The city of Stockton, bedeviled for years by fiscal woes, moved toward bankruptcy as its city council voted to halt payments to its creditors, including municipal bond holders, and enter third-party mediation as a way of heading off a formal bankruptcy filing. If Stockton goes into bankruptcy, it will be largest city in the nation to do so.
From the LAT's Diana Marcum: "It is the first city to resort to a recently enacted California law designed to slow a municipal bankruptcy filing. Under AB 506, all involved parties, including those who hold debt in the form of bonds and employee unions whose paychecks and benefits depend on city revenue, sit down to work out deals with a neutral evaluator, most likely a retired bankruptcy judge.""The city hired attorney Marc A. Levinson to represent it; he's the same attorney who represented Vallejo when that city declared bankruptcy in 2008."
"The 450-page council agenda described the plan as the city's attempt to restructure and avoid bankruptcy. "Right now, we're a city that frankly has hit the wall," said Mayor Ann Johnston during the debate. "We see no way out of this except to begin this process."
Stockton's city manager, in an appearance before the Stockton Record's editorial board, complained about the "mediocracy and sheer incompetence" of city governance over time that he said led to the fiscal collpase.
From the Record's Scott Smith: "Past city managers, finance officers and human resource directors perpetuated the attitude that today has Stockton on the brink of bankruptcy. For years, Deis said, city employees flat-out did not do their jobs."
"The level of mediocrity and sheer incompetence I have never seen in any organization before," said Deis, a 32-year veteran of government service."
"Without naming names, Deis, in a meeting with The Record's editorial board, cited examples of former administrators at City Hall who quietly expanded retirement benefits for city employees without council approval."
One problem cited by Stockton observers was the city's promise of lifetime health care to some employees worth hundreds of millions of dollars. CalPensions' Ed Mendel has the story.
"One of a long list of missteps said to be pushing Stockton toward becoming the biggest U.S. city to declare bankruptcy is a promise of free lifetime health care for some workers, estimated to cost $417 million over the next 30 years."
"California’s 13th-largest argest city, population 292,000, also issued an ill-timed $125 million bond in 2007 to cover pension costs. The bond money shriveled to $82.5 million when CalPERS had huge investment losses in a stock market crash a year later."
"Now Stockton officials think that if CalPERS lowers its earnings forecast from 7.75 to 7.5 percent next month, the city’s annual pension payment could increase by roughly $6.7 million in 2013, about $4.4 million from the deficit-ridden general fund."
Meanwhile, a 50-year plan to restore the Sacramento-San Joaquin River Delta and move more northern water southward through the estuary likely would boost pumping, harm some species but sharply increase marshy wetlands, according to state water officials.
From the Chronicle's Wyatt Buchanan: "State officials hope to have a final version of the plan by the end of the year. Envisioned in the documents released Wednesday is a project that would consist of two large tunnels constructed south of Sacramento and under the delta that would take water - at 15,000 cubic feet per second - to existing pumping facilities near Tracy."
"Water from the Sacramento River would be diverted into the tunnels, instead of flowing through the delta to the pumps, as it does today. The entire plan will cost an estimated $25 billion, with the construction of the project estimated at around $13 billion. Construction costs would be paid by customers of water agencies that benefit from the project, including some in Alameda and Santa Clara counties."
"According to the documents, the tunnels would carry an average of 5.9 million acre feet of water per year to the pumps. Currently, 4.7 million acre feet of water are pumped out of the delta and sent to farmers in the Central Valley and residents in Southern California and parts of the Bay Area."
Four Democratic lawmakerws -- a state Senator and three House members -- sued Democratic campaign accountant Kinde Durkee over purportedly raiding their political accounts in a scheme that was aided by the bank.
The LAT's Patrick McGreevy tells the tale: "Following the lead of Sen. Dianne Feinstein, who had previously sued, new civil complaints were filed in Los Angeles County Superior Court by state Sen. Lou Correa (D-Santa Ana) and Democratic Reps. Susan A. Davis of San Diego, Linda T. Sanchez of Lakewood and Loretta Sanchez of Garden Grove. An attorney for the four estimated their combined loss was about $1.4 million."
“A fraud on the scale alleged herein could not have occurred, and did not occur, without the knowing involvement of First California Bank,’’ the lawsuit by Correa alleges. “In exchange for fees and profits, First California Bank intentionally ignored dozens of red flags, ignored its duties and obligations under state and federal law, and allowed Durkee to perpetuate the scheme.’’
Cougar-hunting Dan Richards, head of the state Fish and Game Commission, faces a move to oust him from lawmakers who are unhappy about his killing a mountain lion in Idaho -- where hunting the big cats is legal.
From the Chronicle's Marisa Lagos: "Assembly Democrats on Wednesday were looking into the possibility of a legislative resolution that would remove him from the board, one day after Richards sent a letter to the Legislature, the governor and other state officials defiantly defending the killing, mocking critics for their outrage and saying that - contrary to beliefs that the shooting was purely a trophy kill - he did, in fact, eat mountain lion."
"Do you really think a California commissioner is actually obligated to follow California laws across these United States? Really?" Richards wrote on Fish and Game letterhead in a two-page correspondence. "Did I try to change California's laws subversively? Did I encourage anyone to circumvent our rules and regulations? ... While I respect our Fish and Game rules and regulations, my 100 percent legal activity outside California, or anyone else's for that matter, is none of your business."
And from our "Gaslight" file comes the tale of people who are using balloons to take natural gas from a Chinese oil field to heat their homes. The fill up the huge balloons with gas, then tote the blimp-like bags home so they can power their homes. Really.
"They have been risking life and limb in the pursuit of warmth by carrying giant balloons full of natural gas from a nearby oil field back to their homes. Too poor to afford the resource on the grid, they siphon their gas from an oil facility in Binzhou, where they connect their balloons to a canister near the extraction machinery."
"They then tentatively edge back with a potential bomb in their hands, being careful not to get too near any naked flames, of course. Some balloons can grow to six metres long and a metre wide."
"It is not clear whether they are stealing the gas, although it is highly unlikely they are being allowed to do it."
Time for a smoke ...