Tag: Vallejo

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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