Vanguard Analysis: Davis Fire Has High Cost Per Service Call

One of the big questions facing the Davis Fire Department is the issue of staffing and the issue of whether or not the fire department needs a fourth fire station. Data presented by the Davis Fire Department has often shown that Davis has a relatively low number of fire fighters per thousand people, a high population per station, and a low cost per capita.

The Vanguard's analysis largely confirms those findings that would seem to suggest that davis is in need of more fire staffing, an additional fire station, and that it is run relatively cost effective.

However, the Vanguard moves beyond that statistical analysis and analyzes these measures looking number of service calls as the key variable rather than population. Using the metric of service calls, we find Davis consistently inefficient. Davis ranks at the bottom in total service calls per year over the four year period, at the bottom in calls per 1000, in the middle of calls per fire station, and fourth to last in the staffing ratio for service calls.



The key finding here is that when you look the cost per call for the city of Davis is it the fourth most expensive of the 12 sample cities at just under $2100 per service call. It ranks below Palo Alto, Folsom and Roseville. And just above the city of Berkeley and the city of San Luis Obispo. However, even that is not the complete picture.

Davis provides Basic Life Support (BLS) and requires firefighters to be EMT's. However, the highlighted cities provide Advanced Life Support (ALS). That means that in addition to fire and EMT services, they also provide ambulance transport which requires Paramedics. In other words, they are providing far more service with their expenditures than Davis does. Whereas Davis has to outsource ambulance services for an additional expenditure.

Looking at it that way, Davis provides the highest cost per service call of any city only providing fire and BLS.

The key for these data is the low volume of service calls overall and the low volume of service calls per 1000 residents. Davis is at the very bottom in terms of number of service calls and far on the bottom in terms of number of service calls per 1000 residents.

On the other hand in terms of calls per station, Davis ranks in the middle at seventh which probably suggests that its current number of stations is about right. Adding to that fact is the fact Davis is the smallest of these cities in terms of square miles (not shown) at 9.9 square miles. It is also second in population density to Berkeley which has 101,000 residents for its 10.5 square miles as opposed to Davis' 63,000 residents for its 9.9 square miles. Thus the physical area of Davis is the smallest and its population heavily concentrated.

This is important to understand because in terms of population per fire station Davis ranks only behind Vacaville and just ahead of Fairfield in terms of the number of people each fire station has to serve on average. Davis also has the second fewest fire fighters per thousand residents, this time just ahead of Fairfield and just behind Napa and Vacaville.



As was mentioned earlier, Davis also ranks second to last in terms of cost per capital. Davis spends just under $144 per person on fire services, that ranks well ahead of Fairfield's $112.50 which was the lowest cost per resident. Davis ranks just behind Napa which was at $147.66.

These statistics are generally used to support additional fire personnel and a fourth fire station. However, they appear to be mitigated by actual need in terms of number of service of calls.

So while Davis ranked 9th in actual overall spending on fire services, again accounting for the fact that five of the municipalities use their fire budget to provide ambulance and paramedic services as well, Davis ranks fourth in that cost per service call.

Davis needs to evaluate its staffing needs based on a full array of statistical measures. As the city moves into a cost saving mode, there are a number of issues it needs to weigh in terms of staffing of the fire department.

The first question is the one that the Vanguard has touched on the most and that is salary of the individual fire fighter in addition to their their overtime, total compensation, and perhaps most importantly their pension plan that will pay them 3% at 50 for every year of service they have provide pro rated to their ending salary.

The second issue is it needs to evaluate its staffing needs. Davis unlike a lot of other cities uses a four person unit. If the city were getting a high number of fire calls, a four person unit might be preferrable, but the call volume and the ratio of fire calls to other emergency calls suggest that this is not the case. Therefore the city might want to look into other staffing configurations that will allow the department to continue to serve the public at the highest possible level while conserving the costs.

Along the same lines, the city might evaluate whether every fire station needs to send out all of its equipment for every call. This is done in case of multiple calls but the result is a loss of efficiency and cost effectiveness. Again, we do not pretend to know the answers here, only pose the questions of things the city can explore to reduce cost.

Finally the issue of the fourth fire station arises. The fire department has long maintained that response time dictates a fourth fire station. The fourth fire station would add construction and maintenance costs, but also staffing costs.

Our analysis calls the need for the fourth fire station, or at least a full fourth fire station into question. The number of calls, the overall staffing, and the population density all point to the need to maintain current levels of staffing at best. A full fourth fire station with equivalent staffing looks like a great waste of resources according to this model.

That is not to completely rule out a fourth fire station. However, the city will need to develop an alternative model for it. A fully staffed fourth fire station, would greatly add to the cost per call. Resident surveys already indicate a high satisfaction rate. So the question is really what is the safety bang for the buck by adding another four person team on call at all times, which would raise the cost by another third.

The city might be better off developing some sort of alternative staffing model or a hybrid model if it believes there needs to be a greater spread throughout the city geographically. However given the compactness of the city, that is not altogether clear. Moreover, given the relatively low call volume Davis receives, the need for additional resources do not seem pressing or justified.

Davis needs to get its fiscal house in order overall. Right now, the city's fiscal situation is not in crisis mode but there are problems on the horizon if the city fails to contain costs. Fire staffing and salaries would seem to be one area that the city needs to look into in order to do so.

---David M. Greenwald reporting

District Teachers Face Agonizing Choices

Under ordinary conditions, it seems unlikely that one would find a person more supportive of teachers than myself. I come from a family of teachers, I have myself been a teacher at times, and I believe in general teachers are unpaid for the importance of the job that they perform. Most people who suggest that teachers have an easy job and work only nine months, have either never taught themselves or never put a full effort into teaching. I am constantly amazed that teachers have the stamina to teach for eight hours and then go home to grade papers (no easy task) and prepare lesson plans.

I say this because after reading the full comments from the teachers from Casar Chavez Elementary School who also spoke up during public comment on Thursday evening at the school board meeting, I'm not sure I could really disagree with them more.

They write:

"First, we do not accept being placed in a position of choosing between salary reductions or seeing colleagues lose their jobs. It is the responsibility of the budget officer, the superintendent and the board to make informed, honest, transparent and responsible decisions.

At the all-district staff meeting held by Superintendent James Hammond on Feb. 11, we were given an ultimatum: Either we agree to a 4 percent permanent salary reduction, before a state budget is even approved, or there will be layoffs this year. We believe there are many more options than just salary reductions or layoffs, and it is incumbent upon the board to ensure that all options are thoroughly investigated."

I am unsure of where these individuals have been for the past few months, but if they read the newspaper at all during that time they might realize that across the state government employees (of which they are one) are having to make this painful decision across the board.

Yolo county employees have taken voluntary furloughs as the county faces a $22 million deficit for next year, in hopes that their colleagues will not be laid off. State employees represented by SEIU have reached agreement with the Governor to take what amounts to a 5% paycut, which is an improvement over the 10% paycut imposed by the Governor. These furloughs and paycuts are happening across a state that has recently had to cut $15 billion in spending due to the worst economic recession in 70 years.

The same thing is happening in the private sector--employees are being laid off in scores. There has been at least 500,000 and sometimes approaching 600,000 job losses per month. So the fact that the district is giving them a choice as to a paycut or pink slips, is hardly unique or surprising.

The teachers have a choice to make because right now the district is running deficits for the foreseeable future in the $3 million range.

The school board takes no joy in this. In fact, I have spoken recently to just about every member of the board and the reactions I have gotten borders on heartbreak for having to make these decisions. They did not run for school board to lay off teachers. But that is the choice that they now face.

I don't see many options other than salary reductions or layoffs and I have been over the budget as much as anyone this side of Bruce Colby. But I suspect if you have a counter-proposal the district would be glad to hear it.

"Second, the top four district administrators made an offer to reduce their salaries. This offer is contingent on the Davis Teachers Association's agreement to teacher salary reductions. It is wrong to pressure the teachers with a misleading public gesture. These administrators have recently negotiated with the board a raise for the 2009-10 school year as well as ongoing yearly increases. These increases add up to as much as 15 percent since October 2006."

I agree with the teachers that it was a mistake for there to have been any kind of raise for administrators. I think one of the worst decisions made was the decision to give Bruce Colby a 5% raise in December. It set a bad precedence and it looks bad to the public. Unlike last year, I think we had a pretty good idea as to what coming down the pike.

"Third, when asked about the magnitude of the administrators' raises, Superintendent Hammond expressed that removing these raises 'would not solve the budget problem.' The teacher whose position is erased by these raises certainly will have a budget problem to solve. "

On the other hand, they have offset these raises by cutting back on their own support staff, not through layoffs but through attrition. In essence, each of these individuals are having to go without support staff or performing the work of multiple individuals. Again I understand the point the teachers make, I agree with them to some degree, but they are focusing on literally pennies on the dollar here. There could have been no raises, and we would still be focusing on this plan which would require either layoffs or salary cuts. This is largely a distraction from the main issue.

"Fourth, we oppose the plan to build a $10 million high school stadium while there are schools such as Emerson Junior High which, last year, was under consideration for closure due to dilapidated facilities. Additionally, the long-term effects of the stadium financing on the general fund are not clearly delineated, and a clear payment plan has not been developed."

My understanding is that there are no impact of stadium financing on the general fund. That money comes strictly from facilities money. There was redevelopment money used to finance a portion of this. There was a strong safety issue and liability issue that exists with the stadium in its current conditions. My understanding of the issues with Emerson is that much of the repair and upgrades have to do with being out of date with various codes and can be addressed at a later point. No one believes that there are either safety or liability issues with Emerson.

While I would tend to agree in part that the district has done an exceedingly poor job of explaining this to the public. That it looks bad to be crying poor at the same time you undergo a $10 million renovation of a football field. Nevertheless, much of that public outcry is based on poor understanding of how school financing works and the fact that facilities money and general fund money that would go to instruction are completely separate, money available for facilities upgrades is not available for use in the classroom.

"We believe that salary reductions should be negotiated fairly and honestly, and only after the state budget is approved and allocations to the Davis school district are clear. Additionally, the offer of the top four district administrators should not be contingent on teachers' agreement to salary reductions."

To me this represents a lack of understanding of the collective bargaining process. The district cannot unilaterally impose changes to a contract. The changes to the contract such as reduction of salary must be approved by the Davis Teachers' Association. Therefore to a large degree the ball is in their court on this one.

As DTA President Ingrid Salim said on Thursday, it was her perspective and possibly that of the DTA membership that they would take their chance with 20 layoff notices (by her count, although the district is approving 36.6 FTE position cuts) than taking a salary cut. That is within their right to determine.

The second part of that is that they are demanding the administrators take a cut regardless. That cut is largely symbolic anyway. We are talking about maybe $30,000 or $40,000 in savings against a deficit of over $3 million over the next two years.

I am all for them taking it, but let us not make this out to be bigger than it is.

Unfortunately the district and board are taking a fiscally responsible step of identifying all of the necessary cuts up front and proposing a balanced budget for the three year period.

The really bad news is that this may not be rock bottom. There is increasing belief that the May revised budget from the state will have another deficit in the 11-figure range that will result in more cuts to education funding.

In short, while I sympathize with the position of teachers and all district employees as well as all state employees, I think that there is going to be little choice but to make the tough decision between salary cuts and pay cuts. I also think that the teachers are setting themselves up for deep layoffs in May, deeper than projected right now by not taking a further look at pay cuts.

By all means identify alternative budget cuts. All entities should do that. But if you look at the district budget, you quickly see where the majority of money goes, and it is to teachers.

It is my hope that the teachers work together with the district and board to make this as painless and cooperative a process as possible given the horrible circumstances that we face in this district, in this county, and in this state at this time.

---David M. Greenwald reporting

Dunning Misunderstands the Need for Local Agencies to Maintain Reserves

The Vanguard has all but stopped responding to Bob Dunning columns from the Enterprise, but his column from Friday is so outrageous, irresponsible, and most importantly just plain ignorant it would be irresponsible not to respond.

The title of the column is "It's Time We Let Go of Our Reservations."

He writes:

"SURPLUS SPENDING - as the economy - locally, nationally, globally (take your pick) - continues to fall off the cliff, it was encouraging to me to intercept an e-mail from Councilman Steve Souza to a local resident bragging about how fat and sassy we are in the City of All Things Right and Relevant - noted Souza: 'Almost all of the cities around us would love to have our financial woes instead of their own. We have a 15.2 percent or $5.35 million reserve.' - wow, 5 million here and 5 million there and pretty soon you have a billion -

But, as nice as a reserve is - and I don't care if we're talking about the city of Davis or the local school district - when you start talking about laying people off instead of dipping into the reserve, your priorities are backward - if we're saving our reserve for a rainy day, I'd like to point out that today is that rainy day - it has arrived - anything we can do to preserve the jobs of city and district employees should be priority one - laying anyone off for fiscal reasons when we have a healthy reserve is contrary to what this town should stand for..."

The first question that comes to mind is whether Mr. Dunning ever does research on his columns, would he like talk to the finance directors from either the school district or the city and ask them about their reserves? Would he talk to Souza himself to ask him about his email?

Here's the best explanation of the city's reserve:

"The City maintains a “reserve” much like an individual or household would keep a savings account accessible for an emergency. The City Council has adopted a policy to have a General Fund reserve equal to 15% of the City’s General Fund revenues. This is a contingency reserve for general operations to help mitigate the effects of unanticipated situations such as recession, man-made or natural disasters, variances in financial forecasting, or costs imposed by other governmental agencies. The City does not use the reserve to fund ongoing services..."

Basically the way you maintain a reserve is you pretend like the money does not exist unless such an emergency situation arises. One reason for that is that city's in general cannot take on debt like the federal government can. So if an actual emergency came up, and the city spend its reserve on say employee salaries, then the city would be in deep trouble.

The city developed this reserve policy back in 2006. According to policy, the reserve acts as a "risk management" tool, it provides a buffer against revenue fluctuations inherent in economic cycles, and most importantly the policy prohibits the use of reserve funds for ongoing operating expenditures.

The key to remember is that the reserve is one-time money. Once you use it, the money is gone.

Dunning's column mentions the school district as well. School districts are required by Ed Code to maintain a fund balance reserve every year. That money cannot be touched at all without severe consequences. The district generally maintains its own reserve above and beyond that much the same way as the City does as a risk management tool and a protection against fluctuations and emergency situations.

In the late 1980s, an increasing number of school districts were facing fiscal insolvency. Laws were enacted that created budget standards and increased fiscal oversight for all local education agencies. One of these standards was that local school districts set aside a certain percentage of their budget as a reserve for economic uncertainties. This reserve provides a cushion against unanticipated fiscal needs that may arise and thus reduces the risk of fiscal insolvency and the associated need to borrow and increase district debt.

Failing to meet the reserve requirement does not have a mandated consequence, however, as we know from other discussions, the County Office of Education oversees the finances of all local school districts. If DJUSD were to eat into its required reserve it would increase the likelihood the county superintendent of education intervening into local school district affairs.

DJUSD carried the state-required 3 percent financial reserve, which is just over $2.1 million. However, they cannot touch that reserve. The district also carries its own one percent contingency reserve which comes to about $650,000.

Interestingly enough, the district discussed this very issue on Thursday and the Davis Enterprise covered it in this morning's paper.

Given the fiscal situation in the state, districts are being given greater flexibility with some of these reserves.

But a key point with these reserves is that they are one-time monies. They will get depleted rather quickly given the nature of the economic crisis. As Bruce Colby put it, last year was a crisis, this year is a crisis, 2010-11 will be a crisis, 2011-12 could be a crisis.

Moreover, in general one has to balance the three-year budget using ongoing revenues, not one-time monies.

As Tim Taylor put it:

"From my perspective, you would spend it in a situation where you have an emergency need, something that would not commit you to ongoing year-after-year obligations."

Bottom line here is that using reserves is not going to solve our fiscal problems, and it could make them worse as time goes on. Bob Dunning needs a better understanding of the fiscal policies, rules, regulations, and economic crisis before he makes such irresponsible statements.

Getting back to his column, there is another key point that needs to be addressed.

Here he quotes Councilmember Stephen Souza:

"Almost all of the cities around us would love to have our financial woes instead of their own. We have a 15.2 percent or $5.35 million reserve."

Davis is in better condition that a lot of other cities but it has very little to do with the reserve. I would and have argued that our fiscal policies are just as bad as many other cities--if not worse. And we are going to have to deal with that. Having that reserve just means we can weather an immediate crisis better than other cities. We still have an ongoing structural deficit. We still have an ongoing problem of unmet needs. We still need to fix our unfunded mandates. We still have to fix the pension system. We still have to reign in employee salaries at the top end of the scale.

However, the bottom line is the city of Davis has been hit less hard than other cities with the foreclosure crisis. It has been hit less hard than other cities because its property values have not plummeted as others have. We rely less on sales tax revenues than other cities as well, so while the declining economy is producing a tax revenue fall off, it is not to the point where cities like Roseville who are facing eight figure budget deficits.

The bottom line is that while we have a deficit for the next few years of at least 3 million and as much as five million (and notice if we used the reserves to fix that, they'd be gone after next year), we can probably survive short term by adjusting our spending and tightening our belts.

That is not to suggest that we do not have bigger issues. It is just to suggest at this point the economic crisis is not devastating us like it is many other cities or even Yolo County.

So yes, Councilmember Souza has good reason to express optimism, but it is not because of our reserves. Our reserves would be depleted very quickly in this crisis, if that was their intent.

Dunning has a large amount of influence in this community and his column is undoubtedly the most widely read feature in the Davis Enterprise. With that influence requires a degree of responsibility to research and understand the issues on which he has opined. In this regard, he has failed in his duties by suggesting the city or the school district are being irresponsible by maintaining fund reserves. In both cases, maintaining reserves is either required by law, required by city policy, and necessary and prudent for these entities to whether the uncertainty of such a downturn. It would be the height of irresponsibility for them to use these reserves in an effort to avoid making tough decisions in the coming year.

---David M. Greenwald reporting

It is Time To End the Two-Thirds Rule

In theory the requirement in California to obtain the consent of two-thirds of the legislature to vote for a budget sounds like an idea that would promote consensus building and bipartisanship. I wish I could say that was in the intent, but it was more mundane. The intent was to prevent tax increases from being enacted. For many years it has accomplished exactly that; however as time has gone on, it has exacted a higher and higher price. It has prevented the type of wholesale structural changes that we need for reform to take place.

It has led to gridlock, forcing budget after budget to be adopted late. It has led to unnecessary delay, wasted time, and worse yet, in a crisis outright paralysis.

An early February Public Policy Institute of California survey showed that for the first time, a majority of Californians supported altering the two-thirds vote requirement to require a 55% vote. That was before our latest drama with the budget.

For years Democrats have wanted to take it on. Now for the first time they are serious about doing so. The only question is how soon they do it and whether or not there is finally the political will for it to succeed.

At the core, were Republicans who seemingly were willing to plunge California into fiscal crisis rather than vote for a tax increase that their own leadership said they had no choice but to support because it was the only way to balance the budget. At which point, at least in the Senate, they got rid of their leadership and elected a more intractable leader.

It was a process that saw one Senator exact a high price in order to finally secure his, the 27th vote in the Senate, and secure the passage of the budget. The price is a constitutional amendment to have an open primary.

Without the two-thirds vote requirement it is clear that the open primary issue would have never come forward. Speaker Karen Bass at the post-budget vote press conference early Thursday morning expressed regret that it came forward in the manner that it did without the kind of public process she would have preferred.

“I will tell you that none of us felt very comfortable with putting a bill forward like the open primary because it was never heard by a committee, there was no public process, that's not the way we like to do business. But the fact of the matter is that just represents one of the many many many difficult choices that we made over these last few weeks.”

She continued:

“If we didn't have the two-thirds requirement to pass the budget tonight's open primary issue would not have even been a concern. We would have passed a budget a long time ago. But you very well know that we needed one more Republican vote in order to pass this budget. And the requirement for that vote was to pass this bill.”

Indeed both Speaker Bass as well as Senate President Pro Tem Darrell Steinberg seem ready to lead the effort to repeal the two-thirds vote requirement.

As Pro Tem Steinberg said:

“The answer in my view is to take this two-thirds supermajority requirement. We are one of three states in the country that allows a small minority of members to hold up the progress.... It doesn't really work for California; it worked this time barely because of the magnitude of the crisis... We need to take the question this two-thirds supermajority to the ballot. I feel even stronger now than I did when I started on December 1.”

Speaker Karen Bass was also ready for the two-thirds requirement to go.

“One of the things I want to be voting on, if not in 09, then 2010, and that's the removal of the 2/3rds vote requirement so that California can be like 47 other states in the union. So the next time when we have a deficit like this we won't go months and months for negotiations.”

The big problem is that two-thirds vote requirement does not produce consensus building, but rather political blackmail, horse trading, quid pro quo, and it often requires the passage of pork in order to secure votes.

To the hold outs get the spoils. Senator Lou Correa is getting an extra $140 million in property tax revenue for Orange County over the next two years and $50 million after that. You see, Orange County happens to have the second lowest per capita property tax revenue in the state. You know who has the lowest? YOLO COUNTY.

However Yolo County is not getting that help, despite a $22 million deficit for 2009-10 in a budget of $66 million. Why is Yolo County not getting that help? Because Senator Lois Wolk and Assemblywoman Mariko Yamada did not blackmail the Democratic leadership and holdout for pork or other promises.

Senator Correa was not alone. Senator Ashburn, one of three Republican votes got a $10,000 tax credit to people who buy new homes.

And of course it is well known about all the things that Senator Maldonado got in exchange for his vote. There is nothing new about this though.

There is concern that the deal cut with Senator Maldonado to enable the budget to be passed sets a bad precedent. That was downplayed to a large degree. Speaker Bass argued that these types of things always happen, although it is more likely to be a specific project or even policy.

“Every year the budget is debated and frankly at the end of every session there's last minute horse trading. Until we get rid of the two-thirds vote requirement we will be doing the same thing.”

Senator Steinberg:

“I don't like it and it was an unpleasant part of the process, but I'll tell you what the answer is. The answer in my view is to take this two-thirds supermajority requirement.”

That movement is already underfoot.

The Courage Campaign has already launched a campaign to end the two-thids vote.

"The rule requiring a 2/3rds vote of the legislature to pass a budget allowed a small cabal of extremist Republicans led by Senator Abel Maldonado to hold the state hostage to their demands, as they have done year after year. As Rachel Maddow explained on her show, this is part of a pattern of Republican obstruction across America."

They are not alone. Word is the Democrats in the legislature have already hired consultants to spearhead the initiative drive.

The League of California Cities recently put out a publication where the focus was on the two-thirds vote requirements. The side in favor of retaining the two-thirds requirement is represented by Assemblyman Roger Niello. At least give him credit, he was one of the three in the Assembly to vote for the bill.

John Laird, an Assemblymember and former League of California Cities board member writes for the opposing side.

One of the problems hanging over the process is the fact that Republicans who vote for these budgets put themselves in electoral jeopardy:

"After a 2001 budget in which four Assembly Republicans joined all Democrats in approving a budget, for various reasons not one of those Republican legislators returned after the next election. That experience hangs over every budget."

Indeed this time we saw a conservative blogger put Republicans heads on the pike, threats from Rush Limbaugh, and the very real possibility of recall for Assemblyman Anthony Adams.

The Redlands Daily Facts reports:

Sen. Robert Dutton on Friday asked state Assemblyman Anthony Adams to resign as chairman of the San Bernardino County Republican Party after Adams voted in favor of nearly $13 million in temporary tax hikes.

...

"Anthony Adams has called Senate Republicans `recalcitrant' because they won't support a budget proposal that raises taxes on hard-working California families by more than $13 billion," Dutton, R-Rancho Cucamonga, said in a prepared statement Friday. "It's clear that Assemblyman Adams doesn't represent the core values of the Republican Party and I am calling on him to immediately resign as chair of the San Bernardino Republican Party."

As the Sacramento Bee reported in the Capitol Alerts, he knows this is probably the end of his political career :

Republican Assemblyman Anthony Adams cast his "aye" budget vote at dawn today with full knowledge that, as he has said, "this will probably be the end of a political career for me."

...

"I think it's important that people know that my caucus is supportive -- that I'm not making any decision lightly," Adams said on his way into a GOP member's office Wednesday. "I'm also not making a decision outside the realm of our caucus. I'm not out there by myself or trying to engage in something that does not have the support of my caucus."

The Bee article continues:

A recall effort against him is already afoot.

The 38-year old lawmaker has been in anti-tax advocates' crosshairs ever since a Sacramento Bee story on Jan. 22 and an appearance later that day on the John and Ken radio show in Southern California. The shock jocks were blasting Republicans, including Adams, for telling The Bee that taxes were on the table in budget talks.

"I dare with the full knowledge that this will probably be the end of a political career for me," Adams told the radio duo. "But the fact of the matter is California is in a place where they need people who are willing to sacrifice their own personal agenda for what's right."

The radio hosts responded by posting an image of Adams' decapitated head on a stick on their Web site.

Truth be told, Anthony Adams is much closer to a hero in the budget battle than Abel Maldonado ever was. He never tried to hijack the process or hold the state for ransom. Instead, he did what he believed he needed to do to protect the state of California and exercise his constitutional duties as an elected official. For that he is probably looking at the end of his political career.

This weekend it is reported that at the Republican's state convention that the six Republican lawmakers will face the possibility of censure by their own political party.

Who would want to subject themselves to that? Who will do so in the future the next time a budget fight comes down and the legislators have to grapple with unpleasant choices? This is not done. There is a possibility that the May revise will be bring even worse news.

The movement is already afoot to repeal the two-thirds vote requirement. On February 18k, 2009, a ballot initiative was already circulating with the California Secretary of State's webpage to do exactly that.

In fact there are two of them.

The language of the first:

"STATE BUDGET. REPEAL OF TWO-THIRDS LEGISLATIVE VOTE REQUIREMENT. INITIATIVE CONSTITUTIONAL AMENDMENT. Lowers the legislative vote requirement necessary to pass the state budget, and spending bills related to the budget, from sixty-seven percent (two-thirds) to fifty five percent. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Unknown changes in the content of the annual state budget. Fiscal impact would depend on the composition and actions of future Legislatures. (08-0022.)"

The second one would retain the two-thirds vote requirement for raising property taxes but remove it for the budget.

STATE BUDGET. TAXES. REPEAL OF TWO-THIRDS LEGISLATIVE VOTE REQUIREMENT. INITIATIVE CONSTITUTIONAL AMENDMENT. Lowers the legislative vote requirement necessary to pass the state budget, spending bills related to the budget, and budget-related tax increases, from sixty-seven percent (two-thirds) to fifty-five percent. Retains sixty-seven percent (two-thirds) vote requirement for property tax increases. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Unknown state fiscal impacts from lowering the legislative vote requirement for spending and tax increases related to the budget. In some cases, the content of the annual state budget could change and/or state tax revenues could increase. Fiscal impact would depend on the composition and actions of future Legislatures. (08-0023.)

As this process shows us quite clearly, we need to change the system for so many ways. First, in an emergency we get a watered down budget that often does not fix the problems.

Second, it leads to delay. Had we passed this back in September of last year, the tax measures could have gone on the November ballot rather than this year's May ballot, and the state could have saved the multimillion dollar cost of a special election. Moreover, the delay cost the state billions of dollars, it costs people jobs, it delayed infrastructure projects that will cost money as well.

Third, it leads to political blackmail. It encouraged holdouts to extort prices for their votes. It gave them perks and rewards for holdout and but the people in districts where the legislators did not hold out often need the help just as badly. The process is inherently unfair.

Fourth, it leads to death threats to politicians, usually Republicans, whose career are now threatened for doing the responsible thing.

And just for good measure, Assemblyman Laird mentions another drawback to the two-thirds process.

"As I write this, the budget is almost two months late. The Democratic legislative committees and the governor have long since proposed balanced budgets with some new taxes, none of which include borrowing.

If by the time you read this, there is borrowing in the budget, it is not what the governor or a majority of the Legislature wanted. It will be the two-thirds requirement that will have leveraged it in so the budget process can conclude. To add insult to injury, often the very interests that leverage borrowing into the budget won’t actually vote for the budget — leaving it to the rest of us to approve a budget that includes things we find distasteful.

It’s said the two-thirds requirement protects fiscal responsibility. I think the opposite is true. We got where we are now with the two-thirds requirement. This is no way to run the government of the eighth largest economy in the world. This needs to be changed. There’s a reason 47 other states do not do this — and that their budgets are adopted on time."

Laird is exactly correct. We do not have fiscal responsibility. We did not pass a responsible budget in September of 2008 and we did not pass one now. We have more borrowing, added pork, we have not fixed the state's structural problems, we have special measures on the ballot, etc. Nothing even resembling fiscal responsibility occurred due to this process.

There is always talk of ending the two-thirds requirement, this time, it appears that there just might be the political will to do it.

---David M. Greenwald reporting

DJUSD Looks at State Budget Impact

DTA Stakes Out Position Against Salary Cuts

For the first time, DJUSD last night began working with real budget numbers rather than rough approximations. The bottom line is that California education took a pretty hard hit and unfortunately, they did not get the kind of full categorical flexibility that they were hoping for. In the coming days and weeks, we will examine some of these numbers more thoroughly.

Right now, we will just offer a brief summary of the district's budget picture and focus on some interesting responses from DTA and the community regarding the issue of the Davis High School Football Field and Track Renovation as well DTA's believed preference to take the 20 RFK's rather than a salary reduction.

But first a brief look at the budget climate at least right now. The state decided not to cut the number of school days. So the 180 day school remains in effect. The school district could have saved $250,000 for each day that was cut from the schedule, but that did not make it to the final budget.

Nor for all effective purposes was flexibility in the text books categorical funding. That would have been a way to save over $800,000 by forgoing updated English and Math text books. But again, that is not to be.

Finally, the speculation is that the state is going to soak up all of the federal stimulus money in order to balance their own budget. There was at one point speculation that DJUSD could get one to two million from that pot, but that is believed to be off the table as well.

There is some categorical flexibility, but that flexibility is off-set by nearly one million in categorical fund reductions. Moreover, there are decreased penalties for going over the 20:1 ratio for class size, but it is not a full flexibility either.

In short, the district is going to have to find a way to reduce its deficit and the most likely to occur either through salary cuts to employees or through pink slips.

STADIUM ISSUE

What is becoming interesting at this point is where the teachers and DTA stand in terms of what the district ought to be doing. Several came up and spoke during public comment expressing displeasure at the district's decision to fund the construction of the new DHS football stadium.

This has become a source of great criticism within the community. Indeed in the Davis Enterprise yesterday appeared two letters criticizing the building of the new stadium.

The most pointed read:

"'Teachers asked to take 2.5% pay cut' along with a higher headline citing the school board's decision to proceed with a $4 million plan to upgrade the football stadium. What a travesty!

Obviously, a stadium is more important than classrooms and teachers and student learning."

Coupled with the criticism during public comment, Superintendent James Hammond responded in perhaps his most heated manner yet attempting to explain once again the funding issue.

What the district needs to understand on this point is that they are not only losing this public relations battle, they are getting killed by it. In terms of the facts, the district is right, the funding sources are different, funds that are available for construction cannot be used for instruction.

Guess what? The public is not going to understand that. They see multimillion dollar upgrades to a football stadium and at the same time the district is contemplating about cutting teacher positions or asking them to take salary cuts, and the public is going to be suspicious of the school district.

The district now puts itself into a bad position. They either have to try to explain this to the public, which will be difficult and perhaps not fruitful. Or they can allow these beliefs to fester. There is no election at this point in time, but people do not forget these kinds of things.

From the teachers standpoint, DTA President Ingrim Salim laid it on the line last night.

"I want to address the stadium question because it is out there. I think what you should all be aware of is that certainly there is different pots of money and many of us can grasp that, but not all of us does. That’s just confusing. It’s going to be really hard to mitigate the effects of the confusion.

The second piece from the DTA standpoint is that while probably from the community standpoint they supported the stadium, certainly within the teaching community, they really wanted to see Emerson renovated. There’s not a way to fix that perception either."

The teacher issue thus is somewhat different. They understand the funding differences, at least in theory, but they believe that the priority should have been Emerson rather than the high school.

The district has a difficult position here because they are correct on two essential points. As mentioned before the funding. And the second problem is that the current situation is untenable. You have a serious safety risk, and that is a liability to the district.

However, the timing of this could not have been worse.

DTA WOULD RATHER TAKE PINK SLIPS THAN A SALARY CUT

Ingrid Salim's follow up comments were just as interesting. As she laid out for the district the likely but not official DTA position on salary cuts. Basically they would rather take the 20 position cuts rather than a reduction of salary.

Here is her lengthy statement from last night:

"Last year we did have reserves and yet we RFK’d 114 people. So people are just suspicious even though I can look at the budget numbers and see what happened as a result of last year and now we’re not being quite so conservative. But last year there was money in reserves that weren’t applied immediate to personnel. So we RFK’d people, we didn’t end up laying off, and we backfilled. We filled back in with DSF money… But we didn’t use those reserves right away. So that might give some understand about why people keep questioning about are there reserves and are suspicious that there might be. I personally don’t question that, I think we’re using them differently than we did before. That’s just the background of where that suspicion comes from.

The last piece of that is that it’s just real hard to correct misinformation that gets out. Whenever people are defensive and afraid for jobs and for money or whatever they certainly spin things. We can do our best job to try to correct misinformation but it’s just a battle. So just to know that. We can civilly disagree but the battle of misinformation will still be there. And perceptions are very hard to fight.

The other dicey piece is that you asked both unions to consider salary cuts and where w are is a combination of all of these perceptions. The reality is that we would have to have all of our membership voting or over half of them… Our union will be doing a survey to see where people are in terms of what they want to do.

But the undercurrent that we’re getting if we’re really talking about 20 jobs, and last year it was 114 and we weren’t talking about a salary cut, that probably the majority of the people say that’s okay. It’s okay to cut 20 jobs. Basically that’s programs that probably need to be tightened anyway if we’re going to have sustainable education with a smaller budget. The bulk of people that we’re hearing and getting information from, and like I said we don’t have a formal hearing to say that for sure, but that’s sort of the sense we’re getting…

We’re certainly going to ask, we’re certainly going to push forward with this concept, and there are people who say no, let’s take a cut for everyone. But that’s kind of what’s out there right now.

The final part is that there are places where we’d say it would be okay to increase class size, for instance at the 9/ 10. I’m not speaking for DTA, I’m just saying things that we might say. The 9/10 English and Math to [a class size of] 24 instead of 22. That’s not a huge impact on class size reduction. That would be preferable to something like considering a salary cut.

We do worry about the logistics of putting into place something like a salary cut or anything like that, because of the exit strategy—when do you change it? What happens to retirees? And all those little tiny things that just seem huge and overwhelming.

We will start that process next Tuesday [petitioning our members]. We’re pretty comfortable about where things are right now in terms of going forward. We’re going to be going over the budget pretty closely ourselves, finetooth combing, trying to find other ways to meet this deficit."

From my standpoint, the position laid out by Ms. Salim makes a good deal of sense from the teacher's standpoint. Salary cuts are problematic for a number of reasons including the difficulty of making ends meet during tough economic times.

Furthermore two other essential points were raise. First, the sheer number, if it is indeed 20, one would think the likelihood of anyone losing their job was pretty small. For one thing you have attrition through retirements and through people moving.

Second, she makes the point, a point that was made on this blog at times, that if we want to have a sustainable education on a smaller budget, and a smaller budget is the reality right now, then tightening up the programs is probably a way to do it.

The part that somewhat surprised me is that the teachers support a slight increase of class size at the 9/ 10 level, a level given full flexibility by the state, from 22 to 24. She argued that was not a huge impact on class size reduction but was preferable to taking a salary cut.

The bottom line here is that a salary cut would have to be negotiated with the DTA through the collective bargaining process. This was a strong and public signal that DTA is not there right now.

The school district has an ongoing perception problem in dealing with the DHS stadium repair. They had better get on top of that issue or it could backfire on them in the future.

---David M. Greenwald reporting

Word To The Wise: The Foreclosure Nightmare Part 2

Wake Up and Smell the Coffee!--PART 2

By E.A. Roberts

Part 1 was published Thursday February 19, 2009

Where Do We Go From Here?

1. Stop encouraging the policy of lending money to folks who do not have the wherewithal to repay.

• Disallow subprime loans, in which borrowers clearly do not have the resources to make payments.

• Use government subsidized “affordable housing” strategies to place low income consumers in homes, rather than pawning off the responsibility to the private sector, which is largely unregulated.

• Encourage people to live within their means.

• Disallow gimmicks by private enterprise that addict consumers to spending.

• Government should set a good example to consumers by balancing its own budget.

• Government cannot keep bailing out private enterprise, which is becoming all too common an occurrence.

2. There must be more government oversight and regulation from the beginning, rather than after the fact, of the following:

• Lending standards

o Proof of employment should be obligatory;
o Sufficient income required;
o Adequate down payment necessary

• Bank/lending institution practices

o Exorbitant executive compensations/perks should be disallowed;
o Compensation should be tied to economic health of company;
o Expensive retreats for non-business purposes should be disallowed.

• Sale of securities

o What type of things can be sold as securities and how can they be sold?
- Ban subprime loans for sale as securities;
- Ban bundling of different types of securities.
o Insist on and enforce an objective credit rating of securities.

3. Make originator of loan accountable for any default - institute tracing system if mortgage is sold as security.

4. Crack down on predatory lending practices.

• Ban Adjustable Rate Mortgages altogether;

• Make sure customer is fully informed as to each and every term of a loan;

• Have strict guidelines for loan refinancing;

• Limit what lending institutions can charge in fees and interest;

• Punish lending institutions that do no conform their behavior to the law

5. End the political and ideological rigidity and polarization that has taken hold in this country. We need to get back to pragmatic policies instituted for the good of the country. Blaming one party or the other is fruitless. There is plenty of blame to go around on both sides of the aisle, in private enterprise, and in regard to consumers.

• Push to obtain minority votes is polarizing this nation;

• Protecting business at all costs is destroying this country;

• Campaign contribution methods are corrupting our political process.

6. Encourage lending institutions to do the right thing, by not giving them any bailout money unless they agree to all of the following:

• Recapitalization of the banking system;

• Restructure mortgages by -

o Eliminating Adjustable Rate Mortgages;

o To avoid foreclosures, restructure existing mortgages -
- From ARMs to fixed rate mortgages;
- Extending time due;
- Decreasing interest rates.

• Limit executive compensation/perks.

• No lavish parties at the company’s expense.

WHAT DOES THE FUTURE HOLD?

It is predicted that this nation should be done with subprime loan foreclosures in the first quarter of 2009. I am not sure I agree with that statement. There is no doubt the housing market will be flooded with bank owned homes - from one quarter to one third of all homes for sale will be bank owned. This occurrence could push down housing prices even more, perpetuating a vicious cycle, but it could also attract bargain hunters (and speculators).

Borrowers can escape negative equity by dropping their house keys in the bank mailbox and walking away - except they still may be held responsible for any loss the bank takes on the eventual sale of the house at auction. But abandoned homes are a plague on the neighborhood. They often fall into disrepair, and offer an attraction to looters and squatters, dragging down property values of the entire street. Housing market deflation can produce overshooting on the economy’s downside.

Lenders could forgive part of the mortgage or renegotiate the terms of the loan a) from an adjustable rate mortgage to a fixed rate one, b) keep the teaser rate for an extended period, c) increase the length of the loan and/or decrease the interest rate. But because subprime loans have been bundled in a pool with other mortgages sold to a diversified group of investors, the packaging process puts the borrower and lender a labyrinth of a distance away from each other. So the ability to renegotiate has become nearly impossible. Subprime loans packaged into securities skyrocketed from 32% in 1994 to 81% in 2006.

The solution to the “distance” dilemma might be to give the legal right to change the terms of mortgage loans, or forgive part of them, to servicers who collect payments on behalf of creditors. Another idea floating out there is for Fannie Mae and Freddie Mac, the government sponsored enterprises whose loose lending policies (prompted by Congress) helped get us into this mess, could buy/guarantee any existing home mortgage at a fixed discount from current principal, e.g. 15%, with the understanding the new mortgage would be supported by federal credit guarantees, with interest rates reduced to perhaps 5% with the payment schedule lengthened. Once these mortgages become liquid/tradable, it would improve the liquidity of the entire financial system, or so the hope goes.

Lesson to be learned: Don’t borrow more than you can afford. Save, save, save. Diversify your investments. Don’t trust everything you read or hear. Bring a good healthy bit of skepticism to the table. Know that not a single person is immune from financial ruin no matter how careful one is. Make sure to keep up with the news, and keep involved in the political system, especially the local scene. Locally is where you can exert the most control on what goes on with your tax dollars.

Part 1 was published Thursday February 19, 2009

Elaine Roberts Musser is an attorney who concentrates her efforts on elder law and aging issues, especially in regard to consumer affairs. If you have a comment or particular question or topic you would like to see addressed in this column, please make your observations at the end of this article in the comment section.

Breaking News: Budget Passes - Maldonado Casts Deciding Vote

After an all night session - 45 hours for the entire session - the State Senate voted early this morning 27 to 12 to approve a massive state budget that includes spending cuts, tax increases, and borrowing money to close to $40 billion deficit. California has been at a standstill for the last five days as legislators grappled over a state budget. Governor Schwarzenegger and legislative leaders struck a deal with Senator Maldonado in exchange for providing the third needed vote to pass the state budget. The three Republican votes for the state budget came from Senator Abel Maldonado (R-Santa Maria), Senator Dave Cogdill (R-Modesto), and Senator Roy Ashburn (R-Bakersfield).

Senator Maldonado agreed to give his much needed third vote by negotiating three major concessions. One concession in particular may benefit Maldonado if he runs for higher office. As part of Senator Maldonado’s negotiated deal legislators have agreed to place an open primary on the June 2010 ballot. The proposal would have an effect on congressional and state races in 2012 and beyond possibly helping Republicans win some seats that were lost during the last election cycle. Under the open primary plan proposed the top two candidates in an open primary election would face off in the general election. Candidates would not participate in partisan primaries, but would be able to maintain their party identity on the ballot.

Senator Maldonado will be termed out of the state Senate in 2012. It is rumored that he is strongly considering a run for the position of state controller in 2010 and used this opportunity to gain leverage that could benefit him in his bid for the position. Sources close to him say that he has not yet decided if he will in fact run for state controller.

Some legislators strongly objected to the open primary bill but voted for it anyway because they believe it is more important to avoid a cash crisis and ward off the planned shutdown today of hundreds of construction projects valued at over $5 billion.

The second concession that legislative Leaders agreed to eliminates the additional 12-cent gas tax, which was estimated to have brought in $2.1 billion through June 2010. As part of the changes, a five percent surtax on income taxes will be replaced by a 0.25 percent increase in each income-tax bracket. The new formula would raise approximately $400 million more in income taxes than the previous proposal. The remainder of the lost gas-tax revenues will be replaced by federal stimulus money and $600 to $700 million in line-item vetoes from the Governor.

The third concession by Senator Maldonado was a constitutional amendment to exclude legislative raises in deficit years. This constitutional amendment will appear on the May 19 special election ballot. Maldonado attempted to eliminate legislative pay altogether when the budget is late; however, legislators believed the idea to be unconstitutional.

Many Democrats and political observers fear that Maldonado strong-arming the legislature may set a bad precedent for future attempts at getting a budget on time.

---David M. Greenwald reporting

Guest Commentary: Addressing Safety Concerns and Design Changes to Fifth St Corridor

by Steve Tracy


image by Maren Walker, Landscape Architecture student, UC Davis

This past Tuesday evening the City Council considered changes to the design of the 5th/Russell corridor, between A and L Streets. Opportunities to put missing bike lanes on the street and deal with ongoing safety issues have been missed in the past. We hope this time the community can learn from the experience in other similar situations, set aside fear and emotion, and support a decision to create a safer street that will serve everyone better.

In February of 2005, the timing of the traffic signals was modified at the intersections where F and G Streets meet 5th Street. The new timing, called “split-phase” in traffic engineer vernacular, allows only one direction of traffic on 5th Street (eastbound or westbound) to flow at a time.

Now left turns off of 5th Street at those intersections are “protected” because oncoming traffic is stopped with a red light. This eliminated many dangerous broadside accidents at the F Street and G Street intersections. The Public Works Department should be applauded for addressing a serious problem created when drivers rushed into unsafe left turns against oncoming traffic.

However, the changes fixed only part of the safety problem on the 5th Street corridor. The new signal timing brought on an additional 30 seconds of delay for most drivers using the corridor, which has led to other hazards.

For example, in the average rush hour, only one car a minute turns left from eastbound 5th Street to northbound F Street. The new signal timing imposes a 30 second delay on drivers westbound on 5th, all for the safety of that one driver. Avoiding that delay has drivers making unsafe turns into the residential neighborhoods north and east of downtown to avoid the signals at F and G. These neighborhoods now see much more speeding by impatient drivers, and traffic volumes on alternative routes have increased.

In the four years since the split phase signals were installed, accidents have continued or worsened, especially at the unsignalized intersections in the corridor. This is the record from March of 2005 through the end of 2008 for the entire corridor, A Street to L Street:

109 accidents total
19 pedestrians or bicyclists hit by cars
63 personal injuries requiring treatment

With the current financial crisis threatening City services, we have a situation where 10% of all traffic related calls made by the Police and Fire Departments on streets in the entire City occur on 10 short blocks of a single street.

A recent AAA study reveals that the cost to individuals and society of a single injury in an automobile accident averages $70,000. So in less than 4 years we have run up a 4 million tab on 5th Street. Please, it’s past time to correct this situation.

The best solution also happens to be the cheapest:

It is shown in the graphic above. It’s commonly called a “road diet.” This sounds like a bad term, because we usually don’t like diets, but this one leads to a healthy street. This design technique has been used in literally hundreds of similar situations across the country. Yes, there was initial opposition in many cases, but the results speak for themselves. We are aware of only two cases where the design was completely or partially undone. In fact, many cities went on from their first trial road diet to redo other streets. It works.

This design merges the two center lanes into a single lane for left turns. In time, portions of this lane can be landscaped to beautify the street. We gain a lot of flexibility by merging the left turn lanes: It provides the room to paint in the missing bike lanes. It provides for faster through travel because demand activated left turn arrows can be installed. This all fits between the existing curbs on 5th Street. It requires only paint, and some new traffic lights at F and G. The existing lights can be reused elsewhere.

Between A and B Streets, the only change would be to restripe the vehicle lanes to remove excess width, and stripe in bike lanes. Again, this all fits between the curbs. Almost 50% of the traffic coming east from UCD in the evening rush hour turns off of Russell at B, so this is the logical place to drop the extra lane which isn’t needed beyond that point.

Other communities engaged in road diet projects to address safety issues, with great results. Accident reductions often have been at or over 50%. The severity of crashes and injuries has seen an even more dramatic reduction, because vehicle speeds are lower, set by the prudent drivers at the head of the lines. Aggressive speeding is virtually eliminated. More information and examples are available at the Old North Davis website.

(Click on the top right to expand and view the full PowerPoint presentation)

Fifth Street Project

Publish at Scribd or explore others: Business california davis

Arguments that have been made against fixing 5th Street:

We need 4 lanes to carry the car traffic—That is not what the model conducted in 2005 showed. In fact, it revealed that travel times in the corridor between A and L Streets will in fact go DOWN as through traffic flow is better organized in a single lane. That is why so many other cities that have removed lanes from 4 lane streets have seen traffic volumes go UP after the street was fixed. These reworked streets often carry 50% more traffic than 5th Street does. It seems counter to logic, but here is why it works: We do not really have a 4 lane street on 5th between B and L at this time—we have a 2 lane street with 2 left turn lanes. Many drivers make left turns at the frequent cross street intersections. While waiting for a gap in through traffic, they sit in the middle lane and block the cars behind them. Stopped buses (70 a day on this section of 5th), bicyclists, and cars slowing down for right turns also impede traffic flow in the lanes next to the curbs. Aggressive speeders slalom through these obstacles, threatening every user of 5th Street.

We need a 4 lane street for trucks to get in and out of downtown—This simply is not true. The only 4 lane truck access to downtown requires trucks from Sacramento to go completely around Davis on I-80 and Hwy 113, then come in from the west on Russell Blvd. No many do that. Even then, they must negotiate 2 lane streets all through downtown, as delivery truck drivers have successfully done for years. All other truck route access to downtown, from Richards Blvd., B Street, L Street, 1st Street, and 2nd Street is on two-lane streets.

Fire trucks will not be able to get down 5th Street—In fact, emergency responders will have it easier. The bike lane will be available for the single lane of cars to pull into, clearing the way. This is quicker and safer than two lanes of vehicles trying to merge into a single line.

There will be long lines backed up at the traffic signals—Again, this is simply not true. Restoring conventional signal operations at F and G Streets will eliminate 30 seconds of delay. Currently, a driver caught at a red light must wait out green lights for two other traffic streams. That wait will be cut in half, and so will the number of vehicles joining the line at the red light. The single line will be the same length as the current double line.

Bicyclists need to ride somewhere else—This is not consistent with federal, state, or City of Davis policy. As we struggle to reduce global warming, all levels of government must promote clean transportation technologies. A recent Complete Streets directive from Caltrans headquarters (DD-64-R1) states “Therefore, the Department and local agencies have the duty to provide for the safety and mobility needs of all who have legal access to the transportation system.” The Davis General Plan “Primary Bicycle Network” map shows bike lanes on 5th Street between A and L Streets. Let’s get them painted, to accommodate the hordes of cyclists now riding in the gutter, in the lanes, and both directions on the sidewalks.

Pedestrians need to go to the signals to cross—This is unfair, and also unsafe because of the heavy traffic volumes at those intersections and all the cars turning across the crosswalks. It takes over 5 minutes for a pedestrian who wishes to cross 5th Street at J Street or D Street to detour to the nearest traffic signal and then walk back to their route, gaining only 50 feet on their trip in the process. Why expect this of people on foot, when the redesign will reduce delay for the people sitting in air conditioned comfort in their cars?

Only the selfish people in Old North Davis want this—At the City Council hearings on this issue, 3 dozen people from all over Davis spoke up in support of the redesign. They talked about the chaotic street that makes them not want to drive downtown to shop, about the automobile accidents they had been in, and how hostile the street is for them on bicycles. Yes, we in Old North want 5th Street fixed. We are shocked that the business owners are so entrenched in their opposition, in spite of all the evidence that this design works. We are their best customers. Many of us are downtown every day spending money. We don’t clog up the streets, and we don’t take up parking spaces. We just want to get there safely.

It will never work in Davis—It already does. We don’t have to look any farther than B Street. Between 1st and 5th Streets, B Street carries almost exactly the same number of vehicles daily, and more bicyclists. These are the same drivers, in the same town, on a street that is the same width between the curbs. It has a single lane in each direction, a shared left turn lane, and bike lanes. Just like the design for 5th Street that is in the General Plan.

There were 30 accidents on the 4,000 feet of 5th/Russell between A and L Streets in 2008, 8 of them involving bicyclists or pedestrians. In contrast, the 2,000 feet of B Street between 1st and 5th Streets had only 6, one involving a bicyclist. This is the safety improvement we can expect on 5th Street with the proper design.

As we stated at the top of this essay, our Public Works Department has demonstrated in the past that safety is their priority. The solution to the safety issues on 5th Street is right before us. It’s time.

• Additional document click here

For updates go to: http://www.oldnorthdavis.net/

Word To The Wise: The Foreclosure Nightmare

Wake Up and Smell the Coffee!--PART 1

By E.A. Roberts

As more heartsick seniors come to me as a volunteer attorney for advice on foreclosure options, I feel compelled to comment on the following issues as I see them:

• Reasons for the plight of our vulnerable older adults;
• How we as a nation arrived at a “mortgage meltdown” scenario;
• Possible solutions to resolve the mess, on a global and more local scale.

REASONS THE ELDERLY ARE SO VULNERABLE IN AN ECONOMIC CRISIS

Seniors as a group have been hit harder than most because of the housing bust that has plagued our economy recently.

• More often than not the elderly are on fixed incomes, with no way of obtaining work to supplement their earnings to recoup financial losses.
• As the retirement accounts and investments of seniors have tanked in the dismal economy, payouts are impractical and dividends nonexistent.
• The frail are frequently beleaguered with huge medical expenses, as they are afflicted with serious and life-threatening ailments.
• Various expenses are financed on credit cards, that are eventually maxed out.
• Borrowing against equity in the house becomes difficult, as the value of homes declines in a stagnant housing market.
• Because seniors are usually the ones with the wealth in this country, they are also the primary targets for predatory lending.
• The elderly do not have the luxury of time to regain their financial status once lost.

HOW DID WE GET HERE?

How did the federal government, Wall Street, lending institutions, and the individual consumer contribute to the deep economic recession our nation finds itself in? There is plenty of blame to go around, but the analysis is important, to give some idea of what can be done to correct flaws in the system, so this never happens again. Vain hope I know, but I am ever the optimist.

In 1977, President Carter signed into law something called the Community Reinvestment Act (CRA). It required banks to have an affirmative obligation to meet credit needs of the communities in which they were chartered. The directive was passed in response to perceived “red-lining”, a policy of banks denying loans for those living in high credit risk inner-city neighborhoods where ethnic minorities tend to live.

Efforts to enforce the law were sporadic until an error laden 1992 study was disseminated by the Federal Reserve Bank of Boston. It purported to prove racial bias in mortgage lending, despite the fact that actual statistics did not support the conclusions reached in the report. Entering the stage at this point was the Treasury Department. In 1995 it prompted the issuance of new CRA regulations: lending institutions had to demonstrate “investment” in poor, higher-risk neighborhoods if they wanted a satisfactory CRA rating.

Much of this money invested went to “counseling” groups such as ACORN, these people priding themselves on making loans to persons with poor credit and little or no savings. Then in the late 1990’s, Fannie Mae, the nation’s biggest underwriter of home mortgages, came under pressure - from the Clinton Administration; the banking industry; and mortgage companies - to make more loans to subprime borrowers. Subprime borrowers are those with high credit risk. A little history will be helpful here to explain what happened next.

Since World War II, thrifts/savings and loan companies profited by taking savings deposits, while paying customers interest, and lending that same money at slightly higher interest rates to homebuyers - as 30 year fixed rate mortgages. Home ownership increased from 45% in 1940 to 65% in 1965, assisted by GI loans made available to military veterans. In 1970, when demand for mortgage money outstripped supply, the government decided to purchase 30 year fixed rate mortgages from thrifts. The mortgages were guaranteed against defaults, pooling them to be sold as a bond to investors. Investors received a stream of payments from homeowners, while thrifts got a cash infusion to lend more money to homebuyers.

In the 1980’s, a new kind of financial product was being touted at Salomon Brothers Investment Bank, called Collateralized Mortgage Obligations (CMOs). A CMO is an investment based on bundles of residential mortgages sliced into sections called “tranches” to be sold separately to investors. Each “tranche” paid a different interest rate and had a different maturity date. The person that dreamed up this idea moved on to become employed by Prudential Securities.

Prudential began selling increasingly exotic securities based on mortgages, credit payments, and car loans. The math behind these investments became so complex and lucrative, a crew of quantitative researchers was required to price them. This industry became known as “structural finance”. Wall Street brokered the deals and collected hefty fees, seeing it as a new opportunity for profit. Loan officers charged fees as much as 5% of the loan, or received kickbacks for tacking on extra percentage points to the interest rate. Clients for these products were mutual funds, pension funds and other large investors.

Just before Bush took office, the technological investment bubble popped, some believing the timing was engineered by Alan Greenspan, Chairman of the Federal Reserve. Greenspan was conspicuously seen at a Democratic party fundraiser with Al Gore during the Bush-Gore Presidential Campaign. As a result of Greenspan’s tinkering with the federal interest rate at the right time for the Dems, Bush would be saddled with a huge domestic problem at the start of his presidency. By the end of Greenspan’s term as Chairman of the Federal Reserve, inexplicably Bush refused to see the viper in his nest - failing to oust Greenspan when the opportunity rose. On top of that came the 2001 terrorist attacks, plunging the economy into a serious recession.

The Bush Administration, led by none other than Greenspan, slashed interest rates to encourage lending and spending. Lower interest rates spurred the housing market, creating a housing boom. The average 30 year fixed rate mortgage fell to 5.8%, the lowest rate since the 1960’s. I know at the time it occurred to me as a bizarre phenomenon. Greenspan had also encouraged the use of Adjustable Rate Mortgages to increase home ownership. I personally never liked these type of loans, and when house shopping myself, refused to take anything but a fixed rate mortgage.

Much of the housing boom was driven by loans made to customers with little savings, modest incomes, and checkered credit histories. They were talked into taking adjustable rate mortgages with low “teaser” interest rates, that ballooned to much higher interest rates after two or three years. Borrowers didn’t have to worry about balloon payments - they could sell at any time, often at a hefty profit, as long as the price of housing inflated steadily. And of course the investors who bought subprime loans enjoyed higher returns.

These subprime loans required no documentation of the borrower’s income; no proof of employment; no money down. For example, a McDonald’s employee earning $35,000 a year received a $500,000 loan, a person in jail was awarded a mortgage, illegal immigrants were being given loans. Worse yet, credit rating companies, which investors relied on to gauge risk of default, gave many of these securities high grades. So Wall Street had no shortage of customers for subprime products, including pension funds, foreign investors, as well as Fannie Mae and Freddie Mac.

Warning signs of the disaster to come appeared in 2003, as homes with subprime loans started going into foreclosure. Subprime mortgages had mushroomed to 20% of all loans, triple the level of a few years earlier. Greenspan ignored the alarm bells, and “couldn’t remember” if he ever told his successor at the Federal Reserve, Ben S. Bernanke, about the burgeoning subprime loan problem looming on the horizon.

In 2006, signs of weakness in the subprime industry were harder to ignore, as more homeowners defaulted on loans. Many homeowners defaulted in the first three months of purchase; others defaulted as the lower “teaser” rates ended and the higher balloon payments kicked in. Seventy percent more homeowners were forced to foreclose in 2005 than the year before, with thousands of new homes left unsold. Profits of banking institutions fell.

Panic set in. Yet if the subprime lender stopped taking brokers’ riskier loans, by increasing restrictions, brokers might take both riskier and higher quality loans elsewhere. The loan sales force at lending institutions worked on commission based on number of loans made. So fraudulent loans were a big part of the subprime debacle. Borrowers’ signatures were forged or incomes artificially pumped up. Borrowers themselves lied about how long they intended on living in the home, to qualify for a lower interest rate - then turned a quick profit by selling within a short period. Borrowers defaulted so quickly, subprime lenders did not have time to pool mortgages and sell them off as securities.

In 2007, Bear Sterns, a New York investment bank, had two hedge funds (funds that handle money for wealthy investors) invested heavily in securities backed by subprime mortgages. Both were on the brink of collapse. Investment banks that had purchased subprime mortgages to pool them were now demanding subprime lenders take back defaulted mortgage loans - arguing that misrepresentations had been made. Lenders were forced to accept the returns, not wanting to risk further damaging their relationship with the investment banks. The entire industry was choking on the sheer volume of loans sent back.

Subprime lending companies tried to sell off bad loans and could not get rid of them, so took a huge hit. Subsequently there was an attempt to tighten standards, but by then it was too late. Banks lending cash to subprime lenders cut them off, and many subprime lenders filed for bankruptcy. Bernanke and others at the Federal Reserve stubbornly still would not see how severely the troubles with the subprime loans would cascade through the economy.

Credit raters downgraded subprime-backed securities that they had previously touted. Banks, anticipating their own losses, began hoarding cash, and refused to lend. The credit crunch sent the stock market into a tail spin. Finally, in July of 2007, Bernanke at last got the message. The Federal Reserve aggressively cut interest rates to encourage banks to lend. An alliance of counselors, lenders and other industry participants, called HOPE NOW, would attempt to help borrowers avoid foreclosure by renegotiating mortgage terms. (In my experience and that of many others, the track record of this alliance is poor at best.)

However, the nation’s biggest banks began reporting unexpectedly large losses. In 2008, Bernanke finally acknowledged that the problems begun in the subprime market would affect the prospects of the broader economy. Nevertheless, Bernanke would only admit a recession was possible! Now, some state-run funds will not invest in mortgage-backed investments. Some forecasters are predicting three million or more homes will go into foreclosure.

Part 2 will be published on Friday, February 20, 2009

Elaine Roberts Musser is an attorney who concentrates her efforts on elder law and aging issues, especially in regard to consumer affairs. If you have a comment or particular question or topic you would like to see addressed in this column, please make your observations at the end of this article in the comment section.