Outspoken Supporter of Terrorism Coming to a Community Center Near You

I received the following information via email from a friend.  I have not had an opportunity to look into this in any detail but, considering the source, I am inclined to support the protest.  If an outspoken supporter of terrorism can conduct a fund-raising event at the Yorba Linda Community Center, I can certainly exercise my right to peacefully protest outside of the event. 

I encourage you to look into this on your own and decide where you stand. 

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Calling All Patriots: Come show your concern that Shariah Law is not compatible with the U.S. Constitution !! Our nation is at a cross road and hemorrhaging. Only your activism with God's help can save her.

Come partner with other Pro-American organizations: North Orange County Conservative Coalition, Tea Party Patriots, and California Republican Assemblies of Fullerton and Yorba Linda to peacefully protest this anti-American, anti-Semitic movement with American flags.

*ACTION ALERT*

Radical Imams fundraise in Yorba Linda's Community Center 

on February 13th at 5:30 pm

The Yorba Linda Community Center  has booked an organization directly connected to the Muslim Brotherhood and two terrorism, Anti American Radical Islamic activists, Siraj Wahhah & Anur-Abel Malik-Ali with the Islamic Circle for North America. 

 Both men have denounced Israel, SUPPORT HAMAS & TERRORISM. Imam spoke at University of California at Irvine in May last year and declared his support of terrorism.  Chancellor Michael Drake immediately released this statement on behalf of the University,"Let me be clear: we condemn the speaker's endorsement of terrorism... these remarks supporting terrorism were deplorable."
Who is the Islamic Circle of North America (ICNA)?
The Muslim Brotherhood document, "An Explanatory Memorandum on the General Strategic Goal for the Group in North America” refers to ICNA as one of the Brotherhood’s 29 likeminded organizations who teach "that their work in America is a kind of grand Jihad in eliminating and destroying the Western civilization from within and 'sabotaging' its miserable house by their hands ... so that ... God's religion [Islam] is made victorious over all other religions. “The Brotherhood’s creed is: ‘God is our objective; the Koran is our law; the Prophet is our leader; jihad is our way; and death for the sake of Allah is the highest of our aspirations.’”

Who is Siraj Wahhaj?

The Muslim Brotherhood calls Wahhaj the “American Imam.” In 1993 he was named as an Unindicted Co Conspirator in World Trade Center Bombings Investigation. Believes in converting gang members to Islam for “day America will crumble.” Wahhaj says for the faithful to go into the hood and prisons and convert disenfranchised minorities, and then arm and train them to carry out an Uzi jihad in the inner cities. Wahhaj says “You know what this country (USA) is? It’s a garbage can.” He snarls. “It’s filthy.” He prays it (USA) “crumbles” and is replaced by Islam.

Who is Anur-Abel Malik-Ali?

At the Universal Heritage Foundation’s December 2003 Islamic Conference in Florida, he warned moderate American Muslims that their desire to be “liked” was turning them into “‘house slaves.’” He said, “Sooner or later, today’s Muslim students will be the parents of Muslim children. And they should be militants.” At the Sixth Annual Muslim Student Association Conference held at UC Berkeley in February 2004, Malik-Ali denounced “the white man, who is the enemy.”

Controller, Legislators Unveil Package of Bills to Improve Oversight of Local Finances

PR11:05
2/8/2011

Contact: HALLYE JORDAN
916-445-2636

SACRAMENTO – State Controller John Chiang and legislative authors today unveiled a package of bills he is sponsoring to provide greater financial oversight of and assistance to cities, counties and special districts.

“These bills will help ensure that local communities and agencies have the assistance they need from the State to keep their communities fiscally healthy, and that the State has the authority to step in to identify and prevent problems,” Chiang said.  “The City of Bell has been a vivid illustration of the devastation that can occur when there is little accountability over how local dollars are spent in our communities.  It is time for the State to have a role in making sure sound fiscal management is being practiced at the local level so that all public dollars are protected.”

While the State Controller’s Office can audit local agencies over their handling of state and federal funds, and when there are problems seen in financial reports filed with the Controller, there is no authority to audit local taxes, bonds or other funds.  SB 186 by Sen. Christine Kehoe (D-San Diego) would expand the Controller’s authority to perform discretionary audits to ensure compliance with local ordinances and state law.

“SB 186 will help prevent public corruption and fraud by providing greater public oversight of government funds,” said Kehoe.  “The public deserves to have confidence in their local governments and know that public officials are acting ethically and legally.  This bill will do that.”

A bill by Sen. Fran Pavley, D-Santa Monica, will authorize the State Controller to conduct an audit of a local agency facing serious financial stress and would assemble a committee of fiscal experts to provide advice and assistance to local agencies in need.

“The state should not wait until a local entity is at risk of complete financial failure before lending assistance,” Pavley said.  “This bill will help prevent problems at the local level, and allow the State to step in with a variety of resources to keep the agency solvent.”

AB 229 by Assembly Member Ricardo Lara (D-Southgate) would increase the number of quality control reviews the Controller can perform of independent, private auditors hired by local governments to prepare their annual audits.

“Private firms hired by the local agency to perform their annual audits must adhere to strong accounting procedures and act independently of the entity that is paying their bill,” Lara said. “AB 229 will overhaul our system of auditing California’s cities and counties to ensure that every dollar is accounted for and every agency is held to a higher standard of accountability.”

Most local government agencies are required to file financial transaction reports with the Controller.  But with relatively small penalties, some refuse to file, or file late, resulting in little, or late, financial oversight by the State.  AB 276 by Assembly Member Luis A. Alejo, D-Salinas, would double the penalties, and triple them in serious cases, and require the Controller to audit the agency if it fails to file a report for three consecutive years.

“These reports provide insight into a local agency’s financial health in order to identify any mismanagement,” Alejo said.  “Agencies that habitually fail to comply would face stronger consequences.”

Under current law, the Controller’s Office is required to prescribe uniform accounting and reporting procedures to counties and special districts.  AB 253 by Assembly Member Cameron Smyth, R-Santa Clarita, would expand that requirement to include cities.  It also would create a committee made up of city officials and finance officers to assist in developing the guidelines.

“Required guidelines will help all cities manage and report their finances in a uniform manner,” Smyth said. “This bill will increase the level of accountability and professionalism of the financial reports filed by cities.”

“This bi-partisan legislative package shows that we all share the goal of improving California’s fiscal health at all levels of government,” Controller Chiang said.  “I thank the Senators and Assembly Members for their leadership in this effort.”

###

Overkill of the Overtime

Doubling wages with overtime has lead at least one firefighter to earn more than $138,000 for doing a job that is capped at $69,253. 

The police and fire personel are the core of the overtime in Fullerton.  Of those fire personel earning more than their maximum salary, the average overage was 38.45%.  The police did a little better with an average overage in maximum salaries of 20.2%.  In all, taxpayers are paying almost $6.2 million in wages that are above and beyond what the established maximum salary. 

Everyone understands that emergencies will keep first responders on the job beyond their regular shift, however their time should be carefully managed. 

Last year a small plane ran out of runway and hit the chainlink fence at Fullerton Airport. The pilot was uninjured and was able to walk away. But that didn't stop about 20 firefighters from responding to the minor collision.  My guess is that not all of the fire companies arrived at the same time.  That begs the question why didn't the first unit on the scene call off the extra emergency workers? 

Here comes the cry and outrage for me even bringing up the issue of pay and overtime for first responders.  How dare I even think of touching this sensitive subject!   

The bottom line is that too many people are collecting too much overtime.  This is purely a management issue or rather a mismanagement issue.  There is no municipal job in which any employee should have the opportunity to DOUBLE their salary through overtime.

Below are those who took home a lot more than the maximum salary.  They are ranked based on their percentage of wages earned beyond thei salary cap.  These are just the ones in the 40th percentile and up.  In all, more than 500 different city employees took home money beyond their salary caps.  Even a council member made the list.  I can't imagine who that might be.

Late word out of Sacramento: Pension Reform + Higher Taxes On Way

***UPDATE***
Sacramento insiders are telling me that GOP State Senators are working on a compromise that would place taxes on the ballot in exchange for pension reform.  No word yet on who will flip.  More updates to come.

***ORIGINAL POST***
An anonymous source out of Sacramento is reporting a backroom deal is in the works with party leaders which will give us pension reform AND higher taxes. 

I am in the process of confirming this information from someone who I consider to be a reliable source.  As soon as I have a confirmation and more details, I will share it here.

Mayor Pro Tem Bankhead to Gov. Brown: Do as I Say, Not As I Do

Just months after approving a $29 million Redevelopment Agency tax bond, Mayor Pro Tem Don Bankhead sends a clear message of "do as I say, not as I do" to Sacramento:

"I would also like to send word to the Governor that the way to balance the State budget is to quit spending more than they have coming to them." 

Now if only the City Council and Fullerton Redevelopment Agency would take that advice and stop borrowing against our City's future.

City to Bleed $14.1 Million from Redevelopment Agency As Governor's Proposed Budget Looms

An urgent meeting is scheduled for this afternoon at City Hall.  While most meetings are scheduled for 6PM or later, this one is set for 4PM, forcing many to leave work early in order to speak at the meeting.

The urgency of the council/Redevelopment Agency meeting comes after Governor Brown announced his intentions of squashing Redevelopment Agencies as component of saving money and redistributing funds to their normally allocated destinations. 

This afternoon’s Agenda has only one item (MISSING WORD ADDED BY ME):

CONSIDER APPROVING A COOPERATION AGREEMENT BETWEEN THE CITY OF FULLERTON AND THE FULLERTON REDEVELOPMENT AGENCY FOR (PARTIAL) FUNDING OF CAPITAL IMPROVEMENT PROJECTS, GRAFFITI REMOVAL SERVICES, AND PROFESSIONAL SERVICES

In a nut shell, City Hall sees their glass house shattering and is looking to pull out as much money as possible from the Redevelopment Agency in order to install street lights in the Lemon/Truslow area, stabilize the slopes along Harbor Boulevard just below the YMCA, improve Hillcrest Park, and build a parking garage at the Fullerton Transportation Center. 

In all, the City/Redevelopment Agency is looking to move $14,100,000 from the Redevelopment agency coffers to the City of Fullerton coffers to help cover some of the upfront costs associated with these projects.

If any of those mentioned sound familiar it’s because just last Tuesday the City Council decided to ask Congress for some money to address them.

This sounds like the scheme of someone who desperately pulls out every bit of equity from their house ($14.1M from RDA’s tax increment), maxes out all of their credit cards ($29M in tax bonds) for that new sports car (town homes and condos and garages) knowing they are about to get slapped by a court-ordered judgment (governor’s proposed budget) that will surely leave them penniless.

Once again, the lack of leadership has manifested itself by the procrastination of City Hall to tackle our crumbling infrastructure.  Water-mains continue to erupt forth from our streets like Old Faithful while the ever-expanding potholes begin to resemble the Grand Canyon.  At this rate, residents will be able to sell tickets to the spectacle as our city sinks into the abyss of municipal doom.

Also in the news, the California State Controller’s Office Announced that they have selected the Placentia Redevelopment Agency among 18 agencies to be reviewed by the Controller’s Office.

“The heated debate over whether RDAs are the engines of local economic and job growth or are simply scams providing windfalls to political cronies at the expense of public services has largely been based on anecdotal evidence,” Chiang said. “As lawmakers deliberate the Governor’s proposal to close RDAs and divert those funds to local schools and public safety agencies, I believe it is important to provide factual, empirical information about how these agencies perform and what they bring to the communities they serve.”

Read more about the review at http://gregsebourn.blogspot.com/2011/01/controller-launches-review-of.html

Controller Launches Review of Redevelopment Agencies

Controller Launches Review of Redevelopment Agencies

PR11:03
1/24/2011

Contact: Jacob Roper
916-445-2636

SACRAMENTO – State Controller John Chiang today announced his auditors were beginning reviews of 18 redevelopment agencies (RDA) across the state in an effort to obtain facts on how RDA funds are used and the extent to which they comply with laws governing their activities.
“The heated debate over whether RDAs are the engines of local economic and job growth or are simply scams providing windfalls to political cronies at the expense of public services has largely been based on anecdotal evidence,” Chiang said. “As lawmakers deliberate the Governor’s proposal to close RDAs and divert those funds to local schools and public safety agencies, I believe it is important to provide factual, empirical information about how these agencies perform and what they bring to the communities they serve.”
The 18 RDAs selected for the reviews represent urban, suburban and rural communities. They are geographically diverse and represent a mix of varying populations. The reviews will look at, among other things, how the RDAs define a “blighted” area, whether they are appropriately paying for low- and moderate-income housing as required by law, whether they are accurately “passing through” payments to schools within their community, and how much RDA officials, board members and employees are being compensated for their services.
To assist lawmakers in their budget debates, the reviews will be completed in early March. The chosen RDAs are as follows:

·       Redevelopment Agency of the City of San Jose (Santa Clara County)

·       Redevelopment Agency for the County of Riverside

·       Community Redevelopment Agency of the City of Los Angeles (Los Angeles County)

·       Richmond Redevelopment Agency (Contra Costa County)

·       Redevelopment Agency of the County of Sacramento

·       Redevelopment Agency of the City of Pittsburg (Contra Costa County)

·       Redevelopment Agency of the City of Fremont (Alameda County)

·       Pasadena Community Development Commission (Los Angeles County)

·       Redevelopment Agency of the City of Fresno (Fresno County)

·       City of Palm Desert Redevelopment Agency (Riverside County)

·       Placentia Redevelopment Agency (Orange County)

·       Parlier Redevelopment Agency (Fresno County)

·       Hercules Redevelopment Agency (Contra Costa County)

·       Anderson Redevelopment Agency (Shasta County)

·       Community Redevelopment Agency of the City of Citrus Heights (Sacramento County)

·       Community Redevelopment Agency of the City of Calexico (Imperial County)

·       Community Development Agency of the City of Coronado (San Diego County)

·       City of Desert Hot Springs Redevelopment Agency (Riverside County)

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2010 Top40 Program Director of the Year: Tom Sebourn

I am proud to announce that my brother, Tom Sebourn, won the title of "Top40 Program Director of the Year." 

In addition to Tom's professional broadcasting career, he is liberal blogger on California's North Coast.  Although I think he refers to himself as a progressive while I am about as conservative as a Republican you might find in Orange County, we often find common ground when we look at the big picture and even many of the details that make up worldy issues. 

I'm excited for Tom and his new award which I'm sure will sit next to the many others he has received over the years for his work. 

Congratulations Tom!!!!

2010 NEW MUSIC AWARDS

AND THE WINNERS ARE . . .

TOP40:Top40 Single of the Year:
"Kalifornia Girls" Katy Perry

Top40 Male Artist of the Year:
Bruno Mars

Top40 Female Artist of the Year:
Katy Perry

Top40 Group/Duo of the Year:
Boys Like Girls

New Top40 Artist of the Year:
Heather Youmans

New Top40 Group/Dou of the Year:
Finding Clyde

Top40 Breakthrough Artist of the Year:
Matt Roehr

Top40 Station of the Year:
KLBQ (El Dorado, AR)

Top40 Program Director of the Year:
Tom Sebourn/KFMI

Top40 Music Director of the Year:
Courtney Blake/KCFV

Top40 Promotion of the Year:
All Access

Top40 Label of the Year :
Capitol
AC:
AC Single of the Year:
"Hey Soul Sister" Train

AC Male Artist of the Year:
Michael Buble

AC Female Artist of the Year:
Amanda Morra

AC Group/Duo of the Year:
Jimmy White w/Jonell Mosser

New AC Artist of the Year:
Emil

New AC Group/Dou of the Year:
Script

AC Breakthrough Artist of the Year:
Britney Reed
AC Station of the Year:
KTDY (Lafayette, LA)

AC Program Director of the Year:
Randy Adams/KKRB

AC Music Director of the Year:
Mike Betten/KQCR

AC40 Promotion of the Year:
Tom Mazetta

AC Label of the Year:
Warner Brothers
COUNTRY:
Country Single of the Year:
"Need You Now" Lady Antebellum

Country Male Artist of the Year:
Vince Hatfield

Country Female Artist of the Year:
Sandra Piller

Country Group/Duo of the Year:
Cerrito w/ Lane Brody

New Country Artist of the Year:
Leah Seawright

New Country Group/Dou of the Year:
Badhorse

Country Breakthrough Artist of the Year:
Melanie Denard

Country Station of the Year:
WFLE/Flemingsburg, KY

Country Program Director of the Year:
Jason Drake/KAIR

Country Music Director of the Year:
Geoff Hayton/WSNN

Country Promotion of the Year:
James Williams/James Williams Promotion

Country Label of the Year:
Lofton Creek


CROSSOVER ARTIST OF THE YEAR:
Brant Miller
COLLEGE:
College Artist of the Year:
Marc Cohn

College Band of the Year:
Thieves & Liars

New College Artist of the Year:
Karen Elson

New College Band of the Year:
War Of Ages

College Breakthrough Artist of the Year:
Sait

College Station of the Year:
WMCR

College PD of the Year:
Jason Wells/WALW

College MD of the Year:
Terry Mosses/KCLC

College Label of the Year:
Alligator

College Promotion of the Year:
Break Thru Promotions

Record Pool of the Year:
Higher Ground/Lithonia, GA

Publicity Firm/PR of the Year:
Webster & Associates


Internet Station of the Year :
Sound Machine/Moyock, NC

Steve Poizner Stops By

January 19, 2011

Friends,
Let there be no doubt that California is still at the brink. With a budget deficit over the $25 billion mark and a combined unemployment and under-employment rate over 20%, it is vitally important that you stay informed, ask questions of your elected officials, and follow closely as they work to overcome the challenges that face our state.

There has been much discussion in recent weeks about a special election with select ballot initiatives developed by the Governor and Legislature that purport to solve California's budget problems once and for all. Much of the talk revolves around spending cuts and a push to raise taxes to close the near-term deficit gap.

My concerns as I track these developments are two-fold.

First of all, there is little discussion on what is needed to get our sputtering economy back on track. Without a healthy, robust, growing economy that produces stable job growth, our state's finances will remain structurally unbalanced and we will continue to face massive deficits each year. Revitalizing California's economy to effectively compete in the global economy should be a top priority. As I have often noted, and Dan Walters of the Sacramento Bee recently wrote: "It's entirely possible that California, with its high taxes, dense regulatory underbrush, poorly performing schools, congested and crumbling highways and water supply issues, may have become noncompetitive in a global economy".

Secondly, there is no discussion of overhauling and reforming state government institutions and programs in ways not unlike what I accomplished at the Department of Insurance. Whether prison reform, K-12 reform, pension reform, or MediCal reform, the question that needs to be asked is: how and what is our state government spending each dollar on, and what are the ways by which we can maximize the value of each and every dollar spent? Institutional and program reform can save billions, all while increasing productivity and efficiencies within a smaller, more accountable government.

Our state faces many challenges this year, but with these challenges comes opportunity to get at the heart of California's problems and rebuild our state.

Mayor Pro Tem Makes Sexually Suggestive Remark At Council Meeting

At Tuesday's City Council meeting (1/18/2011) Fullerton Mayor Pro Tem Don Bankhead said "Mayor, if you need any help, I would be more than happy to help you!"  At that moment Mayor Dick Jones had his arm around a Miss Fullerton contestant while the Mayor Pro Tem seemed to study the young ladies.  You can watch the exchange here.  Forward the video player to 0:20:00.

The unsavory comment, captured on the City's cable TV feed, reflects a good example of poor leadership and disgraceful public service.  Mayor Pro Tem Bankhead was first elected to the Fullerton City Council in 1988.  If he can complete this term without a sexual harassment law suit and another recall election, he will have served for 26 years.

Passenger Admits To Drinking In Downtown Fullerton Moments Before Fatal Crash

The Orange County Sheriff's Department is using the words of a passenger involved in a fatal crash in Fullerton to point out the dangers of drunk driving. 

The Orange County Register reported on the crash on December 22, 2010.  The article states that the unidentified passenger admitted he and the driver, now identified as 22-year old Ryan Rivera, had been drinking in Downtown Fullerton.

As the OC Coroner waits for the toxicology report there is the usual rhetoric and sentiment that thankfully only the drunk was killed.  The incident unfortunately just adds fuel for those who would like nothing more than to shut down the the Downtown Fullerton bars. 

What should happen (but likely won't) is for the servers to be held responsible for over serving patrons.  On any given night a watchful eye can witness the drunks stumbling out of the bars, some even being carried out by friends. 

The Fullerton Police Department and the Alcohol Beverage Council (ABC) should have tackled this problem years ago.

I believe these sad deaths represent numerous failures in our broken community:

• The patrons fail to recognize their bodily limits and take responsibility. 
• Servers look the other way and continue to serve those clearly and visibly impaired.
• Police continue to set up checkpoints rather than targeting the source.
• The ABC is nowhere to be found. 
• Citizens, residents, business owners, parents, patrons, and public officials have failed to come together to address binge drinking and drunk driving. 

It's time for City Hall to wake up. 

The Case for Profiling

By Robert W. Poole, Jr.

Director of Transportation Studies

Reason Foundation

In recent years when discussing a risk-based airport screening system, I have avoided using the word profiling, even though it’s a legitimate concept. Since most people hear the word “profiling” and immediately think “racial,” “ethnic,” or “religious,” I decided that the term itself confused more than it clarified.

But recent online discussions, including an attack on me by two writers for The Nation as a “high-profile charlatan pushing racial profiling as the alternative to TSA pat-downs and body scans,” has led me to change my mind. In a blog post last week for Reason magazine’s “Hit & Run” blog, I explained the legitimate meaning of evidence-based profiling, both positive and negative. (http://reason .com/blog/2010/12/10/the-case -for -profiling-air-tra)

Rather than repeat that argument here (please read the blog post), I’d like to elaborate a bit on how I envision negative profiling (i.e., identifying the high-risk category of travelers) would work. The idea would be to make full use of the various databases the government already maintains, using various intelligence sources, to assign more people to the “selectee” category for which secondary screening is mandatory. Only high-risk travelers, so defined, would be required to face body scans or intrusive pat-downs. Stewart Baker, a former DHS official, points out in National Review (Dec. 20, 2010) that the TSA’s sister agency, Customs & Border Protection, “knows a lot about [people’s] travel plans and uses a database ten or twenty times larger than the selectee list to decide who will be screened closely. And yet for 99 travelers out of 100, border screening is far less hassle—and far less of a privacy invasion—than air security.


The original anti-skyjacking system developed by an FAA task force in 1969-70 used a characteristics-based profile that was not challenged by the ACLU and was ruled constitutional by a New York Federal court. It included 23 elements, of which only half of one percent of air travelers met as many as six, according to David Brown, one of the task force’s members. But according to Brown, all 19 of the 9/11 hijackers would have been flagged by that system—had it still been in use in 2001.
Shifting aviation security from looking for dangerous objects to looking for dangerous people should be high on the agenda of the new Congress.

Even After Filing Bankruptcy, Vallejo's Pension System In the Red $195-Million

(Thanks to PentionTsunami.com for flagging this Bloomberg story) 

Even after filing for Chapter 9 bankruptcy protection, Vallejo continues to fight the public employee's unfunded pension disaster.  Bloomberg.com has a lengthy article on the problems encountered by the city after the public employee unions refused to budge on salaries and pensions.  Is Fullerton headed down the same miserable path?

Vallejo's Bankruptcy `Failure' Scares Cities Into Cutting Costs

By Alison Vekshin and Martin Z. Braun - Dec 13, 2010 9:01 PM PT

When Vallejo, California, filed for bankruptcy in 2008 after failing to win union pay cuts, Councilwoman Stephanie Gomes said officials around the U.S. would have their eyes trained on the city of 120,000.

She was right. The lesson they’ve taken from the two-year- old case, which has cost Vallejo $9.5 million in legal fees and made it a nationwide symbol for distressed municipal finances, is that out-of-court negotiations yield better results.

“They spent a lot of money with very little outcome,” said Jay Goldstone, San Diego’s chief operating officer. Faced with an $82 million deficit in his city’s 2010 budget, Goldstone negotiated pay cuts and higher benefit contributions from unions in 2009 that will save as much as $40 million annually, he said.

Bankruptcy has become less attractive even as U.S. municipal borrowers coped with what the National League of Cities said was the biggest decline in general-fund revenue since 1986 last fiscal year. The mention of Vallejo, the biggest California city and second-largest local government after Orange County to file for bankruptcy, can spook investors and raise interest costs, said Bill Lockyer, the state’s treasurer.

“Declaring bankruptcy is a huge admission of failure on the part of elected officials and their local managers,” Lockyer said in a Dec. 3 telephone interview. Vallejo’s filing “sent a chill through the markets.” Vallejo, a one-time Navy town 32 miles (51 kilometers) north of San Francisco, entered Chapter 9 bankruptcy protection in May 2008. The filing, after employee unions refused to accept salary cuts and the recession eroded tax revenue, allows municipalities to reorganize debt rather than liquidate.

Exit Plan
A five-year budget blueprint approved by the City Council on Nov. 30 spells out how Vallejo will meet $195 million of unfunded pension obligations, its largest liability. It also delays payments to bondholders, trims employee benefits, creates a rainy-day fund and allocates $5 million for unsecured creditors. The city must submit a bankruptcy-exit plan that includes the blueprint to a Sacramento court by Jan. 18.

Vallejo shows that negotiated settlements of budget problems may be better than the distractions of court deadlines and paying millions in legal fees, said Paul Rosenstiel, California’s deputy treasurer from 2007 to 2009.

“A lot of cities looked at Vallejo and concluded that painful as it might be, there must be a better solution,” said Rosenstiel, a principal with municipal-bond underwriter De La Rosa & Co. in San Francisco.

Felt in Tracy
The Vallejo bankruptcy resonates in Tracy, a city of about 82,000 residents 60 miles east of San Francisco, said Zane Johnston, the finance director.

In the face of a $7.5 million budget gap, the police union agreed this year to cancel remaining raises and boost the retirement age to 55 from 50 for new hires even though its contract wasn’t up for renewal, Johnston said in a Dec. 6 telephone interview.

“At the bargaining table,” he said, “Vallejo is the example that everybody knows about that doesn’t have to be mentioned because it can scare the living daylights out of some people.”

The ability of U.S. cities to file bankruptcy is limited. They must be authorized by state law to file under Chapter 9 of the U.S. bankruptcy code. Twenty-five states lack such statutes.

While cities from Detroit to Harrisburg, Pennsylvania, have publicly raised the prospect, the number of filings has declined. Five municipal entities sought protection this year compared with 10 in 2009, according to data compiled by James Spiotto, head of the bankruptcy practice at Chapman & Cutler, a Chicago law firm. The biggest this year was a South Carolina toll road with more than $300 million in debt, he said.

Company Contrast
Since 1937, 619 local government bodies, mostly small utility or sewer districts, have filed for bankruptcy, according to Spiotto. In contrast, there were more than 11,000 Chapter 11 filings, used by companies to reorganize debt, in 2009 alone.

Local-government bankruptcies will “be minimal and isolated to mismanaged or weak credits,” BlackRock Inc., the world’s largest money manager, told clients on Dec. 7. States such as Pennsylvania and Rhode Island have become increasingly active in helping prevent them, it said.
When Harrisburg, the state capital, was weighing a Chapter 9 filing because it couldn’t make $282 million of payments on bonds it guaranteed for a trash incinerator, Governor Ed Rendell stepped in.  Warning that a default by the city of 47,000 could raise borrowing costs elsewhere, Rendell advanced $3.3 million to Harrisburg for a general-obligation debt payment on Sept. 13.

“We couldn’t stand by and let the city default on these bonds,” Rendell said at the time.

State Program
Pennsylvania is considering Harrisburg’s application to the state’s distressed municipalities program, under which it would get help with a recovery plan that finds ways to raise revenue and streamline operations.

BlackRock cited new legislation in Rhode Island prohibiting Chapter 9 filings after the city of Central Falls suggested that path. The town of about 18,000 faced a fiscal 2010 deficit of $3 million, or 17 percent of revenue.

States “will quickly put procedures in place geared toward preventing Chapter 9 filings,” it said in its report.

State oversight boards were created for New York City in the mid-1970s and Philadelphia in 1991. They can bring cities back to an “adult state,” said Spiotto, by requiring balanced budgets, reviewing labor contracts and negotiating debt restructurings.

“We’ve had all sorts of municipalities with problems that were addressed outside of bankruptcy,” said Spiotto.

Bondholder Action
If states don’t act, bondholders will. In September, Bank of New York Mellon Corp. got a judge to appoint a receiver to manage the Jefferson County, Alabama, sewer system after a $3.2 billion debt refinancing collapsed and drove the municipality toward insolvency. Local officials, who are negotiating with bondholders, say a bankruptcy is still possible.

Vallejo made its filing as labor costs, its largest expense, were projected to be about $79.4 million in the 2008- 2009 fiscal year, outpacing estimated net general-fund revenue of about $77.9 million, according to court documents.

“Vallejo’s problem was that they could make no further cuts without breaking legal contracts,” Michael Coleman, a fiscal policy adviser at the League of California Cities, said in a telephone interview Dec. 6. “That’s unique to virtually any other city in California.”

Vallejo had no other options, Marc Levinson, a partner with the Sacramento-based law firm Orrick, Herrington & Sutcliffe LLP who is drafting Vallejo’s bankruptcy-exit plan, said in a Dec. 3 telephone interview.

Lack of Concessions
“Negotiations broke down and we couldn’t get the concessions from the unions and from the bondholders that would keep us out of bankruptcy,” Levinson said.

The city has reached agreements with administrative and police unions that yielded $6 million in savings through June 2010, its website says. The firefighters union agreed to a new contract that was approved by the council in March.

Vallejo still has to sort out more than 1,000 creditor claims as part of its exit plan. And funding of $5 million for unsecured creditors won’t be completed until the 2012-2013 fiscal year.

The bankruptcy process could take another six months, further distracting local officials, said Christopher Mier, chief strategist with Loop Capital Markets LLC in Chicago.

Meanwhile, city residents will have 159 fewer fire and police personnel than seven years ago, road maintenance at 10 percent of recommended levels and no grants for arts and cultural programs.

“Bankruptcy hasn’t been a panacea for the city or the unions,” said Ron Oliner, a partner at Duane Morris LLP in San Francisco who represents Vallejo’s police union.

Gomes, the council member, said the city learned a lesson.

“It’s best to negotiate your way out of the fiscal problem,” she said, “before you go into bankruptcy.”

The case is In re City of Vallejo, 08-26813, U.S. Bankruptcy Court, Eastern District of California (Sacramento).

To contact the reporters on this story: Alison Vekshin in San Francisco at avekshin@bloomberg.net; Martin Z. Braun in New York at mbraun6@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.

FCC Votes Itself Judge Dredd of the Internet

FCC Votes Itself Judge Dredd of the Internet
By Peter Suderman, Associate Editor Reason

In a speech delivered on January 19, 2010, Julius Genachowski, the Chairman of the Federal Communications Commission, declared that transparency "is particularly important for consumer protection and empowerment." He praised "access to information" as "essential to properly functioning markets" and stated that "policies around information disclosure...can be enormously helpful in ensuring that markets are working."

Does Genachowski believe it's less important for the federal government? In theory, no: Last summer, Genachowski promised that under his watch, the Commission would be "fair," "open," and "transparent."

But earlier today, the FCC, led by Genachowski, voted 3-2 to adopt a new set of rules governing private management of the Internet's core infrastructure. Thanks to a decision by Genachowski not to make the order detailing the rules public, no one outside the FCC has seen the actual order that was passed. Even those on the inside were given little time to wade through its reported complexities: Meredith Baker, who along with Genachowski is one of the FCC's five commissioners, said in her remarks that she and her staff only received the most recent draft-the one voted on today-around 11:30 p.m. last night.

Genachowski's remarks portrayed the rules as a moderate middle ground between the extremes. It was a decision driven not by ideology but the desire to "protect basic Internet values." If it's a middle ground, it's a legally dubious one. Earlier this year, a federal court ruled that the FCC had no Congressionally granted authority to regulate network management. Congress hasn't updated the agency's authority over the Net since then, but the FCC is now saying that, well, it has the authority anyway. Genachowski's team has come up with a different legal justification, and they're betting that this time around they can convince a judge to buy it.

Still, Genachowski's portrayal of the order may be half right: The FCC's move on net neutrality is not really about ideology. It's about authority: He's not so much protecting values as expanding the FCC's regulatory reach. According to Genachowski's summary remarks, the new rules call for a prohibition on "unreasonable discrimination" by Internet Service Providers-with the FCC's regulators, natch, in charge of determining what counts as unreasonable. In theory, this avoids the pitfalls that come with strict rules. But in practice, it gives the FCC the power to unilaterally and arbitrarily decide which network management innovations and practices are acceptable-and which ones aren't.

It's the tech-sector bureaucrat's equivalent of declaring, Judge Dredd style, "I am the law!" Indeed, Genachowski has said before-and reiterated today-that the rules will finally give the FCC the authority to play "cop on the beat" for the Internet.

The comparison may not be quite as comforting as he seems to think. But it is telling: Genachowski may not be eager to tell the public exactly what the Internet's new rules of the road are, but he's mighty eager to have his agency enforce them.

Reason.tv on Net Neutrality

• Will Net Neutrality Save the Internet?
• Net Neutrality for Dummies
• 3 Reasons the FCC Shouldn't "Touch" the Internets
• Nick Gillespie On Net Neutrality, Teen Mags, & More

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Can Federal Healthcare Managers do better than the FAA?

The Associated Press reported that the FAA has lost key information on about 119,000 aircraft. 

The Federal Aviation Administration is missing key information on who owns one-third of the 357,000 private and commercial aircraft in the U.S. - a gap the agency fears could be exploited by terrorists and drug traffickers.

And somehow the same bloated federal bureaucracy is supposed to manage our healthcare?  The report doesn't help to instill confidence in our federal government’s management success stories, or rather lack there of.  Even the California DMV does a better job! 

Now THAT should scare you!!

Reason.tv: Great Moments in Unintended Consequences

Reason.tv presents Great Moments in Unintended Consequences!

All actions have unanticipated side effects, but government acting through regulation or legislation is particularly adept at creating disastrous unintended consequences.

Great Moments in Unintended Consequences takes a look at three instances of epic government facepalm: Osborne Reef, Corn Ethanol Subsidies, and a particular clause in ObamaCare that is already doing more harm than good.

Approximately 3 minutes.

Produced by Austin Bragg.

TAKING POLITICS OUT OF TRANSPORTATION: ECONOMIST BRUCE BENSON ON PRIVATE ROADS

(Reason.TV)

Week In Review

Here is a quick review of this week's posts:
I started off with a post on Monday regarding my son, Wyatt, who was suffering a broken arm due to a bone cyst.

On Tuesday I was fired up over the Fullerton Redevelopment agency's redistribution of tax revenue.

Wednesday I was reminded of a 200-year old lesson on the failings of communism. 

Thursday was busy. 

• First I thanked everyone for their prayers and comfort regarding Wyatt who was recovering from surgery. 
• Second was a re-post from a story about an unlicensed wannabe engineer who was looking at serious prison time for fraud. 
• Third was an Orange County Sheriff's department press release regarding a deputy who was arrested - AGAIN - for "an act of sexual penetration with another person who is under 18 years of age". 

Friday's post was simple.  I shared an event flyer for the Orange County Chapter of the California Land Surveyors Association.  We're putting on a great scholarship fundraiser which includes amazing food, fun casino games, and cool raffle prizes.  Come out and join us if you can for just $40! 

Have a great and safe weekend.

Gamble for the Kids