embark on its largest public works project in decades, a union that represents state engineers is questioning whether all the construction work will be thoroughly scrutinized.Contractors submitted bids this week to design and build the first 30-mile stretch of track for the $68 billion high-speed rail system, which eventually is designed to link Northern and Southern California by trains traveling up to 220 mph. The contract they sign is expected to be for up to $1.8 billion to build the initial segment in the Central Valley.The documents outlining the requirements for the bids say the independent contractor that would design and build the first phase of the project would hire the inspectors charged with testing the work on that segment, running from Madera to Fresno. The inspections would then be submitted to the California High-Speed Rail Authority.Critics, including lawmakers and a state engineers union, say the arrangement could present a conflict…
  • CalPERS nears a record $260 billion in assets – The California Public Employees’ Retirement System is poised to top a record $260 billion in assets, the market value it held before the global financial crisis wiped out more than a third of its wealth.The largest U.S. public pension, with half of its money in publicly traded equities, was worth $253.2 billion on Thursday, or about 97% of the pre-recession high set in October 2007. The fund returned 13% in 2012, about the same gain as the Standard & Poor’s 500-stock index.”A lot of the improvements in portfolio returns is simply reflective of the return of the market,” Chief Investment Officer Joe Dear said. “But there is still an important lesson there, which is that when the crisis was full on, we didn’t drastically reduce our equity exposure.”
  • Tobacco tax hike eyed for 2014 state ballot – Get ready for another round of tobacco tax wars, California initiative style.And count three big reasons for a do-over of the electoral skirmish in 2014: the relatively low level of the existing tax, the narrow margin of the vote in 2012, and the fact that it may now be a fight not over bureaucracy and research but rather college tuition.”I think the right measure, going to the right revenue source is going to be the magic combination,” says Democratic strategist Jason Kinney. “And that’s why I think so many people are looking at it.”
  • Jerry Brown’s budget is a boon to California’s unions – Gov. Jerry Brown continues to pose as an iconoclast who is willing to make the tough choices necessary to keep California afloat, but the budget he released recently is more evidence that he remains the cat’s paw for the state’s public-sector unions.“I want to advance the progressive agenda,” Brown said at the press conference unveiling his supposedly balanced budget, “but consistent with the amount of money people made available … I respect and embrace my role of saying ‘no.’”But he certainly has said yes to union demands. The budget is the culmination of Brown’s campaign to convince Californians to raise taxes on themselves. They complied by approving Proposition 30 to help the school kids, yet Brown has played games with that money — earmarking some of it for union pay hikes as a payback for all that help during the Nov. 6 campaign, according to GOP leaders.
  • California death penalty: Will state follow Arizona, which has resumed executions after a long hiatus? – When Arizona prison officials injected condemned rapist and murderer Richard Stokley with a single, fatal drug dose last month, it marked the state’s sixth execution of the year in the nation’s second busiest death chamber.Now that California voters in November narrowly preserved the death penalty, Arizona’s path could foreshadow the future for this state, where not a single one of the 729 death row inmates have marched to execution in seven years.As in California, interminable legal tangles once shut down Arizona’s death penalty system as the state executed only one inmate, who volunteered to die, from 2001 to 2010. But Arizona emerged from numerous court battles that removed all of the legal roadblocks that remain in California.The result has been 11 executions since October 2010, nearly the number California has carried out since it restored the death penalty in 1978. Significantly, the 9th U.S. Circuit Court of Appeals, often the last word for death penalty appeals in the …
  • Plenty of green carpool stickers remain available in California – Green stickers for plug-in hybrids: 9,022. Limit: 40,000. Expire: Jan. 1, 2015 White stickers for electric vehicles and those running on alternative fuels: 21,770. Limit: None. Expire: Jan. 1, 2015. Yellow stickers for hybrids: 85,000. Ended July 1, 2011.
  • Brown seeks to reshape California’s community colleges – With a slate of bold and controversial budget proposals, Gov. Jerry Brown has placed a renewed focus on the state’s struggling community colleges, the world’s largest system of two-year schools that are often overshadowed by the University of California and Cal State systems.The governor’s recommendations are aimed at keeping community colleges affordable, keeping classes accessible and moving students faster through the system to allow them to graduate or transfer to a four-year university at higher rates. Brown’s spending plan must clear the Legislature, and some college officials have vowed to oppose — or at least try to modify — some portions.
  • Medicare Pricing Delay is Political Win for Amgen, Drug Maker – Just two weeks after pleading guilty in a major federal fraud case, Amgen, the world’s largest biotechnology firm, scored a largely unnoticed coup on Capitol Hill: Lawmakers inserted a paragraph into the “fiscal cliff” bill that did not mention the company by name but strongly favored one of its drugs.The language buried in Section 632 of the law delays a set of Medicare price restraints on a class of drugs that includes Sensipar, a lucrative Amgen pill used by kidney dialysis patients.The provision gives Amgen an additional two years to sell Sensipar without government controls. The news was so welcome that the company’s chief executive quickly relayed it to investment analysts. But it is projected to cost Medicare up to $500 million over that period.
  • Dan Walters: Public debts cloud future for California cities – The tendency among local officials – much like their brethren in the state Capitol – is to make financial commitments with little thought to long-term consequences.That’s how our governments dug themselves into deep budget holes – spending revenue windfalls on new services, giving employees big pension and health care benefits retroactively, and borrowing for grandiose projects without economic viability.Three of California’s cities rode that path into bankruptcy. While one, Vallejo, has emerged, two others, Stockton and San Bernardino, are still ruminating over which creditors will take haircuts.Stockton’s situation is especially egregious because it committed all of those fiscal sins. Its biggest debt is money it borrowed to pay its pension obligations, a double whammy.

    In fact, most public debt in California is in the form of pension promises whose dimensions depend on assumptions of pension fund earnings.

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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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Jul 18 2012

Flap’s California Morning Collection: July 18, 2012

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San Bernardino, California

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:

SAN BERNARDINO: Bankruptcy decision back before the council

The San Bernardino City Council will meet again Wednesday to consider a declaration of fiscal emergency and an authorization to proceed with filing for bankruptcy.

Council members delayed making a decision after a more than three-hour hearing Monday, July 16, where many residents and city employees urged the city to seek an alternative.

But with concerns that the city will soon run out of cash and might not make its Aug. 15 payroll, city administrators say bankruptcy is the best course to buy the city some breathing room and get its finances in order.

Last week, the council majority agreed to seek bankruptcy protection due to a $45 million budget deficit. However, it must still approve a formal resolution authorizing the city attorney to file for bankruptcy.

Berman campaign puts Brandon Hall in charge

Brandon Hall, the Democratic strategist who joined the Howard Berman reelection campaign in March as a senior advisor, is taking full charge of everything, campaign sources say. That would be a big and serious shift in approach by Berman, who for decades kept his political campaign machinery tightly in the hands of his brother Michael.

Michael Berman’s deft targeting of voter segments and his media strategy have provided all the firepower and campaign guidance that the veteran congressman needed in the past. But this year, Howard Berman is in the reelection fight of his life. He’s up against another Democratic congressman, Brad Sherman, in a race that’s turning out to be the most closely watched and expensive intra-party battle in the country. In the June primary, Sherman finished ahead of Berman by ten points in the San Fernando Valley district they now share due to reapportionment.

Hall, who moved to Los Angeles with the reputation of having saved Nevada Senator Harry Reid’s skin when his 2010 reelection was in doubt, was in charge of Berman’s day to day operations during the primary campaign. He now will take over the Berman media strategy, messaging and all other key elements. In addition, for the first time in a long while, if ever, the Berman camp is employing an outside pollster. The Democratic pollsters Fairbanks, Maslin, Maullin & Metz will now be helping out, a source close to the campaign confirmed.

Pension funds seriously underfunded, studies find

Corporate and public pension funds across the country are seriously underfunded, threatening the retirement security of workers and straining the financial health of state and local governments, according to a pair of independent studies.

In 2011, company pensions and related benefits were underfunded by an estimated $578 billion, meaning they only had 70.5% of the money needed to meet retirement obligations, according to a report by S&P Dow Jones Indices.

Funds generally don’t need to have all the money needed pay future pensions because returns on investments vary over the years and people retire at different ages and with different levels of benefits, experts said. But a funding level in the 70% zone is considered dangerously low.

The looming shortfall, and the move by corporations to 401(k)-type plans in which the level of investment is controlled by employees, could keep many aging baby boomers from retiring, said Howard Silverblatt, a senior S&P Dow Jones Indices analyst and the report’s author.

“The American dream of a golden retirement for baby boomers is quickly dissipating,” Silverblatt said. “Plans have been reduced and the burden shifted with future retirees needing to save more for their retirement.

“For many baby boomers it may already be too late to safely build up assets, outside of working longer or living more frugally in retirement.”

Bid to curb union spending gets big Democratic backer

Proposition 32 just got a big Democratic voice.

Former state Sen. Gloria Romero, a Los Angeles Democrat, announced her support this week for the November ballot measure that would ban the practice of political contribution by payroll deduction, the primary method labor unions use to raise political cash.

“As someone who has been on the political front lines in Sacramento, I’ve seen first hand how special interests control the political process,” Romero said in a statement. “Through their vast resources, special interests are able to hold lawmakers hostage to their agenda. This isn’t a partisan or ideological issue — all Californians deserve elected officials who will work for them, rather than special interests.”

In some ways, Romero’s support is not surprising. Throughout her tenure in Sacramento she battled publicly with some of the state’s most powerful unions, namely the California Teachers Assn. and the California Correctional Peace Officers Assn. In her statement, she cited education legislation that died in the Legislature because of union opposition.

Supporters note that Proposition 32 prohibits both unions and corporations from contributing directly to candidates. Opponents argue that the measure disproportionately harms unions, which get most of their money through payroll deductions, and does nothing to curb the influence of independent committees and so-called super PACs, which are playing a burgeoning role in elections this year.

Enjoy your morning and Dan Walters Daily video: California’s battle over taxes is heating up

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