Full text of "Hearing"
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HEARING
SENATE RULES COMMITTEE
STATE OF CALIFORNIA
STATE CAPITOL
ROOM 113
SACRAMENTO, CALIFORNIA
WEDNESDAY, FEBRUARY 4, 2009
1:32 P.M.
GOVERNMENT
DOCUMENTS DEPT
MM 1 8 2002
ft'SUC LIBRARY
605-R
3 1223 08678 9006
SENATE RULES COMMITTEE
STATE OF CALIFORNIA
- -0O0- -
HEARING
STATE CAPITOL
ROOM 113
SACRAMENTO, CALIFORNIA
- -0O0- -
WEDNESDAY, FEBRUARY 4, 2009
1:32 P.M.
- -oOo- -
Reported By: INA C. LeBLANC
Certified Shorthand Reporter
CSR No. 6713
SENATE RULES COMMITTEE
STATE OF CALIFORNIA
- - O0O- -
STATE CAPITOL
ROOM 113
SACRAMENTO. CALIFORNIA
- -0O0- -
WEDNESDAY. FEBRUARY 4, 2009
1:32 P.M.
--O0O--
Reported By: INA C. LeBLANC
Certified Shorthand Reporter
CSR No. 6T13
INDEX
Page
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Proceedings 1
Governor's Appointees:
GREGORY W. JONES, Member, State Board of
Education 2
INTRODUCTION by SENATOR ROD WRIGHT ....
INTRODUCTION by SENATOR KEVIN MURRAY .
OPENING STATEMENT BY GREGORY W. JONES
Questions by SENATOR OROPEZA re.
Junior Achievement program 9
Achievement gap 10
Role ofculturaldifferences 17
Preparation of teachers and staff
to meet the Latino demographic ... 1
Diversity on the board 19
Questions by CHAIRMAN STEINBERG re:
SB 219 and drop-out issue
Drop-out rate and API
CAHSEE exam and special ed.
students 25
Eighth-grad algebra requirement
STATEMENT BY SENATOR OROPEZA
STATEMENT BY SENATOR CEDILLO
STATEMENT BY CHAIRMAN STEINBERG .
3
4
5
21
25
26
28
28
37
iii
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3
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7
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APPEARANCES
MEMBERS PRESENT
SENATOR DARRELL STEINBERG, Chair
SENATOR GIL CEDILLO
SENATOR SAMUEL AANESTAD
SENATOR ROBERT DUTTON
SENATOR JENNY OROPEZA
STAFF PRESENT
GREG SCHMIDT, Executive Officer
JANE LEONARD BROWN, Committee Assistant
NETTIE SABELHAUS, Appointments Consultant
JULIE NYSTROM, Assistant to SENATOR AANESTAD
CHRIS BURNS, Assistant to SENATOR DUTTON
BRENDAN HUGHES, Assistantto SENATOR OROPEZA
ALSO PRESENT
ARTHUR L. ANDERSON, JR., Member, Board ofParole
Hearings
GREGORY W.JONES, Member, State Board of Education
1 Witnesses in Support of Appointee:
2 AUBRY STONE, California Black Chamber of
3 Commerce 30
4 JAMES C. SHELBY, Urban League 32
5 RAE BELISLE, Ed Voice 34
6 SHERRY GRIFFITH, Association of California
7 School Administrators 34
8 BRANCHE JONES, California Charter Schools
9 Association 35
10 DEBORAH KEYS, Voices for African American
11 Students, Inc 35
12 JIM LANICH, California Business for Education
13 Excellence 36
14 LARRY LEE, The Sacramento Observer 37
15 - -oOo --
16 ARTHUR L. ANDERSON, JR., Member Board of
17 Parole Hearings 39
18 STATEMENT BY CHAIRMAN STEINBERG 39
19 STATEMENT BY SENATOR CEDILLO 41
20 STATEMENT BY CHAIRMAN STEINBERG 42
21 STATEMENT BY SENATOR DUTTON 43
22 STATEMENT BY SENATOR AANESTAD 45
23 OPENING STATEMENT BY ARTHUR L. ANDERSON, JR..
24 ////
25 ////
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Questions by CHAIRMAN STEINBERG re:
Determining unreasonable risk
of danger 47
Weight of psychological
evaluation 48
Impact of Proposition 9 49
Examples of 15-year denials 50
Effect of inmate's faith on
decision-making process 54
Questions by SENATOR OROPEZA re:
Faith and rehabilitation 51
Ethnic breakdown of board 57
Question by SENATOR DUTTON re:
Number of times in agreement with
deputy commissioner with civil-
service status 59
STATEMENT BY SENATOR AANESTAD 54
STATEMENT BY SENATOR DUTTON 58
Witnesses in Support of ARTHUR L ANDERSON, JR.:
AUBRY STONE, California Black Chamber of
Commerce 56
CATHERINE BARANKIN, California Collaboration
for Youth 63
DAVID DAHLE, Los Angeles County District
Attorney 65
1 PROCEEDINGS
2 CHAIRMAN STEINBERG: Good afternoon. The
3 Senate Rules Committee will come to order.
4 Jane, if you would please call the roll.
5 MS. BROWN: Senator Cedillo.
6 Dutton.
7 Oropeza.
8 SENATOR OROPEZA: Here.
9 MS. BROWN: Oropeza here.
10 Aanestad.
11 SENATOR AANESTAD: Here.
12 MS. BROWN: Aanestad here.
13 Steinberg.
14 CHAIRMAN STEINBERG: Here.
15 MS. BROWN: Steinberg here.
16 CHAIRMAN STEINBERG: A quorum having been
17 barely established, we will begin today with the
18 reference of bills.
19 SENATOR AANESTAD: So moved.
20 CHAIRMAN STEINBERG: So moved by Senator
21 Aanestad.
22 Any questions, Senator Oropeza? Any questions?
23 SENATOR OROPEZA: No.
24 CHAIRMAN STEINBERG: All right. Please call
25 the roll on that matter.
1
Witnesses in Opposition of ARTHUR L ANDERSON, JR.:
MATT GRAY, Capital Alliance 66
KEITH CHANDLER, Sanders & Associates 76
DAVID WARREN, Taxpayers for Improving Public
Safety 81
CLOSING STATEMENT BY ARTHUR L. ANDERSON, JR..
STATEMENT BY SENATOR STEINBERG 88
STATEMENT BY SENATOR CEDILLO 91
-oOo-
Proceedings Adjourned 94
Certificate of Reporter 95
APPENDIX (Responses by Appointees) 96
85
VI
1 MS. BROWN: Senator Cedillo.
2 Dutton.
3 Oropeza.
4 SENATOR OROPEZA: Aye.
5 MS. BROWN: Oropeza aye.
6 Aanestad.
7 SENATOR AANESTAD: Aye.
8 MS. BROWN: Aanestad aye.
9 Steinberg.
10 CHAIRMAN STEINBERG: Aye.
11 MS. BROWN: Steinberg aye.
12 CHAIRMAN STEINBERG: We'll leave the roll open
13 so the members can vote. The vote stands three to
14 nothing.
15 Let us move right into the governor's
16 appointees appearing today, and we'll reverse the order,
17 without objection here, and call up Gregory W. Jones up
18 for appointment as a member of the State Board of
19 Education.
20 Mr. Jones, welcome.
21 MR. JONES: Thank you.
22 CHAIRMAN STEINBERG: I want to make sure before
23 we begin that you have an opportunity to introduce any
24 family members or any special guests in the audience.
25 It's a tradition of the Committee, and I want to give
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1 you that opportunity.
2 MR. JONES: Okay.
3 CHAIRMAN STEINBERG: Oh, yeah. I'm sorry.
4 Before you do that, you have a couple of esteemed -- one
5 member of the State Senate and one Senator emeritus —
6 Not a bad title. Use that one.
7 SENATOR MURRAY: I like that.
8 CHAIRMAN STEINBERG: -- who would like to come
9 up and make an introduction. So if you don't mind
10 taking a seat. Take some water. That's all right. We
11 do have a water shortage, but --
12 SENATOR OROPEZA: We can spare a cup.
13 CHAIRMAN STEINBERG: We'll ask Senators Wright
14 and Murray to please come forward.
15 SENATOR WRIGHT: Mr. Chair and members, thank
16 you for juggling the time. Kevin and I have both known
17 Greg Jones for a number of years through his work with
18 State Farm Insurance, his work with the Urban League in
19 Los Angeles working with inner city children on
20 education, and doing just a yeoman's job making sure
21 that State Farm Insurance was a community-involved
22 insurance company.
23 Some would say that's an oxymoron when you try
24 to involve a corporation like State Farm in the state of
25 California in communities across this state, and I think
3
1 you. It means a lot. And we'll now hear from the
2 appointee.
3 Welcome back, Mr. Jones. Again, I just want to
4 reiterate my offer. If there's anybody you want to
5 introduce at the outset, please feel free to do so.
6 MR. JONES: There are some people that will
7 speak on my behalf. I assume they can do that at the
8 end.
9 CHAIRMAN STEINBERG: They can do that. Just
10 any family member or anyone else.
11 MR. JONES: Okay.
12 CHAIRMAN STEINBERG: Very good. If you would
13 like to make a brief opening statement. We welcome you
14 to the committee.
15 MR. JONES: I would.
16 Thank you very much, Mr. Chairman. It is
17 indeed an honor to come before this esteemed committee
18 to answer your questions regarding my confirmation to
19 the State Board of Education.
20 It has been a privilege to have served on this
21 board for the past year and offer my perspective on
22 raising student academic achievement for all students,
23 for closing achievement gaps and mitigating the
24 continuous drop-out rates that are slamming the door of
25 opportunity, particularly on the poor and children of
5
1 that Greg has been exemplary in that role, and I think
2 he would be a welcome addition to the California Board
3 of Education.
4 CHAIRMAN STEINBERG: Thank you very much,
5 Senator Wright.
6 SENATOR MURRAY: I like that emeritus thing.
7 I'm going to start using that. It gives me something as
8 opposed to retired.
9 Again, I'm happy to be back here before this
10 august body. As Rod said, we've known Greg a long time,
11 and, over the years, in addition to his day job in the
12 insurance business, have sat and talked about his
13 passion for the children in our state and their
14 education.
15 And I think you'll find most importantly that
16 he not only has a passion, that he comes with ideas but
17 not necessarily with an ideological agenda, which makes
18 him, I think, the perfect appointee for this kind of
19 position at this time.
20 And I would, again, for many years of
21 experience working with him, highly recommend him for
22 this job and, hopefully, your support for his
23 confirmation.
24 CHAIRMAN STEINBERG: Very good, sir. Thank you
25 very much for coming back, for taking the time, both of
4
1 color.
2 My passion and focus on these issues -- excuse
3 me -- has its roots in my own personal experience. I've
4 seen both sides of the education divide, if you will.
5 My mother was a teacher of disabled students for
6 20 years. Her mother, my grandmother, was a college
7 graduate in 1906, a rarity for any woman at that time,
8 much less for an African-American woman. She was a
9 teacher and an administrator, and her father, my
10 grandfather, was a president of a university.
11 It was my grandmother who ingrained the words
12 that really guide me today, and I think guide much of my
13 decision-making, when she said over and over to my
14 brother and I, "No one rises to low expectations."
15 On the other side, my father, like his father
16 and his father's father, was a high-school dropout, yet
17 it was he who taught me, I think, the two most important
18 lessons of my life: Number one, that education is your
19 passport to the future; and, number two, as he would
20 say, "You must reach as you climb," meaning that as you
21 realize success, it is your responsibility to reach back
22 and help others.
23 It is that advice, I think, that allowed me to
24 realize a measure of success that I could barely even
25 dream of as a kid and ultimately become, as you have
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1 said, president and CEO of State Farm General Insurance
2 Company, one of California's largest businesses.
3 I think it's that advice that led me to found
4 the NAACP chapter in Ohio and become the founding
5 president of 100 Black Men, and chairman of the board of
6 the Los Angeles Urban League, Junior Achievement of
7 Southern California, and California Business for
8 Education Excellence, and California Business Round
9 Table.
10 My commitment is to bring those experiences to
11 bear as a member of the State Board of Education in
12 collaboration with all of the stakeholders who have the
13 best interest of our children at heart, in order that
14 all children, in particular those who find themselves
15 being left behind, have the same opportunity that I had
16 and that you had to realize their dreams and
17 aspirations.
18 I believe that business has a unique and
19 important role in this partnership, along with the
20 education community, because I believe we bring a direct
21 knowledge of changes that are occurring in business and
22 industry, and a keen sense of requirements for current
23 and future employees. Secondly, I believe we can help
24 define the learning outcomes that the global marketplace
25 requires. And, finally, I think we can provide needed
7
1 to believe more in people than they believe in
2 themselves. That's what has happened to me, and it is
3 what we owe every child we are charged to educate.
4 With that, Mr. Chairman, I am pleased to answer
5 your questions.
6 CHAIRMAN STEINBERG: Thank you very much,
7 Mr. Jones. Let's see if there are questions. I know I
8 have a few, but if there's anything —
9 SENATOR OROPEZA: You don't want to hear from
10 the witnesses first?
11 CHAIRMAN STEINBERG: We usually ask the
12 questions.
13 SENATOR OROPEZA: Do you want me --
14 CHAIRMAN STEINBERG: Go ahead.
15 SENATOR OROPEZA: All right.
16 Thank you very much for being here today. I
17 just have to mention as an aside that Junior Achievement
18 is the thing that turned my life around. I'm a kid that
19 grew up in a challenging environment, and but for that
20 program, I really don't think I would be here. So I'm
21 glad to see you are involved in that. Are you still
22 involved in that program?
23 MR. JONES: I'm chairman emeritus. I'm on what
24 is called an emeritus board of Junior Achievement.
25 SENATOR OROPEZA: How long have you been
9
1 feedback on the degree that students master the
2 qualities required for success.
3 Over the past 18 months, I visited nearly 30
4 schools, most in California, some not, many highly
5 successful --
6 SENATOR OROPEZA: Pardon me. Excuse me. Most
7 in where?
8 MR. JONES: Most in California, some in other
9 states.
10 SENATOR OROPEZA: Okay. Thank you.
11 MR. JONES: Many of them were highly successful
12 schools. Many of them were in poor and minority
13 neighborhoods. I say that only because it has
14 reinforced my belief in, really, three things: Number
15 one, there is no school that cannot be successful;
16 number two, there is no child that cannot learn; and
17 number three, leadership does matter.
18 With high expectations and challenging
19 curriculum, well-trained teachers, involved parents, and
20 visionary school leaders, we can give students the tools
21 they need to realize the quality of life that those of
22 us in this room enjoy.
23 In that regard, I am committed to continue the
24 greatest lesson in leadership that I learned many years
25 ago, and that is this: As a leader, sometimes you have
8
1 involved, just out of curiosity?
2 MR. JONES: Oh, probably about 15 years.
3 SENATOR OROPEZA: That's great. Good. I have
4 a couple of questions.
5 One of the things that is of deep concern to
6 me, and you mentioned in your remarks, is the
7 achievement gap. As a former school board member who
8 represented a predominantly Latino and African-American
9 district, it was always frustrating to me and continues
10 to be frustrating to me the data that indicates this
11 differential between various ethnic students, ethnic
12 groups of students. And I'm puzzled, I'm absolutely,
13 you know, flummoxed about how we go about resolving that
14 and what the root causes are. Might you have some
15 observations about that?
16 MR. JONES: Yes, I do have some opinions and
17 observations about that.
18 The causes, obviously, I think, are many, some
19 of which are — I believe are societal kinds of issues
20 that we all wrestle with. Many of the kids,
21 particularly in this state, but many other places as
22 well, they live in environments that are challenging.
23 Many of them are homeless; many of them have single
24 parents; many of them don't have the type of support
25 that we experience. But those are issues, and I think
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there are a number of them.
But I would say this. But at least for me, and
maybe you experienced the same thing yourself, Senator,
at least for me, the thing that has had the greatest
impact on this are expectations. Let me tell you what I
mean by that.
The children that we're talking about, they
live in a world of low expectations from their home,
from their peer group, sometimes from there own family,
and sometimes in their schools. And so that is kind of
the world that they live and operate in. I saw this
firsthand myself, and, again, maybe you did as well.
I was very fortunate. My kids were very
fortunate. They grew up — Because of my success with
State Farm, they grew up in nice communities, nice
neighborhoods, but — and they went to very good
schools.
SENATOR OROPEZA: Public schools?
MR. JONES: Very good schools.
SENATOR OROPEZA: Public schools?
MR. JONES: Public schools. My kids went to
all public schools, and they were very good schools.
But both of my kids experienced, and I did as a parent,
and many others who I talked to like me,
African-Americans who had kids in school, my kids at
11
1 almost solely on that, how do we go about closing the
2 achievement gap, how do we take best practices. We've
3 created something that I'm very excited about. I think
4 in the last 18 months, we've had a series of five what
5 we call best practice institutes. Just had one three
6 weeks ago in Fresno. Fresno, California, three weeks
7 ago, we brought in 35 high-performing schools in poor
8 and minority communities, brought them together with
9 135 other schools, 350 teachers, who sat and talked
10 about best practices, things that we're doing that are
11 allowing us to close the achievement gap, because all
12 these schools of these 35 schools are closing
13 achievement gaps. That's how you had to qualify.
14 Clearly, there are answers — Clearly, there
15 are answers out there. I believe that's where you've
16 got to start. We've got to start with expectations.
17 We've got to have the right kinds of assessments and
18 measurements so that we're keeping schools on target and
19 focused, and I think we've just got to demand from
20 schools and school districts that they focus on — that
21 they focus on this issue.
22 SENATOR OROPEZA: Let me just follow up briefly
23 on that. The challenge, the problem — The problem is
24 that we've been saying that same thing for a long time,
25 and it is not the first time that I heard about low
13
times were held to lower expectations even than their
white counterparts in good schools. I don't know that
that was intentional. I don't know that people even
knew that that was happening, but that is what happened.
And it was up to us -- It was up to my wife and I to
make sure that we were there to make sure that people
held our children to the same level of expectation. So
for me, I think that's clearly a foundational issue of
what really has sort of driven this. There are,
obviously, a lot of other issues as well.
To the second part, in terms of what do we do
about this, I mean, obviously, that is the most
important question that we have, how do we go from
knowing this to doing something about it. And as I
said, I visited a number of schools in this state, and
most of them minority schools. Many of them were highly
successful. And I say that to say there's a lot of good
learning out there already, and I think perhaps the
first thing that we can do is learn from those who are
already successful, that one of the things I don't think
we have done as well as I would like to see us do is
really create best practices.
One of the things that I've also been involved
in with this other organization called CBEE, California
Business for Education Excellence, our focus has been
12
1 expectations, and I concur with you that some
2 teachers — some schools have a culture of low
3 expectations. How do you -- but I don't think — And
4 you mentioned you don't think that's the total problem.
5 I would concur with you that there are problems in the
6 schools beyond the societal issues, beyond expectations
7 being a problem.
8 How do you think we get beyond just a
9 discussion about expectations at the leadership level,
10 the Board of Education? What have you done, or what
11 would you like to do in your tenure on the board about
12 this problem?
13 MR. JONES: What I have done so far in my
14 fairly brief time on the board, less than a year, are a
15 couple things, I think.
16 First of all, I think was the impetus -- one of
17 the impetuses, I guess I should say, in really helping
18 the board create our first, at least that I know of, our
19 first retreat to help us really get focused on what the
20 key issues are that we want to deal with as a board, so
21 we did that. We went off and created issues. The
22 number one key issue was closing achievement gaps, so
23 that as a board, how do we stay focused on this; how do
24 we bring this in every single meeting.
25 I talked at the last meeting about we need, at
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every meeting that we have, to have closing achievement
gaps on the agenda, what's happening, what are we doing,
what's happening in the field, what can we learn about,
number one.
Number two, I have championed, as you probably
heard or seen, about the establishment of the
African-American advisory committee. I believe that
African-Americans being -- continue to be at the bottom
end of the achievement gap. We really need to
facilitate a way to bring people together that are
having success, that have ideas on how we create this,
because I guess I have come to believe while all of us
have thoughts and ideas, all the answers don't sit here
in Sacramento. The answers are out, people on the
ground, in the field. So that is compatible.
We already have, as you probably know, an
English language learner advisory committee, so this is,
I think, compatible with that. They really do
accomplish the same thing, to get those ideas that
ultimately help to get kids to grade-level proficiency.
Thirdly, what I want to do is, again, sort of
facilitate more learning on our part for the board. How
can we learn from those people that are accomplishing?
We haven't seen many people come to us, at least I
haven't, and say, "Here's what I'm doing. Here's what's
15
1 And you've got to generate energy with students so that
2 they're anxious to learn."
3 And so I just say all that to say there are
4 answers out there, because there are schools right now,
5 because we have some in your district, that are doing
6 some pretty good things.
7 SENATOR OROPEZA: Two more quick questions, if
8 I may, Mr. Chair.
9 CHAIRMAN STEINBERG: Thank you.
10 SENATOR OROPEZA: One is what do you -- Do you
11 think that the role of culture and --
12 What role do you think cultural differences and
13 the understanding of cultural differences has to do with
14 learning? And do you think we are sufficiently
15 preparing our teachers and staff in our schools to meet
16 the new demographic, which is predominantly Latino? In
17 the future, we are looking at a predominantly Latino
18 school district, but a very diverse school district
19 notwithstanding. That's the question.
20 MR. JONES: The first part of the question, I
21 don't know what part it plays. I think it definitely
22 does play a part. And I think, you know, just like me,
23 all of our family history and background and culture
24 plays some degree into who we are, and how we think, and
25 all that. But I do think it has clear relevance. I
17
working," so that we can then take that, translate that,
hopefully create policy that is allowing that to be
scaled in some way so that we can begin to make some
move in that regard.
Finally, I could say -- I said this to Senator
Steinberg this morning. Those schools that I visited,
there are a lot of common denominators, I guess, of
success and all of that, but if I were able to see one
thing through my own eyes, it was what you mentioned
lastly, and that is — it's no surprise; it's just like
business. The best schools are run by the best leaders.
We have to invest in our leadership, because --
I went to a school called Ralph Bunche
Elementary School. Dynamic young principal there. Came
out of Teach for America. She inherited that school.
They were 18 percent proficient in math and language
arts. Five years later — I think I have these numbers
pretty correct -- about 70 percent proficient. She said
to me -- Her name is Mikara Solomon Davis. She said,
"Greg, it ain't rocket science. You got to get parents
involved. You got to get kids ready to come to school.
You got to get kids ready not just to attend school, but
be ready to learn in school once they get there. You've
got to set high expectations. You've got to get
teachers to buy into what it is you're trying to do.
16
1 don't know what relevance that is.
2 In terms of the second part of your question, I
3 would have to say the answer to that is probably none,
4 not nearly as much as we need to. I think we've got to
5 make a lot greater investment in not just the quality of
6 teachers, but teachers who can relate to today's
7 students, and to what their needs are and how they
8 learn. It's a whole issue I think of -- because I think
9 kids learn in different ways.
10 So this whole issue of multiple pathways to
11 results I think is a very important one, because -- like
12 when I went to school, the teacher teaches, and you
13 listen and regurgitate back.
14 SENATOR OROPEZA: Well, let me suggest to you
15 that culture plays a very important part in whether or
16 not a kid can learn, because if a teacher doesn't
17 understand that the use of certain language -- for
18 instance, I'm sure as an African-American, you can
19 relate to the concept of language being effective or not
20 effective, as simple as that, or as complex as something
21 much more complicated.
22 If parents aren't approached appropriately, if
23 children aren't approached appropriately, if we don't
24 take it where they are instead of the reverse, we miss
25 the boat on a lot of youngsters. And I would just draw
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1 your attention to schools where that change has been a
2 focus of the energy of the school.
3 In other words, for instance, in Long Beach
4 where there were significant populations of Cambodian
5 young people in the school, when the principal took on
6 the challenge of educating every teacher about some
7 cultural aspects that might be relevant to the
8 classroom, relevant to the teacher- parent relations,
9 the test scores went up. That's not the only dynamic,
10 but it was a huge part.
11 So let me just suggest to you that you give
12 more thought to how that impacts education, how
13 profoundly it can affect a child's openness or
14 non-openness to being educated by the teacher who, not
15 with any ill-will, but just out of their ignorance does
16 not go where the child's culture goes.
17 Finally, let me ask a question about the
18 diversity. Diversity is a very important issue to me,
19 diversity on our boards, commissions, and every
20 governor's body, including our own Senate, which I
21 continue to fight for this very issue that I'm going to
22 ask you about, and that is the gender imbalance on this
23 board.
24 I know there are eight men and two women
25 serving on the board, and certainly there are at least
19
1 Thank you very much, Mr. Chairman.
2 CHAIRMAN STEINBERG: Thank you very much,
3 Senator Oropeza. I would echo, certainly, those last
4 comments in a very serious way.
5 I would like to ask -- I suppose make a comment
6 and ask a couple of questions, if I might.
7 We've had the opportunity to meet Mr. Jones a
8 couple of times, including this morning, and I enjoyed
9 it very much. Obviously, a sincere and very
10 accomplished person.
11 What I would like to suggest to you, though, is
12 that as you go forward with your full-term members of
13 the State Board of Education, that you focus, because
14 I'll always remember sort of the advice I got when I was
15 newly elected to the State Assembly, and it's advice I
16 try to pass on to new members all the time. They say,
17 "What's the key to success and making an impact?"
18 I was told the key is to -- You can't solve
19 every problem, you can't lead on every issue, but you
20 can pick a couple of things that really matter that
21 maybe others are not paying sufficient attention to, the
22 body politic is not paying specific attention to, and
23 you can drive them.
24 So when you talk about the achievement gap, of
25 course that's the issue of our time, in my view. And
21
1 half of our young people who are female. And I'm just
2 wondering, given that dynamic, how you outreach or how
3 you attempt to seek input from the women — from women
4 about what should be going on at the Board of Education
5 since there don't seem to be a lot of female members.
6 MR. JONES: Well, I think that's a very good
7 observation, very good question. First of all, I hope
8 we see that dynamic change, because my hope is that the
9 state board should reflect our state and our community
10 and our schools, which as you well know are very heavily
11 minority students, and, obviously, 50 percent of our
12 students are likely female. So, obviously, I hope that.
13 I think in terms of what I do, and I can't
14 honestly say I've done a whole lot of this, but I do
15 want to seek out input from all the stakeholders,
16 whether they're women, or minorities, or whoever they
17 happen to be. So that will clearly be something that
18 I'll work at.
19 SENATOR OROPEZA: Thank you. Thank you.
20 MR. JONES: I'll give you my commitment I'll
21 work hard at it. I'll work hard at that.
22 SENATOR OROPEZA: Thank you. Until we get more
23 members, it's the responsibility of some of the men to
24 also convey that perspective and to seek out those
25 viewpoints.
20
1 when you talk about, you know, some of the process-
2 related things that you've done on the board, like
3 organize the retreat in which you urged the achievement
4 gap be part of every agenda, I would like to suggest to
5 you that you think about taking a subset of the
6 achievement gap issue and driving it.
7 Now, I have my favorite issue, which the
8 members have heard me talk about every time we talk
9 about the State Board of Education, and that's the
10 drop-out rate, because the drop-out rate may not be
11 everything, but I think it's a real window into the
12 achievement gap. And it's also something that is
13 tangible enough that if we set a goal, as policymakers,
14 to reduce or eliminate over time, we can actually
15 measure it and potentially achieve it, and in doing so
16 reduce the achievement gap.
17 So I would like to ask you your view on the
18 drop-out issue. I suppose the easy answer would be:
19 I'm against people dropping out.
20 MR. JONES: You just took my answer away.
21 CHAIRMAN STEINBERG: I took the answer away,
22 right, right.
23 But specifically, the board has before it my
24 Senate Bill 219 in which the board is empowered to
25 decide just how large of a factor the drop-out rate
22
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1 ought to be in the academic-performance index, because,
2 as you know, the API is largely based now in test
3 scores; and 219 says "as drop-out rate," and leaves it
4 to you and your fellow board members to determine what
5 weight that should have. I'd like your perspective on
6 that issue going forward, please.
7 MR. JONES: Okay. To the first more general
8 issue, obviously, I agree with your statement. I'm
9 against that. But because of this — and we all know
10 this -- the drop-out rate closes some very promising
11 doors and it opens some very dangerous ones for kids.
12 And it ultimately impacts things like the achievement
13 gap; it impacts things like crime; it impacts things
14 like drugs; it impacts things like teen pregnancy. So I
know that's an objective, and I know you would certainly
agree with that.
But I agree with you. I think it's time for
more action. I think it's time for more focus,
specifically on the drop-out issue. I think it's time,
and I am not only willing but anxious to carry forward
the implementation of 219, because I think it is what
will provide the kind of focus and oversight and
accountability to get to put attention on this issue. A
lot of people talk about it, and everybody thinks it's a
25 bad thing and we need to do something about it, but it's
23
1 just talked about. We've got to give attention to it,
2 we've got to make accountability, we've got to expect
3 that there -- I think we've got to expect every school
4 district to have a strategy to address.
5 CHAIRMAN STEINBERG: Excuse me. Just to get to
6 the subset of my other question, I'm not asking you for
7 a number, because I'm not trying to ask you to
8 pre-decide, but what weight in general do you think the
9 drop-out rate ought to have in the academic performance
10 index?
11 MR. JONES: I can't give a number.
12 CHAIRMAN STEINBERG: I don't want a number.
13 MR. JONES: I think it has a significant
14 weight, because I think it has a lot to do with the
15 drop-out rate. And I think if we can keep kids in
16 school -- for kids being in school, that means they're
17 more excited about school. That means they're more
18 wanting to be there, wanting to be there, and they're
19 going to be, hopefully, more engaged.
20 CHAIRMAN STEINBERG: Okay. Thank you. Maybe I
21 can move on, if you don't mind, to the other areas, and
22 that is: We've been very concerned, many of us in the
23 legislature, about the CAHSEE exam as applied to special
24 education students, especially those with developmental
25 disabilities, and the lack of board action on actually
25
time for us to begin to move to action. So I think
that -- I'm very anxious to do that, number one.
Number two, as I mentioned to you this morning,
Senator, for the other senators, in the last 18 months
I've been involved for my organization, State Farm, who,
by the way, I just retired from last Friday, so I'm not
part of State Farm anymore --
CHAIRMAN STEINBERG: Congratulations.
MR. JONES: Thank you.
CHAIRMAN STEINBERG: But you are still like a
good neighbor.
MR. JONES: They still are sending me a check.
But I travel around the country addressing just
this issue. I worked on behalf of our president and CEO
of our parent company working with America's promise on
creating a drop-out strategy. And part of that strategy
was we held, I think, nine — we don't call it this --
drop-out summits where we got in front of kids and asked
them, "Why did you drop out?" and they gave us all the
reasons. Then we got in front of people like us and
said, "Okay. Let's take that and create strategies to
address it." Talked to probably over 3,000 kids, and
the issues are those that we're all familiar with, but
it has led me to some conclusions about this.
Number one is that the -- the issue that you
24
710/2009 11:26:57 AM
1 aggressively attempting to develop rigorous but
2 alternative assessments so that those with ability but
3 also certain disabilities can, in fact, proudly hold a
4 high-school diploma and go on to higher forms of
5 education. And that doesn't happen now except through a
6 local waiver process, which is rather inefficient, and
7 there isn't a standard across the board.
8 What will you do, if you are confirmed, to make
9 sure that this issue is dealt with at the board level?
10 MR. JONES: I think the waiver process is
11 inadequate in dealing with this. I really do. I think
12 identifying ways for young people that want to take the
13 exam to take the exam. And there are people that,
14 through no fault of their own, are unable to do that.
15 So I would very much support and, again, as I
16 said with the other issue, I'm very much willing to move
17 that forward in our agenda as a state board, to address
18 the issue of alternative assessments for kids with
19 disabilities.
20 CHAIRMAN STEINBERG: And you will do that; you
21 will agendize that?
22 MR. JONES: Yes, I will.
23 CHAIRMAN STEINBERG: Okay. Last question on
24 algebra, the very controversial eighth-grade algebra
25 requirement, which I think we might have a disagreement
26
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1 on that, and that's okay, because reasonable people can
2 disagree on that.
3 But what we talked about in my office and what
4 I would like to just explore briefly with you is the
5 seeming lack of an implementation plan for how to
6 actually make that aspiration, which everyone agrees is
7 a good aspiration, how to actually make it work.
8 And so I wonder if you could talk about whether
9 you've learned any lessons from that experience. As you
10 think about the big policy initiatives going forward, is
11 it essentially to have an implementation plan at the
12 same time you pass a sweeping policy that calls for
13 action?
14 MR. JONES: Yeah, I think in my first ten
15 months, that's probably a great lesson learned.
16 CHAIRMAN STEINBERG: Okay.
17 MR. JONES: I think philosophically, as I said,
18 I believe it's the right thing, because I believe it's
19 the right thing for kids, to set that aspiration for
20 kids. But I would also be willing to say that probably
21 our implementation wasn't as strong as the aspiration.
22 So I think, certainly for me, it's a lesson learned.
23 And I think, as we think about policy, it's important to
24 think about how do we implement things we want to do,
25 and I think that applies to a lot of — yes. There is a
27
1 ever-changing state, very dynamic, and we have to be
2 very sensitive and thoughtful about those demographic
3 changes and the changes in the workforce, and the aging
4 of our workforce. So we have to make — Whatever
5 changes we must make must be urgent, thoughtful but
6 urgent on these matters.
7 And I want to re-emphasize for you, English-
8 language learners and English-language learning is a
9 priority for the Spanish-speaking community, and we need
10 people to recognize that and put the resources that are
11 essential for that. We need to prepare a new workforce
12 for the future.
13 And I would say to you, you need to know that
14 the Spanish-speaking community is anxious to learn
15 English, and we should be responsive to that with the
16 commitment of resources for that community to learn
17 English, to integrate themselves linguistically in our
18 society, and we cannot wait for politics.
19 But this is really a need for a thoughtful
20 policy of making that type of investment. It's
21 important not just for our democracy and integration of
22 these communities, but it's important for our economy
23 and our future.
24 CHAIRMAN STEINBERG: We will let you answer
25 that or respond to that in your closing.
29
1 lesson learned.
2 SENATOR OROPEZA: Would it be okay if I
3 followed up? Just a brief follow-up.
4 CHAIRMAN STEINBERG: Go ahead.
5 SENATOR OROPEZA: That is to say that that is a
6 very important lesson to learn as a policymaker, whether
7 you're a senator or a member of a state board.
8 Practicality, on-the-ground reality, has to
9 kick in. We don't have the good fortune of being able
10 to just philosophize about what-ifs. We have to really
11 adopt laws and regulations that work on the ground.
12 So I'm glad to hear you learned that lesson.
13 It's one that all of us have to learn as we go forward,
14 and we're criticized when we don't. And I agree, it is
15 an important -- very important issue going forward.
16 MR. JONES: Thank you, Senator.
17 CHAIRMAN STEINBERG: Are there other members
18 that have questions and comments for the nominee?
19 SENATOR CEDILLO: My colleague had an
20 observation.
21 CHAIRMAN STEINBERG: No, he didn't. Go ahead,
22 Senator Cedillo.
23 SENATOR CEDILLO: I don't want to delay this.
24 I share the viewpoints of my colleagues.
25 Let me reiterate we do live in a very exciting
28
1 MR. JONES: Okay.
2 CHAIRMAN STEINBERG: Thank you, Senator
3 Cedillo.
4 Let's hear from the witnesses in support of the
5 nominee. Glad to see a couple of my esteemed
6 constituents here today.
7 MR. STONE: Good afternoon, everybody. I'm
8 Aubry Stone, president/CEO of the California Black
9 Chamber.
10 It's a very interesting day for me today. I
11 came with the intent to speak on behalf of a person who
12 has nothing but sincerity in his heart to try to move
13 the agenda in the state of California, and that excites
14 me. But then after my arrival, I saw a gentleman that
15 supported the California Black Chamber in its infancy
16 years up for nomination to the Parole Board, so if I
17 don't bore you guys too much, I'd like to stick around
18 and make some commentary on him as well.
19 CHAIRMAN STEINBERG: You're welcome to.
20 MR. STONE: He's just an outstanding citizen.
21 But Greg, right now I'm very humbled by the
22 opportunity to make some comments on his behalf. For
23 those that know me, Senator Dutton, yourself, and
24 Cedillo, you know I'm not very humble, so this really is
25 very special.
30
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02/10/2009 11:26 57 AM
1 Going back to the senator's statement, and I
2 just want to reiterate that is -- talking about the
3 policy and the algebra thing that the chair brought up,
4 I think that in reality, there's a conceptual approach;
5 but then pragmatically, somebody has got to lay it on
6 the table so that if it happens in three years, five
7 years, whatever is realistic, because those people that
8 come through the educational and academic arena, you
9 know, to get to algebra and geometry, it's a stair step,
10 adding, subtracting, multiplication, short and long
11 division, before it all makes sense, but you got to get
12 there.
13 We have -- As Senator Cedillo mentioned, we
14 have a tremendous stimulus package that's coming down.
15 Everybody knows it. Everybody knows we have this bond
16 issue that's still being rolled out. You can't be a
17 carpenter without having math skills. You can't do any
18 vocational skills. So anybody that raises the issue to
19 raise the expectations.
20 In going to the chair's statement, you know,
21 his subset is drop-out, and that's a great subset. My
22 subset is expectations. I truly think that anybody that
23 makes part of their mantra the expectations of our young
24 adults, because we keep talking about the end-result
25 ills, the overcrowding in prisons, the lack of revenue,
31
1 MR. SHELBY: I'm here today because I have a
2 lot of respect for Greg Jones as an individual, as a
3 corporate leader, and as a man of compassion. I've seen
4 his hard work in terms of bringing corporate dollars to
5 Los Angeles Urban League, millions of dollars in terms
6 of commitment to the strategic plan. Of course some of
7 those millions didn't roll up to Sacramento, but I still
8 love him anyway.
9 In the National Urban League, he has been a
10 national board member. Greg helped start a new program
11 called New Lights. Every summer, 2,000 young people
12 across the country come to the National Urban League
13 convention. They spend a week at a college campus in
14 the city where the Urban League's national conference is
15 held and talk about leadership, and it was Greg's
16 support from State Farm that made that possible. And
17 the program still exists today.
18 I know his compassion for education. We may
19 not agree on everything, but I want someone on the state
20 board where if I have a problem, I can sit down and talk
21 to. And that's what I ask for.
22 Darrell, you know my commitment to dropouts.
23 We graduated over 1200 dropouts from Sacramento Urban
24 League since 1995. That is a mainstay of our
25 organization. We also know about expectations. Poor
33
1 all of these things, if you dig down and roll your
2 sleeves up, comes from the lack of basic education.
3 So, you know, to have this type of individual
4 with his kind of courage, his vision, and I'm sure he's
5 going to modify his implementation skills, you know, we
6 just hit a ball out the park today. I'm glad to see
7 him.
8 CHAIRMAN STEINBERG: Thank you very much.
9 I know there are a lot of witnesses. I would
10 ask the witnesses if you would be brief, we'd appreciate
11 it.
12 Council Member Shelby.
13 MR. SHELBY: Honorable Senator Darrell
14 Steinberg, my state Senators, as president of the Urban
15 League and also mayor of Citrus Heights —
16 CHAIRMAN STEINBERG: Mayor Shelby.
17 MR. SHELBY: - I'm honored to be here this
18 afternoon.
19 CHAIRMAN STEINBERG: Thank you.
20 MR. SHELBY: To other distinguished
21 colleagues --
22 I know I'm not going to get the same time Aubry
23 got.
*4 CHAIRMAN STEINBERG: Aubry always gets the most
'.5 time. That's the rule. That's the rule.
32
1 kids in poor neighborhoods, we know, are taught by not
2 the best teachers. That's a major problem as well. So
3 when we address the system, the policy at the state
4 level is one thing. We have to make sure that the
5 expectations of the classroom is the same in poor
6 neighborhoods as it is in middle-class neighborhoods.
7 I'll sum up by saying this: I'm from a middle-
8 class family. I worked to get there. And my kids went
9 to school. They're all college graduates, but I've
10 always had to go to the school because the teachers'
11 expectations were not as high as mine.
12 CHAIRMAN STEINBERG: Thank you very much,
13 Mayor Shelby. Appreciate all your good work and your
14 testimony.
15 Again, briefly, please. Name, rank, serial
16 number.
17 MS. BELISLE: Rae Belisle, CEO of Ed Voice, a
18 statewide advocacy network supporting low-income and
19 minority children, and we are thrilled to see the
20 leadership that Greg Jones brings for those children at
21 the state board, and we support his confirmation.
22 CHAIRMAN STEINBERG: Thank you, Ms. Belisle.
23 Appreciate it.
24 MS. GRIFFITH: Good afternoon. Sherry Griffith
25 with the Association of California School
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1 Administrators. Our board interviewed Mr. Jones and
2 were persuaded by three important factors, and you heard
3 these today.
4 His support for local control tied to results,
5 his support for equity but without an etiological bias,
6 very open-minded to different approaches, and his belief
7 that strong leaders equal strong schools, which is near
8 and dear to our hearts, and we encourage his
9 appointment.
10 CHAIRMAN STEINBERG: Thank you.
11 MR. JONES: Mr. Chairman and members,
12 Branche Jones, California Charter Schools Association.
13 We support the nominee. We love his commitment to
14 education, first of all, and we think he brings a needed
15 diversity to the State and State Board of Education.
16 CHAIRMAN STEINBERG: Thank you, Mr. Jones.
17 MS. KEYS: Good afternoon. Deborah Keys, vice
18 president of VAAS, Voices for African-American Students.
19 It's a group of educators and community members across
20 the state of California that advocate the — closing the
21 achievement gap of African-American students.
22 Mr. Jones has been a key supporter and leader
23 at a time so critical to the future of our state. His
24 experience as a business leader enables him to
25 understand the quality of education our students need to
35
1 confirmation.
2 CHAIRMAN STEINBERG: Thank you. Appreciate it.
3 Mr. Lee. Welcome. Good to see you. Another
4 constituent.
5 MR. LEE: Thank you, Senator Steinberg. My
6 name is Larry Lee on behalf of The Sacramento Observer
7 and the California Black Media. We'd like to
8 wholeheartedly support this nomination. We think
9 Mr. Jones brings a unique perspective to the problems
10 that face the achievement gap in California.
11 As a member of the media, it's important that
12 we can look at it from an outsider's view and see he has
13 outreached to our communities in a variety of ways, so
14 we wholeheartedly support him.
15 CHAIRMAN STEINBERG: Thank you very much,
16 Mr. Lee.
17 Are there any witnesses in opposition to the
18 nominee? If not, I'd like to take a motion.
19 SENATOR OROPEZA: Moved.
20 CHAIRMAN STEINBERG: Moved by Senator Oropeza.
21 Just a brief comment. I'm proud to support
22 your nomination as well and know that you have taken
23 this process and the comments today very constructively.
24 And I just want to clarify one thing. It doesn't have
25 to be the drop-out rate as your subset. It happens to
37
1 be successful in a global economy.
2 As a state board member, Mr. Jones has
3 consistently proven to be someone who is driven by what
4 is best for all students. He consistently supports
5 legislation and policies that positively affect
6 California students. Mr. Jones is a role model and an
7 advocate for children.
8 It is extremely important that we continue to
9 support high-quality leaders such as Mr. Jones, on whose
10 leadership we depend, and it is without reservation that
11 VAAS enthusiastically endorses the confirmation of
12 Mr. Jones.
13 CHAIRMAN STEINBERG: Thank you very much.
14 Appreciate it.
15 MS. KEYS: Thank you.
16 MR. LANICH: Good afternoon. Jim Lanich,
17 president of California Business for Education
18 Excellence. I'm here advocating for Mr. Jones's
19 confirmation on behalf of California Business for
20 Education Excellence, the California Business Round
21 Table, and the Cal Chamber.
22 What you heard from Mr. Jones today is from the
23 heart. He means it. I can say that. I work with him
24 all day, every day, 24/7, and we're absolutely honored
25 that he's sitting here before you, and we urge your
36
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be mine. But I do think that part of leadership,
especially on a board like this, is to focus on a subset
of the larger problem and be the person known for
driving that change, because to be too much of a
generalist, in my view, leaves you a mile wide and kind
of an inch deep when it comes to actually trying to
effect some of the change that you are committed to.
So I would ask you to think about that as you
begin your four-year service.
MR. JONES: Absolutely will. Thank you very
much, Senator.
CHAIRMAN STEINBERG: Thank you, Mr. Jones.
Let's call the roll on the motion.
MS. BROWN: Senator Cedillo.
SENATOR CEDILLO: Aye.
MS. BROWN: Cedillo aye.
Dutton.
SENATOR DUTTON: Aye.
MS. BROWN: Dutton aye.
Oropeza.
SENATOR OROPEZA: Aye
MS. BROWN: Oropeza aye.
Aanestad.
SENATOR AANESTAD: Aye.
MS. BROWN: Aanestad aye.
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Steinberg.
CHAIRMAN STEINBERG: Aye.
MS. BROWN: Steinberg aye.
CHAIRMAN STEINBERG: Thank you very much,
Mr. Jones. Your nomination will go to the floor of the
state Senate either tomorrow --
MS. BROWN: Next week.
CHAIRMAN STEINBERG: Early next week.
Let's lift the call on reference to the bill
that was file item one, please.
MS. BROWN: Senator Cedillo.
SENATOR CEDILLO: Aye.
MS. BROWN: Cedillo aye.
Dutton.
SENATOR DUTTON: Aye.
MS. BROWN: Dutton aye.
CHAIRMAN STEINBERG: All right. That passes
five to nothing.
All right. We're going to move to Mr. Arthur
Anderson. I'm not sure if there's anyone here in
particular to introduce you, Mr. Anderson.
MR. ANDERSON: No, sir.
CHAIRMAN STEINBERG: Welcome up. Brief opening
statement here.
In view of the Rules Committee, at least the
39
1 SENATOR CEDILLO: I appreciate setting the
2 framework, because I think it's important. The recent
3 history has been the governor has been insistent on
4 sending people before us who are good people, competent
5 in many areas, but who all come from professions that
6 have as their objective, basically, putting people in
7 jail or keeping them in jail.
8 So it seems unfair to the candidates when there
9 is not a mix, when there is not a balance as the law
10 requires. There's not the diversity that the law
11 requires. It's unfair to those candidates, because they
12 have a burden. Each one then comes as a candidate whose
13 sole training has been to put people in jail, to enforce
14 the law, and therefore have a bent or a bias towards
15 that.
16 And then they're asked to come before us as the
17 candidate who is not in compliance with the articulated
18 intent of the law, the letter of the law, and so it's
19 unfair to them, because we have to look at what the law
20 requires, and if it's a diverse board. We have yet to
21 see candidates who reflect that diversity. It's unfair
22 to this candidate and to others.
23 And then we know that we have the recent
24 passage of propositions which add a burden on these.
25 You want them to be courageous and fair, but it's very
41
history of the Rules Committee, these confirmation
hearings for the Board of Parole are particularly
important, because the hearings that you conduct as
members of the Board of Parole are conducted entirely
outside of the public's view, and so our job is to shine
some light on the process. And that, of course, is our
job.
We have many members, actually, that we know we
will be hearing as nominees to this board in the next
several months, and for you, Mr. Anderson, as the first
one, and for all of the subsequent members, we're going
to ask, fundamentally, the following two questions: Can
the appointee, one, provide fairness to all parties in
the so-called lifer hearing process? And, two: Given
sort of the political volatility and public nature of
some of these decisions that you're called upon to make,
does the appointee have the courage to act independently
to determine who genuinely poses an unreasonable risk to
public safety.
So with that, I welcome you to the committee.
If there's any family member or anybody special in the
audience that you want to introduce, please do so. Give
us a brief opening statement, and then we will open it
up for questions.
Senator Cedillo, before that.
40
1 challenging for them, given, one, their training; given,
2 two, the pool that they're taken from; and, three, the
3 recent legislation.
4 So I think we have to really ask the candidates
5 how can they overcome that to see that justice that is
6 articulated in the law, that we're trying to implement
7 here, is realized, given those burdens. And I think
8 that's, really, a necessary question.
9 CHAIRMAN STEINBERG: You remind -- and, again,
10 we're going to get right to you, Mr. Anderson, but I do
11 think it's important to understand what the role of the
12 member of the Board of Parole Hearings is, because
13 before I took this job, I didn't understand exactly how
14 it works, and now I do. And it's important to put it
15 out to the public.
16 There are 17 members of the board. Twelve
17 members hear what are known as adult indeterminant life
18 cases and five hear juvenile cases. What this board
19 does not do, and this was my impression before, again, I
20 got into this, adult members do not do parole
21 revocations, only what are known as indeterminant lifer
22 parole suitability hearings.
23 In other words, in an indeterminant sentencing,
24 somebody is sentenced seven years to life. At seven
25 years, they get an indeterminant parole hearing. Now to
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1 complicate it a little bit with the passage of
2 Proposition 9, if that parole is denied the first time,
3 Prop 9 now says that the presumption is they don't get
4 another parole hearing for 15 years, and of course the
5 old standard used to be between one and five years.
6 Now the board itself -- and this is why these
7 are very powerful positions -- can say, Well, by clear
8 and convincing evidence, this person ought to at least
9 be considered for parole at some point in time less than
10 15 years.
11 So that's the — That's the nature of the job
12 we are talking about here, and I think that's important
13 for everyone to understand as you go forward. Okay.
14 MR. ANDERSON: Okay.
15 SENATOR DUTTON: Senator --
16 CHAIRMAN STEINBERG: Yes, Mr. Dutton.
17 SENATOR DUTTON: This has come up before
18 regarding the apparent makeup of the board, and so I
19 actually did some research regarding the penal sections
20 that involve the selection of the commissioners and
21 deputy commissioners. While it's true it says that
22 the -- "by Governor, confirmation of the Senate, it
23 should reflect as near as possible a cross-section of
24 racial, sexual, economic, and geographic features of the
25 population of the state."
43
1 here in terms of sort of an, A, ongoing maybe
2 philosophical disagreement about the diversity of
3 appointees. Democrats feel that there should be more
4 than just folks from the law-enforcement community. I
5 heard sociology and mental health in that description.
6 SENATOR OROPEZA: And medical.
7 CHAIRMAN STEINBERG: Mr. Dutton, I think, is
8 trying to defend the position that people ought to have
9 some ongoing connection to law enforcement or to
10 corrections. We're not going to resolve that in terms
11 of a policy body here. We need to hear the nominee.
12 But we're setting the stage, really, for future
13 nominations as well.
14 Go ahead, Senator Aanestad.
15 SENATOR AANESTAD: And yet nobody has
16 mentioned, I think, what all of us and all of the people
17 on the board are interested in and have to have as the
18 primary reason, and that is not necessarily to put
19 people in jail, but to protect the public. And I think
20 we're talking about protecting the public. That's what
21 we should be thinking of when we're talking about law
22 enforcement, rather than saying, "All they want to do is
23 put people in jail."
24 CHAIRMAN STEINBERG: Yes. Okay.
25 Mr. Anderson, what do you think of all of this?
45
1 It also says under Penal Code 5075.6(d)
2 "Commissioners and deputy commissioners hearing matters
3 concerning adults under their jurisdiction," and it
4 talks about what they do, and then it goes down and it
5 says "Insofar as practical, commissioners and deputy
6 commissioners shall have a varied interest in adult
7 correction work, public safety, and shall have
8 experience or education in the fields of correction,
9 sociology, law enforcement, medicine, mental health, and
10 education."
11 So this specifies that they want to have some
12 kind of association with that, at least that's what this
13 code says.
14 SENATOR CEDILLO: Right. You're right on
15 point. It says "varied." It means, for example, not
16 just the DA, but the public defender.
17 SENATOR DUTTON: Well, every one of the
18 hearings are by people we confirm, but also it's a
19 deputy -- it's usually somebody who's from the defense
20 that sits at a two-man panel that make these
21 determinations.
22 CHAIRMAN STEINBERG: I don't want to digress
23 too much here. I think that what is clear, and, again,
24 we're going to take Mr. Anderson's nomination as an
25 individual on the merits, but there is a broader context
44
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
SENATOR OROPEZA: Make your opening statement
first.
MR. ANDERSON: Sir, I'm just happy to be here.
I realize I'm the first one out, and I'm here to ask you
to judge me as an individual. I'm here to ask you to
judge me on my record. I'm here to explain to you my
philosophy. And I know you're going to do that.
You look at my application and my resume. My
resume is diverse. I worked my way up through the ranks
of state government, and that includes law enforcement.
I'm proud of my record as a law-enforcement officer,
because it involves a record of fairness. It involves a
record of versatility. You look at some of the programs
I've developed and the organizations I've been involved
in, they're diverse. They're not about always putting
people in jail, because I believe, as a member of this
community, you got to be part of a solution, not always
part of the problem.
And it's true. Our job is -- When I was in the
law enforcement, it was protecting, but I've been an
administrator for 30 years. And I've been -- I've seen
what it takes to have fair laws and to have fairness in
what we do when I was in the law-enforcement arena. And
now I have the opportunity to be in this job. And I've
demonstrated the ability to think objectively, to be
46
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fair and impartial in my hearings, to treat people with
respect and give hearing decisions that are sound based
on the regulations that are provided to us.
You look at some of the programs that I've been
involved in in this community, and we talk about things
like the Special Olympics. You look at the March of
Dimes. I've been involved in the March of Dimes where
we raised $1.5 million this year. I'm proud of that.
I'm proud of my involvement in the Boys' and Girls'
Club. I'm proud of my involvement in Chips for Kids.
We've raised money for toys. So my background is
diverse.
I have educational achievements. I have a
master's degree. I've gone to U.C. Davis and expanded
my educational opportunity. So I know what it takes to
be involved in a community. And I know what
communities, the various communities, expect of their
public servants, because I've been one for 35 years.
Thank you.
CHAIRMAN STEINBERG: Okay. All right. Thank
you, Mr. Anderson. Let me — You have a commendable
record of community involvement and care for people.
That's obvious.
I want to hone in a little bit on your
philosophy in terms of the way you look at the cases.
47
1 an opportunity to look at the psychological report from
2 a professional's point of view, and I use that
3 psychological evaluation as a jumping off place to ask
4 specific questions and to determine suitability factors.
5 Does the inmate have a knowledge of why this
6 occurred? Does he have a proper insight in terms of
7 dangers? And then I use that as a tool, and I, along
8 with the deputy commissioner, determine if that
9 psychological report is appropriate, and we use it as a
10 tool to help us arrive at a decision at that time.
11 CHAIRMAN STEINBERG: My final question for now
12 is to ask you to respond to — or your interpretation of
13 Proposition 9, which — and its impact on the way you
14 conduct a hearing.
15 Do you begin with a 15-year presumption if
16 somebody is seeking another parole hearing after having
17 been denied initially, or do you believe that in most
18 cases, that 15 years is far too long for someone to wait
19 for another evaluation?
20 MR. ANDERSON: Well, sir, I realize that the
21 Prop 9 had a chilling effect on the whole process, and
22 what I do is I weigh each case independently. Some
23 cases will warrant a 15-year denial, and some cases will
24 not.
25 What we look at is the measure, the yardstick.
49
Let's start out with the most basic. Title 15 states
prisoners shall be found unsuitable, quote, "if a
prisoner will pose an unreasonable risk of danger to
society if released."
Now that's sort of a basic definition, but
could you maybe describe with a little bit of detail how
you interpret that standard? What are you looking for
in determining whether somebody is an unreasonable risk
of danger?
MR. ANDERSON: Well, sir, what I use is all the
tools that are available to a panel member. I'll look
at: Is the person a reasonable — like you say, a
danger to society? I start with the suitability
factors. Does the person have remorse? Does the person
have a significant stress in their life that contributed
to the crime? Those kinds of factors. I look at their
institutional adjustment, and I also look at their
current mental and past state of how they are at this
time. And I also look at their parole plans in terms of
getting out of the institution. And so I heavily
weigh — I weigh each one of those factors.
. CHAIRMAN STEINBERG: How much do you rely on
the psychological evaluation?
MR. ANDERSON: The psychological evaluation,
sir, is a tool. The psychological evaluation gives me
48
1 Is there a clear and convincing reason why this person
2 should have a hearing.
3 CHAIRMAN STEINBERG: Can you give two brief
4 examples, one in which you believe the 15 years was
5 appropriate and one in which you believe the 15 years
6 was far too long, just so we get a real life sense. Not
7 names.
8 MR. ANDERSON: A good example of one where
9 a 15-year denial would be appropriate would be a person
10 who has poor institutional adjustment. They've been in
11 trouble.
12 CHAIRMAN STEINBERG: In the prison?
13 MR. ANDERSON: In the prison system. They have
14 a record of violence that's ongoing. They've been in
15 ad seg, which is administrative confinement, better
16 known as solitary confinement. They have poor insight
17 as to the causative factors of the crime. They have
18 no remorse as to the causative factors of the crime.
19 And also, they don't have any realistic parole plans,
20 should they receive a date. Those are the kinds of
21 persons that more than likely will receive a 15-year
22 denial.
23 The other part of it is that the people that
24 drop down into the three, five, seven-year denial. Is
25 that what you're asking me, sir?
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14 of 26 sheets
1
CHAIRMAN STEINBERG: Yes. An example of
1
SENATOR OROPEZA: Okay.
2
someone who drops down to a much shorter period between
2
MR. ANDERSON: Usually when I ask that
3
hearings, and what is your justification for doing so
3
question, they're the ones who have brought religion
4
when you do so.
4
into the conversation, and then I ask the question.
5
MR. ANDERSON: Well, more than likely the
5
The reason I bring that up is because religion
6
individual who dropped down to a shorter period of time
6
played a significant part in my sister's rehabilitation
7
has institutional adjustment. They have made a
7
when she got out of prison.
8
significant institutional adjustment over the years.
8
SENATOR OROPEZA: All right. Thank you.
9
They have remorse. They have parole plans. There's
9
MR. ANDERSON: You're welcome.
10
something in their background or something in the
10
CHAIRMAN STEINBERG: I need to follow up on it,
11
hearing that comes out that says they need another
11
and I'm glad you asked the question, Senator Oropeza.
12
period of confinement to erase these discrepancies,
12
It was one element that concerned me as well,
13
maybe it be three, five, or seven years.
13
not because religion can't help somebody overcome, you
14
CHAIRMAN STEINBERG: Thank you very much.
14
know, their great struggles, but I was raised believing
15
Let's ask other members.
15
very strongly also in the separation of the church and
16
Questions?
16
state.
17
SENATOR OROPEZA: Okay.
17
So what worries me a little bit is if his
18
CHAIRMAN STEINBERG: Go ahead.
18
answer in this particular case or another particular
19
SENATOR OROPEZA: Hi, I have one question, and
19
case was no, whether or not that would negatively affect
20
it relates to a specific in one of your cases.
20
your -- your decision to grant the parole, because there
21
You know, I feel that faith can play a very
21
may be many reasons why the answer would be no. Maybe
22
important role in rehabilitation.
22
they're —
23
MR. ANDERSON: Yes, ma'am.
23
SENATOR OROPEZA: A Muslim.
24
SENATOR OROPEZA: I wonder about how you factor
24
CHAIRMAN STEINBERG: Maybe a Muslim, they may
25
that into all these other elements that you just
51
25
not believe in Jesus Christ. Maybe they're an atheist.
53
1
discussed, and the reason why I asked that is — Let me
1
It may be that they have other sources of spiritual
2
share with you a quote that I have from one of the
2
guidance or other sources of motivation. So that
3
hearings. And the question that you asked the potential
3
bothered me too, so I really need some comfort that --
4
parolee was, and I'll read it directly, "Did the Lord
4
I'm not sure it's an appropriate question,
5
Jesus Christ forgive you for your actions?"
5
first of all. But even if it arguably is, if the answer
6
Now, my question about that is: Is there a
6
is no from the inmate, does that adversely affect your
7
right answer to that to open the door, or is there a
7
decision-making in any way?
8
wrong answer, or how do you factor that in?
8
MR. ANDERSON: Not at all, sir. That is not a
9
MR. ANDERSON: There is no wrong answer. I
9
suitability factor. That is a statement of conversation
10
just want — I don't know the specific hearing, but I
10
that I use when the inmate opens the door and they talk
11
was using that line of questioning to determine how
11
about their religion. It is part of getting relaxed and
12
religion has changed this individual's life, and how
12
allows him the opportunity --
13
much knowledge he has of religion.
13
CHAIRMAN STEINBERG: You wouldn't initiate a
14
SENATOR OROPEZA: This is asking if the Lord
14
discussion about religion?
15
Jesus Christ forgave them. I'm a religious person
15
MR. ANDERSON: No, not at all. I never do.
16
myself. I think that's a pretty — it's pretty --
16
SENATOR OROPEZA: It's a follow-up.
17
There's a great bound of assumption in that. It's a
17
MR. ANDERSON: Yes.
18
pretty heavy question.
18
CHAIRMAN STEINBERG: Okay. Senator Aanestad.
19
MR. ANDERSON: Right. I wanted to see the
19
SENATOR AANESTAD: As somebody who doesn't have
20
response.
20
a whole lot of knowledge about the whole process, I'm
21
SENATOR OROPEZA: What do you do with that?
21
reading in the newspaper or seeing on television all the
22
MR. ANDERSON: I realize if the person says
22
time about all of these people who seemingly get
23
yes, they're really truly involved in their religion;
23
religion and get converted, and now they're trying to
24
and if they say no, I don't take the question any
24
make themselves out -- "Well, now I'm a changed person."
25
further.
25
And while I believe that does happen, I very sincerely
52
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1
believe that, I sometimes wonder how sincere it really
1
the Highway Patrol, and I said, "Art, would you work
2
is coming from some of these folks who use it as part of
2
with me, because we're trying to find a way to be
3
their overall statement.
3
preventive. Forget the backside. If we can just say
4
And I think it's very inappropriate when
4
some things, do some things to push down the number of
5
somebody -- I'm assuming that the inmate has initiated
5
young -- especially African-American males going to
6
that, with that kind of statement. I think it's a good
6
prison, then would you join forces with me?" and he has
7
follow-up to try to assess whether or not they truly are
7
never, ever, ever said no.
8
sincere and have an understanding about what it is
8
And we have done this all over the state. He
9
they're purporting has changed their life.
9
did it on his own nickel, on his own time, took holiday/
10
CHAIRMAN STEINBERG: All right.
10
unpaid leave to come down and be a presenter for us.
11
SENATOR OROPEZA: If I can.
11
And for that I'll be forever grateful.
12
CHAIRMAN STEINBERG: Yes.
12
But more important than that, it goes to where
13
SENATOR OROPEZA: I don't disagree with that,
13
his heart is on this issue, and I think in no uncertain
14
and as a Christian I just don't know whether a litmus
14
terms that he will be very fair, unbiased in all his
15
test of my faithfulness would be if I thought that I had
15
decisions as it pertains to our young men and women that
16
been forgiven yet.
16
are incarcerated. And, really, Prop 9, oooh, that's
17
CHAIRMAN STEINBERG: Or your particular faith.
17
harsh. But anyway, I truly support Arthur.
18
SENATOR OROPEZA: Right.
18
CHAIRMAN STEINBERG: Thanks a lot, Aubry.
19
CHAIRMAN STEINBERG: There's the relevance of
19
SENATOR OROPEZA: Mr. Chair, may I ask a brief
20
the faith in the first place, and then it's, well, a
20
factual question regarding the board itself and the
21
particular faith, Jesus Christ, is appropriate.
21
membership? Can I ask for what an ethnic breakdown
22
SENATOR OROPEZA: What about the rest of the
22
would be? I think we have that, but I'm not —
23
world?
23
CHAIRMAN STEINBERG: Sure. Ms. Sabelhaus,
24
CHAIRMAN STEINBERG: What about the rest of the
24
Mr. Schmidt.
25
world.
55
25
MR. ANDERSON: Yes, ma'am. We have nine males,
57
1
MR. ANDERSON: Senator, again, I want to
1
three females, and three of the males are African-
2
reiterate I will use that as a suitability factor, and
2
American.
3
in all of the cases the inmate brings up the
3
SENATOR OROPEZA: And that's it? Everybody
4
conversation themselves, and it has brought a variety of
4
else is Caucasian?
5
religions in these conversations, not just the Christian
5
CHAIRMAN STEINBERG: Of the 17.
6
faith.
6
MR. ANDERSON: Yes, ma'am. Well, I'm just
7
CHAIRMAN STEINBERG: Okay. All right. Very
7
talking about the adult side.
8
good.
8
SENATOR OROPEZA: What about - Can you share
9
Are their witnesses in support of the nominee?
9
about on the other side? Is it the same? You don't
10
SENATOR OROPEZA: He's back.
10
know.
11
CHAIRMAN STEINBERG: Mr. Stone.
11
MR. ANDERSON: Sorry.
12
MR. STONE: I — very briefly. I can just
12
SENATOR OROPEZA: Well, I just want to say that
13
simply say that the relationship that the California
13
given the demographics of our prison population, this is
14
Black Chamber has had with Arthur, both on the personal
14
another area where I would be concerned about the
15
and professional level, is exemplary. And I would like
15
profile, the lack of diversity in terms of -- I hope
16
to add, too, to the point of concern and —
16
there's some gender difference in terms of the young
17
First of all, I don't envy you to have to
17
people and relative to fairness and an opportunity to
18
evaluate and go through the whole process, especially in
18
really relate to the totality of a human being and their
19
this kind of arena.
19
culture. It just seems like it would be good to have a
20
CHAIRMAN STEINBERG: We sign up for this.
20
little more diversity on this.
21
MR. STONE: I understand. I understand. This
21
CHAIRMAN STEINBERG: Mr. Dutton.
22
is 250 an hour before taxes.
22
SENATOR DUTTON: I feel I have to add some more
23
But on a very serious note, we do a statewide
23
information, because actually I was really interested in
24
leadership conference every year, have been doing it for
24
some of the issues about the board and what their makeup
25
the last 12 years, and I went to Arthur when he was with
25
was, because the people before us, the appointed
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16 of 26 sheets
1
commissioners, they actually work — when they have
1
With specificity, you've articulated that only
2
these hearings, they have a partner. It's a deputy
2
on one occasion he disagreed, but we'd like to know with
3
commissioner who actually has civil service status.
3
the same specificity of those cases how many of those
4
Most of them, 33 of them, actually, are former defense
4
decisions were defense commissioners, which you made
5
attorneys. In fact, a few of them are actually former
5
reference to.
6
lifer-inmate attorneys and parole attorneys, so there
6
SENATOR OROPEZA: With their background.
7
are actually quite a few civil-service-status deputies
7
SENATOR CEDILLO: Right. How many were defense
8
that they work with -- are actually coming out of the
8
commissioners and how many were not.
9
defense side of the ledger.
9
CHAIRMAN STEINBERG: Do you know that one,
10
I think what we'll find in most of these cases,
10
Mr. Anderson?
11
whenever they deny -- my understanding is whenever a
11
SENATOR CEDILLO: In appreciation for what
12
parole is denied, it has to be a unanimous decision
12
we're asserting.
13
between the two hearing commissioners.
13
CHAIRMAN STEINBERG: Do you know the
14
MR. ANDERSON: Yes, sir.
14
percentage?
15
SENATOR DUTTON: Actually, if it's granted, it
15
MR. ANDERSON: I don't know the exact
16
has to be a joint decision.
16
percentage, sir, but a lot of people I work with work
17
Now in your cases last year —
17
with lifer defense attorneys, but I just can't give the
18
SENATOR CEDILLO: So they have veto power.
18
exact —
19
SENATOR DUTTON: Pardon?
19
SENATOR CEDILLO: But anywhere from zero to a
20
SENATOR CEDILLO: The commissioner has veto
20
hundred?
21
power.
21
SENATOR DUTTON: Well, it's 68 current deputy
22
SENATOR DUTTON: Well, they both do.
22
commissioners, 33 of which --
23
My next point is: How many times in this last
23
CHAIRMAN STEINBERG: Thirty-three out of 68 are
24
year, for example, have you disagreed with the
24
defense attorneys.
25
commissioner -- the deputy commissioner who has civil-
25
SENATOR CEDILLO: That's not - You cited
59
61
1
service status, in a decision for that particular
1
specifically his experience.
SENATOR DUTTON: No, no.
2
inmate?
2
3
MR. ANDERSON: One time, sir.
3
SENATOR CEDILLO: No, no. You cited his
4
SENATOR DUTTON: How many times have you been
4
experience.
5
in agreement?
5
CHAIRMAN STEINBERG: One at a time, members.
6
MR. ANDERSON: I've had over 400 cases, and
6
SENATOR CEDILLO: You asked how many times he
7
we've been in agreement in 99.9 percent of those cases.
7
disagreed specifically, his experience and his work, and
8
CHAIRMAN STEINBERG: Thank you. Let's -
8
we should know --
9
Ms. Barankin, welcome.
9
SENATOR DUTTON: The board -
10
MS. BARANKIN: Thank you. Mr. Chairman and
10
SENATOR CEDILLO: If I may finish.
11
members, Cathy Barankin, and I'm —
11
CHAIRMAN STEINBERG: Hold on, Mr. Dutton.
12
SENATOR CEDILLO: How many of those decisions,
12
Finish the point.
13
to be exact, was the deputy commissioner a defense
13
SENATOR CEDILLO: If I may finish, I would like
14
commissioner?
14
to know with specificity, the same specificity, the
15
SENATOR DUTTON: Well, out of the total pool,
15
number of those commissioners that you agreed with that
16
the numbers —
16
were --
17
SENATOR CEDILLO: Not the total pool. I'm
17
SENATOR OROPEZA: And he doesn't know.
18
talking about his experience.
18
SENATOR DUTTON: We may request that
19
SENATOR DUTTON: I don't know.
19
information.
20
SENATOR CEDILLO: We don't want to make an
20
CHAIRMAN STEINBERG: You know what? Here's
21
assumption of what the pool is as it reflects his --
21
what I think would be helpful in terms of the long term.
22
SENATOR DUTTON: I've given you -
22
I think we should bring back to the Rules Committee a
23
CHAIRMAN STEINBERG: Let him finish.
23
breakdown of some of these statistics for this
24
SENATOR CEDILLO: Let me finish, with all due
24
particular -- or not just for Mr. Anderson, but overall,
25
respect.
25
just so we can have, maybe, a discussion outside of
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1
the -- a particular nominee, whether there are trends
1
In support or opposition?
2
that we should be concerned about.
2
MR. DAHLE: Support.
3
Ms. Barankin, please finish.
3
CHAIRMAN STEINBERG: Very briefly, please.
4
SENATOR DUTTON: In addition to that, can I
4
MR. DAHLE: Thank you, members. I'm David
5
also suggest that you actually get the two codes so that
5
Dahle, Deputy District Attorney from Los Angeles County,
6
everybody can see what it actually says.
6
and I am in charge of the unit that does parole hearings
7
CHAIRMAN STEINBERG: Oh, we're not going to get
7
for our county's prisoners that come up for
8
the codes. Just kidding. Go ahead, Bob. I'm just
8
consideration.
9
kidding. We'll bring the codes before all of us.
9
You have a letter from our elected District
10
SENATOR DUTTON: It's just those two sections.
10
Attorney in support of Mr. Anderson. I would like to
11
What I didn't read is "They shall have a broad
11
share with you my personal views, having done now
12
background in criminal justice and ability for appraisal
12
40-some hearings with Mr. Anderson in five different
13
of adult offenders, the crimes for which the persons are
13
venues.
14
committed, and the evaluation of an individual's
14
I would not speak to specific cases, per se,
15
progress towards reformation."
15
because individually, we can agree or disagree on any
16
So I'm just suggesting if we're --
16
particular issue. I think what is most important to you
17
CHAIRMAN STEINBERG: Ms. Sabelhaus, can we get
17
is the overall tenor of what Commissioner Anderson does.
18
to each member of the Committee the relevant sections of
18
He has the intellect, he has the demeanor, and he has
19
the code so that everyone can review them before the
19
the common sense to make a fair judgment in the hearing
20
next time we hear a member of the commission.
20
process. I have seen that firsthand.
21
MS. SABELHAUS: (Nods head.)
21
And I want to reiterate briefly the
22
CHAIRMAN STEINBERG: Ms. Barankin.
22
significance of the fact that there are very few, but
23
MS. BARANKIN: Thank you. I'll be very brief.
23
one I believe he reported, split decisions, and I have
24
I know I get extra points for that.
24
been in hearings with this commissioner who has given
25
CHAIRMAN STEINBERG: Yes, you do.
25
15-year denials, who has given five-year, three-year
63
65
1
MS. BARANKIN: I'm here representing the
1
denials, and given grants, and there has been very
2
California Collaboration for Youth, and I felt compelled
2
little dissension with respect to the attorneys that I
3
to be here, both professionally and personally, because
3
have spoken to afterwards about the way they were
4
I am a huge fan of Commissioner Anderson.
4
treated in their cases. I would support his
5
I started working with Mr. Anderson back in
5
confirmation.
6
1993 when he was the director of the Office of Traffic
6
CHAIRMAN STEINBERG: Thank you very much for
7
Safety, and he started supporting the work that we did
7
coming.
8
for protecting children by supporting efforts to put
8
SENATOR OROPEZA: May I ask you do the DAs ever
9
bicycle helmets on them, put them in booster seats and
9
support parole? Do they ever come up and support
110
car seats, and safe routes to school, and all those good
10
parole?
11
issues, and the relationship has continued to this day
11
MR. DAHLE: I'll be quite candid with you.
112
where he even supports our YMCA camp scholarship /so he
12
It's not very often. I have, on one occasion in which
13
is a wonderful person. He's a person of great
13
this commissioner has given a grant, not opposed parole.
14
integrity.
14
SENATOR OROPEZA: Thank you.
15
I'm also a huge fan of his wife -- it's kind of
15
CHAIRMAN STEINBERG: Thank you very much.
16
i
a family affair, their volunteer work and their support
16
Witnesses in opposition. We have two or three.
17
of the community — who works at the Mustard Seed School
17
Okay.
18
practically every minute she has off, making sure those
18
MR. GRAY: Thank you, Mr. Chairman. My name is
19
kids get a decent education and have a fighting chance,
19
Matt Gray. I am a lobbyist, but I am not here
20
because they're growing up homeless.
20
representing a client. I'm representing myself and my
21
So for those reasons, I strongly urge you to
21
personal experience with Commissioner Anderson.
22
support this nominee.
22
I want to make very clear that I do not know
23
CHAIRMAN STEINBERG: Thank you. Are there any
23
Mr. Anderson on a personal level. By all accounts, he
24
other witnesses in support?
24
seems to be a perfectly delightful individual, so this
25
Witnesses in opposition?
25
is not in any way to be construed as a personal attack.
64
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18 of 26 sheets
1 He says the right things. He's very skilled in what he
2 says, and that's to be respected.
3 I had the opportunity to witness a parole
4 hearing, and it is — For many of you who know my
5 personal story, I cannot go into all the details, but
6 for those of you who don't, I am a victim of a violent
7 crime. I was shot and left for dead by a family member,
8 and I would have died had I not been carted off to the
9 hospital by someone else. The family member that turned
10 themselves into the police, they were wildly drunk off
11 of about a fifth of scotch, and it was an event that was
12 unforeseen, had never been predicated by any prior
13 violence at all. It was something that was fueled by
14 heated tempers, egos, and a lot of alcohol, and it
15 escalated into a shooting incident.
16 It is very unfortunate, but I am both the
17 victim of a violent crime and the survivor of violent
18 crime and a family member of an inmate. So those were
19 the cards dealt to me. I tried to make the best of
20 them. I care very much about public safety. I would
21 not want the person who hurt me to ever be out on the
22 street if I was not 100 percent satisfied and convinced
23 that they were no longer a threat to public safety.
24 I showed up at the parole hearing in support of
25 the release of this inmate. And I know him better than
67
1 crime, you have to rely on the record. You can
2 establish your remorse, how you feel about it, assuming
3 everything is true. So they wanted to discuss remorse.
4 The inmate substantially provided information
5 on how remorseful he was. That was not in question.
6 What was in question was whether or not the inmate had
7 insight into the crime. Well, if you don't remember the
8 crime, it's kind of hard to provide insight into the
9 crime. But the inmate then said, "Okay. I can provide
10 you insight as to who I was as a person at that time."
11 The inmate said that they were making a lot of
12 money, thought they were better than other people, was
13 very arrogant and egotistical, yet had a fragile ego
14 that was — whenever he was faced with problems that he
15 could not compensate for, he would actually engage in
16 drinking alcohol to the point where he would avoid his
17 problems, and that he acted emotionally and
18 irresponsibly at the time. And he had a lot of problems
19 that he didn't know how to deal with and hence been able
20 to deal with.
21 So with that insight, that's what I call
22 incentive to crime. What's going on in your life that
23 led you to the point where you made a defense.
24 Mr. Anderson's conclusion was that the inmate had no
25 insight into the crime.
69
1 anyone else. I have spent a lot of time getting to know
2 him. Some of you also know me. I am pretty good at
3 pushing buttons too. I tried to push his buttons, and
4 it doesn't work very well. He's very skilled.
5 The point --
6 CHAIRMAN STEINBERG: If you can get to the
7 nominee, please. When was the parole hearing that
8 Mr. Anderson conducted?
9 MR. GRAY: Yes, sir.
10 At that parole hearing, the hearing was turned
11 over to the deputy DA. That's in violation of the
12 inmate's rights. Mr. Anderson stated, "You may ask any
13 question you want," to the deputy DA who then directly
14 questioned the inmate. The DA is allowed to ask
15 clarifying questions of the commissioners who then turn
16 around and ask the inmate. That was not how it was
17 done. It was turned over to the DA to ask direct
18 questions.
19 The inmate is allowed by right not to discuss
20 the crime. In this case, the individual was extremely
21 drunk at the time, was suffering from an alcohol-induced
22 blackout. They wanted to discuss the crime. He doesn't
23 remember the specifics of the crime, so Mr. Anderson
24 wanted to then discuss remorse for the crime. Well,
25 it's a little bit difficult. If you don't remember the
68
1 Then the inmate was asked about what kind of
2 program he had done while inside. The inmate said,
3 "Well, in the year and a half that I was out on bail,"
4 that he personally paid for and engaged in therapy
5 weekly, and sometimes biweekly, to find out what was
6 going on in his life. And then when he entered the
7 prison system, for ten years he engaged in Alcoholics
8 Anonymous. However, it got to the point where the tone
9 of Alcoholics Anonymous and the messaging conflicted
10 with --
11 CHAIRMAN STEINBERG: Mr. Gray, I don't want --
12 I want to give you your requisite time here, but it's
13 going to be impossible for us as a Rules Committee to
14 dissect the facts of a particular case and who was right
15 and who was wrong.
16 What we're interested in is your opinion as to
17 what judgment or lack of judgment Mr. Anderson may have
18 exhibited in making a particular decision. So I don't
19 want to cut you off, but I'm wondering -- when you're
20 done with this description, we turn to Mr. Anderson and
21 he can take 15 minutes and tell us how he saw that
22 particular case differently. We weren't there, so --
23 SENATOR OROPEZA: It's not helpful.
24 CHAIRMAN STEINBERG: We want to know what
25 judgment -- What I'm hearing you say is that he did not
70
19 of 26 sheets
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02/10/2009 11:26:57 A*
consider -- The inmate provided adequate evidence of
insight, and Mr. Anderson ignored it.
MR. GRAY: I understand what you're saying.
I'll avoid the opinions, and I'll avoid the background
and get to the point.
CHAIRMAN STEINBERG: Thank you. Please.
SENATOR CEDILLO: I encourage brevity, but I
understand that you are trying to lay out a scenario
that speaks for itself, that you believe will speak for
itself. In the failure to be responsive.
CHAIRMAN STEINBERG: Go ahead.
MR. GRAY: There s case law that says --
There's Lawrence, Davis Lawrence, that says you cannot
rely on —
CHAIRMAN STEINBERG: (To the reporter): Do you
need a break?
THE REPORTER: Yes.
CHAIRMAN STEINBERG: Okay. Were going to take
a five-minute — whatever you need. A five, 50-minute
break. I don't know.
THE REPORTER: Seven minutes.
CHAIRMAN STEINBERG: We'll take ten minutes.
Okay. Thank you.
(Recess taken.)
CHAIRMAN STEINBERG: Okay. Let us resume.
71
1 SENATOR AANESTAD: Are you saying the fourth or
2 fifth time on the same case?
3 MR. GRAY: You cannot continually deny parole
4 z*\-.i .;-.' fz~. 'asoe-ec- 21 -ee- eg-.
5 SENATOR AANESTAD: No. Mr. Anderson said the
6 fourth or fifth time, and then you quoted. Was that
7 involving one inmate or four or five inmate
3 MR. GRAY: This was involving - Wei,
9 actually, Mr. Anderson continually does this. This is a
10 pattern among many board commissioners. Mr.
11 Anderson does it too.
1 2 SENATOR AANESTAD: You mentioned four or five.
1 3 MR. GRAY: For this inmate in particular, sir.
14 SENATOR AANESTAD: So he has gone through four
1 5 parole hearings with one inmate.
16 MR. GRAY: Yes. And that is the standard
1 7 response for most inmates. Parole is repeatedly denied
1 8 based upon what the court has said you cannot keep
1 9 denying parole on.
20 CHAIRMAN STEINBERG: Senator Aanestad's
21 question is: Was Mr. Anderson the officer, parole
22 officer, for the four times this particular inmate was
23 ce- ec-
24 MR. GRAY: No. This latest hearing.
25 SENATOR AANESTAD: That s a big difference.
Mr. Gray, you can continue.
MR. GRAY: So if I understood you correctly,
you want me to start all over again.
CHAIRMAN STEINBERG: Yes. Thank you.
MR. GRAY: I can boil it down to much simpler
points.
Inmates are not required to engage in any
programming which conflicts with their religious views.
Mr. Anderson, after reviewing all of the records and
stating such, ordered the inmate to go engage in a
program which specifically violates the inmate s
religious views, and he cannot do that
The California Supreme Court has said you
cannot continually deny an inmate based upon the
commitment of an offense. That never changes. You have
to look at, yes, what they did, but who are they now as
a person.
The commissioner, Mr. Anderson, denied again,
for, I think, the fourth or fifth time based upon the
commitment of the offense without any nexus as to why
and how it relates to who the inmate is. That's another
violation. That will cost the State, and the State will
lose on that. The Supreme Court has already ruled you
cannot do that.
Another issue —
72
1 CHAIRMAN STEINBERG: Very good.
2 MR. GRAY: And then, finally, the psychological
3 evaluations that they rely upon is really the only
4 evidence.
5 :".; ;s=.3:'t. -i.e:: -i.e:ej-5':
6 convincing evidence. The only evidence they really have
7 is the parole reports. This inmate received four
8 ;2,;'5:e;s*:-:::3: -e::-i ....-_ . -_ : ;:::;e
9 -=: : ;: : - - - . z :-=::-*. s'e"/.s:"=2:
10 :o public safety, or essentially.
1 1 This latest report, which they changed the type
12 of report they're doing a little bit, was only sightly
1 3 worse. Instead of "low," ft said "low to moderate,"
14 which is still at or below average. And Mr. Anderson
1 5 decided to ignore all the previous reports and only rely
16 upon Ms atest pne.
1 7 The problem is Mr. Anderson is not real
18 consistent in how he does his hearings. There are often
1 9 times he may or may not be prepared. He hasn't reviewed
20 all the materials ike he says he has.
21 SENATOR AANESTAD: You've observed how many
22 -e=- "-53 Z' '.' s~
23 MR. GRAY: I was - SpecmcaRy, myself. I
24 -e. e.'.ec :••■: -e=- -gs __e-e s :_e ::~ :2-=: .e -e = — g
25 where the inmate — it was a premeditated, first-degree
74
:'-'- ;: 1-, i~ -■■■
- = :e ": :: "- ; :--:
:: -.' '--. :- n :
1 murder where he shot and killed someone totally
2 unrelated --
3 SENATOR AANESTAD: But you're making your
4 assessment. You said he's not prepared and that he is
5 not consistent, and yet you have personally witnessed
6 how many of his hearings?
7 MR. GRAY: I personally witnessed one, and the
8 statements that I made are accurate for that. I have
9 reviewed the records for another, and the statements
10 that I made are accurate to that.
11 SENATOR AANESTAD: Thank you.
12 MR. GRAY: This premeditated, first-degree
13 murder, for the inmate, there was alcohol involved and
14 drugs. The inmate had done no programming whatsoever,
15 no Alcoholics Anonymous or anything. Nothing.
16 Mr. Anderson decided it was appropriate to give the
17 inmate a two-year denial based upon no other reason.
18 In this case where the inmate had done ten
19 years of programming in AA, plus private programming,
20 plus made amends and had been in for a long time, and it
21 was second degree, no premeditation or anything, he
22 gives him arbitrarily a three-year denial.
23 CHAIRMAN STEINBERG: Okay. All right.
24 MR. GRAY: That pretty much sums it up. The
25 problem is Mr. Anderson keeps the tone up of denying
75
1 paperwork can be done so they can actually leave.
2 Another section that's very relevant is
3 Title 15 of the section dealing with progress hearings.
4 And I can't remember the number off the top of my head,
5 but that is the ~
6 SENATOR CEDILLO: What's the age of the first
7 one, if you know?
8 MR. CHANDLER: Excuse me?
9 SENATOR CEDILLO: What's the age of the first
10 one?
11 MR. GRAY: The age? How old the statute is?
12 SENATOR CEDILLO: How old is the statute?
13 MR. CHANDLER: The statute was written in 1977.
14 It was part of the change from indeterminant to
15 determinant.
16 The board actually has a series of rules that
17 are called progress hearings, hearings they almost don't
18 hold anymore as an institution, because they never grant
19 parole.
20 The original theory of our entire parole scheme
21 was that the legislature set a minimum term of 15 years
22 for second-degree murder and 25 years for first-degree
23 murder, and then they wrote a parole statute that said
24 at the minimum term, the inmate is presumptively
25 suitable for release and that the board shall normally
77
1 parole repeatedly for no appropriate logical reason.
2 Thank you.
3 CHAIRMAN STEINBERG: Thank you, Mr. Gray, for
4 taking the time.
5 SENATOR OROPEZA: I hope at some point there's
6 an opportunity to respond in particular to the question
7 related to the gentleman's religion and treatment
8 through the AA program. I would like to ask
9 Mr. Anderson if that's true or not true at some point.
10 CHAIRMAN STEINBERG: Why don't we just ask
11 Mr. Anderson to answer that in your closing. Okay.
12 MR. CHANDLER: Hello. My name is Keith
13 Chandler. I work at the law firm of Sanders &
14 Associates. Our firm specializes in parole matters, and
15 the letter that our office sent is on file. I don't
16 want to repeat things in the letter.
17 What I did want to talk about today very
18 briefly was the discussion that the Committee members
19 had about getting the rules and laws. I would urge the
20 Committee to carefully read Section 3041 of the Penal
21 Code. 3041 of the Penal Code says that the board shall
22 normally grant parole at the inmate's first parole
23 hearing. In fact, the law is structured so that the
24 first parole hearing has to occur a year before the
25 inmate is actually eligible for parole so that all the
76
1 grant parole at that first hearing.
2 As an institution, I don't believe the board's
3 granted parole to a single inmate at their first hearing
4 in a decade. I would be shocked to learn that occurred.
5 I do this for a living. I've done it for a quarter of a
6 century. I've been involved with this. It's maybe
7 happened a dozen times, and it's not a coincidence that
8 this change has occurred as we went to an
9 all-police-officer board. And this is a huge problem.
10 It's not that police officers can't discharge this duty
11 in a fair way, but "fair" is a relative term, and it
12 deals with your experience.
13 Our firm has had cases that are staggeringly
14 unbelievable in how an inmate doesn't get parole. It's
15 not a hearing that Mr. Anderson did, but recently we had
16 a hearing, and the guy was 82 years old. He's
17 blind from -- I'm trying to remember the disease --
18 cataracts, and they wouldn't do the hearing at first
19 because he was so disabled. When they finally did the
20 hearing, he was denied. He's 82 and blind. He has no
21 real prior criminal record, and his crime was
22 situational. He shot his wife and his brother when he
23 caught them together in bed.
24 Eighty-two, blind, situational offense, no
25 prior history, denied parole. That's how police
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21 of 26 sheets
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02/10/2009 11:26:57 AM
officers approach this task. Their mind-set, even
though in their mind they believe they're fair, it
doesn't allow them to be.
And what we've got is a system where we've lost
focus of what the actual law says. It says it shall
normally grant parole. And I've been in these hearings
where we've had people support commissioners because
they say, "Well, they grant parole at a high rate,
5 percent, 6 percent." I'm not saying we need a quota
and it should be 50 percent. I'm saying that 5, 6, 7
percent is woefully inadequate and is in direct
violation of the law, and I hope the Committee takes
that into consideration.
CHAIRMAN STEINBERG: Thank you, sir.
Question from Senator Aanestad.
SENATOR AANESTAD: I do have a question.
Basically what I'm hearing, and am I correct in hearing
your objection is really to the quota or the fact that
he's a law enforcement officer and not his past one-year
experience on the board himself?
MR. CHANDLER: Our objection, as our office,
is that we don't believe police officers are qualified
to do the job.
SENATOR AANESTAD: I understand that part.
Specifically, Mr. Anderson has been on the job for a
79
1 they're not even being considered.
2 CHAIRMAN STEINBERG: Thank you.
3 MR. CHANDLER: Thank you.
4 SENATOR AANESTAD: I just would comment if
5 Mr. Steinberg has a bad day, he could cost us billions
6 of dollars.
7 CHAIRMAN STEINBERG: Thankfully, I never have a
8 bad day. That's very funny. Go ahead.
9 MR. WARREN: Good afternoon. My name is David
10 Warren. I'm appearing on behalf of Taxpayers for
11 Improving Public Safety. I'm here in opposition for a
12 number of reasons.
13 Senator Aanestad, I have never attended one of
14 Mr. Anderson's hearings. I'll admit that. I've read
15 ten of his transcripts, meaning the transcripts of
16 proceedings which he has overseen. He was not by
17 himself, obviously.
18 In reading those transcripts, I'm greatly
19 concerned by what appears to me to be a predisposition
20 to find a reason under Shaputis to deny parole. Rather
21 than following the Davis Lawrence standard of looking to
22 the underlying offense, determining whether or not a
23 person has made any progress along the way and to
24 determine whether or not a person is a risk currently to
25 public safety, it appears from the comments in reading
81
year. You have not attended any of his hearings or
witnessed that. So you're not objecting to him as a
person, but it's his background and training that you
object to.
MR. CHANDLER: Yes, yes, particularly with
Marsy's Law now in effect. A denial at three years at a
minimum is all this man can do to help a guy that he
thinks is close. When you factor in the fact that
28 percent of our prison population is over 40, but the
people that the board sees are predominantly 40 or over,
because they've already been locked up, most of them 15
or 20 years, these guys are incredibly expensive to
house. Forty-five thousand bucks a year is tossed
around as an average. Averages are averages. The
reality is most inmates are housed for about 15,000 a
year, and the elderly guys cost a quarter million. And
that's how we get the average of 45,000.
When we deny parole to a guy under Marsy's Law,
even if we give them three years, that's a minimum of a
quarter-million-dollar cost to the State. If
Mr. Anderson has a bad day, he can cost us a million
dollars. It's crucial that we put qualified people on
the board.
There are people with doctorates and master's
degrees in inmate rehabilitation and other areas, and
80
1 the transcript, and, again, it is my subjective
2 evaluation, that the goal and the manner in which the
3 questions are phrased and the statements are made are
4 that it is to find a way rather than to find -- to keep
5 a person in rather than to find a source of parole.
6 Also, in several of the transcripts, it is my
7 subjective opinion and there's concern on my part that
8 the commissioner was not prepared for that particular
9 hearing and was confused as to other cases he may have
10 been handling that day. And that is not acceptable in a
11 member of the Board of Parole Hearings.
12 As Senator Steinberg pointed out, all of the
13 parole hearings are done in a closed environment. I
14 have to say in the 14 years I've been working with the
15 Department of Corrections and for the 27 years I did
16 187 defense, I understand that there is no perfect
17 environment. But what concerns me, Mr. Aanestad, is the
18 statement you made, and I think it's most appropriate,
19 and that is the primary concern should be public safety.
20 Recently, an individual came before the board
21 to seek discharge. This individual had a leg amputated,
22 was dying of cancer, was restricted to a bed, and could
23 not sit up by herself. She was denied compassionate
24 discharge because of who she was, not because of the
25 state of affairs.
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/10/2009 11:26:57 AM
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22 of 26 sheets
1 We must focus on the principal reason, and that
2 is to ensure public safety. A person that is dying,
3 that costs the State of California a very large sum of
4 money, which deprives all of us, especially in these
5 budgetary restrictive times, discharge where they can be
6 treated much more cost effectively outside is a
7 catastrophic mistake.
8 Senator Oropeza, you pointed out that we need
9 diversity. I strongly concur with that. I regret to
10 say that diversity is not looked to in the appointments.
11 There are no religious individuals with religious
12 backgrounds as a member of parole hearings for adult
13 operations. There are no individuals from sociology,
14 from psychiatry. We must have these members.
15 In closing, approximately three years ago I
16 attended one of these meetings because there was one
17 particular member whom I found particularly
18 objectionable, and I attended that hearing to testify
19 against that individual.
20 Senator Perata announced at the conclusion of
21 that hearing that even though what I said might be
22 reasonable, he fully accepted — his position was that
23 if the governor appointed people, we should accept them.
24 Over a period of time, and continuing with the
25 hearings and seeing the same people over and over again,
83
1 reference to forgiveness by God, this discussion about
2 when an inmate opens a door, to what extent does that
3 make that appropriate.
4 The pro tern raised the question about the
5 separation between church and state, and I have a
6 concern that it's insufficient that an inmate opens a
7 door.
8 MR. ANDERSON: Let me address that concern,
9 sir.
10 CHAIRMAN STEINBERG: Sum up, if you will.
11 MR. ANDERSON: I don't use that as a
12 suitability factor. I'm merely establishing a rapport
13 with the inmate, allowing them to talk about it.
14 I have talked to a number of religious bodies,
15 and it's a tool of just allowing them to talk about it.
16 It's not a factor of suitability. It's just a statement
17 of allowing them to talk about some things that are
18 important in their lives.
19 With respect to AA, AA is religious-based, and
20 a lot of the institutions have AA. And what I recommend
21 is substance-abuse programming. If you have a problem
22 with AA, which is religious-based, try to get substance-
23 abuse programming in the institution. That's what I
24 recommend, particularly if a person has a substance-
25 abuse issue during the commitment of a crime.
85
1 all with one background and all, apparently, after
2 reading the transcripts, a predisposition, we have to
3 put a stop to it, and we must send a message to the
4 governor that we need a broad spectrum of individuals.
5 That isn't to say there aren't people from law
6 enforcement that shouldn't be on the Board of Parole
7 Hearings. They certainly should be.
8 And there will be people that we will be
9 supporting in the upcoming months who come from the
10 Department of Corrections and from police services and
11 other penal activities as far as the prosecution is
12 concerned, but this particular individual, after reading
13 those transcripts, I strongly urge you to reject his
14 nomination. Thank you.
15 CHAIRMAN STEINBERG: Okay. All right.
16 Mr. Anderson, if you could, in closing, if you
17 want to respond to the opposition, that's your right,
18 and then also make sure you incorporate Senator
19 Oropeza's question. Do you need that reiterated?
20 SENATOR OROPEZA: Yeah, related to the AA issue
21 with requiring AA when it was objectionable on religious
22 basis.
23 SENATOR CEDILLO: I'm interested in this
24 comment about handing over a hearing to the DA,
25 compliance with Daw's Lawrence, and this -- with
84
1 With respect to —
2 SENATOR CEDILLO: Handing over the hearing.
3 MR. ANDERSON: Sir?
4 SENATOR CEDILLO: Handing over the hearing to
5 the DAs.
6 CHAIRMAN STEINBERG: To the DAs.
7 MR. ANDERSON: Oh, handing over the hearing to
8 the DA. I don't hand the hearings to the DA. I don't
9 do that. What I do is allow the District Attorney,
10 rightfully so, according to the code, to ask clarifying
11 questions. What I do is I establish — it's adequate to
12 say, "Do you have a clarifying question?" and the DA
13 would ask that question, and I don't want to repeat the
14 question because it's double repeating, so what I'll say
15 to the inmate is, "Okay. You heard the question. From
16 this point on, I'll go ahead and have you answer that
17 question," unless we have an objection from the defense
18 counsel.
19 The defense counsel is in the room at the same
20 time. If the defense counsel objects to any kind of
21 questions that come from District Attorneys, they do
22 object to it. So I do not hand the hearing to the
23 District Attorney.
24 CHAIRMAN STEINBERG: Okay. Thank you very
25 much, Mr. Anderson. Any other concluding remarks7
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MR. ANDERSON: Yes, sir.
I just want to say in all my life, I've had
some opportunities to do some jobs. I've had the
opportunity to work the Office of Traffic Safety. You
heard the testimony today from Ms. Barankin. My
experience is diverse.
I have not only -- I think we've heard the
opposition talk about denials. I've had grants. I've
had some outstanding people that I have given grants to.
So it's not all about denial. It's also about grants
too.
I established a record of fairness in my
career, regardless of where I work. So I've done that
in this job. Do I have the courage to act
independently? Yes, I do. I do have the courage to act
independently and have done that in the performance of
my job over the past almost one year.
Do I have things that I will be learning and
taking away? Yes, I will. This is an ongoing process.
I've had training to enhance all the knowledge that we
get in terms of doing these hearings. So it's an
ongoing process of correcting issues that come up before
the board, such as Prop 9. We had training on that last
month, two months ago.
So I believe I'm a suitable candidate for this
87
1 crossroads with the administration here sooner than
2 later as some nominations or as some series of
3 nominations come forward, but you deserve to be judged
4 as an individual, of course. And here is why I am going
5 to support you: Because I look at the numbers. And I
6 just want to read the numbers here, because they were
7 interesting to me.
8 The Marsy decision began being implemented,
9 Prop 9, as I understand, in December '08. So we have
10 your numbers pre-Marsy, pre-Prop 9, and here are your
11 numbers: You granted parole 30 times; you denied 315.
12 I don't know if 10 percent is high, low, or whatever,
13 but there's another set of numbers which I think are
14 significant. You most often, in terms of a comparison,
15 allowed for another parole hearing one year later, 132
16 times; two years later, 100 times; three years later,
17 30 times; four years later, 33; and five years, 20.
18 So you've demonstrated, I think, a pattern to
19 at least err on the side of granting the parole
20 hearing -- another parole hearing during a shorter
21 window than a longer window. So that speaks positively
22 from my perspective.
23 Post-Marsy, post-Prop 9, where you have the
24 ability to impose a 15-year wait, and that's a heck of a
25 law, I'll tell you, but you have that ability. So in
89
continuing work with the board. I care about it. I
care about public safety, but I also care about being
fair and impartial to the people I serve. So I take
every job independent, every job seriously, that I've
had, and this is one of those jobs I've taken
independently and fairly.
CHAIRMAN STEINBERG: Thank you very much,
Mr. Anderson.
Excuse me. I turned off everyone else's mics.
Maybe that's a good thing.
SENATOR OROPEZA: Maybe it was time.
CHAIRMAN STEINBERG: I intend to support your
nomination, and I want to explain why.
First of all, I want to speak to some of the
opposition here, because, again, as we said earlier,
yours is the first confirmation hearing of, I think,
nine more to go, and this issue of diversity in terms of
background, I don't mean racial or ethnic diversity and
gender diversity. Obviously, that's significant too,
but I mean in terms of background. I think it's right
that if the board is made up — This is just my opinion.
If the board is made up of all people with a
correctional or law enforcement background, I don't
think that's right.
So I anticipate that we're going to come to a
88
1 the month of December and January, you have had
2 14 cases, and you denied all 14. You know, I don't know
3 about that, but I do know this: You granted a
4 three-year wait -- I'm sorry, a three-year wait seven
5 times; a five-year wait five times; and a 15-year wait
6 only two times.
7 Now, again, we don't have the ability
8 necessarily to dissect all of these cases, but in terms
9 of which side to err on here, the fact that you show a
10 consistent pattern of not giving the maximum carryover
11 shows to me, at least, that you're willing to exercise
12 independent judgment and err on the side of giving a
13 human being another chance where it is appropriate.
14 I urge you to be careful about this religious
15 issue.
16 MR. ANDERSON: Yes, sir.
17 CHAIRMAN STEINBERG: Because, you know, again,
18 in the public square, those things can be
19 misinterpreted. And I urge you, despite the opposition
20 that you heard today, to meet with some of these folks,
21 right? Sit down and understand what they're saying,
22 what's in their heart, and see if you can learn from
23 some of the criticism that you heard here today.
24 MR. ANDERSON: Yes, sir.
25 CHAIRMAN STEINBERG: All right. Is there a
90
710/2009 11:26:57 AM
Page 87 to 90 of 96
24 of 26 sheets
1
motion on the --
1
exception to my policy, because I think we need to
2
SENATOR DUTTON: So moved.
2
recognize people on a case-by-case, and I believe the
3
CHAIRMAN STEINBERG: Moved by Senator Dutton.
3
balance of your commitment to community to serve us that
4
Please call the roll.
4
way where it's been placed on you by the governor, and
5
MS. BROWN: Senator Cedillo.
5
I'm happy to vote yes.
6
SENATOR CEDILLO: Yes. In casting my vote, I
6
CHAIRMAN STEINBERG: Thank you very much.
7
want you to know that the years that I've been here and
7
Senator Cedillo is an aye.
8
working with Senator Perata, I do believe the governor
8
MS. BROWN: Cedillo aye.
9
has a right to make his choices, but there's
9
Dutton.
10
restrictions on that. I believe the governor has
10
SENATOR DUTTON: Aye.
11
consistently been in breach of those restrictions.
11
MS. BROWN: Dutton aye.
12
And, as I said at the beginning of this, it's
12
Oropeza.
13
unfair to you and to all the other candidates, because
13
SENATOR OROPEZA: Aye.
14
the governor insists on sending us only people who have
14
MS. BROWN: Oropeza aye.
15
a badge or who are victim-rights advocates. I have
15
Aanestad.
16
both, but that still does not qualify me for this. In
16
SENATOR AANESTAD: Aye.
17
fact, when it's only that category, it disqualifies you
17
MS. BROWN: Aanestad aye.
18
in some respect. So it's a tougher burden for you to be
18
Steinberg.
19
confirmed.
19
CHAIRMAN STEINBERG: Aye.
20
I would advise you to be thoughtful of Davis
20
MS. BROWN: Steinberg aye.
21
Lawrence, be thoughtful of the presumptions that exist
21
CHAIRMAN STEINBERG: Motion goes out,
22
in the law.
22
Mr. Anderson, five to nothing. Move to the Senate floor
23
MR. ANDERSON: Yes, sir.
23
next week. Thank you.
24
SENATOR CEDILLO: As I said, I don't have a
24
MR. ANDERSON: Thank you very much. I won't
25
policy, let's say, that we should comply with the law
25
let you down.
91
93
1
with respect to these appointments.
1
CHAIRMAN STEINBERG: Thank you very much. We
2
MR. ANDERSON: Yes, sir.
2
appreciate it.
3
SENATOR CEDILLO: But I think when you take
3
(Thereupon, the Senate Rules Committee hearing
4
things case-by-case, there are opportunities for
4
adjourned at 3:37 p.m.)
5
exceptions.
5
6
Let me say to you that with respect to handing
6
7
over the hearings, that's not a matter of convenience,
7
-oOo-
8
that my sense is that the law was designed in that way
8
9
to position you as a mediating force in the questions
9
10
from the DA. In other words, that's the structure.
10
11
That's the architect of that process. So when you, for
11
12
matters of convenience and brevity and efficiency, move
12
13
that away from you, it's really an important breach,
13
14
because I believe the architecture of that law is for
14
15
you to mediate those questions and not hand over that
15
16
role to the DA. So I ask you to be in strict compliance
16
17
with that.
17
18
MR. ANDERSON: Yes, sir.
18
19
SENATOR CEDILLO: Finally, I don't think it
19
20
needs to be said more, a room here full of religious and
20
21
faithful people, but we all understand there should be a
21
22
bright yellow line between our faith and our exercise of
22
23
public service, and it's important for people to
23
24
appreciate that.
24
25
So with that, though, I am happy to make an
25
92
94
25 of 26 sheets
Page 91 to 94 of 96
02/10/2009 11:26 57 AM
-oOo--
I, INA C. LeBLANC, a Certified Shorthand
Reporter of the State of California, do hereby certify
that I am a disinterested person herein; that the
foregoing transcript of the Senate Rules Committee
hearing was reported verbatim in shorthand by me,
INA C. LeBLANC, a Certified Shorthand Reporter of the
State of California, and thereafter transcribed into
typewriting.
I further certify that I am not of counsel or
attorney for any of the parties to said hearing, nor in
any way interested in the outcome of said hearing.
this
10 He
IN WITNESS WHEREOF, I have hereunto set my hand
19
20
23
24
25
day of
., 2009.
_fyuC-A6£
INAC. LeBLANC
CSR No. 6713
-oOo-
95
APPENDIX
/10/2009 11:26:57 AM
Page 95 to 96 of 96
26 of 26 sheets
Senate Confirmation
Arthur L. Anderson, Jr., Commissioner
Board of Parole Hearings
Responses to Senate Rules Committee Questions
January 27, 2009
Statement of Goals
1 . What are your goals and objectives as a commissioner of BPH? What do
you hope to accomplish during your tenure? How will you measure your
success?
First, I was honored to be appointed to the position of Commissioner, Board of Parole
Hearings (BPH). I consider the position a meaningful and challenging position. My goal
is to be fair and objective and make decisions based on factors of suitability and
unsuitably at each hearing.
With reference to accomplishments, it is my desire to use my experience and training to
ensure policies and procedures are realistic and contribute to the overall effectiveness
of the hearing process. Additional goals are to provide the BPH Chair and the Executive
Officer with recommendations to increase the effectiveness of hearings, ensure that
hearings are conducted as scheduled, and avoid unnecessary hearing postponements.
Success will be measured by the continued reduction of backlog cases and assessing
the overall effectiveness of the hearings.
2. Do you believe that an inmate convicted with an indeterminate life
sentence can be successfully rehabilitated and then safely return to
society? Please explain how you have come to your conclusion and what
measures you use to assist with your analysis.
Based on my experience as a Commissioner, I firmly believe that inmates who are
incarcerated with indeterminate life sentences can be safely rehabilitated and safely
returned to society. I have come to this conclusion after conducting hearings where
I along with the Deputy Commissioner have recommended grants of parole. There are
some life inmates where the possibility of parole is currently not a viable option because
they remain a threat to public safety and have done little, if anything, to change that
assessment.
Inmates have the ability and opportunity to rehabilitate through self-help programs,
positive institutional behavior and programming, and development of realistic parole
plans. It is through questioning the life inmate at the hearing that I can assess whether
the inmate is on the path of rehabilitation. Some questions are focused on whether the
inmate has gained insight into the causative factors of the life crime and exhibits
appropriate and genuine remorse. All the information received at hearing is considered
to determine whether the inmate is suitable for release or remains a danger to the
public.
Senate Rules Committer
JAN 2 7 2009
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Senate Rules Committee January 27, 2009
Arthur L. Anderson, Jr.
Page 2 of 8
My experience in conducting hearings has given me the opportunity to evaluate
numerous inmates and determine whether the inmate has availed themselves of the
opportunities to rehabilitate while incarcerated.
My ongoing training and experience has provided me with a foundation to determine the
rational nexus between positive programming and rehabilitation and the ability to fairly
determine the parole suitability or current dangerousness of an inmate.
Training
The 2005 law that created the BPH required that within 60 days of appointment and
annually thereafter, commissioners and deputy commissioners undergo a minimum of
40 hours of training.
3. Now that you have chaired hearings for several months, how do you
evaluate the quality of your training? Do you have recommendations for
improvement?
My initial training consisted of classroom instruction, participation in mock hearings, and
observation of actual hearings prior to being assigned a caseload. The training was
effective and pertinent to the responsibilities of Commissioner. Under the direction of
the Executive Officer, a training officer has been appointed and training is ongoing and
far exceeds the minimum requirements. All personnel who are assigned as trainers are
highly qualified and are subject matter experts. I along with other Commissioners
suggested further training in the use of the psychological reports at hearings.
The subject matter experts were responsive to this request and provided a training
session on this topic for all Commissioners.
After my initial training, BPH has further refined the training program and developed
new modules to ensure consistency among Commissioners. Training needs are
frequently evaluated and discussed with Commissioners at the monthly board meeting.
Training addresses new issues that come up in the field and provides a means to
Commissioners to request information or training on specific issues.
4. When a procedural question arises during a hearing which you are
chairing at an institution, who is available to assist you to answer the
question? During previous BPH confirmation hearings, BPH members
have raised concerns about the lack of support available to them by
phone from Sacramento. Do you believe you get the help you need in a
timely way so that hearings are not needlessly delayed?
Most procedural questions that I would have would be relative to legal matters. A BPH
attorney is available live by Blackberry from 7:00 a.m. to 7:00 p.m. and messages can
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Senate Rules Committee January 27, 2009
Arthur L. Anderson, Jr.
Page 3 of 8
be left on this device outside of those hours to be answered promptly during the hours
of availability. I have not experienced any difficulty utilizing this service. Additionally, I
have the direct telephone number of one of the lead attorneys and have been able to
obtain prompt responses to my inquiries. I have no concerns regarding the level of
support or the promptness of service. I might add, the training officers have legal
backgrounds and are willing to assist Commissioners when the need arises. Finally, all
members of the BPH legal staff are available for support of the Commissioners.
5. The hearings you chair can sometimes involve complex legal or
procedural issues. Does anyone continue to monitor your performance
as a "lifer" panelist, either in person or through a review of transcripts, so
that you may continue to improve your performance?
BPH legal staff reviews all grants and up to 10 percent of all denials. BPH legal staff
provides guidance to Commissioners on legal or procedural matters that have come to
their attention through the review of grants and denials. BPH legal staff also provides
guidance when I conduct a parole suitability hearing directed by court order.
The subject matter experts in the training group review hearing transcripts and provide
feedback to Commissioners on a one-on-one basis. Personnel in the training group
participate in the monitoring process with a goal of developing recommendations for
improvement. As a result of this monitoring process, the training group has developed
procedural advisories for Commissioners. This type of contact keeps me informed of
issues that may be occurring in the field and how to address them.
6. What should the Legislature expect from commissioners regarding
consistency in lifer hearings? Should all of the commissioners and
deputy commissioners weigh the various factors in a consistent manner?
In light of this, how is it that some inmates are given multiple year denials
after receiving one-year denials even though their behavior,
programming, and commitment often remains the same?
As I related in a previous question, the BPH has implemented a comprehensive training
curriculum that focuses on all aspects of the Commissioner's responsibilities.
This training is designed to enhance and promote consistency in how Commissioners
and Deputy Commissioners conduct hearings and make decisions of suitability. During
training, the Commissioners and Deputy Commissioners were provided instruction on
the factors governing suitability and unsuitably as found in Title 15 of the California
Code of Regulations. Denial length and grants are based on the weight given to each
factor which is within the discretion of each panel member.
I believe that the new leadership of the Executive Officer and his focus on ongoing
training will ensure that Commissioners and Deputy Commissioners appropriately
exercise their discretion under the law. I believe the Board is not arbitrary or capricious
99
Senate Rules Committee January 27, 2009
Arthur L. Anderson, Jr.
Page 4 of 8
but makes decisions based on individualized analysis to asses each inmate's current
risk of dangerousness to society. With this in mind, each panel is comprised of different
individuals and a different aspect of the inmate's case may have increased importance
to a different panel. There will always be some variation in results because individual
discretion and professional judgment are part of the decision process, but I believe all
Commissioners work toward a goal of consistency.
I realize the Legislature has concerns regarding consistency in lifer hearings and it is my
goal to remain consistent by considering all factors and provide all parties with a fair
hearing process.
Programs
Prisons have a wide variety of academic and vocational programs as well as self-help
offerings such as Alcoholics Anonymous. Commissioners may recommend an inmate
enroll in a particular program to better prepare himself or herself for life outside of
prison.
7. How do you learn about educational, vocational, or self-help programs in
state prisons? Which programs have you observed and when? How do
you know if a particular program is effective? Please explain.
I have a master list of all the programs that are available at the institutions. Further,
I obtain updates of available programs when I arrive at an institution each week.
During 2009, I visited all academic, vocational and substance abuse programs that are
offered at the California Substance Abuse Treatment Facility (SATF). I interviewed staff
and instructors to gain further knowledge. I also interviewed an inmate who leads a
substance abuse treatment program. I will be observing additional institutional programs
during January 2009.
Regarding program effectiveness, I ask the inmate during the hearing what he has
learned from the program and if applicable how would he use the skills and knowledge
that he has learned in free society. The integration of what has been learned by the
inmate into how the inmate will use it is of the utmost importance in determining
suitability.
8. As the department moves to focus academic and vocational programs on
inmates being paroled in the coming three years, how will life-term
inmates get the programming you recommend for them to qualify for
release? Do BPH members participate in these policy decisions?
Based on my current knowledge, inmates have a wide variety of programs that are
available to them. Some programming may be reduced due to budget restrictions and
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Senate Rules Committee January 27, 2009
Arthur L. Anderson, Jr.
Page 5 of 8
some programs are not available at all institutions. With this in mind, I have previously
recommended that inmate's develop their own self study program, such as specific
reading when resources are not available. I also ask inmates and their counsel to
advise me if there are challenges or problems accessing programming at the institution.
The BPH Commissioners have been informed that the Executive Office is pursuing this
topic of discussion with the California Department of Corrections and Rehabilitation
(CDCR) and program providers. BPH is kept abreast of new developments that may
affect life inmates' programming from CDCR Adult Programs Division.
9. How are you made aware of the availability of programs at individual
facilities? If you recommend participating in a particular program for an
inmate, are you certain it is available to the inmate?
I have a list of all available programs, vocational, educational, and self help at each
institution and I obtain updated information when I arrive at the institution. I ensure that
recommended programs are available or open to lifer inmates before I provide
recommendations through inquiry of staff at the institution.
Proposition 9
An inmate with an indeterminate life sentence is required to receive an initial hearing
one year prior to the inmate's minimum eligible parole date. Until now, subsequent
hearings have occurred between one and five years apart for murder convictions, and
between one and two years apart for non-murder convictions. With the passage of
Proposition 9 on the November 2008 election ballot, these intervals will be changed.
Under the new law, the time between hearings would be extended to between three and
fifteen years, as determined by the board, according to the Legislative Analyst.
Inmates, however, could periodically ask that the board advance the hearing date.
10. What changes in hearings do you foresee as a result of passage of
Proposition 9, and how will they impact the board's workload? How is
your training being adjusted to factor in Proposition 9?
A significant change in the hearing process as a result of the passage of Proposition 9
is the expanded participation by victims and next of kin. This will likely result in hearings
lasting longer and will require exceptional scheduling coordination. Additionally, the
size of the hearing room and security are a few of the operational issues that may
require accommodations. There is a potential that increased participation by victims
and next of kin will impact the number of cases scheduled during the week. The Board
began implementation of Proposition 9 during the week of December 15, 2008, and at
this time empirical data is at a minimum. All board members have received extensive
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Senate Rules Committee January 27, 2009
Arthur L. Anderson, Jr.
Page 6 of 8
training on implementing Proposition 9. Further, the legal team is available as a
resource if needed.
Also of particular significance with the implementation of Proposition 9 is the change in
denial periods when an inmate is found unsuitable for parole. The denial length has
changed from 1 to 5 years to 15, 10, 7, 5, and 3 years. Equally important, is the use of
the clear and convincing evidence standard in determining the appropriate denial length
when an inmate is deemed unsuitable. Commissioners were provided several hours of
training on the use of the new clear and convincing standard and other aspects of
Proposition 9 at our week of training in December 2008.
Psychological Evaluations
The packet of materials available to the hearing panel traditionally includes a
psychological evaluation of the inmate. The timeliness and quality of the evaluation has
been criticized in the past by all parties. The historic lack of clear BPH policy regarding
the appropriate interval between evaluations has been discussed regularly by the Rules
Committee. The absence of a "current" psychological evaluation is often the reason for
a hearing postponement, though under current policy it is supposed to be done every
three years.
Effective January 1, 2009, as part of its effort to reduce the backlog of lifer hearings,
BPH is introducing a new strategy. A new psychological evaluation, called a
Comprehensive Risk Assessment (CRA), will be implemented and will be valid for five
years. A secondary report, known as a Subsequent Risk Assessment, will be
conducted as an update for hearings held prior to the five-year expiration of the CRA.
Reports completed prior to January 1, 2009, will remain valid for three years from their
completion date or until used in a hearing resulting in a decision.
11. BPH policy on psychological assessments seems to be evolving. Please
explain the current policy and whether you expect further fine tuning in
the coming months.
As noted the current psychological evaluation has been revised and is called a
Comprehensive Risk Assessment (CRA). The CRA is valid for five years and updated
by use of the Subsequent Risk Assessment (SRA) when a hearing is conducted prior
the end of the five year shelf life of the CRA.
The psychological report is a tool to assist Commissioners in assessing the present risk
of dangerousness of an inmate as well as their mental state. The new psychological
report guidelines were developed to create consistency within the report and in the use
of the report. Life panel members consider information regarding past and current
mental state and past and present attitude towards the commitment offense. The CRA
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Senate Rules Committee January 27, 2009
Arthur L. Anderson, Jr.
Page 7 of 8
is used as a tool to provide the panel with information. The hearing panel uses this
information to help determine the inmate's present risk of dangerousness. I do not
foresee any major changes until this new tool has more field usage by Commissioners.
12. How have you been trained regarding the role a psychological evaluation
should play in your decision regarding parole suitability? How do you
incorporate this tool?
I have received training on the role and use of psychological evaluations as a tool to
assist in determining an inmate's current risk of dangerousness. I also understand that
as the fact finder, I am free to give the psychological evaluation the weight I deem
appropriate, considering all the facts and circumstances of the case before me, in my
suitability analysis.
The Commissioners received training on the use of the psychological report at hearings.
It is considered a piece of evidence, an expert opinion, that as a panel member, I can
use it to assist with my suitability consideration. The information in the psychological
evaluation provides information for lines of questioning to the inmate at the hearing.
13. Do you believe the risk assessment information contained in the
psychological evaluation is useful to you in making a decision? How will
the new assessment be more effective?
As discussed in the previous answers, the risk assessment information and the
information on which the assessment is based provide fertile ground for questions of the
inmate regarding suitability factors which consider the past and present mental state
and past and present attitude toward the crime.
After receiving training on this new instrument, I am confident that the risk assessment
information is relevant and useful for panel members in determining suitability of
individuals. The importance attached to any circumstance or combination of
circumstances in a particular case is left to the judgment of the panel members.
The CRA will be effective in that it provides more information about a specific issue
such as, propensity to use drugs, role of drug/alcohol in crime, exploration of
remorse/insight and extent to which individuals have dealt with issues that may be
pertinent to determining suitability versus unsuitability.
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Senate Rules Committee January 27, 2009
Arthur L. Anderson, Jr.
Page 8 of 8
Working Conditions
BPH members conduct their hearings in close quarters, inside state prisons in
two-person panels. Some hearing documents are forwarded to them prior to the
hearings.
14. Your working conditions can be difficult and your hearings can be long.
Do you have any suggestions for how the process could be improved?
In reference to working conditions, I have personally worked closely with staff, including
the Warden, to improve unacceptable working conditions at one of the institutions.
The outcome was a tremendous improvement and solved a long-term problem that
affected the operational efficiency at the institution and the hearing panel effectiveness.
Due to budget constraints, and logistical and security issues, poor working conditions
are not easily solved. There is no doubt that Proposition 9 may result in longer hearings
which will impact both BPH and the institution staff. Therefore, ongoing communication
between BPH and the management team from the institutions is a critical component.
I believe that this suggestion has merit and can be addressed by establishing a
committee consisting of the BPH chair, Executive Officer, and warden or assistant
warden from each institution where lifer hearings are conducted. The meetings should
be held semi-annually. Recommendations from these meetings can be used to budget
for changes and serve as a conduit to improve working conditions.
15. When do you prepare for hearings? When are board packets made
available to you? Do you believe the current system allows you to be
fully prepared?
The board packets are sent to Commissioners no later than two weeks before the
scheduled hearing week. I prepare for hearings on my days off and again review each
case thoroughly the night prior to the hearings. Obviously conducting hearings Monday
through Friday does not allow time for preparation during normal work week hours.
However, not being prepared is not an option and I am willing to spend whatever time is
necessary to be prepared. I knew the work week would be more than 40 hours when I
accepted this position.
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106
r
California Legislature
MEMBERS
JIMBATTIN XfQM&bK GREGORY SCHMIDT
VICE-CHAIR X)/iS®§ia|5KNf\ SECRETARY OF THE SENATE
GILBERT CEDILLO
ROBERT DUTTON
ALEX PADILLA
NETTIE SABELHAUS
APPOINTMENTS DIRECTOR
Senate Rules Committee
DON PERATA
CHAIRMAN
December 2, 2008
Gregory W. Jones
Dear Mr. Jones:
This is to inform you that the Senate Rules Committee will conduct a confirmation
hearing on your reappointment as a member of the State Board of Education on
Wednesday, February 4, 2009. We request that you appear. The meeting will begin at
1:30 p.m. in Room 113 of the State Capitol.
We have prepared the following questions to which we would appreciate your written
responses. Please provide your responses by December 28, 2008.
We would also like to receive an updated Form 700, Statement of Economic Interest, by
December 28th.
Goals and Governance
The State Board of Education (SBE) is responsible for setting policy and adopting rules
and regulations for governing standards, curriculum, instructional materials,
assessment, and accountability. The board is also responsible for approving waivers of
certain provisions of the Education Code, reviewing district reorganization plans,
implementing federal programs, and adopting regulations to implement legislation.
Some of these duties overlap with those of the Superintendent of Public Instruction.
1 . What do you hope to accomplish during your first term as a member of SBE? How
will you measure your success?
2. In your opinion, what should be the board's top priority for the coming year?
STATE CAPITOL • ROOM 420 • SACRAMENTO, CALIFORNIA 95814-4900 • (916)651-4151 • FAX (916) 445-0596
107,
Gregory W. Jones
December 2, 2008
Page 2
3. The Governor's Commission on Education Excellence released a report recently
that described education governance as a "crazy quilt. " How do you view your role
within this structure?
4. As a board member, what training have you received regarding conflicts of
interest? From whom do you seek advice on potential conflicts?
5. As a gubernatorial appointee, do you believe you have a responsibility to always
support the Governor's wishes on issues that come before the board?
Accountability
The Legislature, the Superintendent of Public Instruction, and members of the public
testifying at board meetings have all expressed strong support for the view that the
board's top priority should be addressing the achievement gap in California.
6. The State has been criticized for putting too much pressure on schools to "teach to
the test" and requiring students to spend too many hours annually taking tests. Is
that criticism warranted? How do you, as a board member, evaluate our testing
policy and what steps would you take to modify it, if necessary?
7. Is an over-emphasis on test results crowding out other objectives?
8. Last year the Governor signed SB 219 which asks the SPI and SBE to revise the
API to include 8th and 9th grade dropout rates and hold high schools of origin
accountable for the scores and dropout rates of student transferred to "alternative
education." Technically the board does not have to implement the law unless the
Legislature provides funds for local data collection, but the SPI and SBE may enact
these changes of their own accord. Can the board move to enact these changes
by2011?
9. How do you respond to the criticism that current test scores are not a true reflection
of achievement in California because the lowest performing students have already
dropped out and are not being tested?
10. The Legislative Analyst recently released a report suggesting that federal and state
accountability systems be consolidated so that districts understand more clearly
what is expected of them. Do you agree with this recommendation? If so, what are
you doing to implement it?
108
Gregory W. Jones
December 2, 2008
Page 3
No Child Left Behind Act
The federal No Child Left Behind Act (NCLB) requires integration of the state and
federal accountability systems. Specifically, federal law requires the state to define
student proficiency according to standards-aligned assessments, ensure that all schools
make adequate yearly progress toward defined proficiency levels, and intervene with or
sanction schools that do not make adequate yearly progress. This is in contrast to
California's academic accountability system that annually calculates an academic
performance index for all California public schools, including charter schools, and
publishes school rankings based on them.
Schools that do not make their growth targets for two consecutive years are designated
program improvement schools. Districts that are unable to exit program improvement
face corrective action. In March 2008, SBE imposed sanctions for approximately
100 districts under the requirements of NCLB. The board's action required the affected
districts to address the sanctions whether or not funding was provided for that purpose.
1 1. Some districts have been sanctioned for their failure to reach NCLB goals. In
addition, the state board recently increased API growth targets for underperforming
subgroups. It is not likely that state funding will increase for these districts given the
current budget situation. As you make decisions that affect school districts, how do
you factor in the problems that districts face in a difficult budget year?
12. The board has approved policy allowing schools to show "adequate yearly
progress" by making only negligible improvements in their graduation rates - one
percentage point annually. Are you concerned that by placing high expectations on
test score improvement and such low expectations on graduation rates, the State
may create a perverse incentive for schools to let certain students drop out?
13. The board has responsibility for standards and curriculum. It is estimated that al[
districts will be in program improvement by 2013-14. What is the long-term strategy
for developing standards and curriculum for students that address program
improvement issues?
14. Do you believe that the board is doing everything within its power to assist districts
with meeting the requirements of NCLB? If so, what specific steps has the board
taken?
109
Gregory W. Jones
December 2, 2008
Page 4
California High School Exit Exam
Since the 2005-06 school year, all students, excluding students with disabilities, who
sought a public high school diploma had to pass the California High School Exit Exam
(CAHSEE). The test exemption for students with disabilities ended with the class of
2007 and, until further action is taken, all students, including students with disabilities,
must pass both parts of the exam as a requirement for graduation.
15. There has been extensive discussion on options for students with disabilities who
are unable to pass the exit exam. What course of action would you recommend for
those students, and what would you propose as a long-term solution?
16. Federal law requires an alternative assessment to be provided for students with
disabilities, but the board has never authonzed one, opting instead to allow local
disthcts to seek a waiver from the test for affected students. Should the board
accommodate students who wish to take the test rather than waive the testing
requirement?
English Learners
The California Department of Education reports that approximately 25 percent of
California's K-12 students — about 1.6 million — are English learners. They perform at
substantially lower levels on standardized tests than English-proficient students. Last
year's test results from CAHSEE for first-time test takers in the class of 2009 (in grade
10) indicate that English learners performed an estimated 41 percent lower than the
state's overall passing rate on the English-language arts exam, and 29 percent lower
than the state's passing rate on the mathematics exam.
1 7. Concerns have been raised that the state's Reading Language Arts and English
Language Development framework is not designed to ensure that a student will
achieve sufficient proficiency in English to meet academic standards and pass
CAHSEE. How do you respond to this criticism? What, if any, changes would you
recommend to ensure each student has the instructional matenals necessary to
attain reading and English proficiency?
18. SBE recently reestablished the English Learners Advisory Committee (ELAC).
What role will ELAC play in deciding board policy? What is the goal of the
committee? Will you be involved with ELAC? If so, how?
110
Gregory W. Jones
December 2, 2008
Page 5
Algebra 1
Under your motion, SBE recently voted to make the Algebra 1 California Standardized
Test the sole assessment test of record for federal purposes under NCLB for all 8th
graders. The decision creates a de facto requirement that districts enroll all 8th graders
in Algebra 1 or face a penalty for not meeting the 95 percent participation rate target
required under NCLB. The Superintendent of Public Instruction has estimated the cost
to implement the board's action at approximately $3 billion. A plan has not been
provided for execution of this decision, and on October 28, 2008, a temporary
restraining order was issued preventing the state board from proceeding with
implementation.
19. What was the basis for your motion to establish the Algebra 1 exam as the 8th
grade test assessment? Were you provided any research indicating that such a
decision would be in the best interest of students?
20. Did you seek any input from the field - teachers, principals, parents - before
making this decision?
21. Does the board have a plan to assist districts in meeting the mandate? If so, could
you please explain that plan?
Please send your written answers to these questions to Nettie Sabelhaus, Senate Rules
Committee Appointments Director, Room 420, State Capitol, Sacramento, CA 95814.
Thank you for your help.
Sincerely,
DARRELL STEINBERG
DS:LAR
cc: State Board of Education
111
(jTZOp
rA Cj&ne:
r
ness&os*-
1 . It is my goal to implement policies that lead to improved academic performance
from our kids and close the intolerable achievement gap that exists. Many of our
kids are being short changed in this educational experience. Those most impacted
are poor and minority children. With over two-thirds of our public school kids
falling in that category, there is no more important goal to ensure their future
success in either college or the workforce. I would like to see us create better
avenues to solicit and hear the voices of high-performing schools, particularly
high-poverty public schools, to make better policy decisions by facilitating
replication of their best practices. All schools should begin to replicate what has
proven to work in these high-performing schools and districts to raise student
achievement.
I want my role on the board to help create and implement policies that help, not
hinder, this replication and ultimately be measured by increases in academic
proficiency for all students and achievement gap closure between minority and
poor children and their more affluent counterparts.
2. Our top priority should be creating policies that support closing achievement gaps
for African American, Latino, English language learners, and poor students and
that focus our schools and districts to get every child to a minimum grade level
proficiency every year.
3. I view my role in education governance as an independent, nonpartisan board
member who has a voice in policy that has a positive impact on our children and
who adds clarity to standards, accountability, and compliance with state and
federal education laws.
4. I have taken the online training required by all public officials. In a situation
where a state board decision might impact my financial interests or where
participating in a state board decision might create the appearance of a conflict of
interest, I would seek guidance from our General Counsel.
5. The short answer is no. While I would expect our philosophy to be in sync and I
would hope to support that overall philosophy, I fully expect there to be issues
that come before the board where the Governor and I will disagree. It is my duty
to exercise my best judgment independently from those that appointed me to the
board.
6. I do believe there needs to be some balance, education and learning that go
beyond test taking. That said, periodic assessments are a critical part of
instruction in schools and in accountability for our state education system. High-
performing schools across the state tell us that testing is an important tool to be
used in evaluating and adjusting instructional programs ensuring they are aligned
to the state's content standards. -. . _
Senate Rute Commits
DEC 3 l 2006
112 Appointments
When done well, it seems to me there should be little difference between
"teaching to the test" and teaching to content standards.
These high-performing school leaders view these tests as an important part of
their work to help students reach grade level proficiency.
As a board, we should evaluate based on input from schools, whether they're
getting the kind of timely information they need from the test to adjust instruction
for each student to ultimately master the state content standards.
First, I don't think there is any other objective more important than raising student
achievement —to the degree tests help do that, they are an important tool.
State achievement tests are giving us the critical feedback we need to realize that
half of our student population and two-thirds of our ethnic minority and poor kids
are not reaching the minimum of grade level proficiency in reading, writing, and
math.
That means they won't graduate from high school ready for college or the
workplace. If they can't read, write, or compute, then the "other objectives" need
to be reevaluated.
However, it shouldn't be acceptable to only meet their goals for the basic skills
areas. Getting kids to grade level in all core academic context areas is essential.
Honestly, I'm not completely familiar with this, but I believe districts already
have this data. What is needed is a willingness at the leadership level to do
something with it to help stem the growing dropout problem. So, yes, the SBE
can and should require these additional accountability measures so that we have
more clarity on real dropout rates and can do something about it.
While that calls for some speculation, intuitively I believe that to be true. I have
not personally seen data that was comprehensive, timely, and helpful that tells us
who is dropping out and what they might achieve if they stayed in school.
Of course, if we're struggling to get students who are staying in school to grade
level then clearly there is a lot of work to do.
I do believe the SBE should take a proactive position on requiring schools to
accurately measure dropout and graduation rates so we can catch those who fall
through the cracks long before high school.
We should target our focus, resources, and intervention on the students most
likely to drop out very early in their education.
113
10. I believe our accountability system under API is not a particularly helpful tool for
schools to improve. The formulas change annually; many people do not
understand how API is calculated or how they can affect their scores. And
frankly, the growth targets are so minimal that in many cases it would take over
30 years to get all students or a particular subgroup to meet the standards.
An effective accountability system should focus on the rate that schools are
getting students to grade level proficiency.
It seems to me we must ask two questions:
1 ) What happens to a school that is getting all their kids to grade level over a
reasonable time and 2) what happens to a school that doesn't? Today, the
answers to the questions are fairly weak.
As a board member, I want to work to move our state towards more clearly
articulating and measuring schools by how many students are reaching grade level
and through attaching effective intervention for lackluster results and real
incentives for improvement.
11. I think we must examine the premise. In my view, the premise should not be that
districts cannot improve without more money. The fact is there are hundreds of
high-performing schools and districts in California that are meeting their
achievement targets with today's resources. 1) Nor should we allow the state's
budget situation to become an excuse for schools and districts to let up on our
relentless focus on closing the achievement gap. High-performing schools hold
their students and themselves to high standards. Poor and minority students
deserve no less—budget crisis or not. What we learn from these high performers
is they know exactly what they would do with more money if they had it. Our
goal should be to connect struggling districts with those best practices that are
proving to raise academic achievement and closing achievement gaps with current
resource so they can replicate what works. 2) There is too much at stake for poor
and minority kids to surrender on their behalf because we don't have all the funds
we'd like to have.
12. Absolutely. We must raise expectations for grade level proficiency, dropout rates
and graduation rates at the same time and hold schools and districts accountable
for those results.
13. By saying that "all districts" will be in program improvement by 2013-14 implies
and assumes that they have no control over whether they improve or not. Without
sounding as if the solutions are simplistic, which clearly they are not. the long-
term strategy is to keep our standards high and not yield to the temptation of
lowering the bar should they not be met. Instead we should "scale up" and create
interventions and incentives for the replication of best practices from districts and
schools that are raising student achievement and getting the students to meet the
114
standards. The fact of the matter is that there are some excellent public schools in
this state, many of which serve populations of kids that too many are prepared to
write off as incapable of meeting high standards. If the high-achieving schools-
seeming "Islands of Excellence"— are possible anywhere, they are possible
everywhere.
1 4. Everyone in public education including the state board can and must do more to
help districts and schools raise student achievement and thus meet adequate
yearly progress. I believe the SBE took a positive step in clearly defining
intervention for the 97 districts that missed the benchmarks for many years in a
row. The next step is to focus on improving these districts by replicating
practices from across the state and country that are working.
1 5. My mother was a teacher of students with disabilities for over 20 years. She
would say, and I agree, her students do not want to be nor should they be held to
lower standards. By doing so, we set them up for failure post graduation without
the skills needed for college or the workplace. Of course, there are a small
percentage of students with certain very severe disabilities where we need to find
a long term accommodation. For the remainder of students classified as having
disabilities, we must take a hard look at the level of expectations we have for
them, the quality of instruction they are receiving, and how we can do a better job
in remediating skill gaps so that they can pass this minimum benchmark for a high
school diploma.
16. I believe, not withstanding a rare exception for some severely handicapped, we
should not waive the exit exam. We should assess our teaching methods to help
teachers meet the needs of these students so they can pass the test. In limited
cases the board should look toward a long-term plan for accommodating the needs
of severely disabled students.
17. I think the concerns are warranted to some degree. My concern would be not only
about the instructional materials but about the instruction as well. What are the
expectations we hold for these students, who is teaching them and how are
holding schools accountable when English language learners are not progressing
as they should?
If we look at those schools and districts that are getting good results in getting
more English learners to pass the exam it can help us create better informed
policy about what is needed instructionally.
1 8. The EL AC committee should not decide board policy but rather inform and
advise the board in relation to how to raise academic achievement for English
learners. While I'm not working directly with them, I look forward to hearing
from them with regards to how we can raise proficiency levels of students who
are struggling to learn English while meeting our world class standards.
115
1 9. We owe every child the very best education possible. Giving them the skills to
compete in a global information based economy is a must for their future. Setting
expectations high and holding both them and ourselves accountable is not in any
way a detriment to students. Clearly, I am not naive to the fact that this will be a
significant challenge. I firmly believe that it is none-the-less a step we can and
must take. While research on this issue has been lacking, there is no shortage of
research that suggests that students, like all of us, rise to higher expectations.
20. I have personally talked to numerous people on this subject: students, teachers,
administrators, parents, and business leaders. While of course, there is never
complete agreement on this or seemingly any other education issue, most people
I've talked to, particularly in poor and minority communities, believe the
objective is the right one—although agree as I do that much must be done to make
it a reality. In addition, the board received substantial input from the field in the
form of letters and public testimony that was presented to it.
21 . The board's actions in July called for an agreement with the federal government
that would have given the state of California sufficient time to develop the
capacity to implement this decision. Unfortunately, the board has been enjoined
by the court from taking any further action on that agreement. The board is
prohibited due to court order from taking any further action to implement its July
decision, so planning for implementation is not something the board can do at this
point.
116
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HEARING
SENATE RULES COMMITTEE
STATE OF CALIFORNIA
STATE CAPITOL
ROOM 113
SACRAMENTO, CALIFORNIA
WEDNESDAY, FEBRUARY 11, 2009
1:41 P.M.
W^ 1 8 2003
SAN FRANCISCO
P^/CL/BRAR?
606-R
SENATE RULES COMMITTEE
STATE OF CALIFORNIA
- -0O0- -
HEARING
STATE CAPITOL
ROOM 113
SACRAMENTO, CALIFORNIA
- -0O0- -
WEDNESDAY, FEBRUARY 11, 2009
1:41 P.M.
- -oOo- -
Reported By: INA C. LeBLANC
Certified Shorthand Reporter
CSR No. 6713
SENATE RULES COMMITTEE
1
INDEX
STATE OF CALIFORNIA
- -oOo- -
2
P a a e
HEARING
3
4
Proceedings 1
Governor's Appointees:
5
JOSEPH A. FARROW, Commissioner ofthe California
STATE CAPITOL
6
Highway Patrol 2
ROOM 113
7
INTRODUCTION BY SENATOR GLORIA ROMERO
2
SACRAMENTO. CALIFORNIA
8
OPENING STATEMENT BY COMMISSIONER FARROW ....
5
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9
10
Questions by CHAIRMAN STEINBERG re:
Changes in the CHP under
WEDNESDAY. FEBRUARY 11. 2009
11
Commissioner Farrow's leadership . 7
1:41 P.M.
12
Chief's disease 9
- -OOO- -
13
14
15
Questions by SENATOR OROPEZA re:
Diversification 12
911 system 15
16
Question by SENATOR DUTTON re:
17
911 system 19
18
Questions by SENATOR CEDILLO re:
Reported By: INA C. LeBLANC
Certified Shorthand Reporter
CSR No 6713
19
20
Computer-aided dispatch project .. 21
Procurement procedures 21
21
Questions by SENATOR AANESTAD re:
22
CHP officers assigned to the
23
Ca pitol 23
24
25
STATEMENT BY SENATOR AANESTAD 11
STATEMENT BY SENATOR OROPEZA 18
iii
1
APPEARANCES
2
MEMBERS PRESENT
1
Witnesses in SuooortofADDOintee:
3
2
JOHN LOVELL, California Police Chiefs
4
SENATOR DARRELL STEINBERG, Chair
3
Association, California Peace Officers
5
SENATOR GIL CEDILLO
4
Association, California Narcotic Officers
6
SENATOR SAMUEL AANESTAD
5
Association 24
7
SENATOR ROBERT DUTTON
6
ED PRIETO, California State Sheriffs'
8
SENATOR JENNY OROPEZA
7
Association, Yolo County Sheriff's
9
8
Department 25
10
STAFF PRESENT
9
10
AARON READ, California Association of
HighwayPatrolmen. 27
11
12
GREG SCHMIDT, Executive Officer
11
JON HAMM, California Association of
13
JANE LEONARD BROWN, Committee Assistant
12
Highway Patrolmen 28
14
NETTIE SABELHAUS, Appointments Consultant
13
JULIE SAULS, California Trucking
15
DAN SAVAGE, Assistant to SENATOR CEDILLO
14
15
DUNCAN McFETRIDGE, Coalition of Utility
16
BILL BAILEY, Assistant to SENATOR AANESTAD
16
Employees 29
17
CHRIS BURNS, Assistant to SENATOR DUTTON
17
BROOKS ELLISON, California Tow Truck
18
BRENDAN HUGHES, Assistant to SENATOR OROPEZA
18
Association and California Dump Truck Owners
19
19
Association 30
20
ALSO PRESENT
20
TIM CHANG, Automobile Club of Southern
21
21
California 31
22
JOSEPH A. FARROW, Commissioner of the California
22
PAULA LaBRIE, California State Automobile
23
Highway Patrol
23
24
24
25
ii
25
IV
1 of 11 sheets
Page 1 to 4 of 6
02/12/2009 02:47:09 P*
Witnesses in Support of Appointee (cont.):
BILL DOHRING, Independent Auto Dealers 31
JAMES LOMBARDO, SR., California Motorcycle
Dealers Association 32
CARL BRAKENSIEK, California Association
of Licensed Repossessors 32
-0O0--
Vote-Only Item re Confirmation of:
JON A. EDNEY, Member, Water Quality
Control Board, Colorado River Basin Region
DONALD M. JARDINE, Member, Water Quality
Control Board, Lahontan Region
R. STEVEN BLOIS, Member, Water Quality
Control Board, Los Angeles Region
MADELYN J. GLICKFELD, Member, Water Quality
Control Board, Los Angeles Region
CAROL A. DEAN, Member, Water Quality
Control Board, North Coastal Region
DAVID M. NOREN, Member, Water Quality
Control Board, North Coastal Region
STEVEN M. MOORE, Member, Water Quality
Control Bard, San Francisco Bay Region 34
--oOo—
1 PROCEEDINGS
2 CHAIRMAN STEINBERG: Good afternoon,
3 everyone. The Senate Rules Committee will come to
4 order. I want to apologize to everyone for being
5 late.
6 SENATOR OROPEZA: You do have a few things
7 that you're working on.
8 SENATOR ROMERO: At least it's not 100 days.
9 CHAIRMAN STEINBERG: I won't make excuses.
10 Please call the roll.
11 MS. BROWN: Senator Cedillo.
12 SENATOR CEDILLO: Here.
13 MS. BROWN: Cedillo here.
14 Dutton.
15 Oropeza.
16 SENATOR OROPEZA: Here.
17 MS. BROWN: Oropeza here.
18 Aanestad.
19 SENATOR AANESTAD: Here.
20 MS. BROWN: Aanestad here.
21 Steinberg.
22 CHAIRMAN STEINBERG: Here.
23 MS. BROWN: Steinberg here.
24 CHAIRMAN STEINBERG: All right. Today we
25 have one gubernatorial appointee who has been asked
1
Proceedings Adjourned 36
Certificate of Reporter 37
APPENDIX (Responses of Appointees) 38
VI
1 to appear.
2 We would like to welcome up Senator Gloria
3 Romero, our colleague, to introduce the nominee,
4 Joseph A. Farrow, for commissioner of the California
5 Highway Patrol. Senator Romero, welcome.
6 SENATOR ROMERO: Thank you. Thank you. I
7 wanted to come today, because I know that the
8 commissioner, when he was meeting with fellow
9 senators, apparently one question kept coming up and
10 kept asking, "What about Senator Romero?"
11 And then I got a few phone calls asking me,
12 "What about Commissioner Farrow? Are you going to
13 support him?"
14 Of course, there's a reason for that. As you
15 know, both Assemblywoman -- I'd like to acknowledge
16 her -- Assemblywoman Bonnie Garcia, like myself, we
17 did -- jointly on a bipartisan basis, we did ask a
18 number of questions of the role of oversight in this
19 body about some of the operations within the California
20 Highway Patrol.
21 And we know that the CHP is a golden agency.
22 We're very proud of its tradition and its history. The
23 men and women who serve and, of course, here in the
24 legislature, who protect us -- It's a legacy that we
25 want to make sure is always protected.
2
'2/12/2009 02:47:09 PM
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2 of 11 sheets
1 But there have, of course, surfaced over the
2 past few years a number of questions about procurement,
3 about contracts, about funding. In particular for
4 Assemblywoman Garcia and myself, there were concerns
5 about whistle-blowing and the protection of those
6 members within the agency who had the courage, I
7 believe, to step forward and to ask us to do the right
8 thing.
9 Time has passed. We have seen a couple of
10 administrations that have come and gone, and I think
11 it's a new chapter in California's history, and that's
12 why I wanted to step forward today.
13 I've known Commissioner Farrow for some time
14 through what I would consider to be bad times and,
15 hopefully, good times ahead of us as well. I trust
16 him. I believe he's got the integrity to move this
17 agency forward. He's committed to making sure that
18 if there is wrongdoing, it will not be tolerated.
19 But I think more than anything, he understands the
20 mantel of leadership and is ready to step forward to
21 lead this agency into a new and even more golden
22 California than what's existed in the past.
23 So for all of those wondering: What about
24 Senator Romero? Senator Romero is here to introduce
25 Commissioner Farrow and to ask for your support for not
3
1 supporters back there who will introduce themselves
2 in a few minutes as we go along; but I would be
3 honored if I could make an introductory statement —
4 CHAIRMAN STEINBERG: Of course.
5 COMMISSIONER FARROW: -- to the panel, if
6 you would.
7 Mr. Chairman, thank you very much for
8 convening the hearing today to consider my candidacy
9 to become the commissioner of the California Highway
10 Patrol.
11 Vice Chairman Aanestad, appreciate you being
12 here today.
13 Senator Cedillo. Senator Oropeza.
14 The Highway Patrol is a very, very proud
15 organization, one of which I've been a member for
16 29 years. I've served very, very proudly in a lot of
17 different disciplines through the years. We have
18 done a great job throughout our history, and there
19 have been times of difficulties. I think those
20 difficulties are well-chronicled. They've been
21 spelled out. They've been publicized in many
22 different arenas.
23 I'm here today with the support of my entire
24 organization and, really, carrying the weight of
25 every man and woman who works in this great tradition
5
1 only his confirmation, but really for a very new and
2 glorious chapter in the history of the California
3 Highway Patrol.
4 Thank you for allowing me to come.
5 CHAIRMAN STEINBERG: Thank you very much.
6 Thank you, Senator.
7 SENATOR ROMERO: You're on your own.
8 COMMISSIONER FARROW: Thank you. Thank you
9 very much.
10 CHAIRMAN STEINBERG: Mr. Farrow,
11 Commissioner Farrow, welcome to the Rules Committee.
12 If you would like to take the opportunity to
13 introduce any member of your family or any other
14 special guest, please feel free to do so, and we look
15 forward to hearing from you, sir.
16 COMMISSIONER FARROW: That's very kind of
17 you. I would like to introduce just a few people I
18 brought with me here today. My fiancee, Leanne, in
19 the second row.
20 CHAIRMAN STEINBERG: Welcome to you.
21 COMMISSIONER FARROW: And my two
22 stepchildren, Jessica and Gregory, they are here.
23 CHAIRMAN STEINBERG: Welcome.
24 COMMISSIONER FARROW: And some members of
25 the department I did not bring, and I do have some
4
1 to tell you that we are very worthy of your support,
2 we're very worthy of your support, and that we do
3 understand the difficulties that we've faced over the
4 years. We've made some mistakes. Not all were
5 malicious, but they were mistakes made by human
6 beings who tried to do the right thing, they tried to
7 work hard, and sometimes we got out of bounds.
8 I think that the history will show that audit
9 after audit has exposed some weaknesses in our
10 mechanics, the structure of the organization, but I
11 think if you visited the Patrol today, you would find a
12 changed organization, an organization that is very
13 proud, an organization that has learned from some of the
14 missteps that we have had over the past.
15 We have put into place many mechanisms to
16 ensure the public, ensure you that you can trust us,
17 that when we spend the public tax dollars, we spend it
18 wisely to the benefit of all the citizens of this great
19 state and will do so very proudly and will do so under
20 the contracts and structures that are in place to govern
21 any state agency.
22 I'm here to answer any questions that you may
23 have of myself or the organization; but, once again, I'm
24 here very proudly and very honored to have been
25 appointed by Governor Schwarzenegger to be the
6
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commissioner of the Patrol. I'm very thankful for the
kind words of Senator Romero. I've gotten to know her
over the last year and talked to her about the Highway
Patrol. But I'm all ears, and I'm here to answer any
questions you may have.
CHAIRMAN STEINBERG: Thank you very much.
Maybe I'll begin, if that's all right, with just a
question or two.
In your very good written responses, one
thing that obviously stuck out was your comment that
if you were to visit the CHP today, you would find a
proud yet changed organization. What do you mean by
that, and how has the CHP itself changed under your
leadership?
COMMISSIONER FARROW: That question, the
"what changed" part, was the question I knew would
come some day when I got this job.
CHAIRMAN STEINBERG: Today.
COMMISSIONER FARROW: I waited a year for
it. And when I got this job, a very, very smart
gentleman asked me — He said, "Be prepared for the
question 'What changed within the organization?'"
And I think selfishly, or sometimes proudly,
you want to say, "Well, the Highway Patrol is a great
organization. We have done a great job. We have done
7
1 We are the California Highway Patrol, but we are one
2 state agency that is governed by the people. It's
3 governed by yourself, it's governed by the governor
4 of the state of California that we play by all the
5 rules, every rule. Everything that we have to do is
6 transparent, and we do so very, very proudly.
7 What I mean by that, Senator, if you came
8 over today, what you would see is a very proud
9 organization who fell to the bottom at one point. We
10 were down. We were very low. And they're very proud
11 now, and they get it. They readily admit the
12 mistakes that we made over the past, and they do an
13 honorable job. They don't want to fail. They don't
14 want to fail you, they don't want to fail the
15 governor, they certainly don't want to fail me. And
16 that's our commitment. And I feel like I'm carrying
17 all 11,200 of them in this room, because they're a
18 very proud organization, and they want to do the
19 right thing.
20 CHAIRMAN STEINBERG: One issue along those
21 lines that I think has been a source of discontent,
22 obviously within the ranks but also among the public,
23 is the issue of chiefs disease. And maybe you can
24 explain, for those who may not understand what that
25 term refers to, what it means and what you are doing
--
the job that people have asked us to do. We are a
traditional organization of 80 years of strength and
commitment to this great state." And what you want to
say is, "Nothing is going to change," because you're so
proud of the organization.
The challenge that we made to my top management
and my officers was to recognize that the department had
some issues we had to deal with. We had the mechanic
issues that we had to deal with in terms of how we do
business. And we had to change the culture first by
understanding that the problems we faced were all self
done. They were self-inflicted wounds that we had to
do.
There was acknowledgement from not only myself,
but through my executive management, my top management,
and to every man and woman who works for the California
Highway Patrol, to understand we are better. We are a
better organization than what has been portrayed over
the last couple of years. We have accepted that from
the bottom; we've accepted that from the top.
I've embraced a lot of the change mechanism.
I've embraced the support of my unions that we work
so closely with. I've embraced the comments and
feedback from my top management to make this change
from the way we do business by simply meaning that:
8
1 to combat it.
2 COMMISSIONER FARROW: Chiefs disease in its
3 most simplistic definition was a phenomenon known as
4 high-ranking officials who were retiring on
5 disability retirement at the very end of their
6 career. There was a series of articles and series of
7 investigations that were conducted on some
8 high-ranking members of the organization who retired
9 at the very end of their career with a disability
10 retirement.
11 That issue has been looked at for a long, long
12 time. It actually started back when Commissioner Brown
13 was here. It was a charter that he had from then
14 Governor Schwarzenegger who asked Commissioner Brown to
15 look at that issue.
16 The good news that I want to tell you today,
17 four years, five years down the road, the last two years
18 at the California Highway Patrol there has not been one
19 chief who retired on disability retirement from the
20 California Highway Patrol. That's not suggesting that
21 some may have been warranted, and that's not to tell you
22 that somebody may not retire tomorrow on disability
23 retirement. But the procedures and practices we put in
24 place was an identification of really what was going on,
25 that we understood at times that we depended upon what
10
'712/2009 02:47:09 PM
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4 of 11 sheets
1 we thought were other agencies and other people to work
2 the system through and allow people to get involved in
3 that system. We don't do that anymore. Every
4 disability retirement, every filing of disability, is
5 closely looked at, closely scrutinized. It goes through
6 a chain of events that we take a look at to make sure
7 that what is being filed is appropriate. We have a lot
8 of mechanisms in place that have been well-chronicled in
9 the past, and it's something that we take very, very
10 seriously.
11 But at the same time, those people who have
12 legitimate injuries, regardless of rank, we want to
13 make sure that the system is in place to take care of
14 the injured workers. This is a very dangerous job at
15 times, so we want to make sure the system we have is
16 bifurcated in such a way where we make sure that we
17 take care of somebody who may want to engage in
18 misconduct, but at the same time providing the
19 services and the resources necessary for those that
20 need them.
21 CHAIRMAN STEINBERG: Thank you. Let me ask
22 the Vice Chair, do you have any questions?
23 SENATOR AANESTAD: No, but maybe a comment
24 that answers your first question, Mr. Chair, and that
25 is I reluctantly got involved with the Highway Patrol
11
1 yesterday. I appreciate that. We had a good
2 conversation about something that I would like to ask
3 you on the record about, and that is the issue of the
4 diversification of the force, both ethnically and in
5 terms of gender.
6 There are some real disparities between what
7 our community looks like and what the force looks like,
8 and you and, I think, both agree that it's important to
9 have a diverse workforce, because we're public servants
10 and we're out there relating — you're out there
11 relating on a day-to-day basis with the public.
12 So could you talk with me a little bit
13 about -- with us a little bit about your view on it
14 and also what steps you think can be taken to crack
15 this nut a bit.
16 COMMISSIONER FARROW: I certainly would, and
17 I did enjoy the conversation with you yesterday. It
18 was very enlightening for myself.
19 I can tell you this: The growth of the
20 Highway Patrol is one of the things that we have
21 concentrated on over the past year. The legislature
22 and the governor have been very, very kind to Highway
23 Patrol to allow us to grow just a little bit during
24 the very difficult fiscal crisis that we have right
25 now. Being reflective of the communities in which we
13
1 a number of years ago over the citing of offices,
2 special units in my district, and have kept in close
3 contact with not just that unit, but also the 15
4 unit, which runs right through the heart of my
5 district, and the northern people.
6 And I can tell you there is a sense of change,
7 and it's a renewed sense of pride in the Highway Patrol.
8 And I believe, as I've told you, Commissioner, in our
9 offices last week, that he is largely responsible for
10 that.
11 There is an openness, an ability for the people
12 in the mid-level management, as well as the officers, if
13 they have something on their mind, to go to their
14 superior officer now and let them know what they're
15 thinking, because I think they know now that they're
16 going to be heard and listened to, and I think that
17 changes an organization for the better. And I want to
18 commend you, and I'm hoping that that will continue.
19 COMMISSIONER FARROW: Thank you very much,
20 Senator Aanestad.
21 CHAIRMAN STEINBERG: Thank you, Senator
22 Aanestad.
23 Questions. Senator Oropeza.
24 SENATOR OROPEZA: Thank you so much for
25 spending some time with me yesterday. It was
12
1 work is a paramount goal of my administration, to
2 make sure that we can do that.
3 Over the last year, I've asked and we've
4 succeeded, I think, in attracting a lot of qualified
5 candidates throughout California, but I'm here to
6 tell you right now that our work is not done. We are
7 not reflective of California. We still have a lot of
8 work to do, specifically in targeted groups, that I
9 really would like to spend some time on. And I've
10 asked my recruiters to go out and work hard in a lot
11 of non-traditional ways of trying to recruit people.
12 I think that you probably had the opportunity
13 to watch one of the videos that we put together
14 specifically trying to recruit females onto the
15 California Highway Patrol. While our work isn't done
16 there, I'm encouraged by the fact over the last two
17 classes, we have been able to increase the amount of
18 intake we have with females.
19 There again, if you have an agency in 2009 when
20 you're only reflective -- about 6 percent of your
21 workforce is female in uniform ranks, I think we get a
22 failing grade in that. We have done very well in
23 attracting some of the other groups, but our work is not
24 done. I get it. I want to do it. My top management
25 embraces that throughout, the need to the communities,
14
5 of 11 sheets
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02/12/2009 02:47:09 PI
and if there were different fiscal times right now, I
would probably be running different commercials and
things like that, but I recognize there isn't a lot of
money, so we do it almost by foot. We go to meetings
and we try to get involved in all the different
communities. I can commit to you this, is that I
understand that. My top management understands it, my
crews understand it, and we're doing everything we
possibly can to make this department be reflective of
those communities.
SENATOR OROPEZA: Well -- And I'm pleased to
hear that. I would suggest that you might want to
look at new technologies, you know, YouTube and other
kinds of ways to, at low or no cost, get your message
out there once you produce whatever it is you want to
send out as the message.
I think we in the state highly underutilize our
potential relative to technology, and so I would
encourage that, and I am pleased to hear that you feel
that way.
Let me just ask briefly also about another
topic that comes up often at the local level when I'm at
town-hall meetings and other places, and I have my own
personal experience, and I know that CHP is just part of
the puzzle, but can you talk to me about the 911 system
15
1 legislation a few years back allowing local areas
2 to -- the local police departments to start
3 transferring some of those calls. That's a work in
4 progress. That takes time to be able to do that.
5 But here, today, we've had 340 departments that have
6 actually made that transition. There's still many
7 more that have to come, but they've made that
8 transition, and they're starting to take away some of
9 the workload from our CHP dispatchers.
10 SENATOR OROPEZA: So is it that the pressure
11 point ought to be at the local level? If I want to
12 see some action in the south basin of L.A. County, is
13 it the local municipalities that have police -- their
14 own police departments or --
15 COMMISSIONER FARROW: Not necessarily all of
16 them yet. This is a work in progress, because for a
17 local agency to take the calls, to transfer calls,
18 we have to work very closely with the industry, and
19 we have to make sure that the industry is able to
20 transfer those calls. You have to go carrier to
21 carrier. So there are a lot of things.
22 I can tell you this: There are some local
23 agencies fully responsible for the 911 calls. It really
24 depends upon the area you're in, but they will face the
25 same issues that we did, that the system works fine
17
and cell phones, and how it can be that we can pick up a
cell phone, dial 911, and not get anywhere. Can you
share a little bit about what kinds of things are being
done to solve that problem?
COMMISSIONER FARROW: I certainly can. The
911 system that you talked about is a system that's
in constant evolution. The California Highway Patrol
on a yearly basis receives about eight million 911
calls per year. The good news about that is under
the current national standards, about 81 — 91
percent of those calls are answered within the
ten-ring requirement. If you go down to the 15-ring
requirement, we're still at 92, 93 percent. So we do
a pretty good job in terms of getting the normal
calls that come in.
Certainly, though, the department is very
aware of the fact that sometimes on some of your
larger incidents where there's an influx of calls,
they can't get through the system, so you're going to
get one of two things. You're going to get a busy
signal, or you're going to get yourself stuck into a
queue. I would imagine those are the calls that
you're talking about.
The good news is the legislature has worked
very closely with the patrol industry, and we passed
16
1 until there is a major incident where a lot of people
2 call at one time. The systems have a difficult time
3 getting those calls through, but that is a work in
4 progress.
5 And our new radio system, when it is done in
6 the next two years, will help that a little bit because
7 it will automatically identify the caller and the
8 location, which will take away precious time that we now
9 do, to ask those questions, so we can speed the process
10 up.
11 So help is en route. Things are happening
12 as we go along, but the work certainly isn't
13 completed.
14 SENATOR OROPEZA: Yes, and I appreciate any
15 efforts to move that ball along.
16 Finally, I will just say that I have
17 appreciated in my eight and a half years here, the
18 relationship with the CHP, not only here in
19 Sacramento but at the district level where we do have
20 incidents, we do have occurrences where we really
21 need CHP support, and your guys out there in the
22 trenches are doing a great job. I want you to know
23 that. Kudos to them, and I hope that continues. I'm
24 sure it will under your leadership.
25 COMMISSIONER FARROW: Thank you very much.
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6 of 11 sheets
1 CHAIRMAN STEINBERG: Thank you, Senator
2 Oropeza.
3 Senator Dutton.
4 SENATOR DUTTON: Just a quick add-on to
5 Jenny's question about the radio system, because it's
6 been a while in coming. You said it's a couple more
7 years. Could you give us a status report of that, a
8 little more information about where we are with that.
9 And also there was a concern raised to me just about
10 an hour ago that it's already an outdated system.
11 And so maybe you could just comment on that.
12 COMMISSIONER FARROW: The current radio
13 project -- We have a five-year project, $497 million
14 dollar project over five years. We're currently
15 starting the third year. That project, when it is
16 done, will completely resolve and solve, for once,
17 the Highway Patrol's inability to communicate with
18 other allied agencies. So it will solve the
19 interoperability program while giving us a
20 state-of-the art system.
21 That system that we have built and what
22 we're buying is the best we thought we could do at
23 the time, and we built onto the current
24 infrastructure of the Highway Patrol. So the best
25 way to say it is we took our current radio system,
19
1 project is doing well. We're under budget in every
2 component, and we've returned millions of dollars
3 back to the MVA in the first two fiscal years, so the
4 system, I think, is working quite well.
5 SENATOR DUTTON: Thank you.
6 CHAIRMAN STEINBERG: Thank you.
7 Senator Cedillo.
8 SENATOR CEDILLO: Now tell me, unless you
9 just did, about the status of the computer-aided
10 dispatch project.
11 CHAIRMAN STEINBERG: Isn't that the same
12 thing?
13 COMMISSIONER FARROW: Similar to what we
14 were just talking about. That's the current BCP
15 that's going through the system.
16 SENATOR CEDILLO: The next question is:
17 Tell me about your procurement procedures, how
18 they've improved.
19 COMMISSIONER FARROW: The procurement of the
20 patrol was certainly one of the items that was very
21 newsworthy. We received a lot of attention, not only
22 this body but a lot of other people.
23 The good news — what I want to tell you is
24 this: The Patrol is involved in the procurement of
25 about six to seven thousand contracts per year, and most
21
1 and we're updating all the components of that in a
2 five-year project to make it state-of-the-art.
3 The question that it's already outdated, I
4 certainly believe that would be an inaccurate
5 statement. The system isn't completed yet. We're
6 still in the process of procuring some of the
7 components of that. Just this first year we'll be
8 delivering the deliverables to the patrol-car
9 environment, where the last two years we've been
10 actually building the infrastructure of the radio
11 tower that we're doing.
12 We are running, in this current budget year of
13 the BCP, the CAD infrastructure, and maybe that's what
14 somebody is talking about. There is a BCP in place to
15 upgrade the current CAD system, which is the mechanism
16 that the dispatchers use, and we're going to try to
17 enhance that to give them complete ability to use the
18 mobile digital computers out on the road.
19 Maybe that's what they're talking about,
20 because we are coming back asking for a few more million
21 dollars. In the long run, that is a much better deal,
22 because it actually helps this whole system become more
23 compliant with one another and makes the transition more
24 seamless.
25 So I'm happy to tell you I think the radio
20
1 of the contracts have gone through seamlessly. There's
2 never been an issue with those. They go through exactly
3 the way the process has always meant to be.
4 We do have some very celebrated cases out there
5 that people are known to that received a lot of scrutiny
6 and a lot of questions about it. I can tell you this,
7 is that we as an organization learn from each and every
8 one of those audits to make sure that there is a system
9 in place to bring compliance issues in every one of
10 those.
11 And I'll tell you maybe the best way to
12 explain this, Senator, is this, is that the people
13 who are involved in procurement and the people who
14 are involved in my information management provision
15 who actually deal with computers sat down and devised
16 a way that they could sit down and put down all their
17 requirements of a procurement, a successful
18 procurement, and they put it computerized, meaning
19 that if what we're about to buy doesn't match up to
20 everything that is involved, everything within the
21 manual, everything within our own guidelines of the
22 organization, the system will not allow you to
23 proceed. And that is a check-and-balance that we put
24 in place to ensure compliance with all the rules that
25 we have out there.
22
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Sole source, sole brand, those are the
questions we dealt with over the last couple years. I
don't want to say they're non-existent, because there
are certain things that you have to buy that they're
going to be sole source, they're going to be sole brand.
It's very rare in the organization. It's very rare for
us to do this. We look for ways to go out and
competitively bid everything. If we get to a point
where we can't do that within our own infrastructure,
those questions have to come all the way up to this
office to make sure what we're about to do is necessary,
compliant, and we've done all the things that we're
supposed to do before we actually go out for bid.
SENATOR CEDILLO: Thank you.
CHAIRMAN STEINBERG: Thank you, Senator
Cedillo.
Senator Aanestad, you had another important
question?
SENATOR AANESTAD: Very important,
perplexing question.
A lot of the legislators here in the building
are wondering when we see the basement full of all the
Highway Patrol officers checking under our cars and
riding their horses on the grounds and all that, are
they here because this is a plum assignment, or are they
23
1 groups strongly support the appointment of Commissioner
2 Farrow.
3 One of the things that may be a surprise to
4 people here is that there are competing egos in law
5 enforcement — I know it's a shock -- but one of the
6 things that is really a distinguishing feature of the
7 commissioner is his ability to work collaboratively with
8 all jurisdictional levels of the law enforcement family,
9 and in times of limited resources that ability becomes
10 a — really a functional imperative.
11 I also want to state personally I've known
12 Joe for over a decade, and there was a period when we
13 both went around the state and taught police officers
14 the new laws. You're in a different city every day for
15 a two-week period. You really get a chance to know
16 somebody when you're doing that in that kind of intense
17 environment. This is a guy with an exceptional work
18 habit, unimpeachable integrity, and someone who really
19 represents the highest standards of public service.
20 CHAIRMAN STEINBERG: Thank you very much,
21 John.
22 Next witness.
23 MR. PRIETO: Thank you very much. My name
24 is Edward Prieto. I'm the Yolo County Sheriff, and
25 I'm here representing not only the Yolo County
25
being disciplined?
COMMISSIONER FARROW: I hope the question is
rhetorical, but I can tell you the men and women that
serve this Capitol are honored to be here. They're
honored to be here, and if there's ever a need for
their service, they're here for you, and they'll do a
great job for you.
SENATOR AANESTAD: They do.
CHAIRMAN STEINBERG: They certainly do.
They'll be around the next couple of days.
Let's hear from members from the public
here. Witnesses in support of Commissioner Farrow,
please come up.
Senator Wright, are you here for Commissioner
Farrow?
SENATOR WRIGHT: I wanted to come to say hello.
He's really good.
CHAIRMAN STEINBERG: You know you are always
welcome to take the mic, if you would like.
Mr. Lovell.
MR. LOVELL: Yes. Senator Steinberg, members
of the Committee, my name is John Lovell, and I'm here
on behalf of the California Police Chiefs Association,
the California Peace Officers Association, and the
California Narcotic Officers Association. All three
24
1 Sheriff's Department, but the California State
2 Sheriffs' Association, and also as a former member of
3 the California Highway Patrol. I retired after 31
4 years of service and was commander, and I'd like to
5 state I retired for service retirement. I don't want
6 any questions regarding how I retired. It was not
7 medical.
8 But I'm here — I've known Joe for many years,
9 more on a professional level than a personal level, but
10 here in the last couple years I've known him as -- on a
11 personal level. And I would like to say this about
12 Joe: One of the things I appreciate about him, not only
13 myself, but the entire sheriffs' organization throughout
14 the state, is the transparency between him and, perhaps,
15 the reputation of former commissioners of the CHP.
16 He attends many of our conferences. He's open.
17 He's responsive to the needs of the sheriffs department
18 and the unincorporated areas throughout the state. This
19 was clearly demonstrated when one of my officers was
20 shot and killed on Father's Day. He extended unlimited
21 resources to the Yolo County Sheriff's Department. We
22 were able to capture this individual in about 12 or
23 13 hours, and a lot of it had to do with the fact that
24 the CHP responded immediately. We were able to set up
25 perimeter patrol and capture this individual. But even
26
2/12/2009 02:47:09 PM
Page 23 to 26 of 38
8 of 11 sheets
1 subsequent to capturing this individual, the CHP
2 responded to assist in the funeral preparations.
3 Yolo County is not a huge organization. We
4 have about 300 employees. Again, unlimited resources.
5 And I think one of the concepts about law enforcement is
6 that we do join a brotherhood and sisterhood, and Joe
7 clearly demonstrates the support that he's extended to
8 the Yolo County Sheriffs Department, sheriffs in
9 general, and law enforcement throughout the state
10 I'm privileged to call him a friend, but I'm
11 also privileged to know that I get to work hand and hand
12 with an individual such as Commissioner Farrow.
13 My wife works for Joe Farrow. She speaks
14 extraordinarily highly of him, and I think he made an
15 excellent decision in promoting my wife. Thank you.
16 But in all sincerity, I think one of the
17 important aspects of law enforcement is the fact that
18 strong leadership means that you have open communication
19 and that egos are set aside.
20 CHAIRMAN STEINBERG: Thank you very much.
21 Appreciate it, Sheriff, very much.
22 Mr. Read.
23 MR. READ: May I stand? I have John --
24 CHAIRMAN STEINBERG: Of course.
25 MR. READ: My boss gets to sit down.
27
1 issues going on. And Joe has done this job for over a
2 year now, and things have changed dramatically.
3 So on behalf of my board and our members, we
4 are very proud to support Joe, and if morale is
5 important to this committee, then you've got the right
6 man here.
7 CHAIRMAN STEINBERG: Thanks very much.
8 MS. SAULS: Senators, Julie Sauls on behalf of
9 the California Trucking Association. We're here very
10 much in support of the confirmation of Joe Farrow as
11 commissioner of the California Highway Patrol.
12 Since his appointment, we have really
13 appreciated his partnership with our association. He
14 has been there to acknowledge and recognize our efforts
15 for safety. He has participated in our conferences and
16 is very open to our membership, as well as made his
17 staff very open to our membership. It's a relationship
18 that we very much appreciate and look forward to working
19 with him in the future. Thank you very much.
20 CHAIRMAN STEINBERG: Thank you.
21 MR. McFETRIDGE: Mr. Chairman and members,
22 Duncan McFetridge representing the Coalition of Utility
23 Employees.
24 On a personal level, I want to voice my strong
25 support for the commissioner's nomination. And, you
29
1 Mr. Chairman and members, Aaron Read
2 representing California Association of Highway
3 Patrolmen proudly for 31 years, and I think I have
4 known Joe for 25 of those years. We go way back.
5 I'm here to say Joe isn't perfect. I played golf
6 with Joe. I saw him miss one putt one time. Other
7 than that, he is perfect.
8 We're delighted to be here in support, and I'm
9 delighted to have my boss of 25 years, the CEO of the
10 California Association of Highway Patrolmen, here,
11 Jon Hamm, and he will express how the officers on the
12 street feel. Thank you.
13 MR. HAMM: Thank you.
14 Members of this Committee and Mr. Steinberg.
15 I've known Joe for 25 years, and it's been a pleasure
16 knowing him. I'm here also on behalf of every CHP
17 officer that works the street. We have 99 percent
18 membership, and it's 100 percent voluntary membership,
19 so our membership is very united. And the CHP has
20 always been a family. We pride ourselves in working
21 closely with the department for the betterment of the
22 citizens of this state.
23 But I can tell you we're also very
24 knowledgeable of what morale was like just over a year
25 ago, and we were struggling, frankly. We had many
28
1 know, about 12 years ago when I came to Sacramento, one
2 of the first bills that I worked on was with the
3 commissioner, and since that time he's been nothing but
4 professional and diligent in the work that he does.
5 And since being named commissioner, I was very
6 pleased to hear that the one thing you're always going
7 to get from the commissioner here is you're going to get
8 honor, dignity, and he's always going to do the right
9 thing. So I urge your support for this nomination.
10 CHAIRMAN STEINBERG: Thank you very much.
11 MR. ELLISON: Thank you, Mr. Chairman and
12 members. Brooks Ellison on behalf of myself, because I
13 personally know him, and I couldn't give him a stronger
14 recommendation, and on behalf of two motor-carrier
15 clients, two clients that are highly regulated by the
16 department, the California Tow Truck Association and the
17 California Dump Truck Owners Association. And when we
18 reached out to them to tell them that Joe had been
19 nominated, things that come out like integrity,
20 fairness, dedication, hard work, and to kind of sum it
21 up, he's just one hell of a stand-up guy, and we really
22 couldn't urge any stronger support than that. Thank
23 you.
24 CHAIRMAN STEINBERG: I'm not quite sure how
25 this hearing is going.
30
9 of 11 sheets
Page 27 to 30 of 38
02/12/2009 02:47:09 W
1
MR. CHANG: Mr. Chair, members of the
1
Well, I think the testimony summed it up very,
2
Committee, Tim Chang on behalf of the Automobile Club of
2
very well, and certainly the way that you have come
3
Southern California.
3
across to the Committee, both in private meetings and in
4
I've known Joe for almost ten years. When he
4
public meetings, it is very consistent with everything
5
was first with the office as special representative, I
5
we've heard from the witnesses here today. I'm proud to
6
found him to be a very intelligent person highly — a
6
support your nomination and look forward to working with
7
person with high integrity; and in subsequent years that
7
you.
8
I've known him, I've not altered my view one bit. And
8
Please call the roll.
9
the Automobile Club certainly does fully support his
9
MS. BROWN: Senator Cedillo.
10
confirmation today.
10
SENATOR CEDILLO: Aye.
11
CHAIRMAN STEINBERG: Thank you, sir.
11
MS. BROWN: Cedillo aye.
12
MS. LaBRIE: Mr. Chairman, members of the
12
Dutton.
13
Committee, Paula LaBrie on behalf of the Triple A of
13
SENATOR DUTTON: Aye.
14
Northern California. We too support this confirmation
14
MS. BROWN: Dutton aye.
15
very strongly.
15
Oropeza.
16
We have worked with Joe for over ten years in
16
SENATOR OROPEZA: Aye.
17
many capacities. I think all the good adjectives have
17
MS. BROWN: Oropeza aye.
18
been taken, so I'll just say I concur with all of those
18
Aanestad.
19
and we certainly support his confirmation.
19
SENATOR AANESTAD: Aye.
20
CHAIRMAN STEINBERG: Thank you.
20
MS. BROWN: Aanestad aye.
21
MR. DOHRING: Mr. Chairman and members,
21
Steinberg.
22
Bill Dohring representing Independent Auto Dealers.
22
CHAIRMAN STEINBERG: Aye.
23
I too have had the opportunity to work with
23
MS. BROWN: Steinberg aye.
24
Commissioner Farrow since he became special rep, not
24
CHAIRMAN STEINBERG: Thank you very much.
25
always on the same side, but nevertheless we worked it
25
That will move to the floor probably sometime early
31
33
1
out. And I think Gloria Romero, Senator Romero, said it
1
next week, and look forward to your confirmation.
2
all. Ask for your support.
2
Thank you very, very much.
3
CHAIRMAN STEINBERG: Thank you.
3
COMMISSIONER FARROW: Thank you.
4
MR. LOMBARDO: Mr. Chairman and members of the
4
CHAIRMAN STEINBERG: We still have a little
5
Committee, Jim Lombardo on behalf of the California
5
business. Governor's appointees not required to
6
Motorcycle Dealers Association, and we're in support of
6
appear.
7
Joe as well.
7
Any questions on any of these nominees?
8
CHAIRMAN STEINBERG: Thank you. Appreciate
8
SENATOR AANESTAD: Can we separate out E?
9
it very much. Anybody else?
9
CHAIRMAN STEINBERG: Sure. We'll separate
10
MR. BRAKENSIEK: Carl Brakensiek on behalf
10
out E. Is there a motion on B, C, D, F, and G?
11
of the California Association of Licensed
11
SENATOR CEDILLO: So moved.
12
Repossessors.
12
CHAIRMAN STEINBERG: So moved by Senator
13
You've heard many good things about the
13
Cedillo.
14
commissioner today, and they are all true. He not only
14
Please call the roll.
15
is good himself, but he has developed an attitude within
15
MS. BROWN: Senator Cedillo.
16
his staff so that it's just much better and easier to
16
SENATOR CEDILLO: Aye.
17
deal with the Patrol than in the past. So we're very
17
MS. BROWN: Cedillo aye.
18
supportive of his candidacy.
18
Dutton.
19
CHAIRMAN STEINBERG: Thank you very much.
19
SENATOR DUTTON: Aye.
20
Anybody else here in support?
20
MS. BROWN: Dutton aye.
21
Are there any --
21
Oropeza.
22
SENATOR OROPEZA: I'll make a motion.
22
SENATOR OROPEZA: Aye.
23
CHAIRMAN STEINBERG: Moved by Senator
23
MS. BROWN: Oropeza aye.
24
Oropeza, but first let's take any opposition.
24
Aanestad.
25
No opposition.
25
SENATOR AANESTAD: Aye.
32
34
2/12/2009 02:47:09 PM
Page 31 to 34 of 38
10 of 11 sheets
1
MS. BROWN: Aanestad aye.
1
-oOo—
2
Steinberg.
CHAIRMAN STEINBERG: Aye.
MS. BROWN: Steinberg aye.
CHAIRMAN STEINBERG: That passes five
2
I, INA C. LeBLANC, a Certified Shorthand
3
4
5
3
4
5
6
Reporter of the State of California, do hereby certify
that I am a disinterested person herein; that the
foregoing transcript of the Senate Rules Committee
hearing was reported verbatim in shorthand by me,
6
nothing.
7
INA C. LeBLANC, a Certified Shorthand Reporter of the
7
On E, Madelyn J. Glickfeld, member of the Water
8
State of California, and thereafter transcribed into
8
Quality Control Board, Los Angeles region, anything you
9
typewriting.
9
want to say, Senator Aanestad?
10
I further certify that I am not of counsel or
10
Moved by Senator Oropeza.
11
attorney for any of the parties to said hearing, nor in
11
12
13
Please call the roll.
MS. BROWN: Senator Cedillo.
SENATOR CEDILLO: Aye.
12
13
14
15
any way interested in the outcome of said hearing.
IN WITNESS WHEREOF, I have hereunto set my hand
this \2*l davof t^eb^UarU .2009.
14
MS. BROWN: Cedillo aye.
16
15
Dutton.
17
Q, r J l)A
16
17
SENATOR DUTTON: No.
MS. BROWN: Dutton no.
18
JUJ^C ijLll)\^ -
INA C. LeBLANC
18
Oropeza.
CSR No. 6713
19
SENATOR OROPEZA: Aye.
•19
20
21
22
MS. BROWN: Oropeza aye.
Aanestad.
SENATOR AANESTAD: No.
20
21
22
-o0o-
23
MS. BROWN: Aanestad no.
23
24
Steinberg.
24
25
CHAIRMAN STEINBERG: Aye.
25
35
37
1
MS. BROWN: Steinberg aye.
1 APPEHDIX
2
CHAIRMAN STEINBERG: That passes three to
2
3
two.
3
4
(Thereupon, the Senate Rules Committee hearing
4
5
adjourned at 2:18 p.m.)
5
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7
~oOo-
6
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2S
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36
II
11 of 11 sheets
Page 35 to 38 of 38
02/12/2009 02:47:09 M
/ I
SENATE RULES COMMITTEE QUESTIONS
1. What are your goals and objectives as CHP Commissioner, and what do you hope
to accomplish during your tenure? How should we measure your success?
"The challenges we face lay an opportunity at our proverbial doorstep to show our
integrity, value, and worth to the State of California. " This statement, one I shared with
the men and women of the CHP upon my appointment almost one year ago, is the
cornerstone of my vision as Commissioner. In recent years, the proud reputation of the
Department has been challenged and the public's trust questioned. It is the public trust
that has allowed the Department to become a proud organization. The reputation of the
CHP is something I desperately want to protect and build upon. Some may say it cannot
be done, but our proud history, our traditions, our people, and our values tell me "we
can!"
To effect necessary change within the organization I have looked inward. Although some
envisioned my appointment as a simple move from one desk to another, I understood the
gravity of the assignment and the absolute necessity to pilot the organization back to
being a premiere law enforcement agency. To do so, I have committed to lead, as well as
manage the organization; to set the example for others to follow; to be honest; to trust
those I work with to do what is right, and take appropriate corrective action when they do
not; to be positive; to mentor; to listen and be receptive to new ideas and constructive
criticism; to give credit where credit is due; to put the interests of others ahead of my
own; and to be consistent in my demeanor, actions, and decisions. In setting the standard
for others I have asked in the simplest of terms that we "do what is right, for the right
reasons, at all times. "
To specifically address past issues pertaining to procurement, whistle blowing activities,
ethical conduct, and workers' compensation, I strengthened management oversight, as
well as internal audits and controls. I appointed an Inspector General at the level of
Assistant Commissioner with the responsibility to audit and investigate critical functions
within the organization. The Inspector General reports directly to the Office of the
Commissioner to ensure maximum independence. The Inspector General has
responsibility to audit practices and procedures, as well as management operations and
success in achieving strategic goals.
Additionally, I appointed another new Assistant Commissioner with responsibility for
leadership development, training, and communications. This individual will ensure the
leaders of the organization have the training and knowledge necessary to be successful
and properly manage CHP operations. Utilizing information derived from audits
conducted by the Inspector General and external control agencies, management training
courses are adjusted to address identified areas of weakness and share areas of identified
success. Additionally, this individual has begun the process of ensuring the many
accomplishments of the CHP are shared with those we serve.
"J^ff
c
1 39
As the CHP looks inward, I appreciate the importance of looking outward to the success
and failures of other organizations so we may learn and grow from their experiences. In
doing so, I have directed the Department seek accreditation from the Commission on
Accreditation for Law Enforcement Agencies (CALEA). CALEA was created in 1979 as
a credentialing authority through the joint efforts of law enforcement's major executive
associations, such as the International Association of Chiefs of Police (IACP), National
Organization of Black Law Enforcement Executives, National Sheriffs' Association, and
the Police Executive Research Forum. In seeking accreditation, the policies, procedures,
and practices of the CHP will be evaluated against a recognized national law enforcement
model. I am confident the process will validate the majority of existing CHP policies and
practices, while changing others, and ultimately improving the overall operation of the
Department.
If you were to visit the CHP today, you would find a proud, yet changed organization. I
also know you would find an organization that has not hidden from criticism. The results
of every audit have resulted in contemplation and positive changes to policies,
procedures, and practices, where appropriate. More importantly, they have resulted in the
necessary changes in management performance and attitude to preclude reoccurrence,
whenever possible. Although the CHP strives for perfection, perfection is not always
attainable. What is attainable is the effort to try, to do our best, admit mistakes, correct
them, and move past them. This has and continues to occur within the organization.
We are an organization proudly based on tradition and we have made great strides and
enjoyed many successes throughout our 80-year history. We enjoy a reputation of
professional excellence that is often described as "second-to-none." Our service to the
public is based on selecting the best people, providing the best and most up-to-date
training, and instilling a common belief of professionalism, fairness, honesty, and
integrity. It is this reputation I am honored to represent as Commissioner and it is a
reputation I will do all within my power to preserve.
Lastly, it was asked how success would be measured. The most important measurement
is whether I have the respect of the Governor, Legislature, CHP employees, and public.
It is this respect I strive to earn and believe best reflects my performance.
The CHP is an agency worthy of your trust. I am honored to serve as Commissioner and
understand I must earn your trust. I am confident I will do so not based on words, but on
actions. In a document I provided to all CHP management articulating my goals and
expectations, I stated "A position of command does not define one 's leadership abilities -
it reveals them. " I am confident what will be revealed is my sincere desire to do what is
right, always.
40
INDUSTRIAL DISABILITY RETIREMENT
2. What actions, if any, have been taken to address the issue of higher ranking
officers going out on disability, also known as "chiefs disease?" To what extent do
you believe "chiefs disease" still exists at CHP?
I acknowledge the "chiefs disease" syndrome has been a core issue within our
Department for some time and we have worked diligently to fully address the situation.
Starting with the Department's transition to Commissioner Mike L. Brown in 2004, we
initially addressed this issue with a comprehensive review of our own workers'
compensation and disability retirement systems. Based on that review, a report was
prepared for the Governor's Office, wherein we identified a number of internal and
external actions which could be taken to assist us in better managing injury cases and
reducing associated costs. Additionally, former Commissioner Brown made the difficult
decision to refer the findings of specific cases to the Sacramento County District
Attorney's (DA) Office for investigation and prosecution of potential fraud. Although
the DA's investigation did not find any criminal misconduct, it did find violations of
departmental policy and procedure.
Prior to the DA's findings, we had already taken steps to implement all of our
recommended internal actions, revised our policies and procedures, and reinforced sound
case management practices by all of our commanders, managers, and supervisors. Our
goal in reinforcing these policies is to ensure only appropriate injury benefits are
provided to eligible employees and to achieve timely provision of benefits and resolution
of injury cases. The Department is committed to full disclosure of relevant information
to our adjusting agent, the State Compensation Insurance Fund (SCIF), so they may
properly determine liability and eligibility for benefits in each and every injury case filed
by our employees regardless of rank.
Although legislative reforms have had a positive impact on workers' compensation costs
for all employers, we have taken the following internal steps to enhance our abilities to
properly manage injury cases and reduce costs:
•
•
Development of training programs specifically designed for departmental managers at
all levels. These training programs concentrate on personal accountability and
responsibility for proper injury case management.
Distribution of monthly open injury-claim reports to assist management in properly
managing injury cases by providing a tool to access for regular follow-up and
ongoing case management.
Modification of policy to clearly define roles and responsibilities of all departmental
personnel, SCIF, and CalPERS. These policies include guidelines to ensure strict
compliance and enforcement of departmental responsibilities to fully and timely
complete and submit required injury documentation.
41
• Establishment of regular meetings between departmental personnel in our Office of
Risk Management (Disability and Retirement Unit), SCEF, the California Association
of Highway Patrolmen (CAHP), and our Office of Employee Relations. These
meetings are utilized to ensure we maintain on-going communications, attempt to
identify and resolve issues, and continue to improve the processes established
between the various stakeholders.
• Establishment of a legal counsel position primarily dedicated to departmental cases
related to workers' compensation, retirement, recruitment, and equal employment
opportunity. Additionally, legal counsel is consulted to ensure consistent application
of injury case settlement.
• Establishment of policy and procedures to ensure proper handling of claims which
appear to be fraudulent. A "tip-line" and an independent investigative unit have been
developed to specifically investigate cases of workers' compensation fraud.
Externally, we worked to introduce legislation to further reduce the possibility of fraud
and minimize costs associated with injury cases and disability retirements. Although the
proposed legislation was not enacted, the Department continues to explore both internal
and external methods to improve the workers' compensation process.
The fact is "chiefs disease" no longer exists within the CHP. The net effect of the many
efforts the Department has taken in the past few years was to create a cultural change
where anything other than proper handling of injury and disability retirement cases is
unacceptable and one in which "chiefs disease" does not, and cannot exist. This
conclusion is reflected in a significant reduction in new injury claims, overall workers*
compensation costs, and disability retirements for all employees, especially those in the
upper management ranks. The culture today almost prohibits a chief or commissioner
from seeking a disability retirement, even when one may be justified. It is imperative to
the executive leadership of the organization to set the example and not do anything real
or imagined that could reflect negatively on the leadership team and the CHP.
3. What has been the trend for workers ' compensation claims filed by CHP employees
in the past few years?
Let me start by saying the work we do is dangerous and the injuries and associated
disability retirements do and will always occur at a disproportionate rate to those of most
other employers. As I stated earlier, our numbers show a clear reduction in most injury-
related categories as indicated by the following data:
• Overall workers' compensation costs declined 1 1 percent from fiscal year (FY)
2003/04 to 2007/08 (from $67,804,243 to $60,381,188).
42
• Total workers' compensation costs as a percentage of payrolls declined from 9.97
percent in FY 2003/04 to 6.56 percent in FY 2007/08.
• Labor Code Section 4800.5 (continuation of benefits while on disability) costs
declined 46 percent from FY 2003/04 to FY 2007/08 ($9,277,666 to $5,988,853).
• Industrial Disability Leave costs declined 71 percent from FY 2003/04 to FY 2007/08
($1,174,394 to $346,761).
The reduction in these cost categories can be credited to aggressive efforts by the
Department to return all temporarily disabled employees to work, either limited and/or
full duty, as soon as medically appropriate.
• Total new reporting of injury and illness claims declined 33 percent from FY 2003/04
to FY 2007/08 (2,325 claims to 1,563 claims).
• Industrial Disability Retirements (EDR) for the ranks of Assistant Chief and Chief are
at zero over the past two years.
• Overall for all uniformed ranks, IDRs declined 48.5 percent from 2003 to 2007 (97
IDRs to 47 IDRs).
In regards to trends for CHP injury cases, we have seen our overall case inventory
increase from 6,564 cases in January 2006 to 6,820 in December 2008. Although the
total of new claim reports has decreased, we have seen increases in the number of older
accepted claims reopened. This situation has occurred because some employees are
reopening older claims too seek medical treatment and other benefits. Overall, the
statistical trends concerning new claims and total cost show excellent results.
The reductions experienced are the result of concerted efforts to revise our policies and
procedures and ensure proper training and education for the managers/supervisors who
have a direct impact on injury case management. Additionally, improved
communications between our Department and external agencies has brought about more
efficiency in resolving injury and disability retirement cases. Finally, our ongoing efforts
have produced a cultural change where employees with legitimate injuries can be
afforded all benefits prescribed by law and questionable injury filings will receive proper
scrutiny.
43
WHISTLE BLOWING AND RETALIATION
4. What changes, if any, has CHP made regarding its whistle blowing and retaliation
policies?
As Commissioner, I have embraced the challenge of organizational introspection and
improvement. The CHP has an established history of professionalism and the ability to
recognize missteps, apply lessons learned, and adapt as we progress toward the future.
Consequently, I have promoted training and professional development to reinforce ethical
practices throughout the Department. I recently implemented measures to enhance
recognition for assessing whistle blower and retaliation concerns raised internally and
externally. To that end, I directed the reorganization of the Department's leadership to
reflect ethical conduct and accountability. The following positions were created to
accomplish this:
The Assistant Commissioner Inspector General position was created to ensure
departmental adherence to policy and law with regard to fiscal management and ethical
conduct of all employees. This position was created at the Assistant Commissioner level
to provide the highest possible degree of independent review. The Assistant
Commissioner Inspector General oversees the following departmental programs:
• Office of Investigations — Internal employee accountability.
• Office of Risk Management — Civil liability.
• Office of Inspections — Internal auditing of departmental processes.
• Office of Equal Employment Opportunity — Education, discrimination, and
retaliation prevention.
• Information Security Officer — Security and confidentiality of departmental
electronic systems.
• Citizen Oversight Committee — An advisory body to the Commissioner responsible
for review of departmental policies, procedures, training, reporting, and controls to
determine consistency with the demands of public safety, as well as legal, moral, and
public expectations. Specific areas of concern include: use of force/enforcement
contact issues; citizens complaint investigations; equal employment opportunity
issues; management and supervisory practices; personnel practices, including
selection and hiring procedures; and public perception/image.
The position of Special Counsel to the Commissioner was created to provide specific
legal counsel to the Office of the Commissioner. The position also acts as liaison for
issues related to the Fair Political Practices Act and serves as the Department's Ethics
Officer. The Office of General Counsel is being expanded to address the varied legal
44
issues facing the Department, including workers' compensation, equal employment
opportunity, risk management, and internal disciplinary and labor relations matters. The
goal of these entities is to ensure the Department is always on solid legal footing when
addressing the variety of issues we face.
By restructuring the Executive Management team, I believe the Department is more
transparent, proactive, and accountable to our stakeholders, the Governor, Legislature,
and the public.
5. What efforts, if any, has CHP made to educate employees about laws regarding
whistle blowing and retaliation? Do managers receive any specialized training
regarding these issues?
Educating our employees and managers in the area of ensuring a clear understanding of
whistle blowing and retaliation protections is critical to the success of the Department. I
created the position of Assistant Commissioner, Leadership Development and
Communications in order to enhance leadership development through increased training
and comprehensive coaching/mentoring. This position was created at the Assistant
Commissioner level to provide the highest possible degree of oversight and decision
making ability.
To ensure all employees are aware of their rights, the Department provides an annual
notification to all employees, via electronic mail, of the provisions and requirements of
the Whistleblower Protection Act, including the right to remain annonymous and remain
free from retaliation. Additionally, the Department uses our Management Information
System, flyers, posters, briefing items, and most importantly, word-of-mouth to advertise
whistleblower laws.
To ensure our supervisors, managers, and commanders are properly trained, the
Department has recently incorporated a segment on whistle blower protection and
retaliation laws into training for our commanders, managers, and supervisors. The
Department is also instituting a new series of courses in order to develop our employees
throughout their career. Components of the training will ensure our leaders have been
provided the appropriate training in the expected job requirements and competencies.
45
PROCUREMENT PROCESS
6. What measures has the CHP taken to ensure compliance with state procurement
procedures, particularly for the sole-brand procurement process?
When asked what measures have been implemented to address procurement concerns, I
answer, "What have we not done and what more can we do?" As previously stated,
neither I, nor the CHP management team, failed to grasp the gravity of the negative
media attention and resulting audit findings over the past four years. Utilizing the
January 2008 State Audit Report, as well as other internal and external reviews as a
guide, the Department sought to improve its procurement practices to a level beyond that
of other agencies. Some of the changes made to date include the following:
• In 2008, an automated requisition preparation system (ReDS) was developed and
implemented. ReDS edits the requisition against procurement rules to assist
departmental personnel in the proper completion of the requisition, including
automation of the approval process and transmission of requisitions to the Purchasing
Services Unit (PSU).
•
•
The CHP was selected as one of only four agencies to participate in the new
Department of General Services (DGS) e-Procurement system. The new system will
expedite the processing of requisitions, ensure all procurement rules are followed, and
will create an automatic history file for tracking purposes.
To identify goods and suppliers, the CHP conducts market surveys and, if necessary,
uses a Request for Information/Interest which is advertised in the California State
Contracts Register.
In evaluating noncompetitive bid and sole-brand procurements when similar goods
exist, an evaluation is conducted to answer why these similar goods are not suitable.
When no other brand is identified, the CHP uses the information gathered from
similar goods to confirm the cost is fair and reasonable.
The CHP's delegated purchasing authority from DGS requires noncompetitive bid
purchases to have adequate file documentation and approval. The CHP incorporated
the requirement to also include all sole-brand purchases. It is interesting to note,
DGS just recently added the documentation of sole-brand purchases into its delegated
purchasing authority. Since the CHP already implemented this requirement, the
transition to the new requirement was seamless.
The noncompetitive bid and sole-brand procurements are fully documented in the
procurement file, along with a justification from the Office of Primary Interest which
is reviewed and approved by PSU. The procurement justification, along with the
PSU evaluation, is then evaluated by the Administrative Services Division Chief
with the final approval given by the Assistant Commissioner, Staff.
46
The CHP began tracking sole-brand purchases in its database and added the sole-
brand purchase documentation to its checklist to ensure complete procurement files.
Noncompetitive bid purchases have been tracked and reported for the past several
years, as required by the DGS delegated purchase authority. The reports consistently
show little to no activity.
The Department has also instituted mandatory procurement training for all approvers
of requisitions. Only those individuals who have completed the training are allowed
to approve requisitions. In addition, the CHP has added procurement training for
those who prepare the requisitions. This ensures the proper procurement process is
followed from inception to completion.
Two checklists, one each for commodities and services, have been developed to assist
the buyer/analyst and manager in ensuring all procurement files are complete with
proper documentation and approvals.
Conflict of Interest and Confidentiality Statements have been developed for both
CHP employees and vendors. ReDS captures the employee affirmation statements
electronically. All other affirmation statements are kept in the appropriate
procurement file and are included on the checklists.
Quarterly self-inspections are performed by Business Services Section management
and look at the completed procurement files in order to validate the checklists and
files are complete. Remedial training is provided as necessary.
• As a function of the recently created Inspector General, an auditor is being devoted to
the on-going review of purchasing, fiscal accountability, and other critical
administrative functions.
• Due to the complex nature of the procurement process, the Department's legal affairs
function was reorganized and expanded to ensure the availability of legal counsel to
review significant procurements, coordinate with Department of General Services
Legal, and address staff questions pertaining to procurement law and policy.
• To build a stronger foundation and improve communication, the CHP and DGS
created a joint task force to explore best practices. This task force meets monthly to
discuss modifications in process of benefit to both departments, identify major
procurements, and establish time-lines and responsibilities to promote a clear
understanding as procurements proceed.
As illustrated, the CHP has endeavored to ensure practices, policies, and procedures are
in place to secure the fiscal resources provided to the Department by the Legislature,
Governor, and the public. I understand, as does my management staff, that one of our
primary responsibilities is to ensure the public dollar is utilized efficiently and
•
47
appropriately. I am confident we are on our way to that objective and our goal of
managing resources well within the guidelines of law and state administrative policy.
7. What changes, if any, has CHP implemented for major purchases, such as
vehicles?
The CHP manages each purchase as a major purchase. As such, many of the above
modifications have enhanced the Department's ability to conduct proper procurements.
The most notable changes include the following:
• Because of the unique needs of law enforcement procurements, the CHP and DGS
have formed a best practices task force. The CHP and DGS meet monthly to discuss
pending issues, coordinate upcoming procurements, and discuss best practices
involved in purchases. This is especially beneficial with major purchases such as
vehicles, motorcycles, and computer hardware.
• Additionally, the CHP includes all internal and external stakeholders at the beginning
of all major purchases to ensure enough time is allowed and comprehensive
evaluations are completed for all its purchases. This includes DGS completing
preliminary specification reviews to assist us in resolving issues as early in the
procurement process as possible.
• CHP personnel have been trained on policy and law pertaining to procurements to
ensure an understanding of the requirement for competitive bidding, fair and impartial
specification development, use of sole-brand and non-competitive procurements, and
conflict of interest law. Given the decentralized nature of CHP procurements, this
training, coupled with the automation of purchase orders, automatic policy review,
and self-audits has significantly reduced deviations from law and policy.
The Department has gone to great lengths to protect the public dollar. From the
automation of budget allocations to subordinate commands, to automated procurement
audits, to the creation of simple checklists, every measure has been taken to operate
efficiently and professionally. I am confident the CHP procurement process has and
continues to improve significantly and concerns previously noted with the procurement
of firearms, and other items, have been addressed.
48 &TIH 10
M^J^lklPil
SUICIDES
8. What are the results of the Bay Area pilot program ? Are there plans to expand the
program statewide?
I am pleased to say the Bay Area pilot program, which was developed and implemented
under my direction as Deputy Commissioner, to address an alarming increase in suicides
among CHP personnel, became the model for a statewide program that has resulted in
suicides returning to zero.
Between 2003 and 2007, the CHP experienced the loss of 14 employees due to suicide.
Two of these tragic incidents occurred within our Golden Gate Division. As Deputy
Commissioner I responded to these tragic incidents and met with the grieving families
and co-workers who struggled for an explanation. In discussing the suicide trend with
CHP peer support personnel, we recognized the need to assist our employees in
requesting help. As a result, the CHP developed and piloted within Golden Gate
Division, a program entitled "Not One More." The CHP had previously created an
employee assistance team to assist individuals in time of crisis or need. Although the
team was available to help employees, it was apparent our officers were not reaching out
for help during their own personal crisis. Peace officers take pride in bringing stability to
a crisis, resolving problems in the midst of turmoil, and assisting others, and not asking
for assistance themselves or even admitting they need assistance.
The program piloted in Golden Gate Division was created to educate employees on the
indicators and effects of depression, the impact of suicide on others, and most
importantly, how to offer and ask for assistance. The program was developed by CHP
personnel in consultation with a trained mental health specialist. Based on the success of
the pilot, the program was deployed throughout the state, training all employees, both
sworn and nonsworn, in suicide awareness, prevention, intervention, and postvention.
This innovative approach had never been accomplished before. By having qualified CHP
personnel consisting of dispatchers, officers, sergeants, lieutenants, captains, and chiefs,
teach their own, there was tremendous acceptance by all employees.
Since completing the statewide training in mid-2007, the CHP has not suffered another
suicide. Those receiving the "Not One More" training were asked to complete a pre-
training and post-training questionnaire consisting of five questions. Our employees
were asked to rank their confidence levels in recognizing the warning signs of suicide;
their ability to identify risk factors associated with suicide; symptoms of depression; their
level of confidence in having the skills and tools necessary to intervene successfully with
a suicidal co-worker; and to know what to do to assist suicide survivors and the
Department in the aftermath of a suicide. Overwhelmingly, our employees said the
training was beneficial in arming them with valuable information to respond
appropriately and confidently to the issue of suicide.
11 49
Since implementation, the CHP has had successes where CHP employees confronted
with a potentially suicidal employee have helped the employee get the help they required.
One incident in mid-2008 involved an individual who was despondent over a personal
issue. CHP personnel identified potential suicidal indicators and put into motion the
support system now in place to assist employees in dealing with such issues. Today, the
employee remains a proud member of the CHP and an example of the success of a
program designed to assist those who save lives, when they themselves need saving.
A cultural shift was necessary to ensure the success of this program. This cultural shift
began at the top echelons. As a Department, we have worked diligently to remove the
stigma associated with asking for assistance. It takes a tremendous amount of courage to
ask for assistance and we encourage our employees to do so by creating an environment
that is truly dedicated to helping them return to a state of good mental health. The
Department has reinforced that asking for help does not mean the end of a career. The
majority of employees obtain the assistance they need and return to full-duty.
The "Not One More" program has been nationally recognized as meaningful, successful,
and groundbreaking. In fact, the International Critical Incident Stress Foundation
(ICISF) has invited the CHP to present an eight-hour workshop at the February 2009 1 0th
World Congress on Stress, Trauma, and Coping. In addition, the Department's employee
assistance team members received the Governor's Employee Safety Award in 2007 for
their accomplishments in conducting the successful "Not One More" training. Recently,
the IACP, the Bureau of Justice Assistance, and the United States Department of Justice
partnered in producing a computer training disc, which encompasses successful suicide
awareness training programs of departments nationwide, to include the CHP. Numerous
agencies have requested our training material and protocol including New York State
Police, Los Angeles Police Department, Los Angeles County Sheriffs Department, and
the Oakland Police Department to name a few. We are glad to assist our brothers and
sisters in law enforcement in not having to experience one more loss due to suicide.
9. What other measures has the CHP taken, or does it plan to take, to address suicide
prevention within its ranks?
The attention to this important issue did not cease with the end of the statewide training
program, rather it was a beginning. The training program continues as part of the
curriculum for cadets, new supervisors, and managers. In a partnership with Managed
Health Network, a pocket-size guide entitled, "California Highway Patrol Suicide
Prevention" was developed and provided to all employees, and continues to be provided
to all new employees. The guide contains the same information provided during the "Not
One More" training and contact numbers to seek assistance. Employees have found this
to be a tool not only for themselves, but also for their family members, as well.
In cooperation with the CAHP, suicide prevention information has been, and continues to
be, published in their monthly publication, as well as our own Department publication.
50 WT«P' 12
In utilizing these publications, we ensure the information remains at the forefront and is
available to both the employee and their families.
While it is difficult to prove the prevention of a suicide, the results of the training are
reflected in the CHP NOT having ONE MORE suicide. For that, the entire CHP family
is grateful.
13
51
RADIO SYSTEM MODERNIZA TION
10. What progress has been made on the radio modernization project?
The radio modernization project, or the California Highway Patrol Enhanced Radio
System (CHPERS) as it is known within the organization, began under my direction
while assigned as Deputy Commissioner. The program followed years of the state
working to develop a single radio system, a concept that ultimately proved to be overly
complex and cost-prohibitive. The CHP was left with an aging and obsolete radio
infrastructure. More importantly, the system was in jeopardy of failure. The CHPERS
project was born of a need to maintain radio operability, with interoperability as a
secondary objective. I am pleased to say the project, which began in FY 2006/07, is on
schedule and within the approved budget, and will provide both the promised operability
and interoperability.
The primary goal of the CHPERS Project is to apply modern technologies and
methodologies to enhance the CHP's radio communications system while
leveraging the existing infrastructure. Simply stated, rather than purchase a new
radio system, the CHP elected to build upon the radio system already owned by the
state. The CHP is simply replacing obsolete equipment with new current
equipment. However, because of advances in technologies, this new equipment is a
far more advanced and capable communications system; one that allows for stable
radio communications among CHP officers, while providing interoperability with
other first responders.
The CHP has realized significant cost savings on equipment purchases due to the bids
being awarded at a lower than anticipated individual cost. These cost savings are being
returned to the Motor Vehicle Account and are but one example of the CHP's revised
procurement practices and working relationship with DGS.
The installation of equipment will begin this FY at local CHP offices and some remote
radio sites. Over the next two years, the officers on patrol will begin to realize the benefit
of the CHPERS Project. However, it is important to note the CHPERS Project has
already brought significant benefit to the CHP and the state.
In 2007, the Department deployed nine rapid response vehicles. These vehicles are
equipped with state-of-the-art communications equipment and are capable of
interoperability at the local, state, and federal levels allowing agencies to communicate
using disparate radio systems as though they were using the same radio. The vehicles
have been utilized to enhance command and control during the 2008 California wildfires,
the collapse of the maze intersection in the Bay Area, and numerous local incidents. The
vehicles are a reflection of the capabilities that will be offered as the CHPERS Project
concludes.
52 VsflK 14
11. To what extent does the CHP's new radio system achieve "interoperability?" If
not, why not, and how would lack of communication with other public safety
agencies impede emergency response in a major disaster.
To offer a direct response, the CHPERS Project will deliver interoperability with local,
state, and federal agencies. The interoperability will exist at the officer, dispatch, and
emergency response vehicle levels.
Although I admit I may not understand all of the technical issues surrounding
interoperability, as a peace officer and having served numerous times as an incident
commander, I know the ability to communicate with other first responder agencies during
a disaster is vital to effective coordination and recovery. For this reason, we have
ensured the CHPERS Project considered and implemented where feasible radio
interoperability.
The CHPERS Project provides the patrol officer with interoperable communications at
the officer-to-officer level; permitting him/her to talk directly to municipal police, deputy
sheriffs, and other first responders during small scale interagency incidents. For the first
time, a CHP officer will be able to communicate directly via radio with the deputy sheriff
a block away. Communication gateways installed in the CHP's dispatch centers will
provide interoperable communications at the incident command level. The gateways
facilitate large scale interoperability, among multiple agencies, during significant events.
And finally, as mentioned previously, the Department has deployed new mobile
communication vehicles which facilitate interoperability at the incident command level.
In regards to how communications impact emergency response, the fact is agencies have
learned to work without interoperable communications for years out of necessity. With
that said, any emergency responder will tell you we work more effectively when we
communicate and coordinate. Radio interoperability allows first responders to begin the
coordination process before arriving on-scene. Once on-scene, it affords incident
commanders of different disciplines the opportunity to effectively plan and deploy
resources without having to be in the same location. It is not necessarily that the lack of
interoperability impedes effective incident response; incident response is simply more
efficient and effective with it.
I have been impressed with the level of interoperability obtained by the CHPERS Project
to date. The end result will be a level of communication not envisioned by CHP only a
few years ago.
15 53
RECRUITMENT
12. How many line officers are expected to retire in the next few years?
As Commissioner, I have the privilege to sign the retirement certificates for the men and
women of the CHP. In the past, the majority of employees retired after 30-years of state
service. Due to an employee's ability to purchase state time, I have noted the retirement
years of service have on average declined to the 26-year point. Fortunately, the Governor
and Legislature have supported the Department in acquiring additional uniformed
positions which has, and will continue to assist the Department in maintaining adequate
staffing levels to meet the safety needs of the motoring public. The specific retirement
facts are as follows:
• The monthly average uniformed attrition rate is 25. This rate is based upon a three-
year monthly average (See chart below, Total Uniformed Attrition All Ranks). Using
the monthly attrition rate, the CHP anticipates an average of 300
retirements/separations per year for the next few years.
• The CHP began a concentrated recruitment effort beginning in FY 2006/07. This
resulted in an increased class size from 90 in 2006 to 240 in 2008. The estimated
graduating class sizes are now approximately 168 (assuming a 30 percent cadet
attrition rate) which has had a significant effect on the vacancy rate.
• On July 1, 2008, the CHP had a total of 6,493 authorized officer positions, of which
there were 505 tillable officer vacancies. As of November 30, 2008, the tillable
officer vacancies was 381. With continued class sizes of 240, the CHP projects a
vacancy rate of 195 by June 30, 2009. In FY 2009/10, an additional 240 positions
were requested. Including the additional 240 positions and normal attrition, the
projected vacancy rate in June 30, 2010, is expected to be 63.
54
16
Total CHP Uniformed Attrition
All Ranks
Year
Total Uniformed
Attrition
Monthly Average
1989/1990
249
21
1990/1991
216
18
1991/1992
245
20
1992/1993
249
21
1993/1994
245
20
1994/1995
272
23
1995/1996
266
22
1996/1997
291
24
1997/1998
271
23
1998/1999
179
15
1999/2000
272
23
2000/2001
357
30
2001/2002
345
29
2002/2003
298
25
2003/2004
197
16
2004/2005
314
26
2005/2006
272
23
2006/2007
348
29
2007/2008
269
22
3 Year Monthly Average
25 |
13. What is the department doing to recruit and retain new officers?
Enhanced recruitment follows from active community outreach efforts. This has been
my philosophy throughout my career. As part of the reorganization, I brought together
community outreach and recruitment under the Assistant Commissioner, Leadership
Development and Communications position to emphasize its importance. I recognize the
future of our Department rests on the success of our recruitment efforts. Those we recruit
today will be the future leaders of our organization tomorrow. The CHP is committed to
carrying out a broad-based recruitment effort supporting the concept of "Excellence and
Diversity" with a goal of a qualified workforce reflective of the communities the
Department serves.
As you know, I made a commitment to the Governor and the Legislature we would fill
our vacant positions and expand the number of officers in order to better serve the public.
To do so I have stressed the importance of recruitment at all levels and have the
commitment of each commander to ensure employees are actively involved in recruiting
applicants. As a result of this effort we have been able to achieve and maintain our goal
of beginning each cadet class with 240 applicants. To facilitate this unprecedented
recruitment effort the Department has done the following to ensure success:
• Increased the number of recruitment personnel in each of the Department's field
Divisions. This increase has allowed the Department to become more involved in
community events, career fairs, and presentations at colleges and military
installations.
17
55
•
•
Due to the fact law enforcement operations are similar to military operations, we have
significantly increased our working relationship with the military to recruit
individuals who have elected to leave military service.
Streamlined the applicant testing process within the guidelines of law to reduce the
amount of time taken to move an individual from submittal of an application to
assignment to an Academy class. This has reduced applicant frustration, as well as
the number of applicants hired by other law enforcement agencies before CHP could
complete the hiring process. This effort included adding additional background
investigators in each field Division, working with the State Personnel Board to
increase the number of medical staff involved in the review of CHP cases, and a
change from quarterly applicant testing to monthly.
Improved the Department's Internet presence, both on the CHP Internet home page,
as well as creation of a contemporary, easily remembered, website specific to CHP
hiring known as "CHPCareers.com." In a survey conducted by CHP it was
determined a significant number of cadet applicants sought information about the
CHP from the Internet. By enhancing our presence, as well as developing and
deploying an on-line application, we have realized an increase from an annual
average of 18,167 applications per year to 52,398 applications received in the first
eleven months of 2008.
During 2008, the Department completed development of a new recruitment and
branding campaign. This campaign, entitled "Expectations," was based on a
tremendous amount of research. This campaign is designed to have several focused
messages in lieu of one comprehensive message in an effort to reach out to women,
ethnic communities, transitioning military personnel, and the traditional law
enforcement recruit.
The Academy has been modified to appropriately train the increased cadet class sizes,
while continuing to be the primary training center for all other CHP functions. In
addition to increased staffing, additional classrooms were added and existing
classrooms modified to appropriately seat the large cadet classes. These efforts have
preserved the quality of CHP training, which has been recognized by the Commission
on Peace Officer Standards as among the finest in the state.
The CHP Academy staff has incorporated progressive steps to improve cadet
retention and has implemented the following new programs: expanded mentorship
through peers and staff, purposeful remediation with the instructor, enhanced learning
through adult learning principles, family orientation and website postings, and coping
skills for stress and emotional survival. With these enhancements, and record class
sizes, the Academy has seen a reduction in their attrition rate.
56
18
• The CHP works in many arenas, neighborhoods, schools, and community-sponsored
events to attract qualified cadet applications. With the support of the Governor and
the Legislature, I am confident the CHP can continue to aggressively hire, train, and
retain new officers. Given the continuing growth of California in terms of
population, licensed drivers, and registered vehicles, the support of the Legislature at
this time in terms of the growth of the CHP, will ensure the preservation of public
safety in the future.
19
57
58
California Legislature
MEMBERS
SAM AANESTAD
VICE-CHAIR
GILBERT CEDILLO
ROBERT DUTTON
JENNY OROPEZA
GREGORY SCHMIDT
SECRETARY OF THE SENATE
NETTIE SABELHAUS
APPOINTMENTS DIRECTOR
Senate Rules Committee
DARRELL STEINBERG
CHAIRMAN
January 14, 2009
Jon A. Edney
Dear Mr. Edney:
The Senate Rules Committee will conduct a confirmation hearing on your appointment
as a member of the Colorado River Basin Regional Water Quality Control Board on
February 1 1 , 2009. You are not required to appear, but we request that you respond in
writing to the following questions. Please provide your responses by February 2, 2009.
We would also like to receive an updated Form 700, Statement of Economic Interest, by
February 2nd.
Because of situations that occurred with board appointees in the past, we ask that you
provide these responses in your own words, not those of staff.
Statement of Goals
1 . What do you hope to accomplish during your tenure as a member of the board?
What goals do you have for the board, and how will you accomplish them? How will
you measure your success?
2. What do you believe are the most senous issues facing your board?
3. How does your board help the public understand the state of water quality in your
region? Do you believe that the information on your website is adequate? Where
should the public go for information on water quality issues such as the Salton Sea.
the New River, sewage spills, or the overall quality of water in' rivers and streams in
your region?
STATE CAPITOL • ROOM 420 • SACRAMENTO, CALIFORNIA 95814-4900 • (916)651-4151 • FAX (916) 445-0596 -
59
Jon A. Edney
January 14, 2009
Page 2
State and Regional Board Roles
The issues addressed by regional water boards are often scientifically complex.
Preparation for hearings can be time-consuming for board members, particularly
considering these are part-time positions.
4. Who is available to assist you at the state board and your regional board to better
understand some of the complex issues before you? Do you have any suggestions
on how the state water board's staff might better assist you?
5. What training have you received to help you better understand when you might
have a conflict of interest regarding an issue on your board's agenda? How do you
know when to withdraw yourself from voting on an issue? Have you ever done so
since being appointed to this board?
The Porter-Cologne Water Quality Control Act generally establishes the relationship
between the state and regional boards. Regional boards usually set water quality goals
in their basin plans, develop total maximum daily loads (TMDLs), and enforce permit
and discharge requirements as well as state and federal water quality laws. However,
regional board budgets are not reviewed individually by the Governor or the Legislature,
and most regional board staffing decisions are made at the regional level, not at the
state level.
The state and regional board structure has been criticized by both industry and
environmental groups for being cumbersome and lacking accountability, efficiency, and
transparency. Both sides note that major policy issues often are decided through the
state board appeals process instead of through a consistent statewide policy that is
proactively established by the state board and implemented by the regional boards.
6. What is your view of the relationship between the state board and your regional
board? Could coordination and accountability be improved? If so, how?
California State Budget Crisis
California's dire fiscal situation has affected all parts of state government.
7. How do you, as a board member, stay informed of the fiscal resources available to
your board? How does your board prioritize activities if not all can be undertaken?
What are your priorities?
60
Jon A. Edney
January 14, 2009
Page 3
Cleaning Up Polluted Waters
Governor Schwarzenegger has stated in his Environmental Action Plan that he will fully
implement existing water quality programs, such as municipal storm water permit
programs and TMDL programs, which are required under the Federal Clean Water Act
to improve water quality by limiting the amount of pollutants allowed into water bodies.
Currently, regional water boards lag far behind their adopted schedules for cleaning
polluted or impaired waters, and existing monitoring programs make it difficult to identify
other waters that may be polluted.
8. Please describe the status of your board's TMDL process. Does your board have
adequate resources to develop and implement the required TMDLs?
9. How will the board monitor and enforce the TMDLs it has or will adopt?
Enforcement of Water Quality Laws
Several years ago, the office of the Secretary of Cal/EPA reported to the Legislature on
environmental enforcement and suggested that the state and regional water boards
were among the worst agencies in enforcing the law. The report stated that the boards
were very slow to enforce clean water laws, almost never sought criminal penalties for
serious violations, and generally did not aggressively pursue violators.
10. What enforcement options do you believe provide the most effective tools for
violations of board orders?
1 1. What staff is available to assist you in enforcing water quality laws? Is the number
of staff adequate for enforcement purposes? If you must prioritize enforcement
efforts, what are the priorities and how are they determined?
Septic Rule
Chapter 781, Statutes of 2000 (AB 885, Jackson), requires the state board to develop,
adopt and implement statewide regulations for permitting and operation of on-site
wastewater treatment systems (OWTS), commonly referred to as the "Septic Rule". The
board recently proposed draft regulations which are currently available for public
comment until February 9, 2009.
12. Has the state board articulated a role for the regional boards in implementing this
rule?
61
Jon A. Edney
January 14, 2009
Page 4
13. How does the board intend to monitor, enforce and improve septic systems that
contribute to surface and groundwater pollution?
New River Pollution
The New River flows north from Mexicali, Mexico, into the United States just west of
Calexico. The river has been called the most polluted river in the United States, with raw
sewage and industrial waste being discharged into the Mexican portion of the river.
In 1998 the regional water board said that the beneficial uses of the New River were
impaired by bacteria, volatile organic compounds, nutrients, silt, and pesticides. Two
projects in Mexico were developed — Mexicaii I and Mexicali II. Mexicali i, which added
and upgraded sewage collectors, was completed in 2004. Mexicali II added a 20 million
gallon-per-day wastewater treatment plant which is now online.
14. What progress has been made and what types of water quality impairments still
exist? What needs to be done to address the remaining water quality impairments
in the New River?
Salton Sea
The Salton Sea is California's largest inland water body and home to more species of
birds than any other place in California. Over 390 species of birds have been identified
at the Sonny Bono Salton Sea National Wildlife Refuge. The enrichment of nutrients in
the Salton Sea, known as eutrophication, has sufficiently impacted its uses, including
recreation, fishing, and wildlife resources. Some of the specific effects include high algal
growth, high fish productivity, low clarity, frequent very low dissolved oxygen
concentrations, massive fish kills, and noxious odors. External 'oading of nutrients,
particularly phosphorus, is responsible for the eutrophication of the Salton Sea.
Approximately 75 percent of the freshwater inflow to the sea is agricultural drainwater
from Imperial Valley, which is increasing the sea's salinity.
The Legislature approved the preferred alternative for the restoration of the Salton Sea
and provided for $47 million in funding through Senator Ducheny's SB 187, adopted in
the last Legislative session.
15. How does the board monitor Salton Sea water quality issues?
16. How does the board plan to deal with restoration of the Salton Sea?
62
Jon A. Edney
January 14, 2009
Page 5
Please send your written answers to these questions to Nettie Sabelhaus, Senate Rules
Committee Appointments Director, Room 420, State Capitol, Sacramento, CA 95814.
Thank you for your help.
Sincerely,
JW
DARRELL STEINBERG
DS:KW
cc: Water Quality Control Board, Colorado River Basin Region
63
64
January 25, 2009
Honorable Darrell Steinberg
Chairman, Senate Rules Committee
State Capitol, Room 420
Sacramento, CA 95814-4900
Mr. Chairman and Members of the Committee:
Thank you for allowing me the opportunity to respond to the extensive list of questions
concerning my confirmation hearing. I will do my best to answer the questions below.
1 ) I look at my role on the Board as one that can hopefully provide a better
understanding for the vast community of which I serve. The area in which the
Board covers is large and diverse. As the only current member who resides in the
Imperial Valley, it is important that I create a better awareness for those involved
with local government as well as the farming community. In my relatively short
tenure, I have found that many are unfamiliar with the role, responsibilities, and
issues that are faced by a Regional Board. Increased awareness and understanding
is my highest priority.
2) There are many serious issues facing the Board, but it most significantly can view
lack of understanding by the community it serves as number one. Many appearing
in front of the Board, are lacking fundamental knowledge of the regulations and
enforcement requirements. They also look as the Board as another outside agency
from the State coming in to tell them what to do.
3) I believe that the website that is in place is quite adequate in providing
information on the wide range of issues under the purview of the Board. It is easy
to navigate and the wealth of information is excellent. We can certainly do more
to increase public knowledge and awareness. One of the ways our Board is doing
this is by agreeing to spread some of our meetings throughout the Region.
4) The staff of our Regional Board is very helpful and always available to members
for assistance with their questions and concerns. There are also a variety of
workshops and reading material that are used to enhance our knowledge. One
way that could be considered to assist Board Members and the community would
be to have Staff available throughout the jurisdiction in which the Regional Board
serves. As stated earlier, our area is quite extensive and yet all Staff is located in
one central location. In many organizations in which I serve, we have found that
more is accomplished when there are more direct relationships established.
Senate Rules Committee
JAN 3 0 2009
65
5) The conflict of interest training was received prior to my first meeting. The
separate roles by the Board are important in their distinctions. As an elected
official for the past 1 0 years, I have always preferred to error on the side of
caution when there is even the appearance of a conflict. I have in fact withdrawn
from a couple of issues in my tenure. One, when the item concerned the city in
which I serve as a council member and the other concerning a school in which my
daughter is employed.
6) There can be no doubt that the relationship between the Regional Boards and the
State Board can be improved. Most importantly, like most aspects of State
Government, the bureaucracy is too large and not timely in either its actions or
deliberations. I believe increased clarification of the roles and duties are essential.
Certainly a complete review of the roles and relationships can serve to better
implement strategies and improve efficiency.
7) No one can serve a role in California Government and not be aware and
concerned with the fiscal problems facing the State. When it comes to priorities,
the protection and safety of the public we serve must always be job number one.
This must always drive the decisions the Board makes but is critical when fiscal
difficulties are so prevalent.
8) Our Board is currently updating its list and is scheduled to make
recommendations to the State Board during its meeting this month. We have had
an extensive public comment period that closed on January 9 of this year. I can't
say that adequate resources are available or that many of the tools are in place to
complete the necessary improvements. A far more effective outreach and
collaboration between State, Federal, and International agencies throughout this
region must be implemented for us to be successful. As always, the lack of
financial resources will severely impact the results.
9) Region 7 has numerous TMDL plans for implementation throughout its region
including the New River, Alamo River, and Imperial Valley Drains. The
enforcement components require regular testing and strict adherence from local
agencies and users. Increased awareness and streamlined requirements will
increase cooperation by effected entities.
66
1 0) This is best determined by who is in violation. A private individual or entity is
best resolved through fine and or penalty. This deterrent is likely to present the
most effective way to stop the violation and make improvements. For a
governmental agency, I would suggest working more collabarately to find
solutions to the problem. Public agencies being fined and or penalized serves only
to take funding away from improvements in their systems and ultimately harms
those we are trying to protect.
1 1) It is quite impossible to ever say that this or any of the Regional Water Boards
have enough staff to adequately enforce all regulations. Through the best efforts
of staff, they are doing a yeomen's job. Priority is always established in regard to
eminent safety to the public. This often times means delaying much needed
projects and enforcement.
12) I am unclear of the role and responsibilities of the Regional Boards. According
to the bills language, the Regional Boards will have the duty to monitor and
enforce the new regulations. Unfortunately, no additional staff is allocated at this
time and it is not clear as to what enforcement capabilities the Regional Board
will have over local agencies. While the concept is noble, we will need additional
clarification on implementation. Additionally I have considerable concern in
regard to the economic impact of this bill. The estimated costs for improving or
replacing existing systems are extensive. Incomplete analysis is provided as to
where property owners with OWTS systems are going to come up with the
necessary funds.
13) The easiest part of the enforcement will come on regulating new systems that are
planned or developed. We will need to work closely with the local officials
concerning the new regulations in a timely process that begins soon as to provide
information and details prior to the 2010 effective date. Existing systems to be
monitored present more of a challenge. Once again, no additional staff is
identified for the Regional Boards. In addition, it is unlikely that local
jurisdictions have staff or funding available to assist with monitoring or
enforcement. We often have great ideas in government on how best to fix things;
we just never seem to have the funding in order to implement the desired results.
14) The original joint plan by the United States and Mexico was a beginning step to
assisting the enormous challenge of cleaning up the new river. There has been
some improvement and yet it is still likely the most polluted river in the country.
There is still raw sewage being dumped into the river from Mexico. The
opportunity to increase effectiveness of the clean up has never been greater. The
new Governor of Baja is a water and sewer professional by trade. He has both the
desire and comprehensive technical knowledge for us to put forth the necessary
next steps to solve this problem that has been going on for more that fifty years.
67
15) Certainly there is no more significant issue facing Region 7, then the clean up of
the Salton Sea. The Board through its staff and its partners ( IID,
Farmers/Growers, USEPA and IBWC) continue to monitor progress concerning
the Sea. The success of this effort is incumbent upon total collaboration within
these entities.
16) The funding received through SB 187 is a logical first step to the Sea and its
restoration. Unfortunately, providing $47 million for a project that is estimated to
cost in the billions is only putting a band-aid on the problem. We must prioritize
issues within the Region and fund the appropriate amounts in order to facilitate
the improvements that are needed. We must continue efforts to have increased
funding from the Federal Government. Significant issues of the Sea are caused by
the situation in Mexico. It high time the Federal Government step up to its
responsibilities.
I have answered with some brevity as to the questions presented and have used my own
words and knowledge as requested. As a new member to the Region 7 Board, I have
much to learn. I appreciate staff of the Board working with me on an ongoing basis to
enhance my awareness and knowledge. I am available at your convenience for any
additional questions or comments.
68
California Legislature
MEMBERS
SAM AANESTAD
VICE-CHAIR
GILBERT CEDILLO
ROBERT DUTTON ^tstfgSJ8
GREGORY SCHMIDT
SECRETARY OF THE SENATE
NETTTE SABELHAUS
APPOINTMENTS DIRECTOR
JENNY OROPEZA
Senate Rules Committee
DARRELL STEINBERG
CHAIRMAN
January 14, 2009
Donald M. Jardine
Dear Mr. Jardine:
The Senate Rules Committee will conduct a confirmation hearing on your appointment
as a member of Lahontan Regional Water Quality Control Board on February 1 1 , 2009.
You are not required to appear, but we request that you respond in writing to the
following questions. Please provide your responses by February 2, 2009.
We would also like to receive an updated Form 700, Statement of Economic Interest, by
February 2nd
Because of situations that occurred with board appointees in the past, we ask that you
provide these responses in your own words, not those of staff.
Statement of Goals
1. What do you hope to accomplish during your tenure as a member of the board?
What goals do you have for the board, and how will you accomplish them? How will
you measure your success?
2. What do you believe are the most serious issues facing your board?
3. How does your board help the public understand the state of water quality in your
region? Do you believe that the information on your website is adequate? Where
should the public go for information on water quality issues, such as mine waste,
sewage spills, or the overall quality of water in rivers and streams in your region?
— STATE CAPITOL • ROOM 420 • SACRAMENTO, CALIFORNIA 95814-4900 • (916) 651-4151 • FAX (916) 445-0596^ -
Donald M. Jardine
January 14, 2009
Page 2
State and Regional Board Roles
The issues addressed by regional water boards are often scientifically complex.
Preparation for hearings can be time-consuming for board members, particularly
considering these are part-time positions.
4. Who is available to assist you at the state board and your regional board to better
understand some of the complex issues before you? Do you have any suggestions
on how the state water board's staff might better assist you?
5. What training have you received to help you better understand when you might
have a conflict of interest regarding an issue on your board's agenda? How do you
know when to withdraw yourself from voting on an issue? Have you ever done so
since being appointed to this board?
The Porter-Cologne Water Quality Control Act generally establishes the relationship
between the state and regional boards. Regional boards usually set water quality goals
in their basin plans, develop total maximum daily loads (TMDLs), and enforce permit
and discharge requirements, as well as state and federal water quality laws. However,
regional board budgets are not reviewed individually by the Governor or the Legislature,
and most regional board staffing decisions are made at the regional level, not at the
state level.
The state and regional board structure has been criticized by both industry and
environmental groups for being cumbersome and lacking accountability, efficiency, and
transparency. Both sides note that major policy issues often are decided through the
state board appeals process instead of through a consistent statewide policy that is
proactively established by the state board and implemented by the regional boards.
6. What is your view of the relationship between the state board and your regional
board? Could coordination and accountability be improved? If so, how?
California State Budget Crisis
California's dire fiscal situation has affected all parts of state government.
7. How do you, as a board member, stay informed of the fiscal resources available to
your board? How does your board pnoritize activities if not all can be undertaken?
What are your priorities?
70
Donald M. Jardine
January 14, 2009
Page 3
Enforcement of Water Quality Laws
Several years ago the Office of the Secretary of Cal/EPA reported to the Legislature on
environmental enforcement and suggested that the state and regional water boards
were among the worst agencies in enforcing the law. The report stated that the boards
were very slow to enforce clean water laws, almost never sought criminal penalties for
serious violations, and generally did not aggressively pursue violators.
8. What enforcement options do you believe provide the most effective tools for
violations of board orders?
9. What staff is available to assist you in enforcing water quality laws? Is the number
of staff adequate for enforcement purposes? If you must prioritize enforcement
efforts, what are the priorities and how are they determined?
Septic Rule
Chapter 781, Statutes of 2000 (AB 885, Jackson) requires the state board to develop,
adopt and implement statewide regulations for permitting and operation of on-site
wastewater treatment systems (OWTA), commonly referred to as the "Septic Rule". The
board recently proposed draft regulations which are currently available for public
comment until February 9, 2009.
10. Has the state board articulated a role for the regional boards in implementing this
rule?
1 1. How does the board intend to monitor, enforce and improve septic systems that
contribute to surface and groundwater pollution?
Lake Tahoe
The clarity of Lake Tahoe has been declining for decades. In the 1970s a white disc
lowered into the lake could be seen at 100 feet. In 2006 a similar disc could not be seen
below 67.7 feet. More than half of the nitrogen-feeding algae growth in the lake comes
from air pollution, much of it from nitrous oxide emitted by cars. Fine sediment is also a
problem, with studies showing road dust to be a significant factor. According to the
University of California, Davis, Tahoe Environmental Research Center, a 35 percent
reduction in three types of pollution — nitrogen, phosphorus, and fine sediment — could
restore the lake's clarity to the level seen in the 1970s.
71
Donald M. Jardine
January 14, 2009
Page 4
By the end of this year board staff was to have completed a draft Final Lake Tahoe
TMDL with the adoption of the Final TMDL in Spring 2009. The Lahontan Water Board
and Nevada Division of Environmental Protection have stated that they are committed
to the Lake Tahoe TMDL, a strategy to return Lake Tahoe to a clarity depth of 80 feet by
2025, and nearly 100 feet eventually.
12. What plans does the Lahontan board have for restoring the clarity of Lake Tahoe?
Specifically, to what degree are nitrogen, phosphorus, and fine sediment loading
being addressed in the TMDL process, and what is the timetable?
13. When will the clarity standard of 100 feet be achieved?
Lake Tahoe Basin Wildfires
A major public concern in the Lake Tahoe Basin remains the threat of catastrophic fire.
The Angora Fire that erupted in June 2007 destroyed more than 250 homes on the
California side of the Tahoe Basin, and over $141 million in damage occurred. In the
wake of this fire, public agencies with environmental and regulatory oversight of the
Tahoe Basin were criticized for allowing bureaucratic red tape to hinder the
advancement of efforts to prevent such disasters. Heads of various agencies, including
the Lahontan Regional Water Quality Control Board, were encouraged to improve their
communication with each other and with local residents. Governor Schwarzenegger
created the California Nevada Tahoe Basin Fire Commission which, in March 2008,
came up with 70 recommendations.
Fuels buildup is another problem that is affecting the Lake Tahoe area. The community
of South Lake Tahoe is listed by the federal government as a community at risk.
The board will discuss, at its December meeting, waiving discharge requirements for
vegetation management activities regulated by the Tahoe Regional Planning Agency.
14. What steps is the Lahontan board taking to improve its interagency communication
and its communication with local residents so that wildfire prevention efforts
progress?
15. Which recommendations of the Tahoe Fire Commission has the board
implemented? Are there any recommendations that you believe could endanger
water quality? If so, how are they being handled?
16. What steps should the board take to help reduce fuels buildup, especially in the
South Lake Tahoe area? How does the board address water quality concerns
when waiving the discharge requirements for vegetation management activities
regulated by the Tahoe Regional Planning Agency?
72
Donald M. Jardine
January 14, 2009
Page 5
Fee Collection/Timber Harvest Review
1 7. How does your regional board pay for the costs of timber harvest plan review?
Does your board collect a fee for review to pay for the regional board's costs
associated with the water quality review of such plans? If so, what is the amount of
the fee? Does fee revenue stay with the regional board or is it forwarded to the
state board?
18. Do you have any suggestions as to how to better ensure any fees collected by the
regional boards stay with those boards to help pay for staffing and other review and
enforcement costs?
Leviathan Mine
The Leviathan Mine in Alpine County is the former site of intermittent mining operations
dating back to the 1860s and open pit sulfur mining operations from the 1950s through
the 1960s. Major environmental damage has occurred at the mine, which is surrounded
by the Humboldt-Toiyabe National Forest, during the period of open pit mining.
Snowmelt, rain, and groundwater interact with the waste rock, creating sulfuric acid,
which in turn leaches additional contaminants from the native minerals such as arsenic,
copper, nickel, zinc, chromium, aluminum, and iron. The resulting acid rock drainage
(ARD) flows into the Leviathan Creek system at numerous points, eventually joining the
East Fork of the Carson River. For most of the year, roughly half of the flow in Leviathan
Creek is composed of ARD.
Formerly the Lahontan Water Board retained a contractor that operated a treatment
system that ran 24 hours a day and 7 days a week. Currently, a new contractor was
hired who runs a treatment system that operates Monday through Friday, and only
during daylight hours. A multi-year contract for water quality monitoring was executed
with the U.S. Geological Survey in August 2008, but has not been implemented
because of the Governor's executive order which halted new state contracts.
19. How is the change in the treatment system operation from a 24/7 to 5 days a week
and operating in daylight hours only affecting the Leviathan Creek system?
20. Is water quality of the Leviathan Mine site currently being monitored? Will the U. S
Geological Survey take over monitoring in the future, or will the board assume this
responsibility? How do you, as a board member, stay informed of this issue?
73
Donald M. Jardine
January 14, 2009
Page 6
Please send your written answers to these questions to Nettie Sabelhaus, Senate Rules
Committee Appointments Director, Room 420, State Capitol, Sacramento, CA 95814.
Thank you for your help.
Sincerely,
P
DARRELL STEINBERG ^y
DS:KW
cc: Water Quality Control Board, Lahontan Region
74
1. What do you hope to accomplish during your tenure as a member of the
board? What goals do you have for the board, and how will you accomplish
them? How will you measure your success?
• Encourage more use of recycled water. How - requiring higher quality wastewater,
reviewing regulatory program related to use of recycled water to streamline process
and ensure consistency. Measure - track use of recycled water in region.
• Increase rate of compliance with water board orders. How - require water board staff
to report regularly on violations and pursue a consistent and aggressive enforcement
program. Measure - track number of significant violations.
• More consideration for the link between water quality and water quantity
2. What do you believe are the most serious issues facing your board?
• Pollution and degradation of ground water that has current uses or may be used in the
future to store water as part of conjunctive use projects.
• Addressing statutory mandates, public expectations and discharger requests within
the resource allocations provided.
• Addressing groundwater contamination issues in basins that are in overdraft since the
most common remediation technique (pump and treat) could exacerbate this situation.
• Establishing a logical and transparent implementations plan for reversing the loss of
clarity in Lake Tahoe.
• Developing policies addressing discharges to, remediation of, and conjunctive use
groundwater aquifers in the southern portion of the region.
• Maintaining an effective enforcement program that addresses significant violations
and sends the appropriate deterrent message given the other demands on the
resources provided.
3. How does your board help the public understand the state of water quality in
your region? Do you believe that the information on your web site is adequate?
Where should the public go for information on water quality issues, such as
mine waste, sewage spills, or the overall quality of the water in rivers and
streams in your region?
• Water Board's web site contains many useful documents:
Impaired water body list
Results of assessment of water bodies
Monthly Executive Officer Reports
Information on key projects (e.g. PG&E Clean-up, Tahoe TMDL, Leviathan Mine)
Monthly Board meeting agendas
List of projects that will be subject to future Water Board action
The web site was recently revised along with all other water boards in a
consistent format, improvements are still possible, but it takes resources to
maintain it in a manner that serves the public need.
• Board Tours - As part of Water Board meetings the board hosts public tours of water
quality issues (May 2008 meeting included a tour of a fuel reduction project).
Senate Rules Committee
JAN 3 0 ?nnn
75
Appointments
• Staff workshops - Water Board staff have conducted informal public workshops on
issues that may come before the board at as future meeting (e.g. PG&E Hinkley
permits and remediation projects).
• The Board staff disseminates draft water board actions to a wide interested parties list
and agendas for water board meeting agendas are sent electronically and mailed to
over 250 persons and agencies.
4. Who is available to assist you at the state board and your regional board to
better understand some of the complex issues before you? Do you have any
suggestions on how the state board's staff might better assist you?
• I can communicate with our water board executive officer and our staff; however, I
need to be cautious of ex-parte communications on adjudicatory matters
• Additionally, the state board provides the water boards with an attorney from the Office
of Chief Counsel, David Coupe, that advises us on legal matters.
• State Water Board has provided focused training for regional water board members on
many of the programs that we implement and Water Quality Coordinating Committee
meetings provide additional forums to learn about current issues.
5. What training have you received to help you better understand when you might
have a conflict of interest regarding an issue on your board's agenda? How do
you know when to withdraw yourself from voting on an issue? Have you ever
done so since being appointed to this board?
• When appointed I received a briefing from the deputy chief counsel of the state board
• At water quality coordinating committee meetings the Chief Counsel of the State
Board provides a review of conflict of interest laws
• Our executive officer is aware of my public service and employment and advises me
of pending matters that may represent a conflict due to the location or proponent of
the project (within the jurisdiction that I represent).
• As an Alpine County Supervisor, I attend periodic, mandated, ethics training AB 1234,
and as County Supervisor I have withdrawn from voting on issues.
• I have not needed to withdraw on any Regional Board issues yet.
• Our water board attorney is available to assist in advising me if an issue raises a
conflict that warrants that I withdraw from the deliberation and decision process
6. What is your view of relationship between the state board and your regional
board? Could coordination and accountability be improved? If so, how?
• Regional Boards are autonomous bodies that make decisions within the discretion
provided both in law and in policy adopted by the State Board and our regional board
• State Board has authority (can overturn regional board decisions on petition or on its
own action) and responsibility to ensure consistency of actions by regional boards
• State Board is first line for addressing petitions of regional board actions so there
should not be direct communication on project-level decisions so state board can
remain unbiased to handle petition
76
• The State Board can only ensure consistency if it adequately monitors the actions or
lack of action by regional boards. Recently implemented data management systems
should provide information to assist in this effort
7. How do you, as a board member, stay informed of the fiscal resources available
to your board? How does your board prioritize activities if all not all can be
undertaken? What are priorities?
• Monthly briefings from our executive officer and from our State Water Board liaisons
• The water boards do not have the resources to accomplish all of its legal mandates
and expectations so we have always had to prioritize what we do
• Recent expectations for enhanced enforcement to address violations erodes the ability
to address other issues (e.g. delay in reviewing older permits, regulating all activities
subject to regulations, completing inspections of regulated facilities on an established
frequency based on threat to water quality
• Water quality problems become worse if not addressed in a timely manner, yet water
boards only have resources to address the highest priority problems
8. What enforcement options do you believe provide most effective tools for
violations of board orders?
• There is no one options that is best for all situations
• Penalties provide a deterrent to the discharger to avoid future violations and to other
dischargers to avoid similar violations
• Formal compliance schedules in cease and desist orders or clean-up and abatement
orders set clear water board expectations for discharger actions to achieve
compliance and the basis for penalty actions if timely compliance is not achieved
• Forcing a public agency or company to regularly appear before the regional board to
explain why they had violations and what they intend to do to correct the problems
sends the message that the regional board is watching the situation and is prepared to
act if progress is not being made
9. What staff is available to assist you in enforcing water quality laws? Is the
number of staff adequate for enforcement purposes? If you must prioritize
enforcement efforts, what are the priorities and how are they determined?
• Our board has established an enforcement unit that is responsible for developing
enforcement cases
• We do not have sufficient staff to address every violation. Because of relatively new
requirements for separation of prosecutions and advisory functions and the formality
of enforcement proceedings, formal enforcement is more resource-intensive than it
was in the past.
• Some violations are only single-instances with minimal water quality impacts and do
not deserve enforcement. Others receive less formal response
• Our priority is to take the appropriate enforcement action to require dischargers to
return to compliance in the shortest possible time. Additionally, we pursue penalty
77
action when violations cause significant water quality problems, are egregious, or
where enforcement has a significant deterrent effect
10. Has the state board articulated a role for the regional boards in implementing
the rule?
The draft regulations specify a number of roles for the regional boards. These include:
developing memorandum or understandings with counties to implement the regulation,
receiving notification and reports, and making decision on monitoring
1 1 . How does the board intend to monitor, enforce and improve septic system
that contribute to surface and groundwater pollution?
Currently the Lahontan Water Board has MOUs with all of our counties. Our counties
are doing a very good job of addressing these types of problems.
The Water Board has imposed prohibitions in certain areas where septic use is not
appropriate. One example is Eagle Lake and as a result of the prohibition, the two
subdivisions have installed ewers and treatment facilities. In the Mustang Mesa area,
Inyo County worked with local community and installed monitoring and committed to
requiring upgraded systems where they were needed.
1 2. What plans does the Lahontan board have for restoring the clarity of Lake
Tahoe? Specifically, to what degree are nitrogen, phosphorus, and fine
sediment loading being addressed in the TMDL process, and what is the
timetable?
• The draft Total Maximum Daily Load (TMDL) for Lake Tahoe will be released or public
review in 2009. Much of the technical support information has been released and is
available on our web site.
• The TMDL is a collaborative effort with Nevada Division of Environmental Protection
• Based on staff briefings at water board meetings, The TMDL will identify the need to
reduce fine sediment discharges by 55% along with reductions in nitrogen and
phosphorus discharges to restore Lake Tahoe 's clarity
• The TMDL will be implemented through amended permits for the municipalities and
Caltrans. Additionally, staff is collaborating with the Tahoe Regional Planning Agency
to ensure that land use controls embedded in its Regional Plan scheduled for adoption
in 2011 will further efforts to reduce sediment and nutrient discharges
13. When will the clarity standard of 100 feet be achieved?
The water board will be setting a target date for achieving the clarity standard as part of
the adopting the Lake Tahoe TMDL in late 2009. Without hearing all the testimony and
technical information, it would be premature for me to comment on this important water
quality decision at this time
78
14. What steps is the Lahontan board taking to improve interagency
communication and communication with residents so that wildfire prevention
efforts progress?
• Water board staff participates in an interagency Fuels-Fire Treatment Team (project
implementers and regulators) to identify fuel treatment projects, prioritize, plan and
permit
• Staff is working cooperatively with the forest service in the development of a joint
environmental document for a large fuel treatment project in South Lake Tahoe which
will significantly expedite the permitting for this project.
• Staff is working on developing agreements between the water board and other
agencies to simplify permitting and identify a single permitting agency (TRPA - Tahoe
Regional Planning Agency). These agreements and improvements to the Timber
Waiver are slated for board consideration.
• In January 2007 the Water Board adopted a blanket waiver allowing property owners
to complete any defensible space actions without notification or obtaining any permits
from the Water Board. Staff is working with TRPA staff and fire districts to craft a
consistent message on achieving both erosion control and defensible space on private
property.
15. Which recommendations of the Tahoe Fire Commission has the board
implemented? Are there any recommendations that you believe could
endanger water Quality? If so, how are they being handled?
• I have served with board member, Amy Home PhD in 2008 on the Fuels and
Vegetation Management Water Board Subcommittee. This subcommittee accepted
public input and made recommendations which were acted upon by the full board.
• There were 1 3 recommendations (one recommendation has 9 elements) that pertain
to the water board. We have implemented 10 of the recommendations which include a
number of the sub-elements of one recommendation.
• We are in the process of addressing the remaining 4 recommendations which include
all but one of the sub-elements.
• The one recommendation involving use of equipment on slopes greater than 30% is
bering evaluated to determine if there are studies that would support allowing such
activities, the board is monitoring staff efforts to bring a Iscientifically-justified positions
to the board for a decision.
16. What steps should the Board take to help reduce fuels buildup, especially in
the South Lake Tahoe area? How does the board address water quality
concerns when waiving the discharge requirements for vegetation
management activities regulated by the Tahoe Regional Planning Agency?
• Streamline permitting processes - goal would be one-stop-permitting and reduced or
eliminate paperwork for benign projects.
79
• Review existing regulations and prohibitions to determine if still scientifically justified or
if more aggressive fuel reductions methods can be used without causing water quality
impacts.
• The Tahoe Regional Planning agency (TRPA) and the water board have identical
water quality standards, discharge prohibitions and exemption criteria, the
memorandum of understanding between the board and TRPA requires TRPA to notify
the board of projects that have a higher threat to water quality, provide for
collaboration between staffs to ensure appropriate permit conditions are developed
and notification of water quality problems. TRPA also agreed to provide annual reports
to the board. Additionally, the board retains its enforcement authority and can impose
permit conditions on any project if it deems that such action is needed to protect water
quality.
17. How does your board pay for the cost of timber harvest plan review? Does
your board collect a fee for review to pay for the regional board's cost
associated with the water quality review of such plans? If so, what is the
amount of the fee? Does the fee revenue stay with the regional board or is it
forwarded to the state board?
Timber harvest plan review is funded by the General Fund (non federal lands) and
Federal funds (projects on federal lands - USFS or BLM). We do not collect fees to
cover any of this effort.
18. Do you have any suggestions as to how to ensure any fees collected by
regional boards stay with those boars to help pay for staffing and other review
and enforcement costs?
• The workload for individual dischargers fluctuates from year to year (Federal permits
must be renewed every five years, state permits do not expire yet need to be updated
periodically, some dischargers ask for permit modifications, enforcement needs, some
discharges are inspected yearly while others once every five years) while fees do not.
• Also, larger dischargers in urban areas have much higher fees. If fees collected
stayed in region of origin, rural water boards would likely get a lover share of fees than
current allocation. I do not think this is a good idea
1 9. How is the change in the treatment system operations from a 24/7 to five days
a week and operating in daylight hours only affecting the Leviathan Creek
system?
• Currently, untreated acid mine drainage from three sources are discharged to
Leviathan Creek during the winter months. During low creek flow periods, early
through mid winter this AMD likely is half of the flow in the creek. However, in spring,
creek flows increase. During the summer months most of these flows are captured
and treated prior to discharge to the creek. Our pond water treatment system
constitutes much of the flow in Leviathan Creek during summer months. The key issue
80
here is that while AMD does flow into Leviathan Creek, much of that is treated AMD
that has resulted in significant improvement in much of the watershed.
• Acid mine drainage (AMD) from the mine workings is collected year-round in ponds.
Tis AMD is stored all winter and during the summer the pond water is treated and
released to Leviathan Creek to restore the storage capacity for the upcoming winter.
• The contractor is responsible for treating all the AMD stored in the ponds during
summer months and determines the most cost-effective method of completing this
task, the contractor is paid based on the number of gallons treated. This last summer
the contractor was able to complete the task by operating the treatment system five
day per week. When the treatment system is not being operated there is no discharge
from the ponds. The days and hours of operation of the treatment system has no
effect on the quality of Leviathan creek since there is no discharge of AMD from the
mine workings when the treatment system is not in operation.
20. Is water quality of the Leviathan Mine site currently being monitored? Will the
U.S. Geologic Survey take over monitoring in the future, or will the board
assume this responsibility? How do you as a board member stay informed of
this issue?
• The contract in question is for flow monitoring. The UDGS has maintained the
monitoring network continuously, even in the early part of FY 08-09 when the State did
not have a budget.
• The Water Board staff has been doing the water quality monitoring at the site for many
years and has every intent to continue this effort.
• I can and do communicate with our water board executive officer and our staff on this
issue.
• As part of my duties on the Alpine County Board of Supervisors and as Board member
of the Carson Water Subconservancy District, I have taken tours and received periodic
updates on this project.
81
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Watershed and the
function of the river
system. Our thirteen
member Board of Directors consists of representatives from each
of the five counties within the watershed plus two representatives
from the agricultural community. Granted no regulatory authority of
its own, the CWSD's mission is to work within existing
governmental frameworks to promote cooperative action for the
watershed that crosses both agency and political boundaries. The
CWSD strives to involve all counties and communities within the
watershed in the efforts to preserve the rich history and unique
resources of the Carson River Watershed.
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Carson Water Subconservancy District
777 E. William Street. Suite 1*1 OA
Carson City. NV 89701
(775)887-7450
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Watershed Regions
1 . Manage the water's resources for economic sustainability, quality of
life, and protection of private and public property rights.
2. Acknowledge and respect the watershed's natural processes in
land use decisions.
Maintain or improve the quality of the water to support a variety of
beneficial uses.
Protect the headwaters region as the system's principal water
source.
Recognize and respect the interests of all stakeholders upstream
and downstream by fostering collaborative and mutual respectful
relationships.
Maintain the riverine and alluvial fan floodplains of the Carson River
Watershed to accommodate flood events.
Protect and manage uplands, mountain ranges, wetlands, and
riparian areas to enhance the quality of surface flow, groundwater
recharge, and wildlife habitat.
8. Promote conservation of water from all sectors of the community's
water users for the benefit of municipal, industrial, agricultural,
domestic, recreational, and natural resources.
9. Encourage management of growth that considers water quality and
quantity, open space preservation, and maintenance of agriculture
in floodplains.
10. Protect and support opportunities for public recreational access to
natural areas throughout the watershed - including the river
corridor - where appropriate.
11 . Promote understanding and awareness of watershed resources
and issues through cooperative education efforts throughout the
watershed.
Carson Water Subconservancy District
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Alpine Watershed Group | Alpine County Home
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Alpine Watershed Group
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Mission Statement
The Alpine Watershed Group
works to preserve and
enhance the natural system
functions of Alpine
Countya€™s watersheds for
future generations The group
works by inspiring
participation to collaborate
educate, and proactively
implement projects that benefit and steward the Countya€™s watersheds
Whata€™s a Watershed Group?
A watershed group is a locally organized, voluntary non-regulatory group
established to assess the condition of the watershed and build a work plan to
implement restoration and protection activities within the watershed.
Healthy Watersheds Help Create Healthy Communities
A healthy watershed helps filter sediment and pollutants while supporting the
many living organisms that depend on the eco-system Healthy watersheds
improve the economy and help provide resources for everyone to use and
enjoy The Alpine Watershed Group is committed to providing healthy
watersheds for future and current generations
Current Programs
• Volunteer Water Quality Monitoring
• Alpine Creek Days
• Streambank Restoration
• Markleeville Guard Station Restoration
• Erosion Control Best Managment Practices
• Monthly Informational Forums
Login/Register
Contact Information
E-mail:
watershed@alpinecountyca.com
Alpine Watershed Address:
270 Laramie Street
P.O. Box 296
Markleeville, CA 96120
See map Google Maps
Phone: 530-694-2327
Fax: 530-694-2327
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1/29/2009
88
Steve (BCois
January 27, 2009
Ms. Nettie Sabelhaus
Senate Rules Committee Appointments Director
State Capitol, Room 420
Sacramento, CA 95814-4900
Re: Confirmation Hearing
February 11,2009
Dear Ms. Sabelhaus,
Thank you for considering my appointment to the Los Angeles Regional Water Quality
Control Board by holding a confirmation hearing on the referenced date. In response to
the questions posed in Senator Steinberg's January 14th letter to me, please consider the
following:
1 . What do you hope to accomplish during your tenure as a member of the board?
Since my appointment I have been providing the Region 4 Board with a fresh and
reasoned perspective that helps to promulgate rules, policies and procedures that
foster a spirit of cooperation among all stakeholders and results in the
improvement of the water quality in our region. I will continue this approach and
encourage our staff to work pro actively with our stakeholders. What goals do you
have for the board, and how will you accomplish them? The Region 4 board
needs to be viewed as more responsive to the input of all of our stakeholders, thus
helping to ensure that our various actions are as effective as they can be at
improving the quality of our waters in Region 4. I have and will accomplish this
by asking our stakeholders if our Staff has been cooperative and responsive to
their input, and if the rules and orders we promulgate were developed with all
stakeholder's input in mind. If our stakeholders feel they had a hand in the
crafting of our various rules, they will be much more inclined to help in the
implementation of the rules, resulting in improving our water quality sooner than
otherwise might happen. How will you measure your success? My success will
be measured by the positive responses from all of our stakeholders of their
perception of our Staffs willingness to listen and consider all reasonable input in
the crafting of our various rules, policies and procedures. I will ask our
Senate Roles Committee
confirmation answers pg. 1
JAN 3 0 2009
89
Appointments
Steve (Bfois
stakeholders their perception of the process as we consider our rulings during our
meetings.
2. What do you believe are the most serious issues facing your board? Our board
has been perceived in the past as being somewhat arrogant and not receptive to
the input of all of our stakeholders. I have been working hard at changing this
perception. Our mission is to improve the water quality in our region. In order to
be most effective at accomplishing this overall goal, we must involve the
stakeholders from the beginning in the crafting of our various rules, regulations
and policies. If we fail in this, we run the risk of promulgating rules that will be
perceived as impossible to meet and therefore we will not be effective at
improving water quality improvement. If on the other hand we involve our
stakeholders early and often, they will at a minimum feel a part of the rulemaking
process and will have a stake in the successful implementation of the rules we
implement. We cannot afford to be perceived as a punitive and arrogant board,
but one that asks our stakeholders to be involved in the process of improving our
region's water quality. We must partner with those who are affected by our rules
and promulgate those rules so they can be met and followed with proactive
attitudes rather than solely with the threat of huge fines and penalties if they are
not met.
3. How does your board help the public understand the state of water quality in your
region? We maintain a website that contains numerous reports, publications,
notices and links regarding water quality in our region and how the public can
become involved. It is comprehensive, and is linked to the Cal/EPA website and
other informational sites. It contains reports on various waterways, past and
current board actions, and notices of upcoming public meetings where input is
asked for and can be provided by the public. Do you believe the information on
your website is adequate? Although it is not perfect, I do believe the information
contained on our website is adequate. Where should the public go for information
on water quality issues, such as beach closures, sewage spills, or the overall
quality of water in rivers and streams in your region? Our website is a great
place to start; it contains the information cited above, and additionally contains
links to many other websites, such as Heal the Bay, Santa Monica Baykeeper, etc.
where detailed information can be obtained about the issues cited, such as Heal
the Bay's beach report card.
4. Who is available to assist you at the state board and your regional board to better
understand some of the complex issues before you? As an engineer and a
contractor, I understand many of the complex issues that our board considers, but
confirmation answers pg. 2
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Steve (BCois
when I need help understanding technical issues, the regional board's staff has
been very helpful and informative. Depending on the issue, I can talk with
scientists, engineers, biologists, or other technical support who are on staff at the
regional board. Additionally, the State Water board holds symposiums several
times a year where special issues are discussed among all state and regional board
members in attendance. These meetings typically tackle two or three relevant and
current issues before one or more of the regional boards and/or the state board,
and provide a forum to confer with colleagues about water issues across regions.
Do you have any suggestions on how the state water board's staff might better
assist you? Not really. They have already been most helpful, particularly in the
legal arena. When I have a particular question, I can go to their website and find
the proper staff person, then ask him/her my question. I usually must leave a
voice message, but staff has been good at responding quickly.
What training have you received to help you better understand when you might
have a conflict of interest regarding an issue on your board's agenda? Two
attorneys from the State Water Board staff spent all day training me before my
first board meeting, shortly after my appointment. They were very thorough and
had a standard agenda which they presumably follow with all new board
members. They left me with lots of backup material on the law regarding
conflicts of interest. How do you know when to withdraw yourself from voting on
an issue? From the training mentioned above, I know when there is a possibility
of a conflict. Once the possibility is identified, I then call our staff attorney to
confirm or deny the existence of a conflict, and withdraw myself from voting on
that issue accordingly. Have you ever done so since being appointed to this
board? I have withdrawn from voting on two occasions, both times following the
advice of our legal counsel. At our April meeting, when Calleguas Water District
was applying for a permit for their "brine line", I recused myself because my
brother's construction company had a contract to build a portion of that pipeline.
At our August meeting, our board considered rules for water suppliers; as I am a
board member of Crestview Mutual Water Company, I again recused myself.
(This actually created a problem for our board; a majority of us had the same
conflict, and the board therefore could not take action as no quorum was present!)
What is your view of the relationship between the state board and your regional
board? The State Water Board sets overall policy and is the umbrella group. The
Regional Water Boards are subsidiaries and make decisions within the context of
the law and the policies and procedures of the State Board and apply those
decisions locally. Decisions that cannot be reached at the regional level get
pushed to the state level; to the extent that we can, we should strive to reach as
confirmation answers pg. 3
91
Steve (BCois
many decisions at the lower level as possible so as not to unduly burden the State
Board. This process is not unlike our judiciary system where lower court
decisions are appealed to the higher courts. While that can be cumbersome at
times, it has served our democracy well over the years and is ultimately a fair and
impartial process. Could coordination and accountability be improved? If so,
how? Yes, coordination and accountability can always be improved; it is a
matter of communicating, which is never perfect. That being said, from my
limited experience to date, the State Board does a pretty good job of
communicating, first by sending one of their members to most of our board
meetings, and also by holding semi-annual Water Quality Coordinating
Committee (WQCC) meetings. I attended the last WQCC meeting, held in
Sacramento last October, and participated in several good discussions with State
Water Board members and staff, and also members and staff of other regional
boards. The State Water Board's website is also fairly comprehensive and
updated regularly, and well linked with the regional websites.
7. How do you, as a board member, stay informed of the fiscal resources available
to your board? I depend on regional staff s input; they are pretty good at letting
us know when they need money and for what. How does your board prioritize
activities if not all can be undertaken? We have reviewed and discussed our
priorities whenever a situation arises where we cannot accomplish everything. I
have not yet participated in a formal priority review at our regional board, but I
suspect this happens at an annual retreat held for the purpose of setting priorities
and goals. I believe this is an effective way to maximize our resources. What are
your priorities? My priorities are, in order of importance, to protect human life
and health, then to protect water quality in the waters of our region, then to ensure
adequate and reliable supply for the water users in our region, then to protect the
beneficial uses of our various waters, and finally to educate the public about the
importance of water quality.
8. What enforcement options do you believe provide the most effective tools for
violations of board orders? Penalties and fines. These should be structured to be
fairly modest for first time violations, but become exponentially greater for repeat
offenders. I believe in working proactively with our permittees, but if someone
willfully disobeys or ignores our orders, then bring the hammer down!
9. What staff is available to assist you in enforcing water quality laws? Our board
has an entire enforcement section with a group leader and several divisions. They
report to the board in closed session on their results and the level of backlog and
actions they take. Is the number of staff adequate for enforcement purposes?
confirmation answers pg- 4
92
Steve (BCois
Yes. If you must prioritize enforcement efforts, what are the priorities and how
are they determined? First priority has to be those violations that endanger
human life and health. Following, in order of importance, are violations that
grossly degrade water quality, then beneficial uses, and repeat offenders.
1 0. What impact does the Orange County Superior Court ruling have on your board
in carrying out its duties relative to the storm water program? Specifically, what
effect has the ruling had on permitting and enforcement activities? Between July
2nd and November 10th, 2008, the ruling completely stopped all enforcement and
permitting actions of our board. We tried to maintain a presence with all of our
permittees to protect water quality, but legally we had no teeth. After November
1 0th, we once again had teeth and have continued enforcement and permitting
actions as before. The main impact of the ruling is to re-consider our basin plan
during the triennial review process by including the consideration of economic
impacts and excluding potential beneficial uses unless they are probable
beneficial uses. Our board asked our staff during the "slow" period, when they
were legally prohibited from doing many of their usual tasks, to re-direct their
efforts toward the triennial review of our basin plan in order to comply with the
judge's order as quickly as possible. This process is ongoing.
1 1 . Will your board be able to continue to comply with the federal California Toxic
Rule, given the recent court ruling? Yes.
1 2. What options does your board have in addressing the court ruling, and what are
the possible timeframes? We can appeal the ruling, which we are still
considering; we can comply with the ruling and revise our basin plan, which we
are required to do anyway under the triennial review process; or we can do both
of the above. I am not sure of the legal timetable for appealing the ruling, but do
know that our legal staff will keep us apprised of any deadlines. I expect the
triennial review of our basin plan to take place later this year; our board was
informed by staff that they could be ready for this by summer. My belief is we
need to comply with the order and review our basin plan in the manner the judge
prescribed, and not spend any more money on legal proceedings unless there is a
danger of the ruling tainting the State Board or the other regional boards.
13. Has the state board articulated a role for the regional boards in implementing
this rule? Not specifically.
14. How does the board intend to monitor, enforce and improve septic systems that
contribute to surface and groundwater pollution? We currently do these things in
confirmation answers pg. 5
93
Steve (BCois
several ways: in Malibu, we have an MOU in place that gives authority to the
City of Malibu to issue permits for residential and small commercial systems and
to monitor and enforce those permits. (This MOU is currently being re-
negotiated.) In all other areas, the regional board monitors and enforces septic
systems through our groundwater division. In the El Rio area of Oxnard, for
example, which sits on top of a major groundwater infiltration area, our board
several years ago banned all septic systems and required the County of Ventura to
build a sewer system to replace the septic tanks in that area. Grants were given to
facilitate the process, and today it is almost complete. Where the board's
monitoring efforts indicate that septic systems are degrading water quality, we
will implement similar programs. We also need to encourage the development
and approval of efficient, affordable and reliable residential septic systems for use
in our region in order to provide a viable alternative for replacement of existing
septic systems.
15. Are you, as a board member, satisfied with the progress made to date? I am
satisfied that the cleanup process is moving forward, and that progress is being
made every day. Ideally, the MTBE additive would not have been introduced into
the groundwater, but now that it has, the most effective way to remedy the
problem is through a cooperative effort of all parties, and that is what is
happening.
1 6. Under the settlement, will the groundwater be cleaned up, or will treatment be
provided to the water used for drinking purposes? The settlement will result in
both cleaning up the groundwater over time and also providing treatment of the
drinking water. As the contaminated water is pumped out of the aquifer, new
uncontaminated natural supply will fill the aquifer back up, resulting over time in
a remediated aquifer that is free of the contaminant. If wellhead treatment is
provided, will the groundwater basin ever be totally cleaned up? Eventually, yes.
The treatment method and location, wellhead or treatment plant, has no bearing
on the cleanup of the aquifer. The important fact is that contaminated water will
be removed from the aquifer (by pumping) and will be replaced with
uncontaminated water. It may take a long time, but eventually the aquifer will be
cleaned up.
1 7. In your view, what is the role of regional water boards regarding required testing
and standard limits for pharmaceuticals and over-the-counter drugs in drinking
water? The regional water boards have no official jurisdiction over drinking
water standards. That being said, we do work closely with the Department of
Public Health in monitoring drinking water quality, as much of our drinking water
confirmation answers pg- 6
94
Steve (Bfois
supply comes from sources of water over which our board does have jurisdiction.
Our board needs to monitor closely what the Department of Health finds, and if
and when these new emerging contaminants become a threat to human health, we
should work with the Department of Health to establish standard limits and
testing. Should the State Water Board, through regional boards, be working with
the California Department of Public Health to require testing and set safety limits
for drugs in drinking water? Not yet. If and when these new emerging
contaminants become a threat to human health, we should work with the
Department of Health to establish standard limits and testing. In the meantime,
we have no lack of tasks we are working on to clean up the waters in our region!
1 8. To what degree is your board monitoring these and other emerging
contaminants? We have received two reports on emerging contaminants from our
executive officer and senior staff in the executive officer's reports to the board.
To date the concentrations of these contaminants have not risen to the level of
concern, but we continue to monitor these emerging contaminants.
19. What other state agencies are involved in this monitoring process? Do you share
your information with other drinking water and public health agencies? The
reports we have received to date are public information and thus are shared by all
stakeholders. We are aware that several of the other regional water boards have
started monitoring and testing for emerging contaminants, and we are following
these results closely. I am attending the WQCC meeting in Chino next month,
and will ask the other regional board members there about the latest results of
their monitoring programs.
Thank you for the opportunity to answer Senator Steinberg's questions. It has been a
thoughtful and insightful exercise, one that will help me carry out the mission of the Los
Angeles Regional Water Quality Control Board, which is to preserve and protect the
quality of the waters in our region. The questions also help to lead me toward issues
which are of concern to the Rules Committee members, and will help me better prioritize
issues which come before our board. If you have further questions, please do not hesitate
to contact me.
Sincerely,
Steve Blois
confirmation answers pg. 7
95
96
Responses to Questions
1. Statement of Goals
I am honored to be appointed as a member of the Los Angeles Regional Water Quality Control Board.
This Regional Board has been stalwart in its work to improve the water quality and the beneficial uses of
water within this region. The Board and the staff have also worked hard in partnership with permittees
and dischargers to find technical and management strategies for meeting water quality standards that
can be successfully implemented. It will be my goal to continue the efforts of this Board to bring water
quality into compliance with state and federal laws and standards, working with permittees to find
solutions that work and will be implemented.
There are three other goals that I hope to move forward while I am a member of the Board. First, it is
my goal to place a high priority on the timely and fair enforcement of the law when permittees and
dischargers are not following it, and serious water pollution results. I will move forward to accomplish
this goal by insuring that progress on major violations is documented and reported to the Board on a
regular basis, and that violations are brought through the Board enforcement hearing process in a
timely way.
Second, with the current water supply crisis in California, and global climate change making that crisis
worse, the Los Angeles Regional Water Quality Control Board can help make significant progress in
mitigating the impacts of regional water shortages. As a board member, I will review permits with the
goal of minimizing water discharges through reusing and recycling treated water and storing treated
wastewater and stormwater underground for future reuse when it is within the legal capacity of the
Board to reduce discharges.
Third, the Los Angeles Region is one of the oldest industrialized areas of California and has inherited
many brownfields and other industrial pollution sites that continue to endanger public health,
particularly in low income and minority communities. The Board and its staff have made a serious
commitment to pollution remediation and it is my goal to support those efforts through our permitting
and enforcement process particularly when public health of vulnerable populations are involved and
when the reuse of polluted sites will contribute to a healthier economy and community.
How will I measure success? First, I will be one of nine voting members and success will be developing a
broad consensus among Board members and staff to continued and increased commitment to
enforcement of serious water quality violations, more efficient treatment and reuse of water, and
remediation of polluted industrial lands. I will measure success in enforcement by seeing that our efforts
at enforcement motivate increases in the levels of compliance by all permittees. I will measure success
the reuse, recycling and storage of treated wastewater and stormwater when dischargers proudly tell
the Board that they are reducing, not increasing their discharges, and when an increased proportion of
our local water supply coming from these sources.
2. The Most Serious Issues Facing the Regional Board
^ateRBiegCommitt@g
- -;'; 3 0 ?009
97
While I believe that the three goals above-- enforcement; water reuse, recycling and storage; and
pollution remediation— are important goals to attain to improve water quality, there are serious
challenges to meet to be successful in meeting these and other goals.
The most serious issue at this time is budget and resources to comply with our legal mandates— the
over-riding issue for government in California at this time. While it is within the scope of the State
Water Board, not the Regional Boards, to allocate budget among the regions, it is the Regional Board's
job to set the priorities within those allocations that will allow us to meet our legal mandates. As non-
fee resources dwindle, or as allocations shift to other regions or the state board budget, our ability to
set priorities is limited. This makes proactive planning harder and harder to do.
The second challenge will be to improve our stakeholder processes to make all of the key actors,
including local governments, feel that they have a stake in improving water quality and that they can
succeed within reasonable financial means. I believe that the Board is having some success in
collaborating with local governments and this has resulted in fewer cities being involved in litigation, but
we need to do more.
The third challenge will be to identify sources of operating funds for stormwater treatment systems that
comply with the constitutional amendments adopted though Proposition 13 and their successors. Local
governments have taken advantage of capital funds to improve stormwater treatment, but have no
continuing sources of funds to operate and maintain those facilities. These operating funds are essential
to maintaining systems that reuse, recycle and store treated stormwater for future use.
3. How Does the Board Help the Public to Understand the State of Water Quality in the Region?
The Board has a good process for members of the public who are familiar with the Board to participate
in public hearing items before the Board. The issuance of tentative permits allows both permittees and
members of the public with concerns to communicate those concerns to staff before the staff issues a
final report to the Board. The final report to the Board includes detailed responses to all concerns and
recommendations made by all parties. This helps the permittee(s) and public to know what is before
the Board, and be able to add any concerns that the staff has not addressed. It gives the Board an
orderly way to consider all points of view. In addition, on complex issues where there is disagreement
between a number of different stakeholders, the Board will hold workshops to hear information and
concerns on all sides and make suggestions on ways to consider those concerns. Finally, the Board
encourages mediated stakeholder planning efforts meant to balance the concerns of different
stakeholders, with staff participation. Through these efforts, it is sometimes possible to develop
solutions that meet the needs of beneficial users at a cost that dischargers can afford, as on the Santa
Clara River and the salinity TMDL. I believe that all of these efforts lead to better understanding of the
many water quality problems in this region.
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I do think that the Board can do more to improve public understanding of the issues that are not
regularly brought to the board through the hearing process. I recently suggested that the Executive
Officer's Report to the Board that details administrative actions and ongoing enforcement actions as
well as early warnings about issues to come before the Board be posted on our website -it was done
within 24 hours. I think that the maps of impaired waterways and the information about those
waterways under the regional watershed management initiative provides a great deal of water quality
information as well as information about what is being done about water quality problems, linked to the
work of other agencies to improve water quality.
I think that there could be improvement to the website could be designed thought linking each Board
Agenda items directly to the supporting tentative and final reports and other information needed by
participants in the public hearing. I believe that glossaries of technical/scientific acronyms and terms
would also assist new board members and members of the public in participating in hearings. These
actions would make the site more accessible and useful to members of the public who are coming to the
public hearings for one issue, and are not expert at participation.
I also believe that the there is less access for the public to the bulk of the work that is administratively
delegated to the Executive Officer and staff. Regional Board dependence on state board staff for
website design, while good for statewide education and efficiency, may hinder public access to these
regional administrative actions. Information on beach closures, for instance, is on the State Water
Board website for all regions, and is only broken down by county. This does not give the public the same
kind of information for closures of specific beaches, which may be better displayed by the region for
individual beaches. Along the coast in this region and others, the Heal the Bay Beach report card
records number of violations of bacterial counts and closures. The website states that reporting any
kind of industrial spill or sewage spill is mandatory, but finding records of such spills is very hard to do.
That is the kind of public information that government could be providing if there were more financial
resources.
4. Who is available at the State Board and Regional Board to help Board Members understand
complex issues that come before the Regional Boards? Do you have any suggestions on how the
state water board's staff might better assist you?
When I was first appointed to the Board, I had a half day orientation with the Regional Board Staff and
attorneys. They gave me an orientation manual about the operation of the Board staff, Board
responsibilities, meeting procedures, frequently used acronyms and terms, the Bagley Keene Open
Meeting Act, Financial Reporting and conflict of interest information and the Porter Cologne Act. Both
the legal staff and the Executive Officer are available, time allowing, to answer questions about
technical, scientific and legal issues to help me prepare for the Board hearings. The State Water Board
holds two Water Education Workshops per year for Regional Board members on specific legal, scientific
and strategic efforts of the State and Regional Boards. For these meetings, the State Board provides
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extensive written information (also on the State Board website) about the functioning of the state and
regional boards that I use as a regular source of information.
The workshops held by the regional boards before hearings on complex issues, and the comments made
by staff about public input both in writing and in public hearing presentation have been helpful. The
State Board liaison for this Region has made herself and State Board staff available to answer any
questions I have, and has regularly reported on State Board actions that affect Regional Board decisions.
Other Board members are also willing to help, within the confines of the Bagley Keene Act. With all of
this, it has taken time for me to really learn the history and the science behind each issue before us—
experience is the best teacher.
I don't have any suggestions for what the State Board staff could do to better assist me. I think it is up
to the Board member to ask for help when they need it. I have asked for help and always received it.
5a. What training have you received to help you better understand when you might have a
conflict of interest regarding an issue on your Board's agenda? How do you know when to
withdraw yourself from voting on an issue? Have you ever done so since being appointed to this
Board?
See #4 above for training I received on conflicts of interest. Because I fill out the Form 700, it is a guide
to potential financial conflicts of interest and I use it to determine when I withdraw from voting. I
resigned from a nonprofit organization that regularly testifies before the Board to avoid the appearance
of bias. I have withdrawn from voting on a single uncontested item on an agenda because of a financial
interest in one of the permittees.
5b. What is your view of the relationship between the state board and your regional board?
Could coordination and accountability be improved?
The allocation of staff and budget for the Regional Board is made by the State Board, according to their
analysis of need for its own operations and those of each of the regional boards.
Given that the state is so big, the water quality problems so diverse and the scale of basin planning so
local, it is necessary to place the regulatory decisionmaking responsibility at the local level where
regulators are accessible to all of the regional stakeholders and the public. Recently our Regional Board
received a letter from the representatives of a company doing brownfield remediation complementing
our staff on the professional way in which the regulatory requirements were set with specific site
conditions in mind. This enabled clean up of the brownfield and preparation for redevelopment to
proceed in an expeditious manner. While not all permittees before the Board conclude their experience
with this result, I believe that the regional board is best able to establish water quality requirements for
local permittees with maximum public participation.
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I believe that giving participants in Regional Board hearings the right to appeal decisions to the State
Board provides the administrative record to protect both Boards in later litigation. However, I do agree
that it is a better idea for the State Board to set proactive state policy and water quality standards that
can then be applied through the permitting process than it is to decide state policy through the appeals
process. I think that the work that the State Board is doing now on the recycled water policy is a good
example.
6. What is your view of the relationship between the State Board and your Regional Board?
Could coordination and accountability be improved? If so, how?
As noted above, state environmental regulation must recognize the unique circumstances of each region
in this diverse state, and be applied with first-hand knowledge of local and regional concerns and issues.
There needs to be regionally accessible public meetings and access to staff and information in proximity
to the affected permittees and stakeholders. The Porter Cologne Act is a careful balancing of statewide
and regional/local concerns and division of responsibilities between the State and Regional Boards.
In principle, the division of responsibilities works well. The coordination efforts made are considerable
on every level. The Regional Board Chairs meet monthly with the State Board Chair. The Executive
Officers, and legal staff regularly coordinate. The State Board has adopted a strategic plan that sets out
a set of priorities to focus regional efforts upon. The twice a year meetings of all regional board
members helps us to develop a common knowledge of the problems we address and to understand how
other regional boards address those problems.
I do understand that both industry and environmental groups feel that the process is cumbersome and
lacks accountability. I think that, to the extent that the State Board sets standards that can
accommodate regional diversity, rather than set standards through appeals, the Regional Boards will be
able to apply those standards with more consistency and increase the clarity and accountability of the
system. I think that the division of State and regional functions make sense, although I would, as a
regional board member, like to have our Chair and Executive Officer involved in the decisions about the
budget. I would also like our board to have more to say about grants for local financial assistance in this
region.
7a. California State Budget Crisis. How do you, as a board member, stay informed about the
fiscal resources available to your board?
As stated earlier, the budgets for all the regional boards are established by the State Board. The
Executive Officer keeps the Board informed about budget constraints and changes in how staff positions
and operating funds are allocated among the different functions of the Board. The Executive Officer lets
us know how the budget limits the ability of the Regional Board to equally address all of its legislated
responsibilities. Now the Executive Officer is keeping us informed about layoffs in positions not
supported by fee revenues, reduction in operating revenues and the effects of furlough days on ability
of the staff to accomplish its job. It is an extremely challenging time.
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7B. How does your board prioritize activities if not all can be undertaken?
Because everything that the Board does is required under the law, there are no planning and permitting
responsibilities that can simply be ignored by the Board. What we have done is "juggle" between
priorities under the supervision of our Executive Officer. This means moving staff with agility to address
immediate concerns and needs without compromising our basic responsibilities. The state budget crisis
is challenging our ability to continue to juggle with agility.
7C. What are your priorities?
Our priorities are meeting the requirements of the law and achieving water quality results that protect
public health and the environment. Projects, programs, regulations and permits that have the most
impact on water quality in impaired water bodies and groundwater basins are my highest priority.
8. What enforcement options do you believe provides the most effective tools for violation of
board orders?
I believe that the careful drafting of board orders to require the kind of monitoring necessary to detect
and attribute violations of water quality standards to a specific source is critical to enforcement.
Dischargers are unhappy about detailed monitoring requirements that cost them money. However, if
the Board doesn't have the data that proves that violations of water quality in a water body are
attributable to the permitted source, then enforcement cannot move forward. This is particularly true
in Los Angeles, where the density of dischargers is great, and it is challenging to connect pollution in a
water body to one of many potential sources without sufficient effluent discharge monitoring
requirements.
Once the violation is documented and due process is followed, the ability of the Boards to
administratively fine through panel hearings is a very effective way to deter violations.
9. What staff is available to assist you in enforcing water quality laws? Is any number of staff
adequate for enforcement purposes? If you must prioritize enforcement efforts, what are the
priorities and how are they determined?
The Los Angeles Regional Board had eight surface water compliance and enforcement staff and seven
other enforcement staff under a division chief when I was appointed to the Board in March 2008. Our
ability to effectively proceed with enforcement in a region with so many dischargers and municipalities
with a limited number of enforcement staff is a continuing challenge. This level of staffing is not nearly
adequate to address the volume of minimum penalties under the Migden Act, industrial permits,
municipal permits and TMDL violations that this region is experiencing. Monitoring of many different
Onsite Wastewater Treatment Systems is extremely staff intensive and cumulative impacts are difficult
to assign to a particular source. Finally, a court decision that mandates that the Board and the Executive
Officer that advises the Board, cannot have any knowledge of enforcement actions before they come to
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the Board for hearing, has had serious consequences for the Board's ability to oversee the enforcement
process and set priorities for cases. Our board is concerned about our lack of ability to bring
enforcement cases forward to us under the current law, and is searching for ways in which we can
improve the enforcement process with our limited staff.
10. What impact does the Orange County Superior Court ruling have on your board in carryinfi
out its duties relative to the stormwater program? Specifically, what effect has the ruling had
on permitting and enforcement activities?
Last July, an Orange County Superior Court judge found in favor of the plaintiffs in the Cities of Arcadia
et al v The Los Angeles Regional Water Quality Control Board. He agreed with the plaintiffs that the
Board had not updated the Basin Plan, nor adequately addressed stormwater quality standards in the
Triennial Review to allow the Board to establish Total Maximum Daily Loads,(TMDLS), to approve and
enforce stormwater permits and regulations. He ordered all activities related to stormwater regulation
to cease until the Basin Plan and the Triennial Review was updated to establish or reaffirm the standards
for stormwater regulation. This case immediately shut down our entire stormwater permitting and
enforcement program. The ramifications were extremely serious. After requests for reconsideration by
the Board, the Judge amended the order to allow the Board to continue to issue and enforce
stormwater permits while the Board reviews its plans. So, after nearly three months when the Board
was unable to discuss, hear stormwater cases, issue permits, issue notices of violations or proceed with
enforcement on noticed enforcement cases, the Board regained authority to decide these cases.
11. Will your Board be able to comply with the federal California Toxics Rule, given the recent
court ruling?
The Arcadia case did not affect the Board's ability to apply the California Toxics Rule for point sources.
When the initial order was in place, we were not able to set numerical limits for industrial sources of
stormwater. However, since the court revised its order we can apply numerical limits to industrial
stormwater discharges.
12. What options does your Board have in addressing the court ruling and what are the possible
timeframes?
The discussion about specific actions that the Board might take in this case is subject to the rule of
executive session and cannot be disclosed. We are proceeding with the planning reviews and possible
plan revisions ordered by the court. Hopefully, the court will approve our revised plans when we submit
them and that will resolve the case.
13. The State Board is adopting statewide regulations for the permitting and operation of onsite
wastewater treatment systems (OWTS) under AB 885. Has the state board articulated a role for
the regional boards in implementing this rule?
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The statewide regulations set up the standards under which the Regional Boards and local issuing
authorities will regulate OWTS.
14. How does your Board intend to monitor, enforce and improve septic systems that
contribute to surface and groundwater pollution?
The Regional Board will use the AB 885 regulations to monitor, enforce and improve septic systems that
contribute to surface and groundwater pollution. We also use the Total Daily Maximum Loads for
impaired waters to set specific standards for pollutants from septic systems that are affecting impaired
waters. We use Memorandums of Understanding (MOU) with local governments to allow them to issue
OWTS and to require the development of local systems to monitor and enforce septic system
operational standards, and to require review, and if necessary, replacement of obsolete or failing septic
systems.
AB 885 and TMDL numerical limits are now requiring OWTS to be much more sophisticated treatment
systems than conventional septic systems— some are effectively mini-municipal treatment systems.
However sophisticated these systems are, when they are on sites with high groundwater, or on flood
plains or too close to water bodies, or have impermeable soils, they can still fail to meet standards, or
cumulatively exceed groundwater basin capacity. Currently, there is no legal authorization for the
Regional Boards to require properties which are unsuitable for OWTS to discharge their treated effluent
on a site that is suited for that purpose. Recycling water as an alternative to discharge is more complex
with many OWTS than it is for a single municipal treatment plant.
In addition, while conventional septic systems required very little property owner expertise in design,
construction and maintenance expertise and monitoring, these new systems require substantial
expertise, and continual monitoring, adjustment, and repair to function properly. There is extremely
variable competence of property owners in procuring the right expertise to design and operate these
systems, and as properties are sold, the knowledge of buyers about what they are expected to do is
variable.
Without requirements for professional design, operation and maintenance, certification of builders and
operators and requirements for disclosure of responsibilities to buyers, the Boards and local permitting
agencies must devote very large amounts of staff time to monitoring effluent and issuing repeated and
chronic notices of violations to many OWTS. In times of budget crisis, Regional Boards must either
reduce the time that they devote to this, or risk ignoring other important water pollution control
priorities.
15. Are you, as a board member, satisfied with the progress made to date [on MTBE cleanup in
the Charnock Basinl?
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The progress has been very slow to date. However, under the latest settlement agreement in 2006,
progress has been made. It is now expected that Santa Monica will be able to begin to deliver drinking
water from the Charnock Basin in 2010.
16. Under the settlement agreement, will the groundwater be cleaned up, or will treatment be
provided to the water used for drinking purposes? If wellhead treatment is provided, will the
groundwater basin ever be totally cleaned up?
Treatment will be provided at the wellhead to make the water safe for drinking purposes. However,
eventually, it is expected that the levels of MTBE in the groundwater will be reduced to the point that
the groundwater basin itself will be considered safe as drinking water.
17a. What is the role of regional boards regarding required testing and standard limits for
pharmaceuticals and over-the-counter drugs in drinking water?
The State Water Board is addressing this issue in at least two ways. First, they have appointed a Blue
Ribbon Committee of technical experts to develop analytical techniques and monitoring protocols to
allow dischargers to assess the levels of pharmaceuticals in water. Second, while the Blue Ribbon
Committee is doing their analytical work, the State Board is developing a water recycling policy that will
require that all effluent that is to be used as recycled water be monitored for emerging contaminants.
Both the Blue Ribbon Committee analysis and the monitoring data from effluent to be recycled will be
used by the State Board to establish standards for emerging contaminants, including pharmaceuticals.
These standards will be applied by the Regional Board in planning and permitting decisions.
17b. Should the state water board, through the regional boards be working with the California
Department of Public Health to require testing and set safety limits for drugs in drinking water?
The Department of Public Health is very involved with the work of the Blue Ribbon Committee and the
State Board recycled water policy.
18. To what degree is your board monitoring these and other emerging contaminants? How are
you informed about new sources of pollution?
The Regional Board is working with the Southern California Coastal Water Research Project (SCCWRP),
US EPA and some dischargers who are volunteering to monitor their effluent for indicators of emerging
contaminants. This will also bring us one step closer to being able to understanding the appropriate
techniques for identifying the types and levels of emerging contaminants in effluent, potential
treatment approaches, and numeric limits for pharmaceuticals and endocrine disruptors. We are
already working with dischargers on education and reduction of the loads of these emerging
contaminants before they reach treatment facilities.
19. What other state agencies are involved in this monitoring process? Do you share your
information with other drinking water and public health agencies?
10
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As I stated above, US EPA, the State Department of Public Health, SCCWRP and some dischargers are
involved in the monitoring process. When we have data to share with drinking water providers and
local public health agencies, we will probably hold workshops and disseminate it through outreach.
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CAROL DEAN
North Coast Regional Water Quality Board
STATEMENT OF GOALS
1 . What do you hope to accomplish during your tenure as a member of the board?
What goals do you have for the board, and how will you accomplish them? How
will you measure your success? I applied for a position on the North Coast Regional
Water Quality Control Board as an individual who is concerned about quality of life
issues and as a community activist who sees the needs to balance government,
regulations and costs to the public. Water is a precious commodity that needs to be
conserved and protected for all beneficial uses and users. Water is also important in
controlling the economy and quality of life for all those who reside in the North Coast
region, California and beyond. I believe everyone should be committed to
environmental protection, conservation, reuse and compliance. My goal when I
joined the board was to ensure that all communities, large and small, have a level
playing field in dealing with governmental regulations and boards. Since serving on
the board I have discovered that this is also a goal of the regional board staff as well.
We have had to make some painful decisions that we know create hardships but have
seen water quality improve. There is no better way to measure success than to see an
improvement in water quality. My goal for the board is to see it continue to work on
distressed water sheds in a comprehensive and consistent manner.
2. What do you believe are most serious issues facing your board? At this period of
time, I would have to say the budget, and having enough staff to do the work already
required and that which the board would like to mandate.
3 . How does your board help the public understand the state of water quality in your
region? Do you believe that the information on your website is adequate? Where
should the public go for information on water quality issues, such as beach
closures, sewage spills, or the overall quality of water in rivers and streams in your
region ? Study sessions and workshops help attendees of board meetings understand
the complex issues regarding water quality in the region. Staff is also very willing to
meet with any individual at additional times to explain and educate those who ask.
Our website is quite comprehensive and all documents are easily assessable. The
only suggestion might be links to various cities and counties in the region. The web
site is a perfect medium for public information. But it cannot be the sole means of
information. Beaches must still be posted and in serious health threats or life
threatening situations, the paper, radio news and television should still be utilized.
City and county websites can also post information for their particular area in the
region.
STATE and regional BOARD ROLES Senate Rules Committee
FEB 0 3 2
Appointments
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The issues addressed by regional water boards are often scientifically complex. Preparation
for hearings can be time-consuming for board members, particularly considering these are
part-time positions.
4. Who is available to assist you at the state board and your regional board to better
understand some of the complex issues before you? Do you have any suggestions
on how the state water board's staff might better assist you? Whenever I have a
question, I ask the executive director and since I live close to the office she arranges a
meeting with the appropriate staff member to meet with me to go over my questions
or concerns, or through e-mail exchanges. To date, I have always been able to get the
information I need. If my question is a legal one, one of the attorneys assigned to our
region will get back to me either via e-mail or telephone. Going to the EO first gets
me routed to where I need to go for information. I find this is an efficient way to
obtain the necessary information.
5 . What training have you received to help you better understand when you might
have a conflict of interest regarding an issue on your board's agenda? How do you
know when to withdraw yourself from voting on an issue? Have you ever done so
since being appointed to this board? When I was first appointed to the board Phil
Wyels, the Assisgtant Chief Counsel to the S WRCB came to Santa Rosa and gave me
an in depth orientation. At the time I had just been appointed to fill a vacancy on the
Santa Rosa City Council so the City of Santa Rosa also provided me with council.
My term on the council has expired. If I have any question about my ability to vote
on an item I notify the Executive Officer who then asks the appropriate attorney for
the board for a ruling. I would rather be safe than sorry. Yes, I have abstained twice
from voting.
The Porter-Cologne Water Quality Control Act generally establishes the relationship between
the state and regional boards. Regional boards usually set water quality goals in their basin
plans, develop total maximum daily loads (TMDLs), and enforce permit and discharge
requirement, as well as state and federal water quality laws. However, regional board
budgets are not reviewed individually by the Governor or the Legislature, and most regional
board staffing decisions are made at the regional level, not the state level.
The state and regional board structure has been criticized by both industry and environmental
groups for being cumbersome and lacking accountability, efficiency, and transparency. Both
sides note that major policy issues often are decided through the state board appeals process
instead of through a consistent statewide policy that is proactively established by the state
board and implemented by the regional boards.
6. What is your view of the relationship between the state board and your regional
board? Could coordination and accountability be improved? If so, how?
California is a large state with complex ecosystems which means it is hard to have
one regulation that fits all regions. I see the roll of the state board as the overseer and
delegator of basic regulations and the regional boards as the implementer of the
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regulations based on what is feasible for that particular region. Each area is unique so
even within a region one TMDL does not address each watershed in the region. The
current set up gives each regional board the ability to really know the region and how
best to deal with those particular issues. The current relationship takes the "political"
pressure out of the arena and focuses on the health of water quality. They hear
complaints as well but understand that no one likes to be regulated.
California State Budget Crisis
California's dire fiscal situation has affected all parts of state government.
7. How do you, as a board member, stay informed of the fiscal resources available to
your board? How does your board prioritize activities if not all can be undertaken?
What are your priorities? Most of our resources come from permit fees and penalties
the board handles and not much from the general fund of the State. My priority is
how to get the biggest bang for the buck. I look to staff to give advice on what can be
accomplished, what the results will be vs. costs. Regulatory programs are supposed
to support themselves.
Enforcement of Water Quality Laws
Several years ago, the Office of the Secretary of Cal/EPA reported to the Legislature on
environmental enforcement and suggested that the state and regional water boards were
among the worst agencies in enforcing the law. The report stated that the boards were very
slow to enforce clean water laws, almost never sought criminal penalties for serious
violations, and generally did not aggressively pursue violators.
8. What enforcement options do you believe provide the most effective tools for
violations of board orders? Obviously financial impacts get attention. I am in favor
of mandatory fines with significant portion going to mitigation, preferably to a project
that will eliminate or reduce the probability of repeat violations. In my short tenure
on the board we have threatened referral to the attorney general and are closely
monitoring the situations. There are several options available to the regional board
and I am in favor of issuing a warning which encourages the violator to comply and
then get more aggressive and punitive.
9. What staff is available to assist you in enforcing water quality laws? Is the number
of staff adequate for enforcement purposes? If you must prioritize enforcement
efforts, what are the priorities and how are they determined? From my perception,
staff is very responsive to any report of violations and the board is continually
updated. Our efforts are to rectify the cause of the violation and to mitigate the
impacts of the violation. Penalties are always invoked. Staff has its own council to
advise them legally and the board has a separate attorney to make sure we follow the
rules and laws. I would say staff functions well but any cutbacks will threaten the
board's ability to function at today's standards. Priorities obviously will go public
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health and safety. The sheer number of discharges requires more funding than is
available for enforcement. Self reporting helps but is not the answer. Enforcement is
driven by mandatory minimum penalty directives from the state board. Staffing and
funding are the biggest hurdles.
Septic Rule
Chapter 781, Statues of 2000 (AB885, Jackson), requires the state board to develop, adopt
and implement statewide regulations for permitting and operation of on-site wastewater
treatment systems (OWTS), commonly referred to as the "Septic Rule". The board recently
proposed draft regulations which are currently available for public comment until February 9,
2009.
1 0. Has the state board articulated a role for the regional boards in implementing this
rule? There is a workshop in Santa Rosa later this month which will help me
understand what concerns the public may have. My understanding is that the state
will be setting minimum standards which will be incorporated into the various basin
plans.
1 1 . How does the board intend to monitor, enforce and improve septic systems that
contribute to surface and groundwater pollution? The regional board and local
governmental agency may have more stringent regulations than the statewide
standards. The North Coast Regional Board has given the counties the authority to
issue permits and deal with violations. The board will continue to coordinate and
track the various county programs. Regulation of septic systems is long overdue and
as with any new regulation will be closely watched.
Nonpoint Source Pollution - Freshwater Creek and Elk River
At the board's strategic plan workshop last year, one of the most identified pollution sources
in the North Coast region was nonpoint pollution, which includes sedimentation.
For at least five years, your board has tried to deal with the issues of water quality
specifically due to sedimentation buildup in the Freshwater Creek and the Elk River areas of
Humboldt County. Your executive officer has issued orders for technical reports on
abatement actions for dischargers who harvest timer in the area. The board has issued
cleanup abatement orders on these same timer harvest operators, however, Freshwater Creek
and Elk River residents still complain about the impairment of their water, both for
agricultural and domestic uses.
12. What do you believe the board should be doing to address nonpoint source
pollution in these two areas? Specifically should additional action be taken to
mitigate the sedimentation buildup? What is the timetable for resolving these
issues, and how do you monitor progress? As you may know, ScoPac/PalCo filed
bankruptcy and the bankruptcy court has approved the purchase of the property to
Humboldt Redwood Company who's owners have a proven track record of working
with the regional board and achieving results in Mendocino County (Mendocino
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Redwood Company). This change of ownership just recently took place. HRC will
practice selection harvesting which will be less of an impact, has a good public
relation track record and will be particularly mindful of water quality. Future actions
planned include, but are not limited to, combining all orders and WDRs into a single
WDR, one for Freshwater and one for Elk to comply with the TMDL to be adopted
for each area. The TMDLs final adoption is about 18 months away. Funding seems
to be limiting factor in expediently dealing with flooding and stream restoration.
Fee Collection/Timber Harvest Review
13. How does your regional board pay for the costs of timber harvest plan review?
Does your board collect a fee for review to pay for the regional board's costs
associated with the water quality review of such plans? If so, what is the amount of
the fee? Does fee revenue stay with the regional board or is it forwarded to the
state board? This program is currently funded from the state's general fund.
However, our board does charge a $1226 yearly for each timber harvest plan and the
state board collects the fees and puts them into their waste discharge fees fund. The
regional board does not receive any allocation from the state board for timber harvest
review.
14. Do you have any suggestions as to how to better ensure any fees collected by the
regional boards stay with those boards to help pay for staffing and other review and
enforcement costs? The state board could change its policy to allocate funds from
the fees collection to pay for the program.
Harmful Algal Blooms and Klamath River TMDL
Blue-green algae blooms have been found in the Klamath River, Big Lagoon, and the Eel
River. A study by the Center for Integrated Marine Technologies (CIMT) points out that
these blooms negatively affect fish, marine mammals, and seabirds. Some algal species
cause large fish kills by clogging up or lacerating the fish's gills.
The CIMT report said that there is growing evidence that human contributions of phosphorus
and nitrogen are causing the blooms to occur more frequently and contributing to their
duration and severity. A presentation to your board on December 1 1th discussed the TMDL
process for the Klamath River. Staff said that 76 to 80 percent of the phosphorus and
nitrogen would have to be eliminated in the river to achieve TMDL compliance. Staff also
indicated that the TMDL would not directly deal with blue-green algae.
15. What is the extent of harmful algal blooms in inland and marine waters in your
region? How serious are the negative effects on fisheries and marine mammals?
How does your board determine the seriousness of those effects? The Klamath
River is actually more impaired at its source in the State of Oregon than it is at its
outfall in the State of California, which is most unusual. The area of most concern for
harmful algal blooms is in the hydro reservoirs on the Klamath River. Blooms are
also found in areas below the hydro dams. Blue-green algae toxins have been found
111
in fish in the Klamath, but we have information that it has been found elsewhere. We
consider the algal blooms to be of significant concern.
16. Is it feasible to eliminate 76 to 80 percent of the nutrient loading in the Klamath
River? What type of restrictions would have to be imposed to achieve this level of
reduction? As stated above, the Klamath originates in the State of Oregon and the
largest portion of nutrient loading of the Klamath originates from Oregon in the
Upper Klamath Basin and Lost River watershed which effects and impacts the hydro
reservoirs. The Shasta River further impacts the nutrient loading but the Shasta River
TMDL implementation has show water quality improvements in the Shasta. Oregon
would have to reduce its nutrient loading levels by treatment, infrastructure
improvements and long-term restoration projects. If dam removal does not occur,
there are some in-reservoir engineered options that may provide some relief. All
together it is possible, but will take many years to achieve.
17. When will the TMDLsfor the Klamath River be completed? As information is
developed by the board, can it be released to contribute to the discussions and
negotiation regarding the Klamath River? The regional board's website already
contains information regarding the Klamath TMDL and will be updated as new
information is available. The current timeline for the TMDL is for public draft to be
released this coming May with regional board consideration scheduled in October
2009. From there it will go to the state board for final adoption.
1 8. Are the adoption of the Klamath River TMDLs integral to the broader discussion of
poor water quality and dam removal on the river? Absolutely. When the public
draft is released it will show that the technical analysis to be a comprehensive look at
water quality - its current condition, causes of impairment and solutions.
Emerging Contaminants
New and emerging contaminants are unregulated. They may be new contaminants present
but not detected. Among these are pharmaceuticals and personal are products, industrial
chemicals present at low concentrations, and chemicals that may affect the hormone system,
referred to as "endocrine disruptors."
Additionally, new testing by independent organizations has turned up pharmaceuticals and
over-the-counter medicines affecting drinking water supplies across the country. While the
findings reported by the Associated Press in Parch 2008 involve miniscule amounts of
various pharmaceuticals, concerns over long-term consequences to human health and
possible additional testing have resurfaced.
Under current law, required testing and standard limits for pharmaceutical and over-the-
counter drugs in drinking water are limited. Beginning in January 2008, several water
systems began monitoring under the U.S. Environmental Protection Agency (U.S. EPA)
Unregulated Contaminant Monitoring Regulation for contaminants detected from the
contaminant candidate lists. These are potential contaminants that the U.S. EPA may
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regulate in the future. Federal and state laws give authority to U.S. EPA, the California
Department of Public Health, or the regional water boards to regulate contaminants, which
could include pharmaceuticals.
The Department of Public Health has developed draft regulations and is proposing to require
an analysis of specific unregulated chemicals and report detections for certain groundwater
recharge and reuse projects. These chemicals include pharmaceuticals, endocrine disruptors,
and other wastewater indicator chemicals.
19. In your view, what is the role of regional water boards regarding required testing
and standard limits for pharmaceuticals and over-the-counter drugs in drinking
water? Should the state water board, through regional boards, be working with the
California Department of Public Health re require testing and set safety limits for
drugs in drinking water? I see this as an emerging issue and will need to be hashed
out similar to the septic issue. Well users already test their water. As the science
improves we will be better equipped to address the issue.
20. To what degree is your board monitoring these and other emerging contaminants?
How are you informed of new sources of pollution? Staff and board members attend
workshops sponsored by various national and state water associations such as
California Association of Sanitation Agencies.
2 1 . What other state agencies are involved in this monitoring process? Do you share
your information with other drinking water and public health agencies? We are
always willing to share information with other state agencies or associations.
California Department of Public Health and the state board are great sources of
information.
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114
David M. Noren
February 2, 2009
Mr. Darrell Steinberg, Chairman
Senate Rules Committee
California Legislature
State Capitol, Room 420
Sacramento, California 95814-4900
SUBJECT: CONFIRMATION RESPONSES FOR APPOINTMENT
NORTH COAST REGIONAL WATER QUALITY CONTROL
BOARD
Dear Mr. Steinberg:
The following presents answers to the written questions regarding my confirmation to the
North Coast Regional Water Quality Control Board (NCRWQCB) appointment. 1 have
provided the answers in the order they were posed in the January 14, 2009 letter. I am
also including an updated Statement of Economic Interest Form 700. My responses are
as follows:
1. My goals as a board member of the NCRWQCB is to be a part of the
regulatory process in the formulation and passage of the Total Maximum
Daily Load (TMDL) for a majority of the impaired water bodies that have
been identified in our region. These include the Russian and Klamath Rivers
as well as smaller coastal tributaries. The TMDL process is conducted in
conformance with Section 303d of the federal Clean Water Act. Many of
these water bodies within our region have been identified as being impaired
due to a variety of factors that include excess sediments and nutrients, low
dissolved oxygen levels, elevated water temperature levels as well as
anthropogenic impairments from toxic chemicals. The TMDL process is an
overall watershed approach to water quality study and improvement that
identifies impaired water bodies and mandates development of the TMDL
process as a means to restore these impaired water bodies for full support of
beneficial uses.
To date the NCRWQCB has implemented TMDL's with implementation
plans for several impaired water bodies. The implementation plan is an
important component for the actual work that is needed to meet the
Senate Rules Committee
FEB 0 2 2009
115
allocations. These TMDL's include the Garcia River, the Shasta and Scott
Rivers. Several impaired water bodies have a technical TMDL that identifies
the impairment but have no implementation plan. It is important to have
implementation of some form for each of these impaired water bodies.
There has been success in improving water quality using the TMDL process
that is quantifiable and measurable. Success of implementation is measured
using a combination of metrics including stream and water quality testing,
measures of the density and extent of riparian vegetation, fish and aquatic
organism surveys, stakeholder participation and others. One important aspect
of implementation is to have a sustained effort by all the participants including
the agencies along with stakeholders to carry out the various implementation
processes in a concerted effort. This includes seeking funding opportunities to
allow for large scale improvements where possible. There have been
successes and there is commitment from the participants to take the process
forward in these water bodies that have the process in place. It is very
encouraging to see the success of these programs within specific watersheds
and to know that we can take that process and duplicate it on another system
with success. I would like to see the TMDL process completed and
implemented to the best of our ability in all of the identified water bodies in
our region.
Another area of importance is the ongoing permit process for permitted
discharges coming up for renewal. As Board members we have an obligation
to review and improve upon these permits as they are renewed. The continued
compliance for point source dischargers is a first order of compliance that
needs to be maintained and improved on a constant basis to include up to date
means and methods for permit requirements and permitting structure and
function based on a sound scientific basis.
Another area that I want to work on includes permitting of dairy and
rangeland entities. We are the last of several Regional Boards to complete a
permit process for these operations. The dairy industry in region 1 is unique
in that the sizes of these facilities tend to be small and many are located in
coastal settings that experience high seasonal rainfall. Nutrient management
is a necessary part of the permitting process to be protective of surface waters
as well as measures to be protective of groundwater resources. I have worked
with Regional Board staff and stakeholders to begin the development of this
process. It is my goal to have this permitting process in place and active in
the next 12 months.
Another area of importance to complete is the development of riparian and
wetland policies. There are the beginnings of a concerted and coordinated
effort between the State Water Resources Control Board (SWRCB), the San
Francisco Bay Regional water Quality Control Board and the NCRWQCB to
develop a consistent statewide policy for wetlands and riparian zones. This
116
policy, if enacted, can function synergistically with many of other programs
including the TMDL and timber permitting programs. I have been part of the
initial discussions for this policy and would like to see a consistent policy
developed that can then be applied on a larger basis.
Many additional opportunities for improvement are available.
The two most serious current issues facing our Board are the ongoing budget
problems and the drought conditions that currently exist on the north coast.
The State of California budget woes threaten existing and future programs at
the NCRWQCB by constraining the current and long term implementation of
many programs that are vital to protecting and improving water quaJity.
There is also the added problem of the economic times that limits the ability
of the regulated community to put forth the necessary resources to implement
mandated requirements for projects. There has been a great amount of effort
and capital that has been expended to implement programs with years of work
by agencies and the regulated community that is threatened by the budget
crunch.
California is also in a state of continued drought that translates to less water
overall and a competition for scarce resources. In many north coast water
bodies there is intense pressure for water for human uses that is in direct
competition with the natural requirements of these water bodies to support all
of the beneficial uses for the long term health of the water body. These
pressures are only exacerbated by the current drought conditions.
There are many outlets for public information including press releases, web
disseminated information, public workshops and public hearings that allow for
public participation. The information on our web site is formatted and
presented in a consistent format with SWRCB and other Regional Board web
sites. As with any web site, there can always be improvements for more
information, although I find our web site to be well organized with valuable
and up to date content.
Many water quality notifications are overseen by participating public agencies
including the Regional Board. In many cases the Regional Board participates
by gathering and dissemination public information that is then released
through a companion agency. An example of this is the notification of health
warnings for human contact for water bodies that are impaired by bacterial
contamination that is posted and disseminated by the local Public Health
Department. Another example is the posting of the health risk of microcystin
in the Klamath River area by the California Office of Environmental Health
Hazard Assessment.
Our Regional Board staff has been very helpful in providing background
information and answering questions for complex issues. The staff of our
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Regional Board has been very professional and well informed. As a Board
member I am constantly being briefed by staff of upcoming issues which
allows for an opportunity to ask questions and have a broad discussion of the
issues. I have found the State Board staff to be equally helpful to me as a
Board member. The S WRCB has been active in reaching out to the Regional
Boards through the Water Quality Coordinating Committee (WQCC)
meetings that include the SWRCB and all the Regional Boards. I attending a
meeting of the WQCC this past fall and will attend another in February.
These meetings are very informative and allow for a better understanding of
the participatory role of the SWRCB and the Regional Boards. This process
also allows for a better understanding of the complexities of each region and
the water quality issues that are specific and unique to each area of the state.
5. I have had numerous publications forwarded to me from the State Board
council regarding conflict of interest. In addition we have had presentations
and discussions regarding conflict of interest issues at the WQCC meeting.
The office of Counsel and our own staff attorneys continues to be available in
helping to understand conflict of interest and ex-parte issues. This has been
especially important for me as 1 am an environmental consultant that works in
the greater North Bay area on water quality issues. An example of this is the
MS4 permit renewal process for the City of Santa Rosa that recently came
before our Board in which I recused myself because as a consultant 1 have
performed stormwater sampling and other professional services for this
program. Legal counsel is available for Board members where any issue of
potential conflict arises.
6. The relationship of the SWRCB and the Regional Boards is very important.
The Regional Boards cannot be totally autonomous in the formulation of
policies or programs, however: it has been my experience that the Regional
Boards are often in a front line position to develop and implement policy. It
has also been my experience that each region is unique in it character and
geographic complexities. In the short time that I have been on the Regional
Board, there has been an ongoing relationship with the SWRCB for the
development and implementation of policy. I would recognize that there are
always opportunities to improve this process and to have a more consist
process. It is not always an easy thing to carry that out in practice.
7. We have had several opportunities to be briefed on the effects of the
California budget crisis and potentially what it means to our region, staff and
programs. For the Regional Board this information has been presented as part
of the Executive Officers report for each meeting. We have also had briefings
from Slate Board at the WQCC meetings. As a Board we have yet to
prioritize efforts based solely on the budget issues as this is a fluid issue that
has yet to be resolved. My personal belief is that we have an obligation to
keep existing programs such as TMDL, enforcement and compliance funded
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to the best of our ability. Any new programs would have to be evaluated as to
our ability to implement them based on staffing needs and resources.
8. The Regional Board has many enforcement options available depending on
the type of problems. It has been my experience that a model of progressive
enforcement is the most effective. Enforcement would start with violations
through inspections and follow-up to issuance of fines through the process of
administrative civil liability. We also have the option of issuing orders
including Cease and Desist Orders, Cleanup and Abatement Orders and in
recalcitrant cases referral to the Attorney General.
For many permits there are Mandatory Minimum Fines that are imposed for
violations of waste discharge requirements. In the case of the NCRWQCB
there was a historic backlog of these fines that to my understanding have been
largely resolved and brought to manageable levels.
9. There has been a historic problem with adequate funding for staffing to
manage and oversee enforcement. With the current fiscal crisis there needs to
be a priority to manage and oversee our enforcement efforts. Enforcement
should be prioritized for exists permits and programs to ensure compliance
both as a means to address violations and make sure that fines when levied are
assessed and collected. It is my understanding that there is one person year
allocated for enforcement. It has been my experience that at each Board
meeting there is enforcement issues that come before us for our review and
approval. This includes input from staff and legal counsel if required.
It is my belief that enforcement should be prioritized for existing programs
and permits that we have at this time. This includes a priority to enforce for
discharge violations in regard to permitted point source facilities as well as to
provide progressive enforcement on an as needed basis to dischargers that are
not in compliance with applicable requirements or are unwilling to make
efforts for improvement. The enforcement model can and should be used as a
tool to move the compliance process forward.
10. The State Board is currently circulating the draft regulations for AB 885 for
public comment. The role for Regional Boards has not been finalized in the
implementation of this program. In the past the NCRWQCB has had a limited
role with the permitting and oversight of septic systems. In most cases the
authority and oversight for the installation and operation of these systems has
been delegated to the local health departments. Our Basin Plan however
requires the NCRWQCB to permit and oversee systems that are in excess of
2,500 gallons per day of effluent discharge. It is likely that the NCRWQCB
will have a continued limited regulatory role to play in this policy
implementation.
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1 1 . The way that the septic tank rules are currently written monitoring and
enforcement by the Regional Board is mandated for septic systems that are
located within 600 feet of a water body that is 303(d) impaired for nutrients.
In the current draft regulations, these systems are subject to additional
monitoring and inspections for existing systems and more stringent
requirements for the siting and operation of proposed systems. Trie final
regulations will likely dictate our role in carrying out this program.
12. The Elk River and Freshwater Creek have a long regulatory history that has
been controversial. These watersheds have historically been intensely logged
that has resulted in the deposition of large amounts of sediments to these
water bodies. The NCRWQCB issued Waste Discharge Requirements for
timber permits in these watersheds with limitations on the amount of harvest
and enhanced monitoring and reporting to track the impacts to these
watersheds.
In the past several months there have been changes in the owners and
operators of timber operations in these watersheds with the purchase of the
former Pacific Lumber Company by the Humbolt Redwood Company. A
recent report to our Board by Humbolt Redwood Company indicated that they
have a very different approach and model for timber operations that include
selective harvest instead of clear cuts and implementation of improvements to
the watersheds through management processes that includes road maintenance
and improvement, sediment management and improved public outreach.
It is my understanding there is also a commitment for improvement and
maintenance of the drinking water resources of local landowners that have
been impacted by the sedimentation in these watersheds. It is also my
understanding that the TMDL process is underway for both these watersheds
that will result in an implementation of remedial actions to restore these
waterways. As with all TMDL's there will likely be many options for the
long term improvement of these watersheds that will address sediment and
other water quality issues. The timing for the implementation of the TMDL's
for these watersheds will depend upon staffing and resources. It is my
understanding that options for dealing with sedimentation may include
dredging and streambank restoration. With adequate funding the time table
for implementation could likely be within the next three to five years.
13. It is my understanding that the fee for the timber harvest program is funded
from the state general fund. There is a fee for enrollment upon issuance of
Waste Discharge Requirements. I have been recently informed by staff that
the fee is $1,226 for each year the Timber Harvest Plan is enrolled. The fee
is prorated in the first year based on enrollment date. I was also recently
informed that the SWRCB issued invoices for 412 Timber Harvest Plans in
our region that totaled $436,658 for the past fiscal year with our total program
cost being $1 ,552 1 ,000 for this time period.
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14. It is my understanding that a change to the allocation of monies for this
program would require a policy change by the SWRCB.
15. Blue green algae blooms have been an ongoing problem on the main stem of
the Klamath River, specifically in the area of the existing dams, and on
portions of the Eel River. The bloom of these algae, especially mycrocystin,
has been problematic due to aquatic and systemic toxicity from these
organisms. They represent a serious health and environmentaJ issue. There
have also been public notification postings for the Klamath River in the area
of the dams and the south fork of the Eel River for blue green algae. The
public health advisories limit consumption of aquatic species and limit public
contact recreation for these impacted areas. Ongoing monitoring has been
implemented by companion agencies and stakeholders including the
California Office of Environmental Health Hazard Assessment to monitor and
provide notifications regarding the effects of blue green algae blooms. This
is an ongoing serious issue regarding water quality in these areas.
16. The TMDL for the Klamath River does set large allocations for the reduction
of nutrient loading. These reductions are similar to the reductions set forth in
the Shasta River TMDL. These are large reductions that need to be managed
to restore water quality. In terms of the Klamath River there are both point
and non-point sources for these nutrients. There are also sequestered nutrients
in Upper Klamath Lake that are historic to the watershed and the result of the
Mount Mazama volcanic orogeny that formed this area. To further complicate
matters, the Klamath River is an interstate water body that originates in
Oregon and flows through California to the Pacific Ocean. There are many
permitted point sources that are regulated for nutrients along the Klamath
River. Given that many of these point sources are already permitted, the non-
point sources are subject to regulation as part of the TMDL. These include
nutrient sources from irrigated agriculture, timber and rangeland and others.
To achieve these allocations, any and all regulatory tools will have to be used
to have success.
17. The TMDL for the Klamath is mandated by the Consent Decree to be
completed by December 2010. Complete means that the TMDL is approved
by the North Coast Regional Water Quality Control Board, the Office of
Administrative Law, the SWRCB and the federal Environmental Protection
Agency. It is my understanding that to meet this schedule the TMDL needs
to be approved by the NCRWQCB by December 2009 to allow for enough
time for the other participating agencies to complete their review and approval
processes. We were informed in our monthly Board meeting last week that a
draft of the implementation is soon to be released for comment.
18. I think that the adoption of the TMDL for the Klamath River is integral to the
water quality issues and the removal of the dams from the Klamath River. As
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of yet the NCRWQCB has not had a significant part in the Agreement in
Principal for the negotiations for the removal of the dams. Nor has the
NCRWQCB had a role in the 401 Water Quality Certificate for relicensing the
dams as they are federally permitted as power generating dams and the
SWRCB has the authority to issue the 401 permit. As a Board we have a
strong desire to have our staff and Board be a part of the discussions with
respect to the removal of these dams and the longer term implications for
impacts to water quality.
19. The issue of emerging contaminants is new to the regulatory agencies with
respect to both drinking water and treated wastewater. There is now a State
Board panel that has been formed to explore these substances and how to
regulate them. I think the Regional Boards will have a part to play in the
implementation of policy that requires testing and perhaps treatment for these
compounds. The State Department of Health Services along with other
applicable agencies will also need to be part of the mix in regulating these
compounds.
20. It is my understanding that there hasn't been a great amount of testing by
dischargers in our region for emerging contaminants. As far as I am aware
there is very little or no testing required in our existing permits for emerging
contaminants. I have recently attended a conference for emerging
contaminants sponsored by the California Groundwater Resource Association.
I then requested at our next Board meeting what we are going to do in regard
to these constituents. There is interest in these contaminants and there has
been and will continue to be development of rules and regulations on the State
and Regional levels to monitor and regulate these compounds.
2 1 . The California Department of Health Services and the Department of Toxic
Substances Control have been involved with the monitoring of these
compounds. I think it will be important to work collaboratively with these
agencies as information comes forward and policies are developed for
emerging contaminants.
I trust this provides the information that you require at this time. If you have any
comments or questions, please call me.
/
Sincerelv, / \- f
A).
/ /
David Noren ^
V
Enclosure: Form 700
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Senate Rules Committee
Questionnaire
Regional Water Quality Control Board Appointment Process
January 30, 2009
Steven M. Moore
Member, Regional Water Quality Control Board, San Francisco Bay Region
Statement of Goals
1 . What to accomplish during tenure? What goals and how achieve? How measure
success?
I would view my tenure as a success if the general awareness of citizens in the Bay
region increased with respect to how our daily lives affect the quality of the region's
fresh, estuarine and salt waters, and if some vital behaviors shifted accordingly over that
time. Similarly I would like to see a shift in the institutional bias of local agencies toward
integration - the "turf of specific agencies related to water supply, flood control and
municipal functions needs to be let go in favor of meeting multiple, compatible
objectives. I would also like to see certain over-the-counter products substituted with
water quality-friendly products because it is unreasonable to expect all citizens to
properly dispose of dangerous substances, and, as we have learned, these substances find
their way to the water system.
As a Board member I can help bring this message to the people of the region by
establishing requirements to renew the drainage infrastructure to prevent pollution,
principally through regulation of urban runoff by NPDES permits and regulation of flood
control and dredging projects under Water Quality Certifications pursuant to Clean Water
Act Section 401. The technical reasons to make these investments relate to integrating
water supply, flood control and water quality. By requiring the integration of water
quality improvement with the other traditional public works, we assign a cost to
removing over-the-counter products of concern after they are used by consumers, and
thereby create an incentive for local governments to apply pressure to product
formulators in forums such as the California Product Stewardship Council (CPSC).
People need to better understand the linkages between our actions and the infrastructure
and water system that sustain our quality of life, including water professionals and
elected representatives. In my experience, many people treat such information with
natural curiosity and are interested in changing behaviors if the change will make a
difference. We saw this in the Bay Area in the late 1980s when communities like Palo
Alto began curbside recycling. Landfill expansion slowed greatly when this recycling
habit took hold in Bay Area communities, which led to national changes. Part of this
awareness that leads to behavior changes includes an understanding that all waters are
protected by the rule of law. Even when the Water Boards merely contemplate major
increases in regulatory oversight, it can motivate affected parties to seek behavior
changes to attain the environmental goal at less overall cost. As a Board member I would
&»«* R^ conunitfee
l F6B ° 3 7floS
teats 123
judiciously use the authorities to provide such motivation, and exhibit flexibility knowing
that environmental goals can be achieved through control at the source, treating at the
end-of-pipe, or some combination of the two.
I have specific goals related to the untapped potential of the region's natural forces for
the benefit of the people of the state. The natural hydrology and topography of the Bay
Area make this region globally unique in terms of its ecosystem potential. The dozens of
square miles of flat areas naturally subject to tidal action create a template for the most
efficient carbon-fixing machine on the planet - tidal salt marsh is as productive at
sequestering carbon on a square mile basis as any ecosystem on Earth, including tropical
forest. The fundamental force of biological productivity is photosynthesis, translating the
sun's energy into food energy that people and wildlife can use. Biological productivity is
therefore something that can be put to work in the Bay Area in a powerful, far-reaching
manner. This untapped power translates to local food production, recovery of
endangered species, flood control, water quality improvement, and incremental reduction
of global warming. Food production in San Francisco Bay is not just harvesting fish and
shellfish in the Bay, which is currently a relatively narrow enterprise, but supporting
early life cycles of commercially important ocean fisheries such as Dungeness crab,
California halibut, and sole.
The Water Board's active participation in the Comprehensive Conservation and
Management Plan (CCMP) for the San Francisco Estuary shows its commitment to
recovering the tidal marshlands of the region for water quality, critical fish and wildlife
habitat, and biological productivity. Wetlands restoration has long been a priority in the
CCMP and for this Water Board. As a Board member I can make sure this emphasis
continues.
I want to see more investment into drainage infrastructure renewal to meet the three-fold,
interrelated disciplines of water supply, flood control, and water quality. By renewing
infrastructure to meet these three goals together, we will have more reliable, sustainable
water systems that improve the quality of life. People naturally want to go down to the
water - too many of these resources have been separated from the community by barbed-
wire and reinforced concrete. As these systems crumble, we can renew them with our
modern understanding of river science and create community assets instead of liabilities.
I would measure my success in the miles of restored channel, the acres of marsh restored
to the tide and the gallons of local water runoff harvested to offset imported potable water
demand. I would measure success in the reduction of the number of sanitary sewer
overflows and a lowering of pollutant levels in fish and shellfish that people consume.
These targets all relate directly to meeting water quality standards.
As a Board member, I believe I have opportunities in the regulatory programs to
accomplish these various measurable benchmarks. As mentioned above, the 401 Water
Quality Certifications and Waste Discharge Requirements (WDRs) issued to flood
control districts around the region can include provisions for water quality protection, and
by extension, local water supply enhancement. Permitting and enforcement in the Water
Board's existing NPDES and WDR programs can encourage restoration of stream and
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wetland functions, encourage local jurisdictions to harvest local runoff, lower pollutant
levels in fish and shellfish through TMDL implementation, and reduce sanitary sewer
overflows.
2. What are most serious issues facing this Board?
In the water quality discipline, the most serious issues are irreversible, permanent
impacts. A lot of pollution episodes are short-lived, ameliorated by natural processes that
naturally cleanse pollution such as low oxygen demand, high solids, dangerous bacteria,
ammonia, and even metals and some organics. These issues are still important to
address, however, especially when there are chronic, recurrent problems. Examples
include discharges that carry higher risks of people getting sick or periodic fish or bird
mortality attributable to recurrent disturbances that may be related to infrastructure or
maintenance issues. Where sources of these types of pollution are currently regulated
under Waste Discharge Requirements, some progressive enforcement actions may be
needed to spur on needed investments to remedy chronic issues.
The more serious threats from discharges to the creeks and Bay are the ones for which
recovery is either impossible or very-long-lived. A good example is plastic debris - the
plastic trash that is scoured by urban runoff and sent to the Bay and ocean is
accumulating in the Northeastern Pacific Ocean Gyre in an infamous garbage patch the
size of Texas and growing. Because this material is not degradable, it accumulates,
reducing the flow of energy through the ocean's food web, threatening our food supply.
While the region's contribution to this global issue is of concern, so also is the
accumulation of these plastics in local creeks and the Bay for the same reasons offish
and wildlife entanglement or malnutrition. In my view urban runoff programs of the
region need to review their storm drain systems for opportunities to apply best available
technology to remove plastic debris. There are successful retrofit project examples in the
region that they can emulate, and I think the NPDES permits should compel these
evaluations to curb the discharge of plastics.
Other irreversible impacts from discharges include aquatic invasive species from
discharges of ballast water. Once introduced, an aquatic invasive species is impossible to
eradicate and sometimes our lives have to change to adapt to their introduction, as is what
happened in the Great Lakes/Mississippi Basin with the zebra mussel or is starting to
happen in California with the quagga mussel and the mud snail. U.S. EPA has begun to
use the NPDES program to address these discharges, and I think the Water Board should
advise the U.S. EPA in this process to ensure that appropriate technological controls are
implemented as new ships are built.
Synthetic organic pollutants can pose serious risks because organisms did not evolve with
their presence in the environment. In some cases like DDT and PCBs, the widespread
use of yesteryear is still showing signs of impact almost 40 years after their bans. The
ongoing introduction of chemicals into mainstream circulation poses a general risk where
chemical characteristics are similar to known toxins but there is insufficient information
about the chemicals' thresholds of concern to people, fish and wildlife. Polybrominated
125
diphenyl ethers (PBDEs) used as flame retardants in this country fit that model. Before
registration, all chemicals and drugs should at least be screened for potential water
quality and food source impacts. As a member of the Water Board I can bring this
perspective to forums such as the Product Stewardship Council and other similar
organizations that need support in pushing private industry for product reformulation that
would help water quality.
Some behaviors from citizens and businesses are continuing to foster the belief that
waterways and ditches are acceptable for waste disposal, and I believe it is a serious
issue. When an urban stream or lake is constantly littered with various trash and debris, it
sends a message that it is acceptable to use these facilities to dispose of waste. These
practices perpetuate problems of toxics and plastic in the creeks, marshes, bay and ocean.
Increased regulation of what goes to landfills through the CIWMB only increases the
pressure on waterways to be dumping grounds. Citizens and businesses need to
understand that waste disposal in waterways is unacceptable, illegal, and undermines our
efforts to clean up the waters for their use and enjoyment by people of the state. There is
hope for sustained improvement - in communities where waterways have been
systematically cleaned up, the local population has been shown to be interested in
keeping them clean. As a Board member I can help support such community
improvements by allowing flexibility in urban runoff requirements to allow non-
structural solutions to move forward where it is demonstrated that an equivalent level of
protection can be provided as with more costly capital, structural solutions.
3. How does the Board help the public understand the state of water quality in this
region? Website adequate? Where should public go for info.?
As with other states, the Board collects data on water quality with a very limited budget.
Discharge permits contain requirements to generate monitoring information to augment
the Board's efforts and help define the state of water quality. It is difficult to arrive at
scientific conclusions on water quality with a couple of hundred thousand dollars for
every 10,000 square miles every year.
In the early 1990s, the Board made an important accomplishment when it partnered with
the NPDES dischargers to initiate the Regional Monitoring Program (RMP),
administered by the San Francisco Estuary Institute (SFEI). Prior to the RMP, NPDES
dischargers had local effects monitoring programs that were not coordinated, but were
already costing the local governments money to administer. The RMP is funded through
these same monitoring funds, but in a regionally consistent and coordinated fashion. The
RMP is nationally recognized as one of the best-coordinated, science-based estuarine
monitoring programs. It was funded through the redirection of existing expenditures and
did not require significant state or federal funding. The RMP information is the
authoritative long-term water quality information for the San Francisco Bay and can be
accessed at the SFEI website www.sfei.orR.
The website for the Water Boards was recently revamped and made it more difficult for
regular users, because the hard-wired links to information got redefined. Perhaps it is
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easier for the public, but it is geared toward assisting entities to comply with regulations,
and not so much to report out on general water quality. The public should go to the
Regional Water Board staff contacts for general information because they are the most
objective and knowledgeable about the wide range of urban and rural water quality
management issues in the region.
For up-to-the-minute information on beaches and such, the county health departments
should be the place to go because they handle the day-to-day management of exposure to
potential health threats. There are some user-friendly websites operated by non-
governmental organizations such as http://www.earth91 1 .org/waterquality which take the
local county health information and consolidate it across county lines.
Board roles
4. What training have you received about conflict of interest? How to know when to
withdraw? Have you ever done so?
I received a four-hour training from Board counsel Phil Wyels on conflict of interest
issues, and I am confident in my knowledge of when to withdraw. I furnished a list of
clients from the company I work for, Nute Engineering, to the Governor's office of
appointments. 1 recuse myself from voting on any matter from this finite list of clients,
mostly located in the North Bay area and Marin County. To date I have excused myself
from voting on issues related to Novato Sanitary District and Sanitary Dist. No. 5 of
Marin County (Tiburon), even when both matters were on the uncontested calendar.
5. What is your view of the relationship between the State/Regional Water Boards?
Could accountability and coordination be improved? If so, how?
The relationship is inherently uneasy because the State Water Board is an appeals body
for Regional Water Board decisions, and because the State Water Board handles all the
fiscal responsibilities. For two-step approval processes like TMDLs and water quality
standards, the State and Regional Water Boards have done a better job in the last ten
years of coordinating at the staff level to avoid duplicative processes starting from
scratch. I have noticed that State Water Board members exert influence on staffing
decisions and priorities much more directly than at regions, perhaps due to their full-time
employment status. The imbalance of power and money between State and Regional
Water Boards will ensure that challenges will be encountered in the future.
Accountability and coordination are improved through simple communication and where
State Board staff recognizes the Regional Water Board staff expertise and connections at
the local level, and when Regional Water Board staff recognizes that the power to affect
change to meet regional goals is augmented through teamwork with State Board staff.
This commitment to coordination requires time on the phone, on emails, and in getting
together periodically in person. It is also helpful to expose State Board staff and
members to the Regions' realities on the ground whenever possible.
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In spite of the challenges imposed by the organizational structure, I believe the Water
Boards have come a long way in the last 1 5 years to function as more of a unified agency.
An example of the progress and teamwork between regions and the State Board is the
stream and wetland policy now being developed by Regions 1 and 2 and State Board as a
coordinated effort. This effort is not only between State and Regional Water Board
staffs, but between State and Regional Water Board members as well.
California State Budget Crisis
6. How do you stay informed of fiscal resources available to the Board? How does
Board prioritize activities if not all can be undertaken? What are your priorities?
The Executive Officer (EO) and staff do a commendable job keeping Board members
informed through the EO's monthly report to the Board and public, periodic emails to
Board members from the EO, and in Board hearings. Fiscal limitations are often
mentioned in documentation from agenda items.
The Board's work is largely fee- and cost recovery-supported (about 85% or more). As
such, the work is prioritized accordingly. The fee-supported programs deserve attention
at a level commensurate with the funding they provide and the PYs (person-years) they
support. Efforts within these programs are targeted toward persistent pollution problems,
whether abatement or prevention, based on the water quality challenges that have been
established as priorities working with the regulated community and the interested public.
My priorities are to run the delegated permitting programs effectively and to the
satisfaction of State Board and USEPA, including permit re-issuance, compliance
monitoring, and enforcement. I also believe in the importance of ambient water quality
monitoring to assist in prioritization efforts so that the limited resources are targeted to
issues that we have the best hope of solving before they become intractable and all the
more expensive to address.
Enforcement of Water Quality Laws
7. What enforcement options do you believe provide the most effective tools for
violations of board orders?
The Water Boards enjoy a host of enforcement options and flexibility, allowing tools to
be applied to specific cases with an appropriate level of discretion for maximum
effectiveness. The options range from requiring more technical information, issuing
notices of violation without fines (a warning), issuing mandatory minimum penalties,
cleanup and abatement orders, cease and desist orders, and imposing administrative civil
liability (ACL). Significant cases like oil spills can be referred to the Attorney General.
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The ACLs can be up to $10,000 per day and $10/gallon, which add up quickly as
maximum fines, creating a significant deterrent.
To wisely use discretion, Water Boards need to recognize that public agencies under
permit to the Water Boards share the mission of the boards. These entities are beholden
to the public that supports them through fees, and their stated purpose is to protect water
quality through proper operation and maintenance of facilities. For these entities, the
ability to use a majority percentage of fines for supplemental environmental projects
(SEPs) is the most effective tool to get the needed change in behavior and to maintain a
teamwork relationship between the Water Boards and the local government and citizenry.
If most of the fine money goes to the Cleanup and Abatement Account, the Water Boards
are more likely to be cast as intruders or adversaries in local communities and meet
resistance in meeting the letter of requirements.
It is much more effective and efficient to engender trust and keep ratepayer money in the
local watershed, allowing the public servants to save face and show something tangible
and positive that resulted from the misfortune of an effluent limit violation or something
like a fish kill. It doesn't work to just fire personnel if a mistake occurs - there has been
too much public investment into the personnel and associated institutional knowledge to
just toss the baby out with the bath water. Enforcement actions need to recognize the
nuance and not alienate people and communities that are fighting for the same clean
water.
For private entities that may benefit economically from noncompliance, the Board needs
to use the full range of the Water Code's strict enforcement provisions to make the
necessary deterrent to protect the critical water resources that benefit us all.
The policy of progressive enforcement works well in all cases because water quality is a
goal that all individuals understand and that good neighbor businesses strive to protect. If
the desired performance or behavior change is not achieved after a warning, the
progressive increase in enforcement response from notice of violation to cleanup and
abatement order or cease and desist order draws more attention to the culprit. The Water
Code's maximum penalties are among the strongest globally for water quality protection
and provide a significant deterrent. This Board has actively used this progressive
enforcement approach to address violations.
In the last decade the Water Boards have been issuing mandatory minimum penalties,
which are set at $3000 per violation, and these have been an effective deterrent for the
municipal dischargers, because the frequency of these violations has noticeably declined.
8. What staff is available to assist you in enforcing water quality laws? Is the
number of staff adequate for enforcement purposes? If you must prioritize
enforcement efforts, what are the priorities and how are they determined?
This Water Board recently reorganized in a fashion to elevate the importance of
enforcement actions in the overall work program. The Assistant Executive Officers have
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been charged with administering enforcement actions, which has raised the profile of
enforcement significantly. There is a division in the agency dedicated to enforcement,
and the actions before the Board in 2008 represented an increase in enforcement to a
wider variety of perpetrators. While there may not be adequate staff to address all
enforcement needs, there are more staff than ever before to assist in enforcement.
I support this new direction of increased enforcement presence and demonstrating that
water pollution can come from a wide variety of land uses and discharges. I believe the
Water Boards need to hold permit-holders accountable and show the compliant permit-
holders that we will seriously pursue the non-compliers who may otherwise have an
economic advantage related to noncompliance. This demonstration of follow-through on
enforcement needs to touch all facets of the Board's operations, not just major industry
and large cities. There needs to be a breadth to the enforcement program in this fashion.
Also, there needs to be a depth in the area of prioritizing the most egregious
noncompliance and having some enforcement cases that will generate large fines to
remind the citizenry that the Water Code is one of the toughest laws in the state. By
having large fines ascribed to public agencies, the Water Board will demonstrate that no
entity is above the law.
Cleaning up Polluted Waters
9. Please describe the status of the Board's TMDL process. Does Board have
adequate resources to develop and implement required TMDLs.
This Water Board has adopted a steady stream of diverse TMDL projects over the past
year, addressing impairments in the Bay and in watersheds. In 2008 we also approved a
conditional waiver program for ranching operations to implement the Tomales Bay
pathogen TMDL that was one of the first such regulatory programs in the state. The
TMDL process is one of the top priorities in this region with a constant presence in Board
agendas.
I recognize that a lot of resources have been made available to develop TMDLs. To
address the whole 303(d) list with TMDL projects, more resources would be necessary,
but we have accomplished a lot thanks to available funding.
I am concerned about whether there are adequate resources to implement the TMDLs. but
I think that staff has been resourceful in leveraging existing regulatory programs as the
implementation mechanisms for TMDLs. I believe a lot of the discharges that cause
impairment should have been regulated under existing Water Code authorities anyway.
We could use more personnel to show field presence for TMDL implementation, or we
could look into other mechanisms to deputize citizens, organizations and local agencies
to assist the Board in keeping an eye on waters and the programs that are designed to
protect them.
10. How will the board monitor and enforce the TMDLs it has or will adopt?
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There are existing mechanisms to collect information on attainment of water quality
standards, including the 305b assessment, the 303d listing process, SWAMP, local
monitoring efforts, and the Regional Monitoring Program of the SF Bay funded by
dischargers. Permitting and enforcement will be done through the conditional waiver,
waste discharge requirements and NPDES permits programs that are tailored to reach the
TMDL targets. Permitting staff have been dialed into the TMDL development processes
and anticipate the work. As an example, in 2008, the Board adopted a region-wide
NPDES permit for mercury discharged from wastewater treatment plants. This permit
encourages collaborative monitoring and assessment amongst the permittees, ensuring
consistent and cost-effective monitoring that can drive future decisions.
1 1 . What is the Board's progress in reducing Hg, PCBs, dioxins, pesticides,
pathogens, PBDEs, and other pollutants that pose health risks to those
recreational ly taking fish and shellfish in SF Bay and along the region's coast?
There is progress on reducing pollutants in the Bay. The regulatory structures have been
recently adopted to chart the course for improvements related to the persistent
bioaccumulative pollutants Hg and PCBs, with the region-wide permit noted in the
answer at question 10 a prime example. These requirements set the stage for related
action on dioxins and chlorinated pesticides. Strict requirements were adopted in 2008
for the hot spot pathogen area in Richardson Bay and form a template for similar areas on
the Bay and ocean. Over-the-counter pesticides are addressed through a TMDL as well,
with reporting requirements for municipalities.
Because the bioaccumulative pollution that affects people's ability to consume shellfish
or fish is a long-term cleanup effort (>30 years), efforts in the near-term need to focus on
communicating with the populations that consume the high-risk organisms like shark,
sturgeon, and white croaker, and encouraging them to shift their diet to less dangerous
fish. The Board has required a risk communication program that does just that.
The progress for pollutant reduction requires an ongoing commitment to implementing
the TMDLs and the Water Boards to partner with local agencies to manage the risk
through public outreach as pollutant levels come down over the next decades.
Infrastructure improvements to address pathogen sources should help with the health risk
to people that recreationally collect shellfish and fish in those areas.
12. How are you informed about new sources of water pollution in the Basin? How
should the Board respond to the increasing problem of PBDE which is being
found in harbor seals, fish, bird eggs, peregrine falcons, human breast milk, and
the fatty tissue of humans?
The San Francisco Estuary Institute (SFEI) is a science-based organization that manages
the Regional Monitoring Program (RMP) for San Francisco Bay. This program looks for
signs of accumulating pollution in the Bay, using advanced laboratory analysis
131
investigation techniques. The Bay Area Pollution Prevention Group (BAPPG) is a
partnership between the Water Board and the municipal dischargers and proactively
investigates emerging contaminants based on SFEI information and other information
from around the world. The BAPPG formulates communication strategies and pollution
prevention strategies for communities to implement.
1 think the Board should elevate PBDE as a pollutant of high priority for product
substitution. It may be appropriate to list the Bay as impaired by PBDEs, since they
exhibit similar physical properties and accumulation in tissues as deadly dioxins, PCBs
and DDT.
13. In your view, what is the role of Regional Water Boards regarding required
testing and standard limits for pharmaceuticals and over-the-counter drugs in
drinking water Should the State Water Board, through Regional Water Boards, be
working with the California Dept of Public Health to require testing and set safety
limits for drugs in drinking water?
The Regional Water Boards have a secondary role in drinking water protection, as the
Dept. of Public Health is the lead agency. The Water Boards become involved at the
level of regulating discharges to protect sources of drinking water. Most drinking water
sources are upstream of regulated discharge points. In cases where the drinking water is
downstream of the discharges, then the Water Boards have a role to play to establish
effluent limits or other waste discharge requirements to limit pharmaceuticals and over-
the-counter drugs to levels in ambient waters that will not contribute to elevated levels at
the tap. The main difficulty at this time is determining the "safe" ambient levels - this
research is ongoing and can inform future Water Board decisions. Most endocrine
disruptors and over-the-counter products that are not explicitly regulated as pollutants do
not have numeric thresholds established that Water Boards can use as limits. Many of
these compounds may not pose a threat at all to beneficial uses or public health. Much of
the discussion to date has been surrounding the fact that they are merely detectable and
imagining what the effects may be.
14. Your Board reported working in partnership with community groups on a project
promoted locally to collect unused prescription drugs from area residents (no
drugs down drain campaign) to help reduce contamination of water supplies.
How does the Board review the success of such projects? Do Boards share best
practices?
This campaign is derived from the partnership of the BAPPG and Bay Area Clean Water
Agencies (BACWA), described above. The project is a success because of the huge
amounts of drugs collected. It is a proven strategy in that it works with local agencies to
communicate a message that can begin to change a vital behavior in the citizenry of "just
flushing it." The success can be broadened by going out to more communities, and
accounting for the weight of all the drugs collected as a quantifiable measure of the mass
of this material that did not otherwise reach the Bay. It can be broadened by engaging the
medical community more and thereby close the loop on "cradle to grave."
10
132
Board staff work with BAPPG and BACWA to review both progress and obstacles in
expanding collection programs like "no drugs down the drain." And mercury-containing
household items, for example. Both of these groups have made regular presentations on
their progress to the Water Board.
This Water Board started an annual award program in 2007 to recognize and support
local pollution prevention programs, and encourages public agencies to partner with
community groups to both publicize the need to properly dispose of prescription drugs
and expand take-back opportunities. BACWA and Save the Bay have an ongoing
partnership that is working well and creating teamwork between organizations that have
been at times adversarial, recognizing the common ground among the NGOs and the
agencies.
At this Board, both staff and Board members are enthusiastic about sharing the successful
programs and lessons learned along the way with anyone that would listen. Water Board
staff participate in roundtables with other regions to share "best practices" and address
obstacles.
Septic Rule
15. Has the State Water Board articulated a role for the Regional Water Boards in
implementing the rule?
As with all statewide policy enacted by the State Water Board, the Regional Water Board
is the agency that tailors policy implementation to its region. The Basin Plan would be
updated to be consistent with the statewide policy, and Board orders would be modified
as they come up to be consistent with the policy. Long-standing agreements with the Bay
Area counties could be modified as well. There isn't an explicit need for the State Water
Board to articulate a role for the Regional Water Boards; it is self-evident from the
language in the proposed policy and the Water Code compels Regional Water Boards to
adhere their actions to duly adopted statewide policy.
16. How does the Board intend to monitor, enforce and improve septic systems that
contribute to surface and ground water pollution?
On-site systems in the San Francisco Bay Region are regulated by counties via
resolutions that were initially enacted in the 1960s and periodically updated since then.
The Water Board becomes directly involved in larger individual or community systems,
or will assist a County on a case-by-case basis if requested. The intention of the Water
Boards would be consistent with its authorities articulated in the Water Code.
Water Districts around the Bay Area have a more rapid response capability than the
Regional Water Board in detecting and abating groundwater pollution that could come
from septic systems. If these entities are not satisfied with the response of the County,
11
133
then the Regional Water Board could assist with monitoring or enforcement related to the
failing system(s).
In water bodies impaired by nutrients or pathogens, the Water Board's TMDL process
compels the review of on-site systems and whether they are contributing to the water
pollution problem, and to repair them, or change the method of disposal if determined
necessary. This approach was expressly delineated in the Board's Tomales Bay, Sonoma
Creek, and Napa River pathogen TMDLs.
Sewage Spills
17. Do you believe additional steps should be taken to address the chronic sewage
spill issues?
The State Board's general order on discharges from sanitary sewer collection systems
provides a statewide, consistent program for addressing the chronic sewage spills, which
are derived from aging infrastructure and antiquated design features like overflow weirs.
The Water Board has taken enforcement actions on the more egregious spills in the
region and will continue to do. The regulated community is paying close attention to its
preventive maintenance programs and its notification and cleanup requirements. The
additional steps needed are not regulatory, but monetary. More infrastructure renovation
dollars are needed to assist local agencies in their rehabilitation work, and this Board is
pushing these agencies to secure federal economic stimulus funds that will shortly come
to California. Nonetheless, local ratepayers will need to pay a higher share for service to
adequately cover this overdue work.
18. Has your Board determined if the combination of storm water and sewage
disposal in the same pipe in some communities is contributing to this problem? If
so, what should be done?
Yes, the infiltration of groundwater and the inflow of storm water into the sewage
collection systems are contributing to the problem in a number of communities in the Bay
Area, notably the older communities in East Bay, Marin County, Vallejo and the
Peninsula (San Mateo County). A long term maintenance program should be undertaken
by all local communities to select a project life interval for its infrastructure assets (say
50 or 80 years) and replace all infrastructure on that long-term schedule. These issues
cannot be addressed within a 10 year timeframe, as the rehabilitation of these systems is
very disruptive to the community and very expensive.
19. As a Regional Water Board member do you believe all permittees such as Mirant
should meet the conditions of their permit in order to continue operating?
Noncompliance with permit conditions is a basis for enforcement actions, fines, and
provisions to correct the noncompliance. Noncompliance with such time schedule and
action provisions is a basis for subsequent enforcement action. Eventually, along such a
trajectory, no business would continue to operate if the monetary obligations related to
12
134
enforcement overwhelmed the business's ability to remain profitable. The Water Board
does not shut down businesses or agencies that do not comply, but rather takes
enforcement actions, such as cease and desist orders, which chart a course for
compliance.
It is my understanding that, contrary to press reports, Mirant is in full compliance with
the conditions of its permit, but that legitimate concerns over once-through cooling
operations in general are being addressed at the statewide policy level. I believe that
once-through cooling is damaging to the water ecosystem and am concerned about
perpetuating its use where alternatives exist, but to pursue the consistent policy approach
suggested in question 4, this Board should wait for the State Board's policy before acting
on a discharger that is currently in compliance.
Pollution in Suisun Bay
Regional Water Board won't approve cleaning technology that is only 90% efficient and
notified Marad of its intent to sue.
20. What is the status of this issue and how are Board members kept informed?
The Water Board decided unanimously to serve notice of its intent to sue the U.S.
Maritime Administration (Marad) because of Marad's gross inaction on the matter of
controlling pollution from its mothballed fleet. Since the Administration did not
implement any controls in response to the notice, the Attorney General, acting on this
Board's behalf, has sued Marad and is preparing for court.
The in-bay "scamping" hull cleaning technology that Marad considers effective results in
dissolved metal pollution levels that we have seen are over two orders of magnitude (100
times) the level of acceptable levels that we impose on nearby treatment plants. The 90%
efficiency claimed by Marad is based on collecting solids, but we are skeptical of that
reported efficiency of the in-bay cleaning method. The environmentally responsible
approach is to get the old ship into drydock and have it cleaned or dismantled in a
controllable working area. Marad has been evasive and holding itself to a different, loose
standard than other organizations that work hard to protect the environment. Their foot-
dragging was unconscionable and they misrepresented the opinions of other states like
Virginia and Texas, alleging that our requirements were unreasonably stringent, when
they are in fact based on federal standards. Marad needs to be held to account and this
Board intends to carry out that action with State Board and Attorney General support.
The EO regularly reports to the Board on Marad's progress or lack thereof, and the Board
has met in closed session to discuss the specifics of the suit.
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HEARING
SENATE RULES COMMITTEE
STATE OF CALIFORNIA
GOVERNMENT
DOCUMENTS DEPT
MAY 1 8 2009
SAN FRANCISCO
STATE CAPITOL PUBLIC LIBRARY
ROOM 113
SACRAMENTO, CALIFORNIA
WEDNESDAY, FEBRUARY 25, 2009
1:40 P.M.
607-R
SENATE RULES COMMITTEE
STATE OF CALIFORNIA
- -0O0- -
STATE CAPITOL
ROOM 113
SACRAMENTO, CALIFORNIA
- -0O0- -
WEDNESDAY , FEBRUARY 2 5,2009
1:40 P.M.
- -oOo- -
Reported By: INA C. LeBLANC
Certified Shorthand Reporter
CSR No. 6713
SENATE RULES COMMITTEE
STATE OF CALIFORNIA
- - 0O0- -
STATE CAPITOL
ROOM 113
SACRAMENTO. CALIFORNIA
• - OOO- -
WEDNESDAY. FEBRUARY 25.2009
1:40 P M .
- - OOO - -
Reported By INA C LeBLANC
Certified Shorthand Reporter
CSR No. HI]
1 ALSO PRESENT (cont.l
2
3 DONALD B. KOCH, Director, Department of Fish and Game
5 INDEX
6 Paoe
7 Proceedings 1
8 Governor's Appointees:
9 JOHN G. TELLES, M.D., Member, Air Resources
10 Board and San Joaquin Valley Unified
11 Air Pollution Control District Board 1
12 INTRODUCTION BY SENATOR DEAN FLOREZ ...
13 OPENING STATEMENT 5
14 Question by CHAIRMAN STEINBERG re:
15 Balancing transportation of goods
16 with cleaning the air 7
17 Question by SENATOR OROPEZA re:
18 Reason for working on cleaning
19 the a ir 9
20 Questions by SENATOR DUTTON re:
21 Short-term economic impact of
22 scoping plan implementation of
23 AB 3 2 2 1
24 Impact on small business
25 community 25
APPEARANCES
MEMBERS PRESENT
SENATOR DARRELL STEINBERG, Chair
SENATOR GIL CEDILLO
SENATOR SAMUEL AANESTAD
SENATOR ROBERT DUTTON
SENATOR JENNY OROPEZA
STAFF PRESENT
GREG SCHMIDT, Executive Officer
JANE LEONARD BROWN, Committee Assistant
NETTIE SABELHAUS, Appointments Consultant
DAN SAVAGE, Assistant to SENATOR CEDILLO
BILL BAILEY, Assistant to SENATOR AANESTAD
CHRIS BURNS, Assistant to SENATOR DUTTON
BRENDAN HUGHES, Assistant to SENATOR OROPEZA
ALSO PRESENT
JOHN G. TELLES, M.D., Member, Air Resources Board
and San Joaquin Valley Unified Air Pollution
Control District Board
32 sheets
1 Conversation with governor
2 regarding concerns with economic
3 analysis 27
4 Questions by SENATOR AANESTAD re:
5 Internal work relationship between
6 ARB board members and staff 29
7 Independent review of scoping
8 plan by board members 31
9 Support letters from agricultural
10 and business communities 32
11 Manner in which the governor learned
12 of D r. Telles 3 3
13
14 Witnesses in Support of JOHN G. TELLES. M.D.:
15 SARAH SHARPE, Fresno Metro Ministry 12
16 MARY D. NICHOLS, Air Resources Board 14
17 NIDIA BAUTISTA, Coalition for Clean Air 15
18 SOTIR1S K. K O LO B OTR O N IT, Fr'end 17
19 MARTHA GUZMAN, CRLA Foundation 17
20 BILL MAGAVERN, Sierra Club California 17
21 MICHELLE GARCIA, Fresno-Madera Medical
Society 18
22
KATHRYN PHILLIPS, E n v ir o n m e n t a I D e fe n s e
23 Fund 19
24 BONNIE HOLMES-GEN, American Lung Association
of California 19
25
Page 1 to 4 of 8
03/03/2009 11:59:13 AM
1 Witnesses in Support of JOHN G. TELLES, M.D. (cont,):
2 DIANE BAILEY, Natural Resources Defense
Council 19
3
ANDY KATZ, Breathe California 19
4
PETE PRICE, Union of Concerned Scientists ... 20
5
LAURA FULTZ STOUT, Coalition for Clean
6 Air - Fresno, California 20
7 REY LEON, San Joaquin Valley Latino
Environmental Advancement and Policy Project,
8 Mexican-American Political Association 20
9
10
11
12
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14
15
16
17
18
19
20
21
22
23
24
25
-o 0 o --
DONALD B. KOCH, Director, Department of
Fish and Game 37
STATEMENT BY CHAIRMAN STEINBERG
OPENING STATEMENT BY DONALD KOCH ....
Questions by CHAIRMAN STEINBERG re:
Vision for resolving crisis 38
Effects of suction dredging 39
Due date of recommendations on
science 42
Court's ruling 46
P r o te c tio n / r e s to ra tio n of salmon
Timetable for increase in salmon
resource 52
Fish and Game warden layoffs ..
Los Banos farm worker camp
3 7
39
50
53
55
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Witnesses in Support of DONALD B. KOCH (cont.l:
BEN HIGGINS, California Rangeland Trust 75
NOELLE CREMERS, California Farm Bureau
Federation 77
JUSTIN OLDFIELD, California Cattlemen's
Association 77
JIM WATERS, California Water Fowl Association,
Suisun Resource Conservation District 78
TRACY SCHOHR, California Rangeland
Conservation Coalition 79
CINDY GUSTAFSON, Fish and Game Commission ... 81
Witnesses with C o n ce rn s /O p o o s itio n to DONALD B. KOCH
PAUL MASON, Sierra Club California 82
THOMAS WESELOH, California Trout 86
NOAH LEVY, Environmental Protection
Information Center 91
ZEKE GRADER, Pacific Coast Federation of
Fishermen's Association 95
MARTHA GUZMAN, CRLA Foundation 99
MICHAEL GRABEDIAN, Friends of the North Fork. 103
S. CRAIG TUCKER, Karuk Tribe 113
DAN BACHER, Editor, Fish Sniffer 115
-o0 o -
1 Question by SENATOR OROPEZA re:
2 Issuance of permits 43
3 Question by SENATOR CEDILLO re:
4 Ability to exercise discretion... 49
5 STATEMENT BY SENATOR AANESTAD 47
6
7 Witnesses in Support of DONALD B. KOCH:
8 RUDOLPH ROSEN, Ducks Unlimited 57
9 MARK THEISEN, The Gualco Group 59
10 RICHARD COLLINS, Natural Heritage Institute . 59
11 TOM GALLIER, El Dorado Irrigation District .. 61
12 JIM KELLOGG, U.A., California State Pipe
Trades, State Building Trades 63
13
SCOTT WETCH, Labor/Management Committee
14 of the Wood Products Industry 63
15 P. ANTHONY THOMAS, California Forestry
Association 6 5
16
JOHN BERNSTEIN, Pacific Forest Trust 66
17
JERRY KARNOW, JR., California Fish and Game
18 Wardens Association 66
19 MARK HENNELLY, California Outdoor Heritage
Alliance 70
20
REED ADDIS, Ocean Conservancy 71
21
DAN TAYLOR, Audubon California 72
22
MELVA BIGELOW, The Nature Conservancy 73
23
KAREN GARRISON, Natural Resources Defense
24 Council 74
25 TIM SCHMELZER. Wine Institute
75
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Vote-Only Item re Confirmation of:
CHARLES J. KIM, Member, Acupuncture Board ...
JUDITH N. FRANK, Member, California Health
Facilities Financing Authority 118
RONALD JOSEPH, Member, California Health
Facilities Financing Authority 118
ISRAEL RODRIGUEZ, Member, California Student
Aid Commission 118
GERALD E. BELLOWS, Member, San Francisco Bay
Area Water Emergency Transportation
Authority, Board of Directors 118
ANTHONY J. INTINTOLI, JR., Member,
San Francisco Bay Area Water Emergency
Transportation Authority, Board of
Directors 118
CHARLENE H. JOHNSON, Member, San Francisco
Bay Area Water Emergency Transportation
Authority, Board of Directors 118
- -O 0 o - -
Proceedings Adjourned 118
Certificate of Reporter 119
APPENDIX (Responses of Appointees and
Witness Statements) 120
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PROCEEDINGS
CHAIRMAN STEINBERG: Good afternoon, everyone.
I want to welcome the Members and the public to the
meeting of the Senate Rules Committee for February 25th,
2009.
Please call the roll.
MS. BROWN: Senator Cedillo.
Dutton.
SENATOR DUTTON: Here.
MS. BROWN: Dutton here.
Oropeza.
SENATOR OROPEZA: Here.
MS. BROWN: Oropeza here.
Aanestad.
SENATOR AANESTAD: Here.
MS. BROWN: Aanestad here.
Steinberg.
CHAIRMAN STEINBERG: Here.
MS. BROWN: Steinberg here.
CHAIRMAN STEINBERG: Very good. Nice to be
back to the regular business of the legislature. Try
not to put any bills on call, motions on call.
SENATOR OROPEZA: No lockdown today.
CHAIRMAN STEINBERG: Why don't we begin with
Dr. Telles. I think we'll do that. We'll begin with
1
1 it was diesel rules, whether it was implementation of
2 some bills we put forward on air quality.
3 To be honest with you, Members, I was very
4 skeptical of Dr. Telles. I didn't believe in many cases
5 that it was going to be possible for a gubernatorial
6 appointment for a very tough place, for the Central
7 Valley, that might use the kind of captured board to be
8 both even-keeled and very forthright in terms of facing
9 the issues; but I was pleasantly surprised that the man
10 I'm sitting next to actually was very balanced.
11 I don't always agree in many cases with the
12 board, or in some of these cases, votes, but Dr. Telles
13 has always been someone who, in my view over the last
14 year, has displayed a remarkable sense of balance. And
15 I think it's very difficult to do that in a very tough
16 place where we have agricultural interests and developer
17 interests, and we're doing everything we can to try to,
18 in essence, clean the air with the very, very strong
19 environmental justice groups. To walk that line in the
20 Central Valley is extremely difficult.
21 I can tell you that Dr. Telles does it very
22 well and is very balanced, and I'm here to ask you to
23 please support him in his nomination not just for our
24 local board, but at the ARB level, because I believe the
25 governor has made a very, very good choice, a very
3
John D. Telles, physician member, San Joaquin Valley
Unified Air Quality Management District and also up for
confirmation for the State as a member of the State Air
Resources Board.
I know we've got Senator Florez here, the
majority leader, to welcome Dr. Telles, and please come
forward. And we welcome you both.
SENATOR FLOREZ: Thank you. Mr. Pro Tern and
Members, it's my pleasure to introduce you, and I know
you've extensively gone through Dr. Telles's resume, but
as you probably know --
Let me give a little bit of a context to air
quality in the Central Valley, where we are and where
we're going, in particular at the ARB level and the
statewide level.
Living in the Central Valley isn't the easiest
place to live, and particularly the air quality issues
we face. We have many, many issues, many, many
problems; and we were thankful that even in the budget
bill, there was some relief and one program being
expanded for farm equipment. But I can tell you that it
is a very tough place for any member to be.
And when Dr. Telles was appointed by the
governor to serve his interim year, there could not have
been any more significant challenges facing him, whether
2
1 strong choice, with Dr. Telles. And I just wanted to
2 stop by and say most of us particularly concerned with
3 air quality over the last eight years are very happy
4 that he will be a wonderful member on both boards, and I
5 thank you for that.
6 CHAIRMAN STEINBERG: Thank you very much,
7 Senator Florez. I really appreciate you taking the
8 time. Appreciate it a lot.
9 Is it "TELL-us" or "TAY-is"?
10 MR. TELLES: It's a Portuguese name, and it
11 could be pronounced "Sa-TAY-jes," but I've been called
12 "TELL-us." It's mostly pronounced "TELL-us."
13 CHAIRMAN STEINBERG: Dr. Telles, welcome to
14 you. If there's any member of your family or anybody in
15 particular that you want to introduce, please feel free
16 to do so.
17 MR. TELLES: Well, the person who has been most
18 helpful to me in this pursuit is my wife Jolene, who is
19 is here, and one of my sons -- I have four sons, and one
20 of my sons, Rainer, is also here, who is much wiser than
21 he looks at his age, but he's my resource.
22 And I also have three of my staff here,
23 Jaime Mevi and Eileen Saldivar and also Janis Thornton,
24 who have been very helpful with me managing my practice
25 while I'm in Sacramento at the local board. I'd like to
4
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1 introduce them.
2 CHAIRMAN STEINBERG: Very good. If you would
3 all stand and take a bow, we would like to welcome you.
4 Welcome to the family and staff.
5 If you would like to make a brief opening
6 statement, then we'll open it up for questions from the
7 Members.
8 MR. TELLES: I don't have a prepared statement,
9 and I've been thinking about what to say for probably
10 the last ten years. But first of all, and foremost, I'm
11 a cardiologist. My comfort zone is in the cath lab at
12 night with somebody having a heart attack. I feel a
13 little bit uncomfortable here with everybody looking at
14 me, even though I get into some hairy —
15 CHAIRMAN STEINBERG: It's not so bad.
16 SENATOR OROPEZA: You look good.
17 MR. TELLES: Thank you.
18 As a cardiologist I got involved in this
19 because of the health issue. I feel that the San
20 Joaquin Air Pollution Control District and ARB are -- my
21 primary view of them is they're public health
22 committees. Their primary purpose is to improve the
23 public health of the people they serve. And in our
24 area, we have a public health crisis with air pollution,
25 as Senator Florez mentioned.
5
1 partner of my practice. So I do have economic-backed
2 credentials. But my biggest economic credential is that
3 I see the economy every day come into my office. I take
4 care of some of the richest and some of the poorest
5 patients in our region, and I'm totally aware that the
6 biggest health risk a person can have -- it's not air
7 pollution. It's the loss of their jobs. There's no
8 bigger stress on a person than to lose their job, from
9 all points of healthcare, and I'm totally aware of that
10 in my position on these boards.
11 And with that, I'm ready for any questions you
12 may ask.
13 CHAIRMAN STEINBERG: Thank you. I suppose the
14 last part of your statement sort of leads to the first
15 question, which is: How, with some degree of
16 specificity, do you balance the two? How do you balance
17 job creation and maintaining jobs and the ability to
18 transport goods with the necessity of cleaning the air?
19 MR. TELLES: The — There's many ways to
20 balance it. No matter how you look at it, it will cost
21 something to clean the air. And the way to pay for
22 those costs have to be balanced and distributed
23 throughout society in a way that it's affordable to do.
24 The recent truck rule that was done was
25 probably the biggest thing that I was involved in in
7
1 From a cardiology point of view, you would
2 think: Why would a cardiologist be involved in this?
3 Mostly, this is respiratory. But that's not true. Most
4 of the mortality that occurs with air pollution is
5 actually cardiovascular death. And if you look at our
6 area, the morbidity related to cardiovascular illness
7 perfectly templates upon the air-pollution problem that
8 we have, and we have the highest cardiovascular-death
9 rate in the state in the San Joaquin Valley.
10 I certainly bring the medical credentials to
11 this. Some of the senators that I talked to earlier
12 today and yesterday were concerned about my economic
13 credentials, being concerned about the economic impacts
14 of these positions, members on these two boards.
15 I am a long-time life resident of the San
16 Joaquin Valley. I come from an agricultural family. My
17 family was involved in growing multiple different types
18 of crops, including lettuce, strawberries, cotton,
19 citrus, almonds. We had a dairy. We had a large number
20 of diesel trucks to service this farm. So I'm familiar
21 with the economics of agriculture, and I'm also familiar
22 with the potential sources of pollution from
23 agriculture.
24 I'm also — have been a board member of a
25 health insurance company, and I am also a managing
6
1 trying to figure out a balance on this. The way that
2 that is supposedly to be able to be paid for is there's
3 some incentives from the government, and then also
4 private business will help pay for this.
5 The incentives, to me, and this is my own
6 feeling, is the incentives oftentimes don't parallel the
7 source of the pollution, and they're not paid for by the
8 proper -- proper means of payment. An example of that
9 is that the -- the incentives for the truck rule is
10 about $1.2 billion dollars. The truck rule is going to
11 cost 5.5 billion. From my trucking friends, it's
12 probably going to cost more in the range of 8 to 12 --
13 to 10 billion dollars, and how to pay for that -- I
14 think we have to look at other ways to do that. I
15 suggested, via comments from other truckers, that it be
16 paid for somewhat by a tax on a diesel fuel, which in
17 this climate is very difficult to do. I understand
18 that.
19 CHAIRMAN STEINBERG: Seems we talked about that
20 recently.
21 MR. TELLES: There's 17 billion miles that the
22 diesel trucks travel in California each year, and if you
23 put a small tax on that, you could easily come up with
24 $5.5 billion dollars. There's other things, too, that
25 could be done.
8
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4 of 32 sheel
CHAIRMAN STEINBERG: Okay. Very good. Let's
see if there are questions from other members around the
dais. Senator Oropeza.
SENATOR OROPEZA: Yes. I want to thank you,
Doctor, for the time that we shared a little earlier
today. I found it really interesting. And this notion
of connecting the quality of our air with the health of
our bodies is something that I think everybody in this
room knows is dear to my heart, no pun intended, but I
was interested to learn the facts about heart trouble
versus, say, cancers or other kinds of mortal diseases.
I wonder if you could share with us -- You
referenced not only in our meeting, but in your opening
remarks today, ten years, that you've been thinking
about this ten years, and I wonder if you can share with
us why it is that you decided to apply for this, and
does it go back to something that happened ten years
ago. Or what's the ten-year connection?
And give me a reason, if you have a specific
one, why you decided to join forces here with others on
cleaning our air.
MR. TELLES: Okay. The short answer is I just
think it's the right thing to do. And I'll explain why
I came to that conclusion.
In our area, we have had for years a problem
9
1 experience and my position in the community. I really
2 wasn't. 1 wasn't supported by anybody. And some of
3 that --
4 SENATOR OROPEZA: Probably shows why you were
5 just right.
6 MR. TELLES: Well, I shouldn't say I wasn't
7 supported by anybody. I did have some people support
8 me, but as far as the big health and environmental
9 groups in the industry, and agriculture groups, because
10 I was kind of in between them all, I wasn't strongly
11 supported by either one of those groups. Somehow I
12 popped up out of the process, and I told the people the
13 story about that the other day. I don't think I will
14 bring that up right now.
15 But, really, it comes down to public service.
16 And my father was very much involved in the public life,
17 even though he was a private citizen, and I think it's
18 something that I inherited from him.
19 SENATOR OROPEZA: That's a great answer, and I
20 think on the ARB board, you can provide a very vital
21 role not only as a physician but as a layperson too.
22 The political aspects of these boards,
23 although — I'm sure that there are politics to the
24 local board as well, but I think having someone who is
25 in the middle is not such a bad thing, and I think
11
with air pollution. I got involved in thinking about
this probably 20 years ago when I was a soccer coach,
and I mentioned to some of you, a lot of my kids had
asthma, and I carried around their inhalers in my
pockets, and it kind of made me start thinking about
this.
I've had personal difficulty in recruiting
physicians to my practice. We've had difficulty
recruiting a neurosurgeon to Fresno at times in our
city, in our region, which has over a million people in
it. We don't have a neurosurgeon on call, because the
neurosurgeon doesn't want to come and live in an area
which is polluted, and indirect severe detriment and
deterioration of the access to healthcare in our area
related indirectly to health pollution.
All these things kind of coalesce, and
everybody says, "Well, we ought to do something about
it," and I started doing a series of talks up and down
our valley about the effects of air pollution, and
trying to just kind of make people aware of it so they
can modify their own lifestyles to help improve our
issues.
When the seat came up for the San Joaquin
Valley Air Pollution Control District, I thought I would
be the natural person to go into that seat because of my
10
1 having somebody who listens to all sides and then goes
2 away and makes their own judgment after absorbing all
3 that information is a good way to make decisions. And I
4 think you've given one of the best answers on how you do
5 that, or that you do that, and that's how you see
6 yourself, that I've heard thus far as a member of the
7 Rules Committee, so I'm very delighted when the
8 appropriate time comes to make the recommended motion on
9 this.
10 CHAIRMAN STEINBERG: Thank you very much,
11 Senator. Are there other questions and comments? If
12 not, let's hear from witnesses in support.
13 I'm sorry. Senator Dutton.
14 SENATOR DUTTON: Go ahead. I can ask later.
15 CHAIRMAN STEINBERG: Okay. Let's hear from
16 witnesses in support or any witnesses in opposition and
17 ask people to be extremely thorough and very brief.
18 MS. SHARPE: Good afternoon, Honorable Chair
19 Steinberg and Committee Members. My name is Sarah
20 Sharpe, and I'm the environmental health director for
21 Fresno Metro Ministry. I'm also here to represent the
22 Central Valley Air Quality Coalition legislative
23 committee, because we were strong supporters of SB 719,
24 which was the legislation that created this position on
25 the local air board for a doctor and a scientist to join
12
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1 that, and for the governor to appoint them, and we
2 definitely fought very hard to make sure there was a
3 Senate confirmation as part of that process.
4 We are pleased to be here and to support
5 Dr. Telles in his confirmation, although he did mention
6 we didn't officially support him in his nomination to
7 both the San Joaquin Valley Air Pollution Control
8 District Board and to represent the San Joaquin Valley
9 on ARB.
10 Over the past year, Dr. Telles has offered a
11 tremendous amount of oversight and accountability to
12 both boards. By Dr. Telles's relationship with the
13 agricultural industry, we have found him to be a very
14 thoughtful and fair voice on both boards. Although we
15 may not always agree with Dr. Telles, as Senator Florez
16 mentioned, his decisions, we can be assured that he has
17 thoroughly reviewed the materials and deliberated on the
18 issue at hand, which is somewhat unique to some of these
19 boards.
20 And, finally, over the past year, we believe
21 that Dr. Telles has brought an invaluable medical
22 knowledge and public health perspective, which he
23 mentioned earlier, to his new positions, and we urge you
24 to confirm his appointments, and we look forward to
25 working with Dr. Telles as he continues his leadership
13
1 their expertise in particular areas, and Dr. Telles
2 fills one of those expert positions on the board.
3 He is very, very helpful as a member of the
4 board in sharing his expertise and his information with
5 us when we're hearing testimony about public-health
6 issues, whether it's from the staff or from the advocacy
7 organizations, people that come in with studies, and
8 counter-studies, and so forth. His ability to bore into
9 those and to raise issues that might not otherwise come
10 to the floor is something that has turned out to be
11 very valuable to the board.
12 So I think the fact that this body, the
13 legislature, that is, added the position of physician to
14 the San Joaquin Valley District and that the governor
15 chose the person in that position to sit on the Air
16 Resources Board will stand us in very good stead. Thank
17 you.
18 CHAIRMAN STEINBERG: Thank you very much,
19 Ms. Nichols.
20 MS. BAUTISTA: Honorable Chair, Members of the
21 Committee. My name is Nidia Bautista. I'm with the
22 Coalition for Clean Air. We're a statewide air quality
23 organization, and we're also members of the Central
24 Valley Air Quality Coalition, a coalition that actually
25 pushed for and was really driven by valley voices to
15
1 in the air quality arena. Thank you.
2 CHAIRMAN STEINBERG: Thank you very much.
3 Appreciate it. Next.
4 MS. NICHOLS: Hi. Good afternoon. My name is
5 Mary D. Nichols, and I wanted to come over this
6 afternoon to lend my support, not because I think that
7 Dr. Telles needs it, particularly, but I just wanted to
8 share with you that I didn't know him before he was
9 appointed. Well, actually, we spoke on the phone
10 briefly, I guess, while he was being interviewed for the
11 position, and I came away from that extremely impressed
12 by the quality which I think has surfaced here today,
13 which is his independence of mind.
14 And when I read the written statement that he
15 submitted in response to the Committee's questions,
16 there were times in which my eyebrows went up, probably
17 to my hairline, because there were things that he stated
18 there that would not have been said by somebody who had
19 been coached politically about what to say; and the fact
20 that he did this on his own and shared his own views and
21 ideas candidly, I think, is a fairly typical thing about
22 him as a member of the Air Resources Board.
23 I think you know we have a board that is made
24 up of a mix of people who are elected officials at the
25 local level and people who are appointed because of
14
1 ensure that there would be a doctor representing them on
2 these issues at their local air board.
3 And we're really pleased to see that through
4 this process, that a year from now — We can reflect on
5 the past year and know that there's been a very
6 appropriate representative not only to the San Joaquin
7 Valley Air District Board, but also to the governing
8 board of the ARB representing the San Joaquin Valley
9 interest.
10 I think as has been shared, Dr. Telles has been
11 very balanced in his approach and also very thorough in
12 his approach, and I can't speak enough to that. He
13 reads every item before the board, really listens to the
14 concerns that are being raised and really studies the
15 issues. I would love to say that all board members from
16 all agencies that we interact with do this, but that's
17 definitely not the case. He's very rare, indeed, in
18 that regard.
19 But more than that, he's very willing to raise
20 the questions that need to be raised during these very
21 challenging issues at times, but knowing full well that
22 the right thing to do is move forward in cleaning up our
23 air, making progress there. And I think his
24 appreciation for how that impacts our bodies is
25 particularly important.
16
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6 of 32 sheet
So with that, we want to support him, and we
ask for your support as well.
CHAIRMAN STEINBERG: Thank you very much.
Appreciate your testimony.
Keep coming. If you can, again, keep it
relatively brief, we'd appreciate it.
MR. KOLOBOTRONIT: Good afternoon, Honorable
Chairman, Members of the Committee. Sotiris
Kolobotronit, Sacramento, California. I'm friends with
Dr. Telles and his family, and I'm here to express my
feelings about him and my beliefs. I think he's the
right man for this job and would be very proud if you
confirmed him. And I urge you strongly to confirm him.
Thank you.
CHAIRMAN STEINBERG: Thank you very much.
MS. GUZMAN: Martha Guzman with California Real
Legal Assistance Foundation, also members of the
Central Valley Air Quality Coalition, and we are very
happy today to support, and we are also looking forward
to Dr. Telles's expertise in really evaluating the
balance of the toxic air contaminants, pesticides, and
their contribution to toxicity, as well as to smog.
CHAIRMAN STEINBERG: Very well. Thank you,
Mr. Guzman.
MR. MAGAVERN: Bill Magavern of Sierra Club,
17
1 — in that he holds everyone accountable across
2 the board. So when there isn't enough information, he
3 ensures that all the information is brought forth.
4 Thank you.
5 CHAIRMAN STEINBERG: Thank you very much,
6 Ms. Garcia. Next.
7 MS. PHILLIPS: Kathryn Phillips with
8 Environmental Defense Fund. Ditto. We support.
9 MS. HOLMES-GEN: Bonnie Holmes-Gen with the
10 American Lung Association of California, and we're
11 pleased to support Dr. Telles as the second physician
12 member to the Air Resources Board.
13 I would have to say having two physician
14 members has made a very big difference in bringing
15 public health into the discussions at the board level.
16 We strongly support Dr. Telles, and he has really made a
17 big difference on the board.
18 CHAIRMAN STEINBERG: Thank you.
19 MS. BAILEY: Good afternoon. My name is Diane
20 Bailey. I'm representing the Natural Resources Defense
21 Council, and we're here in strong support of Dr. Telles.
22 Thank you.
23 CHAIRMAN STEINBERG: Thank you very much.
24 MR. KATZ: Good afternoon. Andy Katz, Breathe
25 California, also testifying in support of Dr. Telles.
19
California, in support of Dr. Telles's confirmation for
both boards.
And at a time when some of the flaws in
California's system of governance have recently gotten a
lot of attention, I want to draw attention to the fact
that here's a situation where the system is working very
well. The Senate reformed the San Joaquin board,
created the position for a doctor. The governor made an
excellent choice in choosing Dr. Telles, and by virtue
of that he now also sits on the State board. He's
independent, hard working. He's incredibly well-
qualified, and he's doing a good job. Thank you.
CHAIRMAN STEINBERG: Thank you very much.
Welcome.
MS. GARCIA: Thank you. Hi. My name is
Michelle Garcia, and I'm the air quality director for
the Fresno-Madera Medical Society. I'm here to give my
support to Dr. Telles.
It's been an honor and a pleasure to work with
him. He's been very instrumental in public health, and
so it's definitely been a breath of fresh air to have
him representing us and definitely a breath of fresh air
in the sense —
CHAIRMAN STEINBERG: So to speak.
MS. GARCIA: Yes. No pun intended.
18
1 CHAIRMAN STEINBERG: Thank you.
2 MR. PRICE: Mr. Chairman, Pete Price with the
3 Union of Concerned Scientists. I just want to echo all
4 the excellent comments in support of Dr. Telles, and we
5 urge your support.
6 MS. STOUT: Laura Fultz Stout for the Coalition
7 for Clean Air based in Fresno, California. I just
8 wanted to let you know that Dr. Telles is very
9 accessible to everyone and willing to bring environment
10 and industry together to dialogue and find common
11 ground. We appreciate that.
12 CHAIRMAN STEINBERG: Thank you.
13 MS. STOUT: Thank you.
14 MR. LEON: Good afternoon. Rey Leon,
15 co-founder and vice chair of the Central Valley Air
16 Quality Coalition, and director of the Latino
17 Environmental Advancement and Policy Project, as well as
18 associate president of the Mexican American Political
19 Association, and on behalf of all these groups, here in
20 strong support of Dr. Telles.
21 It's been a long struggle to get a medical
22 expert on the air district board, five years, and
23 finally we see the fruits of our labor, so to speak.
24 And I'm here in very strong support, because we need
25 that expertise, that perspective, to really create the
20
if 32 sheets
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5
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7
8
9
10
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13
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15
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17
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19
20
21
22
23
24
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district, the agency, into a public health agency and
not so much a corporate economic development agency,
which it has been, to a good extent, for the previous
years. So we're looking forward to Dr. Telles's
continued leadership as he has done. So thank you very
much.
CHAIRMAN STEINBERG: Thank you very much.
Any other witnesses? Any witnesses in
opposition to the confirmation of Dr. Telles?
SENATOR OROPEZA: Can I move both appointments?
CHAIRMAN STEINBERG: Yes, you can. Can we move
them concurrently?
I know Senator Dutton has some questions and
maybe Senator Aanestad as well.
Senator Dutton.
SENATOR DUTTON: I have questions not on the
San Joaquin board, but more in your role on the Air
Resources Board. The Air Resources Board is responsible
for the implementation of AB 32. I can talk a little
bit louder.
Anyway, AB 32's scooping plan -- scoping
plan --
CHAIRMAN STEINBERG: You heard the dog bark.
SENATOR DUTTON: Actually, I did.
Just recently, that was reviewed and so forth,
21
1 how to implement AB 32. But I think when it gets down
2 to the details of doing the regulations, I think it's
3 going to be less vague, and I think all the economic
4 issues will be looked at and assessed, and make sure
5 that it does what the economic analysis says it's going
6 to do and not screw up the economy.
7 SENATOR DUTTON: So you don't feel that it's
8 going to have a negative impact on the economy based on
9 what you've been given?
10 MR. TELLES: I don't feel that if it's --
11 SENATOR DUTTON: On a short-term basis. I
12 understand the potential long-term gain. On a
13 short-term basis.
14 MR. TELLES: On a short-term basis, it probably
15 will have a negative impact, and that may be counter to
16 distinction of what the ARB says, but I don't see how it
17 cannot have a slight negative impact in electricity
18 prices and things like that.
19 Now, there are ways to mitigate against the
20 rise in electricity prices by conservation, and other
21 ways to get there. But I think in the implementation of
22 this, there will be some -- probably some negative
23 financial impact.
24 The implementation is not next year. It's
25 years down the line, so hopefully we'll be out of this
23
1 in December, and I was curious. You did have a chance
2 to go through that before the action of the board, and
3 as you and I were discussing, I have some concerns about
4 the economic -- short-term economic impact and some of
5 the findings of the report. I was curious if you could
6 share with me your thoughts on that matter.
7 MR. TELLES: The economic impact report that
8 was done by the staff at ARB suggested that
9 implementation of the scoping plan would have no
10 negative impact and perhaps even a slightly positive
11 impact on the State economics. There's been independent
12 review of that suggesting that that's not true.
13 The scoping plan — You have to understand that
14 the scoping plan is just a blueprint on how to get
15 there, and each regulation is going to come up, and each
16 regulation is going -- To implement the scoping plan
17 will have its own economic review, and I think it's a
18 piece in work rather than completion.
19 When an issue comes up, I mean, it's going to
20 be reviewed, and I think the economics will be reviewed
21 in much more specific detail than the scoping plan. In
22 all fair defense of the people who wrote the economic
23 analysis, it's very vague. If you read it, it's very
24 vague, and it's the reason why the scoping plan itself
25 is somewhat vague, just giving a broad-brush stroke of
22
1 economic problem by the time things are starting to roll
2 on that. I think it will certainly affect what comes
3 out of the plan based on what the economy is at the time
4 that the regulations are actually written.
5 SENATOR DUTTON: I understand that there's a
6 Dr. Robert — or statements from Harvard University
7 based on his analysis of the report that was given to
8 all of you to review. It says, quote, "I have come to
9 the inescapable conclusion that the economic analysis is
10 terribly deficient in critical ways and should not be
11 used by state government or the public for the purposes
12 of addressing or assessing the likely cost of CARB's
13 plans. I remain willing to help CARB in the future if
14 they wish to develop an economic analysis that is truly
15 useful and reliable."
16 I also have comment that the report was
17 reviewed by Matthew Kahn from UCLA. He also actually is
18 one of the supporters of the governor's AB 32 goals.
19 And according to him, "I am troubled by the economic
20 modeling analysis that I have been asked to read.
21 AB 32 is presented as a riskless free lunch for
22 Californians. The net dollar cost of each of these
23 regulations is likely to be much larger than what is
24 reported in the plan. The bottom line is that the
25 economic supplement provides an incomplete report on
24
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8 of 32 she*
what we know and need to know about the economic
consequences of this important regulation." And also,
we've got a couple others here too. Even the LEO was
critical of the analysis.
Now the question that I have, given all that,
what was the thinking? Because you as well as the other
board members just went ahead and actually approved
everything, went forward with regs. I would have
thought this would have given you enough concern that
you'd want to say, "Hey, wait a minute. Maybe we better
recheck some of these things to make sure that we're not
doing something that's going to cause even greater
problems."
I mean, we're already starting in a downhill
slide. We've got a problem with the economy. It's not
just California. It's all over. We certainly don't
need any more discouragement, especially in the small
business community. So I'm a little concerned about
what appears to be the lack of concern for the small
business community. So maybe you can address that for
me and give me a comfort level.
MR. TELLES: It's obviously a difficult
question. I'm not an economist. I did read the report
from the staff, as well as summaries of the report that
you're talking about, and I know that they're in
25
1 particular fleet. And that particular rule was pulled
2 out to be re-looked at by the ARB board and staff
3 because of those concerns.
4 And I thought in that particular instance that
5 the ARB board did the right thing in that they looked at
6 this and said, "Some truckers, this just doesn't work,
7 some it does, so we better look at this," and that's
8 going to be re-looked at.
9 SENATOR DUTTON: Didn't the ARB board decide
10 they were going to have the economic analysis
11 reevaluated or something? I recall reading that
12 someplace.
13 MR. TELLES: Yes.
14 SENATOR DUTTON: If that's the case, why
15 wouldn't you want to wait until that re-analysis is done
16 before you decided to go forward on some -- AB 32 in
17 itself, when it moved through the legislative process,
18 even provided for provisions in the event of economic
19 crisis or downturn, or concerns, that there was the
20 ability of the governor, obviously, to delay the
21 timetable.
22 But you're a governor's appointee. Have you
23 talked to the governor about any of the concerns that
24 you have about the economic analysis?
25 MR. TELLES: I haven't had any conversation
27
disagreement, and I think probably there's someplace in
between where the true reality is.
If you look at economic analyses for our
country, you know, five years ago, I don't think anybody
was predicting that we were going to be where we are
now. And I think it's difficult to predict the economic
impact of something like this, but I think it has to be
done on a regulation-by-regulation basis. If the
regulation doesn't work, if the economic impact is too
high, it shouldn't be done.
SENATOR DUTTON: How do you know that being
they each have to fit in with each other? I mean, they
don't operate independently.
MR. TELLES: No.
SENATOR DUTTON: This is different, different
kind of plan.
MR. TELLES: No. And there's only been a few
regulations done so far in regards to the scoping plan,
and one of them was done on the same day as the truck
rule, and it's a regulation to help streamline large
trucks to make them more fuel efficient. And it works
and it doesn't work. It depends on — By that I mean
some trucks are already doing that, because it is a
fuel-efficient thing, and some trucks are not doing that
because it hasn't been a fuel-efficient thing for their
26
1 with the governor since I've been in this position.
2 CHAIRMAN STEINBERG: He's been busy.
3 MR. TELLES: And nor has he — He hasn't phoned
4 me up and said, "Hey, it's not going to work."
5 To be honest with you, I don't know all the
6 details of the law that you're talking about. I know
7 that there were certain timelines that had to be met to
8 implement AB 32, and one of the timelines was to have a
9 scoping plan on the table by the time that it came on
10 the table.
11 Knowing that it's not a perfect document,
12 knowing that going ahead with it doesn't mean that
13 everything has worked out, I think things are going to
14 be worked out more specifically when the regulations are
15 done rather than the — I read that document five times.
16 I think if you have problems with insomnia, I suggest
17 you read it. And it's really vague and....
18 SENATOR DUTTON: So you wouldn't necessarily
19 use that as a prescribed way to do some kind of surgical
20 procedure on the heart or anything like that.
21 MR. TELLES: No.
22 SENATOR DUTTON: You wouldn't take the
23 vagueness of this report and the guidelines and actually
24 put that in practice as a medical physician.
25 MR. TELLES: No, not at all. When I get it on
28
if 32 sheets
Page 25 to 28 of 120
03/03/2009 11:59:13 AM
1 a case-by-case basis, I'll do the right thing.
2 SENATOR DUTTON: All right.
3 CHAIRMAN STEINBERG: Thank you.
4 Senator Aanestad.
5 SENATOR AANESTAD: Thank you, Doctor, for our
6 snappy discussion that we had this morning in my office,
7 and I hope you enjoyed it as much as I did.
8 MR. TELLES: I did.
9 SENATOR AANESTAD: And I appreciate your
10 candor. The ARB would not make the admission that there
11 might even be short-time economic harm that you just
12 made, and yet we all in this room know that's probably
13 true, which brings me to just a follow-up on one of the
14 things that Senator Dutton said.
15 When the legislative analysts put out their
16 reports on the scoping plan, they basically make the —
17 not only was it a rather negative report and report card
18 on the ARB, they basically said that there was so little
19 cooperation that they couldn't even get any information
20 from the ARB.
21 What kind of input do you, as an ARB — would
22 you, as an ARB member, have in relationship to your
23 board — I mean, to your staff? For example, could I
24 call you up, and could you get me that information?
25 Since the leg. analyst could not get the information out
29
1 SENATOR AANESTAD: Will we, as the legislature,
2 however, ever hear about that independent review by the
3 board members, or are we going to just hear a
4 reiteration of what the staff has put up? Because we
5 haven't heard from the individual members. All we've
6 seen is a unified front between staff and board on what
7 I consider to be a poor response to the scoping plan
8 question that we brought up.
9 MR. TELLES: One of the things which I
10 addressed in my written comments is the lack of
11 communication between board — or ARB and legislature.
12 And I became more aware of this —
13 I was duck hunting the other day with one of
14 the assemblymen —
15 SENATOR AANESTAD: You just got Bob Dutton's
16 vote.
17 MR. TELLES: Good. We had a good day. We got
18 our limit.
19 One of the assemblymen was there — and I won't
20 mention his name. We weren't talking about this stuff.
21 We were talking about what we were doing that day, and
22 he started talking about this, and my realization was
23 that he really didn't know what ARB was doing, and he
24 was prying me for comments and the same thing that
25 you're doing.
31
1 of staff, I'm just wondering how the legislature or the
2 legislative analyst, the non-partisan analyst for the
3 legislature, would have access, because there was a
4 certain amount of uncooperation to begin with, and then
5 a rather negative report based on the data they did
6 have.
7 I guess my question really involves the
8 internal work relationship between you as a member and
9 the staff and who's in control.
10 MR. TELLES: All right. That's a good
11 question. And that was brought to my attention as far
12 as board-staff relationship by one of the people that
13 supported me in getting to where I am. That's Bill
14 Jones, who is one of our local previous senators and
15 Secretary of State, a friend of mine. He cautioned me
16 to be careful about staff. Staff has their agenda, and
17 that's the role of the board, to look at what staff is
18 creating and whether it's a workable thing. And I feel
19 it's the responsibility of the board not just to rubber
20 stamp what the staff does.
21 I think it's a great staff at ARB, and I think
22 we're blessed by the quality of the people that are
23 there, but sometimes the way they see the world is going
24 to be different than a panel of, hopefully, independent
25 people looking at it and reviewing it.
30
1 And I think it's important to have a better
2 system of communication of what this agency is doing
3 with the legislature so they can stay in tune and move
4 ahead on some of these things together rather than all
5 of a sudden having a Shockwave come over that this is
6 happening without you knowing it.
7 Now, I know ARB may not want to do that -- I
8 was talking to our legislative person — and I'm in
9 disagreement with that, that we should inform the
10 legislature on what's going on, not to get their tacit
11 approval or anything, but — and not to be afraid to
12 inform them because we don't want them to mix any of the
13 things that are going on over at ARB, but I think they
14 need to be informed because this is such an important
15 committee that I think it just needs to be better
16 communication between the board and the legislature.
17 SENATOR AANESTAD: I notice all the support
18 that you got, and I've seen the letters in the packet.
19 What was missing — and I also will say I didn't see any
20 opposition. But what's missing, in my opinion, is
21 anything from the agricultural community and anything
22 from the business community, the Chamber of Commerce.
23 Can you explain that?
24 MR. TELLES: I didn't solicit any support
25 letters at all. I'm happy that the people came by and
32
03/03/2009 11:59:13 AM
Page 29 to 32 of 120
10 of 32 sheet
1
said that — and said what they did say. I'm — I
1
you pride yourself on your independence, and I would
2
didn't ask for any assistance.
2
point out to anybody who might be a skeptic that in
3
Some of that is, I think, you need to be
3
terms of his balance, which is always important, you
4
independent. In talking with — We talked earlier. I
4
were specifically appointed to the physician spot on the
5
don't think I'm not supported by the trucking industry.
5
board here, and we would hope that the physician
6
One of the persons who runs the CTA here, she asked me
6
appointee to the board is one who pays special attention
7
if I wanted a letter of support, and I said no. And I
7
to the health impacts of air quality. And so we want
8
didn't call up any of the farm bureau people that I
8
the balance, of course, in how you make your decisions;
9
know, or Manuel Cuma (phonetic), to ask for letters of
9
but you were appointed to a very important and specific
0
support. I have him on my speed dial. I can give him a
10
slot, and I think that's important to keep in mind.
1
call right now.
11
Senator Dutton, Senator Oropeza, asked that we
2
CHAIRMAN STEINBERG: Let's do Phone-a-Friend
12
divide the question.
3
here.
13
SENATOR OROPEZA: That's fine with me.
4
SENATOR AANESTAD: One last question.
14
CHAIRMAN STEINBERG: If that's okay. Take
5
MR. TELLES: And Manuel, by the way, often
15
first the San Joaquin Valley Air Quality Management
6
calls me on my speed dial on some of these issues.
16
District. Take that motion first.
7
CHAIRMAN STEINBERG: Let's see if we can wrap
17
Please call the roll.
8
this up.
18
MS. BROWN: Senator Cedillo.
9
Go ahead.
19
SENATOR CEDILLO: Aye.
0
SENATOR AANESTAD: How did the governor learn
20
MS. BROWN: Cedillo aye.
1
about you? How did he find out about you?
21
Dutton.
2
MR. TELLES: Okay. This is kind of a good
22
SENATOR DUTTON: Aye.
3
story.
23
MS. BROWN: Dutton aye.
4
CHAIRMAN STEINBERG: Briefly.
24
Oropeza.
5
MR. TELLES: Briefly. It will probably be the
25
SENATOR OROPEZA: Aye.
33
35
1
most entertaining thing you'll have all afternoon.
1
MS. BROWN: Oropeza aye.
2
As I mentioned, I didn't have a lot of support
2
Aanestad.
3
from the ag. community at the beginning, or the medical
3
SENATOR AANESTAD: Aye.
4
community. I didn't have friends like Bill Jones and
4
MS. BROWN: Aanestad aye.
5
people like that, and Jim Coss, to write letters, people
5
Steinberg.
6
I've known for a long time, and that kind of helped open
6
CHAIRMAN STEINBERG: Aye.
7
the door, but I didn't have the level of support needed
7
MS. BROWN: Steinberg aye.
8
to get to where I am.
8
CHAIRMAN STEINBERG: That is approved five to
9
My wife came up with the idea to send a picture
9
nothing, will go to the Senate floor.
0
to the governor. I have a picture in my office of the
10
Now let's take Senator Oropeza's motion on
1
governor holding up a patient of mine with one hand, who
11
Dr. Telles's appointment to the State Air Resources
2
this patient was a Mr. America in 1930 who later on
12
Board.
3
developed the Universal Gym, you know, the
13
Please call the roll.
4
weight-training things, and he was holding up, with one
14
MS. BROWN: Senator Cedillo.
5
hand, his grandson. This was in a swimming pool in
15
SENATOR CEDILLO: Aye.
6
Fresno.
16
MS. BROWN: Cedillo aye.
7
So when I came to the appointment, I said,
17
Dutton.
8
"This is who I am. I'm the guy who takes care of that
18
Oropeza.
9
guy," and that's how I got here.
19
SENATOR OROPEZA: Aye.
0
CHAIRMAN STEINBERG: Good story. Wow!
20
MS. BROWN: Oropeza aye.
1
Well, let me just make a comment or two, and
21
Aanestad.
2
then I want to make a request to Senator Oropeza in
22
SENATOR AANESTAD: Aye.
3
terms of the motion, if we might.
23
MS. BROWN: Aanestad aye.
4
I think you did a terrific job here today. I
24
Steinberg.
5
think you did demonstrate thoughtfulness, the fact that
25
CHAIRMAN STEINBERG: Aye.
34
36
32 sheets
Page 33 to 36 of 120
03/03/2009 11:59:13 AM
1
MS. BROWN: Steinberg aye.
1
forward here, if you're confirmed, what's your vision
2
CHAIRMAN STEINBERG: Very good. That motion
2
for resolving this crisis? What is it that you need in
3
passes as well, and the nominations for both will go to
3
order to resolve the crisis?
4
the floor.
4
There also have been some specific concerns
5
And thank you very, very much for your public
5
raised about the suction dredge mining issue, which
6
service, Doctor.
6
we're going to want to get into in some detail, and a
7
MR. TELLES: Thank you.
7
few other issues.
8
CHAIRMAN STEINBERG: Let us take a five-minute
8
So with that opening, we genuinely do welcome
9
break, okay?
9
you and ask if you would like to make a brief opening
10
(Recess taken.)
10
statement.
11
CHAIRMAN STEINBERG: All right. Let us resume
11
MR. KOCH: Thank you, Senator.
12
after a short recess.
12
I prepared a statement so I could calm down,
13
I would like to ask Donald Koch to come
13
basically, and read it for you, but I think just based
14
forward, who is the nominee as the director of the
14
on what you said, perhaps maybe we ought to start with
15
Department of Fish and Game.
15
questions, because I do look forward to trying my best
16
Welcome to you, sir.
16
to answer some of those and explain some of my history
17
MR. KOCH: Thank you, sir. Is this on?
17
with the department and why I came back from retirement.
18
CHAIRMAN STEINBERG: We want to welcome you and
18
Indeed, I did inherit the job, but I was also
19
ask if there's anybody -- member of your family or any
19
part of the organization for 30 years, and I love it
20
other special guest that you would like to introduce
20
dearly, and I have a high passion for the resource.
21
before we get started.
21
That's why I came back. But perhaps maybe it would be
22
MR. KOCH: No, thank you, sir. My wife of 29
22
most expeditious to start.
23
years and a friend for a little longer is not here
23
CHAIRMAN STEINBERG: Let me begin and go from
24
today, and working, so....
24
sort of the specific to maybe the broader issue.
25
CHAIRMAN STEINBERG: Okay. Very, very good.
25
The issue of suction dredging. The code is
37
39
1
Very, very good.
1
pretty clear. It's 5653(b) of the Fish and Game Code,
2
I want to make a brief opening comment. You --
2
and it states that the department may only issue a
3
People say very positive things about you, sir,
3
permit for suction dredging, quote, "...if it determines
4
Mr. Koch, so I think today we want to have some probably
4
the operation will not be deleterious to fish."
5
pretty detailed discussions not only about you and your
5
So I guess the first question is: Has the
6
directorship, but also about the direction of the
6
department determined that this practice of suction
7
department itself, both the department you inherited and
7
dredging is not damaging to fish as required by the
8
the department that you are now responsible for
8
section? And, if not, how can this practice be allowed
9
managing, because the concern that has been expressed to
9
to continue?
10
Members of the Committee is not so much about you, but
10
MR. KOCH: Certainly. I think that the same
11
it is about the department, that we have many laws on
11
series of sections there directed the department to
12
the books, but whether it's staffing shortages or lack
12
promulgate regulations to issue those permits, which we
13
of will, there's a feeling that many of the laws don't
13
did in the past, and at that time we closed numerous
14
have real meaning if they can't be enforced.
14
waters in the state because we had determined there were
15
We understand that 98 Fish and Game wardens
15
deleterious impacts, timing, season changes, a variety
16
were just given notice that they may lose their jobs.
16
of constraints on that activity to protect the fish.
17
We're particularly interested and obviously concerned
17
Subsequent to that -- those adoptions of
18
about the fisheries resource, that wild populations of
18
regulations to allow people to suction dredge, we've had
19
Coho salmon are less than 1 percent of what they were in
19
interactions with a group tribe, Cal Tribe, and others
20
the 1940s, that commercial and recreation salmon fishing
20
who brought data to the department that said, "We
21
seasons were completely closed last year. The governor
21
believe deleterious effects may be occurring in these
22
himself declared the closure would have a $255 million
22
waters, climate watershed salmons and associated trips."
23
dollar impact and a loss of an estimated 2,200-plus
23
Our fisheries biologist looked, met with them
24
jobs.
24
and worked with them and said, "Good point. There are
25
So I think the big question is: As you move
25
deleterious effects in this water."
38
40
03/03/2009 11:59:13 AM
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12 of 32 shee
So the process that we went from and that was
in litigation, I may add — The process we went through
to adopt those regulations is the same process we're
going through now, and that is it's a regulatory process
that CEQA is applying. So to change those regulations,
all the counsel I've had is that we need to go through
the CEQA process, the environmental review process, to
change those regulations. That's an expensive process.
It's a long process. We....
CHAIRMAN STEINBERG: Isn't it true, though,
that under the regulations, that you as the director
have the authority to declare an emergency?
Let's cut to the chase here. The item of
controversy, and I know you'll hear today from the
representatives of the tribal nation, the Karuk
petition. Why wasn't it granted, and what was the
thought process that went in to your thinking on that
issue?
MR. KOCH: The first thing I did was go back to
the same biologists that issued declarations that said
they were deleterious and asked them their opinion from
a biological standpoint. I'm a scientist, and that's
one of the reasons that I came back, to make sure that
happens.
Their statements to me was, yes, there are
41
1 excuse me -- the bid process is closed to conduct an
2 environmental review. It's a statewide environmental
3 review to analyze suction dredging statewide that should
4 be completed -- the contract expires in October of 2010.
5 CHAIRMAN STEINBERG: 2010. So it may take
6 another year and a half —
7 MR. KOCH: That's correct, sir.
8 CHAIRMAN STEINBERG: -- to finish the analysis
9 before the regs can potentially be changed, regulations
10 can potentially be changed to address the particular
11 issue. Okay.
12 Senator Oropeza on that.
13 SENATOR OROPEZA: On that point of what you
14 were told are the criteria for the emergency-level
15 declaration, is there something in between a full-on
16 declaration of emergency and status quo operation?
17 In other words, do you issue permits for this
18 behavior?
19 MR. KOCH: Um-hmm.
20 SENATOR OROPEZA: Wouldn't it make sense to
21 suspend the issuance of the permits, perhaps, as a
22 mitigation against any further deleterious effects
23 beyond what you have already permitted? Would that fit?
24 MR. KOCH: I asked that question, because it's
25 a very valid question, and to change the regulations
43
deleterious effects. Is it at the level of an
emergency, in other words, those impacts from suction
dredging, not the impacts that are going on in the
environment that have continuing cause and effect to
salmon, but the impacts from suction dredging of those
watersheds didn't rise to the level of an emergency.
The second tier of that decision was working
with our general counsel to ask what criteria do I use
to declare an emergency. And the counsel I got there
was that the Administrative Procedures Act defines what
that is and defined those criteria.
So it was really a two-step process. I was
going back to the scientists, the fisheries biologists
and asking them was it a biological emergency, did we
need to take action to close the watersheds of the
petition by the Coho tribe and Cal tribe, and they said
no, the process we're going through will result in
scientifically based recommendations to change that.
And from a legal perspective, I was counseled.
CHAIRMAN STEINBERG: When are those
recommendations due on the science?
MR. KOCH: The environmental review process --
We receive funding from the legislature, graciously a
million dollars in last year's budget, so late
September. The contract has been issued to conduct --
42
1 that are in place which allow us to authorize the
2 permit, the statute directs us to adopt — to pass
3 regulations which are in place. To change those, I
4 can't be essentially — I need to go through the
5 environmental process to do that.
6 SENATOR OROPEZA: You mean counsel tells you
7 there is no way for you as director to suspend the
8 issuance of further permits pending some kind of factual
9 gathering of information? Counsel tells you that? It's
10 either all or nothing? I mean, you can't do anything?
11 Your hands are tied?
12 MR. KOCH: I think we are doing something, but
13 counsel advise that the action -- I could not declare an
14 emergency based on....
15 SENATOR OROPEZA: Understood.
16 MR. KOCH: So that was -
17 SENATOR OROPEZA: Understood. I understand you
18 can't declare an emergency without meeting the criteria.
19 What I'm saying is: What in the law or code tells you
20 as director of an agency that you can't suspend the
21 issuance of new permits until such time as these other
22 facts are found out as to whether it is, in fact, an
23 emergency, it isn't, what the merit is. Well, it is an
24 emergency -- it's not an emergency. But what the merit
25 of the actual facts are in evidence and what you're
44
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1
going to find out. Isn't there any middle ground?
1
the tools to do that. What I believe sincerely is that
2
CHAIRMAN STEINBERG: If I may, because I think
2
I'm required — Even though I know they're deleterious,
3
you're --
3
that doesn't mean there's an emergency. There are a lot
4
SENATOR OROPEZA: Help me, Mr. Chair.
4
of deleterious effects in the environment, and those
5
CHAIRMAN STEINBERG: Maybe we can cut -- This
5
three — two watersheds with some of their trips, if it
6
is the issue that I think is troublesome on this, is
6
rose to an emergency, I would be there in a heartbeat,
7
that there's an environmental process pending, an EIR
7
sir. I mean, that's my passion.
8
pending, and so the department allows the practice to
8
The process we're going through is to look at
9
continue while the environmental analysis is pending
9
that practice statewide in all state waters to allow the
10
when you already have an opinion from your biologist
10
amendment of the regulations that authorize those
11
that there is a deleterious effect on fish. So why
11
permits.
12
wouldn't it be the opposite, that we only allow it to go
12
CHAIRMAN STEINBERG: Okay. Let's -- We'll move
13
forward -- we stop it now -- we only allow it to go
13
on, because we're going to hear testimony on this issue,
14
forward if the environmental impact report in fact says
14
and maybe we can get back to it.
15
that there isn't a harm or that the harm can be
15
Senator Aanestad, if you have a question, go
16
mitigated. That's, I think, the question.
16
ahead.
17
SENATOR OROPEZA: Thank you.
17
SENATOR AANESTAD: I guess -- See if this
18
MR. KOCH: I appreciate that. I think the
18
analogy would explain. I'm an oral surgeon licensed,
19
issue has been there's three avenues for that emergency.
19
permitted by the State of California to practice. I
20
One is judicial. That's how we sort of entered this
20
passed the test and am under the control of the State
21
process. That question has been in front of the court.
21
dental board. A patient makes a complaint against me,
22
They directed us, basically, they had the opportunity to
22
but the dental board finds no emergency. Therefore,
23
suggest it was an emergency. Based on the declarations
23
does the dental board have the right or even the moral
24
that was not done. We were instructed to do the
24
obligation to suspend my practice? My answer would be
25
environmental review document, which I'm bound — As
45
25
no. Your answer would be no, because that's what the
47
1
frustrating as it is by me with that process, that tool
1
law says.
2
is a very valuable tool that says — it brings science
2
SENATOR OROPEZA: What about the deleterious
3
to the table. It brings....
3
behavior, though?
4
CHAIRMAN STEINBERG: But the court didn't say,
4
SENATOR AANESTAD: But the board or the
5
"Allow the practice to continue while the environmental
5
department found no emergency.
6
report goes on," correct?
6
SENATOR OROPEZA: Right.
7
MR. KOCH: The question in front of the court
7
SENATOR AANESTAD: That's the difference. He
8
at times was, yes, should there be —
8
just got done saying that if he found an emergency, he
9
Their original -- I'm not an attorney -- I
9
would have issued it in a heartbeat; but he and his
10
believe, prayer for relief asked for that.
10
biologists and his lawyers found no emergency. And
11
CHAIRMAN STEINBERG: And the court granted the
11
therefore, I believe that the people who are doing the
12
prayer for relief?
12
suction dredging and have the permit have the right to
13
MR. KOCH: No. It was withdrawn.
13
continue until that emergency is found, or until
14
CHAIRMAN STEINBERG: So that court did not
14
scientific data and a review of the regulations proves
15
order the department to allow the practice to continue
15
otherwise.
16
pending the EIR, correct?
16
CHAIRMAN STEINBERG: I think it is about the
17
MR. KOCH: I believe it was silent on that
17
definition of emergency, and it is gradations because --
18
issue.
18
not to get too far afield, but if there was a reasonable
19
CHAIRMAN STEINBERG: It was silent on the
19
suspicion or probable cause, or use whatever legal terms
20
issue. Go ahead. You said there were three things. Go
20
you want, that you were violating your licensing
21
ahead.
21
requirements as oral surgeon, the board might have very
22
MR. KOCH: I'm sorry. Thank you for doing
22
well suspended your license.
23
that.
23
SENATOR AANESTAD: They would have found an
24
Legislative option in terms of that kind of
24
emergency.
25
relief that would provide the tools or the department
25
CHAIRMAN STEINBERG: I'm not sure that the term
46
48
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14 of 32 sheet
is what's at issue. What the discretion of the
department is, either allow it to go forward or not
allow it to go forward. And maybe we ought to hear from
our lawyer here at some point regarding — so that we
fully understand and have some common ground with the
director as to what his and the department's discretion
actually is or isn't before we make a judgment as to
whether or not he did or did not use that discretion
wisely.
Senator Cedillo.
SENATOR CEDILLO: I think it's how you frame
the question. Another question is: Are you prohibited
from exercising discretion? Are you prohibited? Is
there a ruling? Has there been a direction from the
court that prohibits you from exercising discretion to
halt the practice? And given that you've got some
notice, not to the level of emergency, do you have or
are you prohibited in any way from exercising
discretion, given the circumstances, given the totality
of the circumstances, from terminating the practice?
Not of the particular person that has the licenses, but
issuing that.
So that's the question before all of us. It's
a judgment question that comes before us in terms of
your ability to — some of us may think -- to be prudent
49
1 What is your position on supporting necessary changes
2 before the Board of Forestry? Is there a timetable
3 involved in any proposed action that you might take?
4 MR. KOCH: Sure, sure. The Board of Forestry
5 is currently reviewing its rules in relationship to the
6 timber harvest plan. The scientific review that was
7 done on the adequacy of those rules and the science
8 regarding forest practice and salmon is completed. We
9 were active in that.
10 We just worked with the Board of Forestry and
11 their staff to develop a new joint Board of Forestry and
12 Fish and Game Commission policy that clearly articulates
13 the position of the department, of Cal Fire, the Board
14 of Forestry, and Fish and Game, our commissioners will
15 see at their meeting next week, late next week, that
16 raises the bar, so to speak, to a conservation standard
17 and that we're making progress. Those were difficult
18 discussions. That was completed recently.
19 We are now actively in the process of working
20 with the review team as they evaluate those rules in
21 front of the board. I believe they will happen soon
22 with the Board of Forestry involved.
23 To do that, one of the things I've done since
24 I've been director is to bring what I feel is one of the
25 most qualified and talented program managers in terms of
51
about your exercise of discretion.
CHAIRMAN STEINBERG: Go ahead and answer, and
then I'm going to want to move on, and we'll probably
come back to this issue.
MR. KOCH: Thank you. I think that is a very
valid discussion, and that issue was raised in court by
the other four parties that ultimately filed in that
process. And their point was it was an emergency, and
you need to go through this process. That's where I
stated -- The court had a decision at one point either
to immediately go to trial or try to do the
environmental document.
I fully understand the frustration of
everybody, including the department, and the timeline,
because it took us almost two years to get funding.
But that issue was -- There were other parties
who weren't silent, including the department. The
original -- One of our declarations filed by Mr. Mangey
was in a settlement to, in fact, close those waters. We
were immediately back in court to go through the process
to close them.
CHAIRMAN STEINBERG: Let's talk about the
salmon for a moment, sir, the big-picture issues. Do
you intend to propose any rule changes that would
protect and restore the salmon resource in this state?
50
1 our forestry, as well as salmon, bring them to the
2 department and work directly with the director to try
3 and make sure, where it's effectively possible, those
4 rule changes are proposed in front of the board now that
5 are pending in front of the board.
6 CHAIRMAN STEINBERG: You heard me cite, and I
7 don't know if you agree with the statistic, in my
8 opening statement about the comparison of the salmon
9 resource from the 1940s to today. Do you have a
10 timetable for how you would like to see or intend to see
11 that percentage increase, if not to the 1940's level,
12 somewhere closer?
13 MR. KOCH: Sure. Like everybody in this room,
14 I think I would like it to be tomorrow. But one of the
15 things, when you look at salmon resources in the state
16 of California -- In the '30s, major water projects were
17 put in. Those blocked 40 percent of the available
18 habitat of all salmon. The Klamath Dam is 380 miles of
19 salmon habitat.
20 It took a long time for those habitat losses.
21 All the other changes have occurred to the environment
22 because of human pressures to catch up with the salmon,
23 who are very resilient. It's going to take a long time
24 to recover to those levels. We've done a lot of really
25 good things in the interim to do that. Unfortunately, a
52
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1 lot of those things take time to show themselves in
2 population response.
3 Some of the greatest things we've done since —
4 I want to write down my career is working with 26-plus
5 very disparate parties in agriculture, there's
6 commercial fishermen, Native American tribes,
7 conservation groups. We've come to an agreement in
8 principle to remove four of those dams, 380 miles of
9 habitat.
10 We've successfully worked with a similar type
11 of coalition on Battle Creek, 42 miles of streambed,
12 closed waters, and numerous projects in the south part
13 of the state, trying to make sure we open access to
14 historic steelhead ranch, San Clemente Dam, and others.
15 So we're doing a lot of things. I can't give
16 you a time frame how quick it will happen, because it's
17 going to be slow. Wildlife populations respond over
18 time. Ocean conditions are a part of that, certainly
19 not all of it.
20 CHAIRMAN STEINBERG: Last area of question -
21 Well, two other quick areas, and we'll turn it over.
22 Fish and Game wardens. Ninety-eight -- Is it
23 true that 98 wardens have just been given layoff
24 notices?
25 MR. KOCH: Sir, one of the most difficult
53
1 fund, and one new forensic pathologist.
2 CHAIRMAN STEINBERG: I knew there was something
3 good in that budget.
4 MR. KOCH: I was trying to top Dr. Telles.
5 CHAIRMAN STEINBERG: Go ahead.
6 MR. KOCH: Okay.
7 CHAIRMAN STEINBERG: Last issue, on the
8 Los Banos farm-worker camp. There has been a complaint
9 from CRLA and other farm-worker groups that it has taken
10 three years for the department to improve a temporary
11 drinking water supply connection to a farm-worker
12 housing development near Los Banos. What can you tell
13 us about that, and what are you doing to resolve that?
14 MR. KOCH: The good news is I hope it is
15 resolved. We received engineering plans from the
16 engineer for the Housing Authority for Merced County, I
17 believe yesterday, saying based on their flush test that
18 we're required by — to do the hookup. There were no
19 changes needed. We responded that as far as we were
20 concerned, that was great. The other conditions that
21 they had worked out with a variety of people was to
22 receive funding for a long-term solution. My comment to
23 to them was, "As long as grant funds are held up, that's
24 reasonable."
25 So I believe they received permission either
55
1 things that I've done in my 30 years was about a week
2 ago, signing letters to 406 department employees
3 advising them because of the State's budget situation,
4 that they may be subject to a reduction in force. And I
5 want to emphasize "may."
6 I have gone through that twice in my career,
7 sat across from people, and know how difficult that was.
8 It's obviously the most painful thing I've done.
9 The fact that we notified those people is the
10 fact that they were the last 20 percent hired by the
11 department, regardless of classification, job duty, or
12 anything else. It's just a fact of seniority.
13 If we have to move forward with layoffs in the
14 department, at that time we would do a reduction plan
15 that's based on a variety of civil-service regulations
16 which allow us to look at classifications, geographic
17 scope. So, yes, they did receive them and....
18 CHAIRMAN STEINBERG: The resolution of the
19 budget last week, does that now alleviate -- do you now
20 withdraw the notices?
21 MR. KOCH: No, sir, we haven't been instructed
22 so far to withdraw the notices. I would indicate the
23 really good news in last week's budget that you folks
24 worked so hard on, there are 50 new wardens in that
25 budget, from direction of Fish and Game preservation
54
1 yesterday evening or this morning from the City of
2 Los Banos to connect.
3 CHAIRMAN STEINBERG: That's a great outcome,
4 and I appreciate it. And not to put a damper on it, but
5 why did it take so long?
6 MR. KOCH: I think for a variety of reasons.
7 One is I think the Housing Authority built a facility
8 fully intending to use groundwater in the area, and it
9 didn't par out. There was water quality issues. Their
10 other alternative was a line that was in the area that
11 went out to the department's wildlife area. That water
12 is used for a public facility as well as dwellings and
13 fire protection. The line was built in the '70s,
14 substandard, didn't meet current fire code, so we
15 expressec concern at that time. There was some question
16 at the beginning who owned the line, if it was Fish and
17 Game or the City.
18 It took time. There was a lot of people
19 working on it to try to work, I think, at various times.
20 There were starts and stops by all the parties involved.
21 CHAIRMAN STEINBERG: One of the common
22 complaints about government, you know, is that it just
23 takes too darn long, and I would hope that if you are
24 confirmed that you will look at issues like these and
25 champion them. Sometimes it takes one person to just
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16 of 32 sheet:
corral all the disparate forces and the different
bureaucracies and different jurisdictions and just plain
make it happen. Lock people in. Lock people in for
hours, if you need to.
SENATOR AANESTAD: Just tell them to bring
their toothbrush.
CHAIRMAN STEINBERG: All right. Are there
questions from other Members? We'll take the public
testimony, and that may open up more questions. Why
don't we do that.
You're welcome to sit at the table. Let's take
witnesses in support here.
Go right ahead.
MR. ROSEN: Thank you, Mr. Chair, and Members
of the Committee. My name is Rudolph Rosen, and I'm
director of western operations for Ducks Unlimited, a
wetlands conservation and water fowl conservation
organization.
We do support the appointment of Mr. Koch
today. We found him to be accessible and proactive when
it comes to wetlands conservation issues.
In addition to that, I would like to make a
personal observation. If you confirm Mr. Koch, he'll
join a small fraternity of fish and wildlife
professionals who have been directors or are directors
57
1 through efficiently, if we can. Thank you.
2 MR. THEISEN: Chairman Steinberg, Members of
3 the Committee. Good afternoon. Mark Thiesen with the
4 Gualco Group. I'm just here very briefly to reiterate
5 and underscore the reasons nine of our clients indicated
6 in their correspondence to you dated February 13th.
7 Those nine entities come from agriculture, business,
8 labor, the environment, the entertainment industry, and,
9 last but not least, water, and certainly are indicative
10 of the broad base of support for Mr. Koch. And,
11 certainly, he's the man for this particular job, given
12 the challenges that this committee just discussed.
13 Thank you very much.
14 CHAIRMAN STEINBERG: Thank you very much.
15 Next.
16 MR. COLLINS: Mr. Chairman, Members. I'm
17 Richard Bruce Collins. I'm the legal director for a
18 public interest law firm called Natural Heritage
19 Institute in San Francisco. I'm here to testify in my
20 personal capacity, not on behalf of clients, some of
21 whom are here to testify directly.
22 I've gotten to know Mr. Koch through the
23 Klamath negotiations in particular, and I offer you this
24 testimony based on that experience. The proposed
25 agreement there, when final, will resolve water wars
59
of Fish and Game agencies. And I'm a member of that
group, having been director of two state Fish and Game
agencies in the past. The decisions he makes will not
be approved by everyone. In fact, some decisions he
makes may be unapproved by everyone.
Work in the environment on ecosystems and
ecosystems that have been affected, it's not a black and
white sort of thing. Biological decisions are rarely
black and white. They're very often very difficult.
Consider, for example, that wetlands in the
state of California have been destroyed to the extent
of -- 95 percent of all wetlands have been destroyed.
Think about the fact that we're looking at the impacts
of climate change now. 95 percent of the wetlands in
California have been destroyed. That's catastrophic.
These are the kinds of issues that Mr. Koch and his
staff have to work with. It's very difficult. It's
very challenging.
And in my personal opinion, Mr. Koch is up for
the challenge based on experience and just based on the
observations that my staff and I have made since he's
taken office. He's been very, very accessible, and
that's a key ingredient to being successful.
CHAIRMAN STEINBERG: Thank you very much.
Appreciate the testimony. Let's continue. Let's move
58
1 that date back decades and that threaten the stability
2 of one of our most important watersheds. Every party
3 and every negotiator in that effort deserve credit, but
4 there's a handful who made it happen, and Mr. Koch is
5 one of them.
6 He is dedicated to the mission of this
7 department, so dedicated that he was, if you'll excuse
8 the phrase, crazy enough to come out of retirement to
9 take what is almost mission impossible. He is
10 principled, he's trustworthy, he speaks plainly. When
11 he tells you what he's going to do, he does it. He
12 relies on science, as he understands it, and he is
13 creative.
14 The solution that we're developing in the
15 Klamath will require public investment but will
16 ultimately be less than the emergency relief which is
17 currently being paid while these resources collapse. I
18 think that he is an extraordinary candidate, and I hope
19 you support him.
20 If I may, Mr. Chairman, offer one last thought.
21 The programmatic challenges that you described for the
22 department are more than budget. They also go to
23 authority. The department currently does not have clear
24 authority to enforce many of the provisions of efficient
25 income in the Section 5900 series related to diversions,
60
' of 32 sheets
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1 screening, and so forth. If the department had clear
2 authority to issue administrative orders rather than
3 rely on district attorneys, the enforcement could be
4 much more efficient.
5 CHAIRMAN STEINBERG: Authority from who?
6 MR. COLLINS: Authority from this legislature
7 in the form of clarification that it may enforce those
8 provisions directly through administrative orders.
9 CHAIRMAN STEINBERG: Interesting. Thank you.
10 MR. COLLINS: Thank you.
11 CHAIRMAN STEINBERG: Next.
12 MR. GALLIER: Thank you, Mr. Chairman, Members
13 of the Committee. My name is Tom Gallier. I'm the
14 general manager of El Dorado Irrigation District. We
15 serve about 100,000 people with water utility services
16 in El Dorado County. We also have a 20-megawatt
17 hydropower project that includes reservoirs up in the
18 high Sierras up in Alpine and Amador counties.
19 The reason I'm here today is because last
20 summer we had a crisis. We had an emergency with one of
21 our reservoirs, a failing outlet gate structure, that
22 essentially required us to, unfortunately, drain most of
23 that reservoir. That is a trojan fishery up there.
24 There were many issues that were impacted by Department
25 of Fish and Game rules and regulations.
61
1 appreciate it.
2 Mr. Kellogg. Good afternoon.
3 MR. KELLOGG: Good afternoon, Senator. Thank
4 you for this opportunity. Mr. President and Senators.
5 Gil. I'm here representing two or three different
6 groups.
7 CHAIRMAN STEINBERG: You didn't wave to --
8 MR. KELLOGG: I see Dutton all the time. I
9 just had to say hi to him.
10 Look, I represent the California State Pipe
11 Trades, as you know. I'm also secretary-treasurer of
12 the State Building Trades, and I'm representing them as
13 well today, 300,000-plus construction workers in the
14 state of California. We unanimously support Don Koch's
15 confirmation.
16 I also am vice president of the State Fish and
17 Game Commission, and I was appointed back in Gray
18 Davis's day, so I've been here longer, through four
19 different directors now. And I'm not going to take up a
20 lot of time. As you know, I'm not that dynamic a
21 speaker anyway, but I just want you to know -- most all
22 of you know me, and I'm here to tell you that out of all
23 the directors I've sat through, Don's only been director
24 since April, he's done a tremendous job with the
25 multitude of issues that we have.
63
1 We had to move extremely quickly so we could
2 initiate those repairs and have them completed before
3 the winter set in. It was a matter of public health and
4 safety risk and environmental damage that potentially
5 could have been caused downstream. To be honest, the
6 initial reactions we got were a little bureaucratic. As
7 you mentioned, Senator Steinberg, that can happen with
8 some agencies.
9 I placed a direct call to Director Koch, got
10 him on the phone and in about a ten-minute conversation
11 explained the situation we were dealing with. He pulled
12 the right people together in a room, as you said, and
13 from that point on we had outstanding cooperation from
14 the Department of Fish and Game. They coordinated a
15 three-way effort between my district and Fish and Game
16 and volunteers.
17 We did two major fish rescues, pulled thousands
18 of fish out of Cables Lake, moved them over into other
19 lakes, got the reservoir drained. Repairs were
20 completed in November. It would not have happened
21 without this gentleman's assistance and direction.
22 CHAIRMAN STEINBERG: Thank you very much for
23 coming to testify.
24 MR. GALLIER: Thanks.
25 CHAIRMAN STEINBERG: Very valuable. We
62
1 And I would only add that had he decided to
2 take a direct decision and stop what the people are
3 complaining about him not stopping, you would have had
4 just as many letters from the people that he stopped and
5 be questioning him from the other direction on the same
6 issue. Thanks.
7 MR. WETCH: Mr. Chairman and Members. Scott
8 Wetch on behalf of the labor/management committee of the
9 Forest Products Industry, comprised of the Association
10 of Western Pulp and Paper Workers, the California
11 Conference of Machinists, the California State Council
12 of Carpenters, the Western Council of Industrial
13 Workers, and Woodworkers District Lodge No. 1 in strong
14 support of Mr. Koch.
15 We've had a long relationship with Mr. Koch
16 prior to his retirement when he was the director of
17 region one. He's a collaborative type of manager,
18 somebody who brings everybody into the room.
19 We've been a party to most of the resource/
20 forestry-related battles here before the legislature
21 over the last decade, and there's one thing I think that
22 both sides of those battles could agree on, and that is
23 at the end of the day, all you can ask is that the
24 science carries the day.
25 And this is the first time we've had a director
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18 of 32 sheet!
1 of the Department of Fish and Game, in at least the last
2 20 to 25 years, who is a scientist and who is a
3 biologist. And I think equally important, you have
4 somebody who has come out of retirement, who has come
5 out for the sole purpose of providing public service,
6 who has no other horizon before him to color his
7 judgment other than to look at the data and make the
8 best decision.
9 So based on that and all the aforementioned
10 organizations, we urge your confirmation. Thank you.
11 CHAIRMAN STEINBERG: Thank you very much,
12 Mr. Wetch.
13 MR. THOMAS: Good afternoon, Mr. Chairman and
14 Members. Anthony Thomas, vice president of government
15 and legislative affairs for the California Forestry
16 Association.
17 I just want to echo some of the comments of the
18 previous speakers, and the Forestry Association believes
19 that Mr. Koch -- his leadership with the Department of
!0 Fish and Game will be in very, very good hands.
M The commission that he references is just a
12 testament of some of his leadership skills and items
23 that he will be doing to further the proper policies
J4 insofar as Fish and Game is concerned, and we urge your
!5 confirmation.
65
1 burden today to deliver what I'm going to deliver, but
2 it needs to get out there.
3 Basically -- And you guys understand, because
4 of the recent furloughs of the Fish and Game Wardens
5 and ~ in addition, more than 30 percent of all of the
6 patrolling game wardens in California received surplus
7 layoff letters this past week. The wardens association
8 wanted to not endorse this government's appointee. With
9 no disrespect, and I believe at no fault to Director
10 Koch, I'm saddened that I have to make this stance on
11 behalf of game wardens. I believe he is a victim of
12 this circumstance.
13 CHAIRMAN STEINBERG: What stand -- Are you in
14 opposition to the nomination?
15 MR. KARNOW: For director.
16 CHAIRMAN STEINBERG: We were still hearing the
17 support.
18 MR. KARNOW: We are also -- I got about two
19 minutes to go through this to put it in perspective the
20 best that I can to bring forth the thoughts of the
21 Wardens Association, if I may.
22 CHAIRMAN STEINBERG: Go on.
23 MR. KARNOW: Thank you. I believe he's the
24 victim of this circumstance. The Wardens Association is
25 pleased that Director Koch is a Department of Fish and
67
1 CHAIRMAN STEINBERG: Thank you, Mr. Thomas.
2 Next.
3 MR. BERNSTEIN: Mr. Chairman, Members of the
4 Committee. John Bernstein. I'm the vice president of
I 5 Pacific Forest Trust. Our president couldn't be here.
i6 She got called away.
7 As many of you folks know, there's a large
• 8 network of non-profits, such as land trusts and other
9 conservation groups, that tremendously extend the work
10 of all you folks here. The agencies leverage the work
II that agencies do. And I have to say on behalf of
12 Pacific Forest Trust, that Don Koch has been a great
13 partner to us, has been very helpful and successful in
14 working with the state agencies.
15 I'll just say in passing also that I've been
6 the head of a state environmental agency, and there's
7 lots of tough judgment calls that create hot-button
8 issues in front of the legislature, but I think if you
9 ask him, he probably has some judgment calls that he
','.0 thinks are pretty good ones that he'll be happy to tell
)!1 you about.
2 CHAIRMAN STEINBERG: I'm sure. Thank you.
3 MR. KARNOW: Chairman, Committee Members,
.4 Director Koch. Jerry Karnow with the California Fish
[5 and Game Wardens Association. I kind of have a heavy
66
1 Game veteran employee and also that thus far he has been
2 a great advocate of game wardens and their mission
3 without question, and we're trying to explain that to
4 the wardens in the field.
5 So we do not oppose his confirmation, but at
6 this time the Wardens Association will not offer an
7 official endorsement to any director appointed by this
8 governor. The governor's proposal a year ago to
9 eliminate 38 wardens is also troubling. Not until the
10 governor makes a tangible commitment to his game wardens
11 to maintain or increase law enforcement personnel will
12 we offer support.
13 Game wardens are defined by the California
14 Penal Code as peace officers whose authority extends to
15 anyplace in the state. This is the same, for example,
16 as California Highway Patrol and other State peace
17 officers who have already been exempted from these
18 layoffs and furloughs. In addition, all wardens are
19 federally deputized by the United States Department of
20 Interior to enforce even broader laws. To top it off,
21 there are roughly 220 game wardens statewide, the worst
22 per-capita ratio in the United States and all of North
23 America.
24 The word "surplus" in the recently received
25 layoff letters is an insult to the profession. The
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1 letter actually states "You have been designated as
2 surplus and have priority hiring preference for open
3 positions for which you qualify."
4 It is well known there has been a campaign to
5 expose a brewing crisis of too few game wardens and how
6 that negatively affects public safety and California
7 resources. Wildlife crime habitat destruction and water
8 pollution are out of control in this state. Warden
9 investigations document the illegal take of wildlife
10 with regularity. Our work establishes there is both a
11 statewide and worldwide network in the illegal trade of
12 fish and wildlife. Water pollution continues to plague
13 our state, and game wardens are there to hold
14 accountable individuals and companies that ignore
15 pollution laws. It's tragic our state professes to be a
16 leader in the green movement yet will not hire nor
17 maintain enough staffing to protect our natural
18 resources.
19 Some of you may have recently seen media
20 coverage from several high-profile poaching cases in the
21 past weeks. Sadly, half the investigating officers that
22 conducted surveillance, served search warrants, and
23 arrested those criminals received layoff letters.
24 Personally, I wish you all the luck, and I hope
25 you can stick around.
69
1 He relies very much on science, which we always want to
2 hold up as one of the most important factors, and he's
3 always been able to bring together various groups that
4 don't always agree with each other and come up with
5 common-sense, consensus-based approaches.
6 We are very happy that he is bringing to the
7 table about 30 years of experience within the
8 department. We think that will serve him well in this
9 capacity, and we strongly urge you to approve him.
10 Thank you.
11 CHAIRMAN STEINBERG: Thank you very much.
12 MR. ADDIS: Thank you, Mr. Chair and Members.
13 Reed Addis on behalf of the Ocean Conservancy. We're
14 here in support today. We know this department has had
15 challenges, and we've had challenges with that
16 department over the years and probably will continue to.
17 However, we have been -- the Ocean Conservancy in
18 particular has been focused on marine policy and has
19 been working with the department over the last several
20 years on the implementation of the Marine Life
21 Protection Act.
22 The department has done a very good job in
23 dealing with a very complicated and difficult law and
24 implementation of that law. We have appreciated working
25 with Mr. Koch on that implementation and feel it's very
71
1 So I hope that makes sense to you guys.
2 CHAIRMAN STEINBERG: Clear as mud. Perfect.
3 It actually does make sense. We understand.
4 SENATOR AANESTAD: What's the saying? Friends
5 like that....
6 CHAIRMAN STEINBERG: We understand you came
7 up -- had to come up to make the appropriate statement
8 on behalf of your members, and you distinguished your
9 feelings on the situation from your feelings about
10 Mr. Koch, and I think we all get that. Thank you.
11 Appreciate it.
12 MR. KARNOW: Thank you.
13 CHAIRMAN STEINBERG: Work toward better days.
14 This is all support.
15 MR. HENNELLY: Mr. Chairman and Members. Mark
16 Hennelly with California Outdoor Heritage Alliance. We
17 represent over 30 hunting and wildlife conservation
18 groups statewide, and we've had the privilege of working
19 with Mr. Koch over the last ten years on a variety of
20 fish and game issues, including Klamath River basin
21 water issues, public use of the Department of Fish and
22 Game's lands, and private land conservation programs,
23 and we've found that Mr. Koch has always demonstrated a
24 very in-depth knowledge of the, frankly, often
25 controversial and complicated issues facing the state.
70
1 important to keep him in that position to help, and
2 continue to keep the Marine Life Protection Act on
3 schedule and to implement it in time. Thank you very
4 much.
5 CHAIRMAN STEINBERG: Thank you very much.
6 Next.
7 MR. TAYLOR: Mr. Chair and Members of the
8 Committee. Thank you very much. I'm Dan Taylor, policy
9 director for Audubon California. Today I speak for
10 Audubon together with my colleague organization,
11 Defenders of Wildlife, in support of the confirmation of
12 Mr. Koch.
13 As has been said by others, we believe his
14 career experience provides a unique perspective for him
15 to take the department forward. We've been impressed
16 with the openness and transparency that Mr. Koch has
17 brought to his job and to the department. And,
18 specifically, we're in conversations now to create some
19 legislative direction on the whole question of poaching,
20 which you heard about earlier, and Mr. Koch has brought
21 forth professionals in the law enforcement branch of
22 Fish and Game to work with us in developing strategies
23 and solutions which will make a difference in the real
24 world. Not every prior director of Fish and Game would
25 have been willing to do this. We appreciate that.
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I'm also thankful that the Klamath Restoration
Agreement has been put on the table and discussed here.
Don is one of the unsung heroes of that very landmark
opportunity to rescue what has often been seen as a lost
cause.
Obviously, Fish and Game is an important agency
for our organizations and for the people of California.
We do not for a moment discount the very tough questions
which your — which the dialogue earlier gave reference
to, and I believe -- we believe it's incumbent on all of
us, be it agency professionals, interest groups, public
citizens, elected officials, to remain on our toes in
dealing with these very, very tough, difficult issues
that the department faces and the wildlife faces in
California. But we believe that Don Koch is the right
person for the job, and we're happy to endorse his
candidacy.
CHAIRMAN STEINBERG: Thank you very much.
Appreciate the testimony.
Next.
MS. BIGELOW: I'll be quick.
CHAIRMAN STEINBERG: Okay.
MS. BIGELOW: Mr. Chair and Members. My name
is Melva Bigelow, and I'm here representing The Nature
Conservancy, and I will not echo all of the points that
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1 improving the department's fiscal helm, and he works
2 well with the commission. And all of those strengths
3 are important foundations for making the department more
4 effective, more accountable, and strengthening its
5 ability to defend our precious natural resources.
6 CHAIRMAN STEINBERG: Thank you.
7 Sir.
8 MR. SCHMELZER: Mr. Chairman and Members.
9 Tim Schmelzer representing the Wine Institute. We
10 represent over 1100 members throughout California.
11 We're here in support of the nomination of Mr. Koch, and
12 I just wanted to say we have profound respect for the
13 experience that he brings to the table. Notably, we
14 have great appreciation for his reliance on science
15 and -- which is very important to my members.
16 We're very encouraged by his ability to bring
17 disparate parties together to forge solutions, and we
18 have great faith that he will take a balanced approach
19 in tackling the difficult issues before him. Thank you.
20 CHAIRMAN STEINBERG: Thank you very much.
21 Mr. Higgins.
22 MR. HIGGINS: Mr. Chairman, Members of the
23 Committee. My name is Ben Higgins, chief operating
24 officer of the California Rangeland Trust. It's a
25 pleasure to be here today and speak on behalf of the
75
have been raised by my colleagues in the conservation
movement.
I would just like to point out that like most
of our public servants/administrators, this man has an
almost impossible job.
CHAIRMAN STEINBERG: We wouldn't know anything
about that.
MS. BIGELOW: You do know that. Most public
servants in California have equally impossible jobs. I
would just like to say what he cannot. Do what you can
to help him with this difficult job.
CHAIRMAN STEINBERG: Very good. That's
helpful. Thank you, Ms. Bigelow.
Next.
MS. GARRISON: Mr. Chairman, Members of the
Committee. Karen Garrison, co-chair -- co-director of
the Natural Resources Defense Council oceans program.
We're supportive of this candidate, and I'd like to
follow Melva's comment.
We take very seriously the concerns raised by
our conservation, fishing, and tribal colleagues. We
think the Committee deserves an explanation and
commitments to address those issues going forward, but
based on our experience Director Koch has been
accessible to all interests. He's shown a commitment to
74
1 organization in support Mr. Koch's confirmation.
2 Briefly, our organization has now had the
3 opportunity to see this man on the job, and we are
4 convinced that he has the scientific background, the
5 institutional knowledge, and the ability to work with
6 divergent interests that are going to serve the agency
7 and conservation interests as well. He understands the
8 important role the private landowners play and ranchers,
9 in particular, in resource management, and we feel in
10 many issue areas he adopts a very appropriate balance
11 between the needs of farmers and ranchers, sensitive
12 species, important resources, and the public welfare.
13 We have in this state a growing interest by
14 landowners and ranchers in conservation. We have the
15 opportunity, our organization does, to protect an
16 additional 500,000 acres in this state right now. Our
17 ability, however, to protect these landscapes hinges
18 largely on the capacity and willingness of state
19 agencies and the Department of Fish and Game in
20 particular, to brand new partners in conservation.
21 We are confident that Mr. Koch will not only
22 serve as an important partner, but also a capable and
23 careful steward of California's natural resources. We
24 encourage his speedy confirmation.
25 CHAIRMAN STEINBERG: Thank you,
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1 MS. CREMERS: Good afternoon. Noelle Cremers,
2 California Farm Bureau Federation. Most of what I was
3 going to say has already been said, so I won't repeat
4 it; but I did want to make the point that Mr. Koch
5 recognizes the importance of partnerships and working
6 with private landowners on a voluntary basis to help
7 them preserve the state's resources. And I think it's
8 very important that we have a director of the Department
9 of Fish and Game that recognizes that and realizes that
10 it will take these partnerships to make sure that
11 California's resources stay strong. Thank you.
12 CHAIRMAN STEINBERG: Thank you.
13 MR. OLDFIELD: Good afternoon, Mr. Chairman
14 and Members of the Committee. My name is Justin
15 Oldfield. I'm with the California Cattlemen's
16 Association, and CCA strongly urges you to confirm
17 Mr. Koch as director of the Department of Fish and Game.
18 California's ranchers and beef —
19 THE REPORTER: Please slow down.
20 MR. OLDFIELD: — are stewards of our state's
21 land, wildlife, and water resources, and manage nearly
22 31 million acres —
23 CHAIRMAN STEINBERG: Slow it down for the
24 reporter.
25 MR. OLDFIELD: I apologize.
77
1 District. Both those organizations are run by
2 biologists, and we really appreciate Don being involved
3 in the department as a scientist.
4 I don't have to remind you that as the largest
5 state in the union, with the most population, the most
6 threatened and endangered species and the close
7 proximity of both, we have a lot — Don will have a lot
8 of work ahead of him. We urge you to support him and
9 confirm him.
10 CHAIRMAN STEINBERG: Thank you.
11 MR. WATERS: Thank you.
12 CHAIRMAN STEINBERG: Welcome.
13 MS. SCHOHR: Good afternoon. My name is
14 Tracy Schohr, and I'm here this afternoon on behalf of
15 the partners of the California Rangeland Conservation
16 Coalition steering committee in support of Mr. Koch's
17 confirmation.
18 The Rangeland Coalition is an unprecedented
19 group of over a hundred organizations representing
20 California ranchers, environmentalists, and local state
21 and federal agencies. Together we're working to
22 preserve private working ranches, support the long-term
23 viability of the ranching industry, and to protect and
24 enhance California grasslands for protected and
25 endangered species.
79
1 — thirty-one million acres of California
2 rangeland.
3 Working side by side with Mr. Koch, he has
4 continuously demonstrated his willingness to work with
5 landowners, ranchers, and other stakeholders to develop
6 solutions for some of the state's most controversial
7 issues.
8 You know, in addition to his commitment to
9 maintain a collaborative attitude, Mr. Koch has also the
10 necessary understanding of the policy and natural
11 resource issues, and I think that he has the ability to
12 manage the department in a very successful and effective
13 way.
14 That being said, CCA does urge you to join us
15 and other stakeholders to support Mr. Koch in his
16 efforts to work with all stakeholders to develop a
17 sensible and feasible solution to our state's most
18 challenging natural resource issues, which many of you
19 heard of today, and confirm him as director. Thank you.
20 CHAIRMAN STEINBERG: Thank you. Couple more
21 witnesses.
22 MR. WATERS: Mr. Chairman and Members of the
23 Committee, my name is Jim Waters, and I'm a member of
24 the board of directors of the California Water Fowl
25 Association and also the Suisun Resource Conservation
78
1 Our coalition, and in particular the steering
2 committee, have had the opportunity to work with
3 Mr. Koch on numerous endeavors in his position as acting
4 director. During the short time he has made significant
5 strides in encouraging staff to be become engaged in a
6 partnership recognizing the importance of private lands
7 for wildlife habitat.
8 Furthermore, Mr. Koch has been supportive of
9 the department finalizing a new program designed to
10 improve natural resources on private working ranches.
11 This will be the first program offered by the department
12 encouraging private landowners to improve habitat for
13 threatened and endangered species. Thus, it's supported
14 by everyone from private landowners to the defenders of
15 wildlife.
16 In addition, Mr. Koch has committed to working
17 with our members to address the barriers to cooperative
18 conservation that is having a direct effect on the
19 voluntary enhancement of fish and wildlife habitat on
20 private land.
21 In conclusion, Mr. Koch's tenure with the
22 department has included various leadership roles that
23 serve as a strong foundation for his appointment as
24 director. These past experiences coupled with his
25 willingness to address conservation barriers, work with
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private landowners, and support collaborative
conservation initiatives such as the Rangeland Coalition
is why I'm here today in support of his confirmation.
CHAIRMAN STEINBERG: Thank you very much for
your testimony.
Last but not least.
MS. GUSTAFSON: Thank you, Mr. Chair and
Members. I'm Cindy Gustafson, and I'm honored and
privileged this year to serve as the president of the
California Fish and Game Commission.
Even though the gentleman that spoke before me,
Mr. Kellogg, has many more years on the commission, I
would like to think I have a lot of experience now in my
four and a half years on that commission.
These are unparalleled challenges to the
resources of this state, and there is not one of us on
the commission or in the department that doesn't
recognize that. These challenges are insurmountable in
many ways. We are trying to balance the impacts of man
and the environment, and how we best balance that.
Don being willing to do this is something that
I have questioned his sanity. Did he really want to do
this in coming back? And, obviously, this man is
passionate about what he's trying to accomplish here.
Not only that, but he has been willing to sit down with
81
1 California. Just to be clear at the outset, we don't
2 have --
3 CHAIRMAN STEINBERG: Just a second.
4 (Discussion off the record.)
5 MR. MASON: Again, Paul Mason with Sierra Club
6 of California. We don't actually have either a support
7 or opposed position. We do have some serious concerns,
8 and I want to focus on a couple of those and make sure
9 those are out in the full light of day, and it goes back
10 to the question of salmon protection, and particularly
11 on forested landscape, how the Board of Forestry and the
12 department interact to fix the known deficiencies with
13 the forest practice rules.
14 This could be a really long bit of testimony,
15 but it's already fairly late, so I'll try to make it as
16 condensed as possible.
17 CHAIRMAN STEINBERG: Please.
18 MR. MASON: A couple of years ago, Secretary
19 Chrisman proposed significant new rules to address the
20 fact that salmon across California, pretty much
21 everywhere, are in serious decline. So this came before
22 the Board of Forestry. The department was a strong
23 proponent of taking a more conservative and more
24 proactive approach to salmon protection.
25 In the face of strong industry opposition at
83
me and with members of the commission and brainstorm
what can we do to be more effective, because we know
their challenges that we're not being as effective as we
could be and protecting the resources.
Don has been willing to look at those issues
and look at how he can change this department into a
solution-oriented department. They are now asking what
they can do to be better. We really appreciate that.
He is open and willing to work with all groups and all
sides. He's a humble man, a man of integrity and of
science, and I couldn't think of a stronger leader for
this department. So I want to thank you all for your
time.
CHAIRMAN STEINBERG: Thank you very much for
coming to testify.
The reporter and I, and maybe others, need
another five-minute break. We'll take a five-minute
break and come back and hear from the opposition.
(Recess taken.)
CHAIRMAN STEINBERG: The Committee will come
back to order.
Let's hear from the opposition to the
confirmation of Mr. Koch. Witnesses in opposition.
MR. MASON: Good afternoon, Chairman Steinberg,
Members of the Committee. Paul Mason for Sierra Club of
82
1 the board, those got whittled down, and whittled down,
2 and whittled down until at long last they adopted a set
3 of rules that rather than taking a proactive protection,
4 the Board of Forestry adopted rules that, in our
5 opinion, set a cap on how much conservation would
6 happen, and only for Coho salmon, and only if the
7 logging was so bad it was actually going to kill fish.
8 There was no proactive habitat protection involved at
9 all. Sierra Club and other organizations challenged
10 those rules.
11 After that happened, we got into last year's
12 really dramatic crash of salmon where the governor
13 declared an emergency. All salmon fishing was shut
14 down, and that's when the fishery service came out with
15 new salmon returns that showed that across the coast,
16 not just in areas where we have the big dam problems and
17 the delta problems, but throughout all the coastal
18 streams in California, returns for Coho were down about
19 75 percent compared to three years ago. So we were in a
20 major and we still are in a major salmon crisis.
21 Given that, Sierra Club's Environmental
22 Protection Information Center in California Trout
23 brought in an emergency petition to the Board of
24 Forestry based on the rules that they had previously
25 supported and saying, "Look, we have an emergency here.
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1 We can't be waiting years to go through this long
2 literature review. Let's take a more cautious approach
3 now, and we can continue to have this literature review,
4 but salmon are going extinct in California on our
5 watch."
6 We had discussions with the department, with
7 the National Fishery Service, in advance of this hearing
8 and fully expected both of them to show up and be in
9 enthusiastic support, because these were modest changes
10 long identified as essential. The day of the hearing,
11 we have the Bush administration's National Fishery
12 Service standing up there saying that "There is an
13 extinction crisis in California. You should absolutely
14 adopt these rules. It's critical that we not keep
15 waiting."
16 And, unfortunately, we had the Department of
17 Fish and Game get up and their representative sort of
18 say, "Well, you know, things are basically working out
19 fine the way they are," and it was tragically
20 disappointing. As somebody who worked on this issue for
21 well over a decade and had expected the department to
22 step up and take advantage of this opportunity, very,
23 very disappointing.
24 The reason that I'm not here in strong
25 opposition but rather raising this as a concern is that
85
1 the north coast manager for California Trout, and I drew
2 the organization's short straw for today.
3 I've known Don for a long time, and it's very
4 difficult for me to get up here and not be able to
5 support him. We also are in a similar position of
6 Sierra Club and opposing, but we do have some concerns.
7 Paul just very clearly articulated some of
8 them, and they go back a lot longer than that for me. I
9 was actually appointed by the resources secretary back
10 in 1995, I believe, to a coastal salmon initiative that
11 was to deal with these types of issues on behalf of the
12 state to deal with the implementation of the federal
13 listing. There were seven environmental and fishery
14 representatives, and three of them are dead, three of
15 them are retired, and I'm the only one that's left doing
16 this anymore.
17 I'm a little bit concerned about the timelines
18 that we look at when we look at processes. This led to
19 the State listing that was supposed to be a one-year
20 process. I submitted that petition myself in 2000. It
21 just finished going to the Supreme Court this last year.
22 The regulations that Paul spoke of were being
23 discussed back in 1995. They were actually recommended
24 for adoption when the species went through candidate
25 status and, through a variety of circumstances, still
87
1 I don't doubt that Director Koch has a commitment to
2 salmon. I have concerns about what his bosses have for
3 a commitment to salmon. I don't think the department
4 did a 180-degree turn on their intention to support
5 these rules based just on the director's intention.
6 They have an opportunity to rectify this
7 problem, because, as the director noted, the Board of
8 Forestry is currently revising these rules. They have
9 tasked a very competent staff person to be fully engaged
10 over at the Board of Forestry. He's doing a good job.
11 For the last couple of months, I would be quite pleased;
12 but given recent history, I want to make sure this
13 committee and the Senate is aware that -- it's kind of
14 like Lucy and the football over there. You think that
15 you're about to make progress, but at the last minute
16 you're back to square one and you make no progress. So
17 those are our concerns.
18 CHAIRMAN STEINBERG: I really appreciate the
19 testimony. I think it's very thoughtful.
20 I'm not sure if I want to ask Mr. Koch for a
21 response now or not. I probably don't. Let's get
22 through the rest of the opposition. You can address the
23 concerns or not in your closing.
24 Next.
25 MR. WESELOH: Good afternoon. I'm Tom Weseloh,
86
1 have not been adopted. The Lucy-and-the-football
2 analogy is basically something I've been saying for
3 years.
4 I understand a lot of these issues are not the
5 director's. He's inherited them. He may have been
6 given advice on how to deal with some of them that may
7 not be under his control.
8 I want to state that your opening remarks about
9 the deep concern of the fish, of the forest practice
10 rules, of the mining, you were right on the mark with
11 those, and while --
12 CHAIRMAN STEINBERG: Wrote them myself,
13 actually.
14 MR. WESELOH: I wasn't - I was born in '61,
15 and when I was a kid I could fish for salmon -- Coho
16 salmon that swim between my legs, catch them on the fly,
17 and they were abundant fishing.
18 When we started the coastal salmon initiative
19 process, that's when fishing ceased in the ocean,
20 fishing ceased in the river. There's been generations
21 of Coho, three or four now, that we've not fished for at
22 all, and they haven't returned.
23 During all of this, what surprises me is the
24 burden of proof is always on the fish. They're all
25 always on the fisherman. The precautionary principle of
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1 protecting species before they're disappearing really
2 isn't paid attention to, and that's what I thought I
3 heard you discussing. And in the suction dredge mining
4 issue, to me, when I hear that we have a patient, as far
5 as the analogy goes, that's the fish, and you are
6 responsible for your patient, and yet the fish is being
7 harmed. We know there's deleterious effects, and we're
8 not going to do something about it until we go through
9 another process.
0 I've been processed to death. I feel like
1 Velveeta cheese. Like I said, I'm not going to hold the
2 director responsible for all these. I've worked with
3 Don for a long time, and I think I've been on a
4 first-name basis with directors for 20 years, but there
5 are deep-routed fundamental problems. And I believe
6 most of the Committee members, if not all of you, have
7 this. This is a report that Cal Trout commissioned.
8 It's called "Native Fish Crisis."
9 That's where we are. We're in a crisis. And
!0 it has recommendations, and some of them go to the core
!1 problems that we have. The department has too many
!2 mandates, not enough funding, not enough support,
!3 doesn't have the authorization, as Richard Bruce Collins
!4 testified, to implement some of the protective measures
!5 they need in the Fish and Game Code, and our concerns
89
1 MR. WESELOH: Correct, and we do have some
2 differences of opinion, but —
3 SENATOR DUTTON: Do you feel you can work with
4 him, though?
5 MR. WESELOH: Yes.
6 SENATOR DUTTON: Okay. Thank you.
7 SENATOR OROPEZA: That's fair.
8 CHAIRMAN STEINBERG: Next.
9 MR. LEVY: Mr. Chairman -
10 SENATOR OROPEZA: They make those chairs to be
11 uncomfortable.
12 MR. LEVY: I didn't tip all the way.
13 Mr. Chairman, Members of the Committee. Thank
14 you for the opportunity to speak today in opposition to
15 the confirmation to Mr. Koch.
16 My name is Noah Levy. I'm president of EPIC,
17 the Environmental Protection Information Center, based
18 in Humboldt County, and I want to thank you too for your
19 opening remarks. I don't want to repeat things that
20 have been said or will be said, but to give a few
21 specific examples of why we are concerned about this
22 appointment.
23 For the past 30 years, EPIC has worked to
24 secure the protection for fish, wildlife, forest, and
25 watersheds that the people of California have sought to
91
'1 are that these become a priority and a proactive
2 precautionary principle basis.
:3 And I think Don knows for the most part we
i4 don't have these deep-routed fundamental differences in
!5 philosophies on what we need to do to protect our fish,
:6 but we are very concerned with the lack of resources
7 that the department has, that we put that precautionary
8 principle first, and we make sure whenever we have a
:9 deleterious effect, whenever we have something that's
0 causing a problem with our fish, halt it before they
'1 disappear.
2 The healthiest population in Marin County this
3 year has less fish than there are people in this room
<4 for Coho salmon. South of San Francisco, same way.
5 They are disappearing.
6 So whatever you can do to help us, I'd greatly
7 appreciate. You put some wonderful laws on the books.
8 We need to enforce them. And if confirmed, we look
9 forward to doing that.
0 CHAIRMAN STEINBERG: Thank you very much for
1 your testimony.
2 SENATOR DUTTON: I'm confused. Are you neutral
!3 or are you opposing? You're protesting the department,
i4 more or less, or practice, not necessarily the
>5 applicant.
90
1 provide through our Constitution and our Assembly. It
2 has never been more important that the Department of
3 Fish and Game be led with the vision, leadership, and
4 force of character necessary to turn back the entrenched
5 interests who would accept the loss of species as the
6 cost of doing business.
7 Unfortunately, Mr. Koch's role in shaping the
8 Department of Fish and Game's policies and practices in
9 Northern California leave us with no confidence that
10 Mr. Koch would lead the department to uphold its vital
11 public trust responsibilities, which are to protect our
12 fish and wildlife, our waters, and our central habitats
13 from needless and lasting degradation.
14 Most of you know the story of the Headwaters
15 Forest and the role the State played in protecting a
16 last fraction of our ancient redwood forests. Assembly
17 Bill 1986 provided some $245 million dollars for the
18 acquisition of important habitat areas and a plan to
19 ensure logging in the area would not harm already
20 imperiled species, including marbled Murrelets and
21 salmon. However, under Mr. Koch's guidance, the
22 department took the position that it need not review
23 timber harvest plans to ensure compliance with AB 1986.
24 Mr. Koch personally signed off on decisions allowing
25 logging of the highest quality Murrelet habitats around
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1 headwaters. Today's steep decline in Murrelet
2 populations is clearly tied to habitat loss. Had the
3 department worked harder to protect habitat, the species
4 might have better prospects today.
5 Similarly, our salmon suffered a host of
6 impacts such that most of our mainlands are protected
7 under both the California and federal Endangered Species
8 Act. The Assembly has required, and Fish and Game Code
9 Section 5937, that dams and diversions maintain flows
10 sufficient to ensure survival for salmon and trout.
11 During Mr. Koch's tenure, the department's own game
12 wardens were instructed not to enforce the law in the
13 Scott and Shasta River basins. The result, according to
14 game wardens quoted in a 2001 San Francisco Chronicle
15 article, was the loss of essentially all of the
16 anadromous fish in those rivers at that time.
17 I'd also refer very briefly to the more recent
18 matter that Mr. Mason noted in his comments that over
19 the last year, due to the department's failure to
20 protect Coho salmon from the effects of logging roads,
21 EPIC and other organizations finally filed suit seeking
22 better rules, and as part of the settlement agreement
23 with the department, we proposed emergency rules to the
24 Board of Forestry that the department promised to
25 support. Unfortunately, the department reversed its
93
1 DFG had acted beyond its legal authority.
2 EPIC would respectfully suggest that in none of
3 these cases has Mr. Koch demonstrated the commitment to
4 the protection of California's precious fish and
5 wildlife that the department needs at this historic
6 juncture. These are not isolated instances, but
7 examples of Mr. Koch's sometimes cavalier attitude
8 towards the laws the department is charged with
9 upholding and his willingness to do the bidding of
10 powerful interests. We need a Department of Fish and
11 Game director who will uphold the public's trust and
12 restore integrity to the department.
13 Thank you, Mr. Chairman and Members of the
14 Committee.
15 CHAIRMAN STEINBERG: Thank you very much.
16 Next.
17 MR. GRADER: Thank you, Mr. Chairman and
18 Members of the Committee. My name is Zeke Grader, and
19 I'm the executive director of the Pacific Coast
20 Federation of Fishermen's Association. We represent
21 working men and women in our commercial fishing fleet.
22 We are, in fact, the largest commercial fishing
23 organization on the U.S. West Coast, and among others we
24 represented what were working salmon fisherman.
25 Our position today is a lot like that of the
95
1 support for the proposed rules just before the hearing.
2 This failure of leadership has cost the state precious
3 months in responding to an ongoing extinction event and
4 will continue to cost our organization and the state a
5 great deal of time and resources that would be better
6 devoted to fixing the actual problems.
7 Finally, I would call your attention to the
8 story of the Scott Bar and Siskiyou Mountain
9 salamanders. In 2005, scientists announced they had
10 discovered Siskiyou Mountain salamanders, a species
11 listed as threatened under the California Endangered
12 Species Act, actually consisted of two different
13 species. The new species, christened the Scott Bar
14 salamander, was by far the less numerous and widespread,
15 with only a few dozen known populations.
16 Nevertheless, the department, in a position
17 Mr. Koch directly approved, decided that it would be
18 perfectly acceptable to allow the clearcut logging of
19 nearly a third of those known salamander sites, areas of
20 old growth forest which had been specifically set aside
21 to protect those same salamanders when they had a
22 different name. The agency's justification was that the
23 newly named species was not on their list of protected
24 species. Only prompt legal action prevented the
25 logging. A subsequent court ruling made it clear that
94
1 game wardens, which was elaborated earlier, that there's
2 an extreme amount of frustration in our organization,
3 but there is no official position either of opposition
4 or support. But there are some very serious concerns.
5 Let me say at the outset a number of my members
6 along the north coast have had experience working with
7 Mr. Koch when he was director of region one and had good
8 working relations with him, particularly trying to
9 resolve some touching land issues in that. However, I
10 think where we are right now, in an ongoing frustration,
11 and, obviously, we have to look beyond just whether or
12 not a person is a decent person, a good person, an
13 accessible person, but what's been the performance of
14 the agency. As Harry Truman said, "The buck stops
15 here," and that's what we have to look at, is what
16 exactly is happening.
17 Now, there's been a great deal of frustration
18 with my members just about the lack of performance by
19 the Department of Fish and Game. In fact, they've often
20 wondered who are they out there representing, because at
21 times the feeling has been that they only not care about
22 fishermen, they don't even care about the fish much of
23 the time.
24 Now, obviously, that can't be blamed on
25 Mr. Koch. He's only been there since last April.
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However, we have been concerned at the lack of progress
since that time, particularly at looking at department
funding. The department has been in continual fiscal
crisis now for probably as far back as I can remember,
and I've been at this job now 33 years. So it's
something that we've attempted time and again, not only
ourselves, but a number of coalitions, to try and help
the department find a way out of its financial morass.
The problem we get into is while it becomes a
convenient claim, "We can't do this; we can't do that.
We don't have staff for this or that because of no
funds," yet when we go and attempt to find funding for
the department, there's absolutely not a finger lifted
to try to help itself. It's as if this has become a
convenient excuse to do nothing, and that's, in fact,
what they've done in a great many areas, is nothing.
And so as a result, many of our fisheries are in crisis
because of that, and people are losing jobs.
The latest example, the one that really is
stuck in the craw right now, is the fact that we can't
even get an audit on our salmon snap program. This is a
program the fisherman came to the legislature with about
30 years ago, got the thing passed, offered to tax
themselves -- now, there's not many people who offer to
tax themselves — to front specific things. And,
97
1 need to look at this as a confirmation of the department
2 as a whole, and if this administration will not give it
3 the authority it needs to enforce Fish and Game laws,
4 and if it does not get the financial support from this
5 legislature, then I would simply state the department
6 gets no confirmation. Thank you.
7 CHAIRMAN STEINBERG: Thank you.
8 Ms. Guzman.
9 Mr. Koch can talk about the resolution of the
10 housing issue and the clean water issue. Do you have
11 any more comments on that?
12 MS. GUZMAN: Yes. For those who don't have the
13 background, this is a migrant camp just outside the city
14 of Los Banos. It's about 250 people, about 50 units,
15 and it's open from May to November. And for three
16 years — another issue that you've inherited — we've
17 been trying to work with Fish and Game to hook up to a
18 temporary line there.
19 And, unfortunately, I'm here with a bit of
20 skepticism that this is going to happen, because — I
21 wish I had a picture to show you of the lines, because
22 you can weld these lines together in probably a matter
23 of hours. In fact, I could probably weld them together
24 in about four hours or so.
25 It's atrocious that we have a solution to
99
indeed, in its first years, it was beneficial. It
actually paid for itself by the fact we saw increased
salmon production.
However, in recent years we have not been able
to find out what the status of that report is. We can't
get an account. We can't get an audit. We don't know.
All we're being told is that there's no money. We know
fisherman are paying into it. There's got to be money
someplace.
So this is -- Again, it's not a problem
directly related to Mr. Koch, but it is something that
has been ongoing and still hasn't been resolved, and we
do need to get these financial issues resolved,
particularly is first and foremost getting an audit on
these snap programs that fisherman have come forward and
offered to pay themselves. How often is it when you
have taxpayers willing to tax themselves to put in these
programs? And yet, this is the way it's treated. So
that's got to be changed.
CHAIRMAN STEINBERG: Wrap up.
MR. GRADER: Yeah, I'm wrapping up here.
My feeling is that, again, this is not so much
a judgment on Mr. Koch, but really in a sense you may
have here a good man in a bad department. And I think
more than anything else, this is really -- you almost
98
1 provide 250 human beings safe drinking water, and it
2 takes a matter of hours to do that, and we haven't been
3 able to do it because of what I think are false reasons.
4 And I just want to share one of those false
5 reasons that happened last year under Mr. Koch's tenure,
6 that one of his regional directors said during a phone
7 call, and fortunately at the time we had one of the
8 local county supervisors on the call, who was a
9 Republican, and he called him out on it, and what he
10 said at the time was -- because as you notice, Senator,
11 that one of the first criteria that Fish and Game was
12 putting on the community before hooking them up was that
13 they had a secure source of funding for the long-term
14 connection, the 12-inch line to the city of Los Banos.
15 And, fortunately, DPH really stepped up and did
16 something that they hardly ever do and said, "We're
17 going to commit to you," and I think the director even
18 called the director himself and said, "This lady is
19 going to come here. It's Prop 84 money," and you guys
20 know that story.
21 So after that point we were on a call to figure
22 out what we needed to do, flush the line, whatever else
23 needed to happen. And at that point, the regional
24 director said, "One of the other things that we're going
25 to be adding to the MOU is that we're not going to
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1 connect the line until you guys can secure funding for
2 us to connect to that future line."
3 And, basically, fortunately at the time
4 Supervisor O'Banyan called him out and said, "Are you
5 really saying what I think you're saying here, and
6 you're going to leverage the health of 250 individuals
7 until you can get a secured connection to a line that,
8 you know, is going to be there in the future?"
9 So I just want to share with you this anxiety
10 that I have where we've heard this story before, that
11 this connection is going to happen, and, you know, your
12 staff, since before -- Bill Craven has been working on
13 this issue for three years, and I really do — would
14 respectfully request that, again, this is a connection
15 that takes no more than a day. It's a couple-hour
16 connection. And if we can't get this connection done,
17 it doesn't make any real sense to me. The City of
18 Los Banos has always been supportive. They have
19 reaffirmed that recently. And I would respectfully ask
20 that you at least hold this appointment confirmation on
21 the floor, at a minimum, until that connection takes
22 place.
23 I have no knowledge whatsoever about the fish
24 and wildlife issues. I'm really just speaking on behalf
25 of these 250 individuals that — and, in fact, for the
101
1 MR. GARABEDIAN: Good afternoon, Mr. Chairman
2 and Senators. I'm Michael Garabedian representing
3 Friends of the North Fork, that's the north fork,
4 American River. The president stripped the part about
5 five years ago "to protect that river."
6 We want to thank you for this essential
7 opportunity to air these critical issues of concern. I
8 think we would sum up our comments this way: What our
9 experience in the north fork is, the Department of Fish
10 and Game — When it comes to streambed and riverbed
11 protection, Department of Fish and Game does not have a
12 regulatory culture.
13 Examples of what I mean by that are: We have
14 looked to streambed alteration permits as an opportunity
15 to participate. Well, as I'm sure you know, they're not
16 really permits. The public has no role. There's no
17 public hearing. There's no public appeal. Same thing
18 when it comes to the suction dredging permits. There's
19 no public role, no appeal, no hearing. The $32.75
20 permit, cheaper than a hunting permit talked about --
21 hunting license — earlier, is what's being used, as
22 I'll cover a little bit later, to mine our riverbeds.
23 And I'll talk about how we come into these very quickly
24 and I think to the point.
25 The north fork has populations of the
103
1 local government who have paid about 40,000 a year to
2 pay for bottled water — to try to provide some sort of
3 potable water to the community.
4 So I think it's — you know, I'm sure some of
5 the workers would go down and weld it themselves, if
6 that was the issue. So the flushing has been done.
7 There's nothing holding this up at this point. It's
8 just a matter of....
9 CHAIRMAN STEINBERG: But you were told this
10 morning from the Housing Authority and Fish and Game
11 that it's all done but the hookup itself?
12 MS. GUZMAN: That's correct.
13 CHAIRMAN STEINBERG: So the hookup has to
14 occur.
15 MS. GUZMAN: Correct.
16 CHAIRMAN STEINBERG: You're waiting for
17 confirmation. In other words, you want to see it
18 hooked.
19 MS. GUZMAN: I would just love for the workers
20 to come back in May with a safe drinking water supply,
21 and I think you have the power right now to make that
22 happen.
23 CHAIRMAN STEINBERG: Okay. Thank you.
24 MS. GUZMAN: Thank you.
25 CHAIRMAN STEINBERG: Next.
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1 yellow-legged frogs, a species with special concern
2 and -
3 SENATOR CEDILLO: Sir, this is very
4 interesting, and I appreciate it, but we've heard a
5 series of indictments of the department. I think with
6 all due respect, without any position on the director,
7 there should be a nexus between the director's conduct
8 in the course and scope of his duties and performance as
9 it relates to the department.
10 CHAIRMAN STEINBERG: I was going to get to all
11 of that. This is the last witness, or is there one more
12 witness? Two more witnesses. Three more witnesses.
13 SENATOR CEDILLO: You've been very generous.
14 CHAIRMAN STEINBERG: What's that?
15 SENATOR CEDILLO: You've been very generous.
16 CHAIRMAN STEINBERG: I'm going to ask the
17 remaining witnesses to be very brief, because I think we
18 have heard a lot of it. And I want to suggest a course
19 of action.
20 SENATOR CEDILLO: I get a sense people don't
21 like the department, but that's not the issue.
22 CHAIRMAN STEINBERG: Right, but in a way there
23 is. In a way there is. So let me suggest —
24 SENATOR CEDILLO: Some nexus between --
25 CHAIRMAN STEINBERG: Some nexus. Let me --
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I will suggest a course of action as soon as
we're done, but let's -- I'm not saying you're
repeating, but we understand the complaint about the
suction dredge mining, the easy permitting, the
environmental review ongoing while the practice is
allowed. We've heard all of that, so lets —
MR. GARABEDIAN: Well, the nexus in our case,
Senator, is that we are looking to you to receive from
the appointee assurances that he will bring the
regulatory culture to the department.
For instance, for the outstanding dredging
permits, we would love to see the department send a
letter to the holders of the permits asking them to
document how they met the conditions of the permit, for
instance, their Clean Water Act discharge permits, and
so forth. And we don't see why the department couldn't
revoke the permits without the other obstacles that
they're talking about here.
I just want to mention, at least briefly, in a
paragraph or two, the north fork issues. This is an
unregulated stream with no dams on it. Eight-inch
dredging, suction dredging, is allowed on this river,
which is far more than.-- a huge portion of the volume
of that river. It does not make any sense for that
river.
105
1 SENATOR DUTTON: I'd like to know if they
2 actually got something about the director.
3 CHAIRMAN STEINBERG: We're going to get to that
4 in moment. I understand. But it is also the purview --
5 Let me just say it before we hear the rest of it.
6 Look it. There would be a question to ask this
7 director, which I think would be an unfair question at
8 this point, which is: Are these your decisions, or are
9 these the decisions -- some of these decisions being
10 called into question of others higher up in the
11 administration?
12 I would choose personally not to ask that
13 question, but what I would choose to do, and maybe this
14 could obviate the need for the rest of this testimony
15 today, is - Your year is April 21st. Okay? We have a
16 little bit of time here. We're not down to the last
17 week. I would like to put the nomination over, and I
18 would like the opportunity to be able to meet with
19 Mr. Chrisman, Secretary Chrisman — other Members might
20 want to do the same -- and to meet with the governor and
21 other members of the administration and, frankly,
22 explore some of these policy issues, because they are
23 troubling.
24 Mr. Koch, everybody says — and I believe what
25 I'm hearing. You've come out of retirement. You didn't
107
The Department of Fish and Biologists surveyed
the north fork and dredging. They found the channel is
disturbed in numerous areas by suction dredging
activities. What I found hiking up that canyon ten
years ago is -- are huge pits. There is no restoration
being done on these permits. There are mercury issues
in this area.
Two years ago our lawyers prepared a memorandum
explaining issues that — I won't repeat the issues
here, but the need for waste discharge permits, the need
to enforce streambed alteration agreements around these
dredging issues.
A little over a hundred years ago,
Teddy Roosevelt and the Congress made the first efforts
in this country to legislate wildlife protection on our
public and other lands. California needs to. And if
you don't act, we aren't going to have restoration. We
need a director who will commit to undertake real
regulation, and we're counting on you.
CHAIRMAN STEINBERG: We got the message. Thank
you, sir.
Okay. Three more witnesses. Briefly.
With all due respect, your written, long-winded
statement, we don't want to hear it. We don't want to
repeat the testimony. Okay?
106
1 have to do it. You're a dedicated public servant, and
2 people respect you, rightfully so. But what you've
3 heard today is that while we are discussing your
4 confirmation, and we will get to that, it's not just
5 about you. It's about the direction of the department.
6 And rather than put you on the spot and say
7 that "You or this X,Y, Z upstairs," I would prefer to
8 put this over, given that we have until April 21st, and
9 I would like to explore some of these questions with the
10 appropriate cabinet secretaries and others in the
11 administration, and let's gain a better understanding of
12 how we, in the end, pump up, so to speak, the regulatory
13 enforcement when it comes to suction dredge mining and
14 when it comes to the restoration of fisheries, and,
15 particularly, the salmon in the state of California.
16 That's our obligation.
17 SENATOR DUTTON: I think that's a good idea,
18 but I'm going to need more information. So are we going
19 to have a full informational hearing about the
20 Department of Fish and Game?
21 CHAIRMAN STEINBERG: What we may do - I mean,
22 some of this is going to explore -- We'll explore
23 member -- anybody else is welcome to as well -- member
24 to administration official. I heard you whisper
25 earlier, Senator Dutton, that maybe what we do in the
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1
interim --
1
Aanestad, I think you make a very good point. Senator
2
And we're going to be very cognizant of the
2
Aanestad says, "Well, to change the entire department
3
April 21st date. Don't worry. Don't worry.
3
or move it in the direction you want may take a long
4
Maybe what we do here is that we do refer some
4
time" —
5
of these questions to the appropriate policy or budget
5
SENATOR AANESTAD: Let me say one more thing.
6
subcommittee and ask them to put on a hearing. I'm not
6
CHAIRMAN STEINBERG: Go ahead, and then I want
7
sure the Rules Committee is necessarily the venue for
7
to respond.
8
it, but I think that this is important.
8
SENATOR AANESTAD: When I was an assemblyman, I
9
And you're — You may be caught in the middle,
9
had several meetings with the Department of Fish and
10
you may not be caught in the middle, but we'll do right.
10
Game, not this gentleman, but I represent most of the
11
But let's take the time and make sure we get complete
11
area that everybody is talking about up here, from
12
answers to these questions.
12
Sacramento up to Oregon, out to the coast in Crescent
13
Does that suffice?
13
City and over to the Tahoe National Forest.
14
Senator Aanestad.
14
The number one agency that I received
15
SENATOR AANESTAD: In listening to the
15
complaints on from my constituents was the California
16
gentleman from Cal Trout and looking at the book, the
16
Department of Fish and Game. Let me tell you there has
17
answer is right here. The agency is awash in unfunded
17
been a marked difference in the last two years, and I
18
mandates. It's being asked to do too much with no
18
cannot say that they're now even in the top three or
19
funding and no authority.
19
four of the complaints with my agency, and I think if s
20
Now, those aren't things that are going to be
20
a result of a new thinking in the leadership reflected
21
covered in a hearing. They're going to be covered with
21
by this person.
22
legislative action and budgetary considerations over
22
So I would urge you to go ahead with this
23
months and months. So I personally don't see holding up
23
confirmation, and let's give California Fish and Game
24
this nomination, this particular person.
24
the funds -- let's give them the priority of the
25
We've heard one person in the last two hours
25
mandates, and then let's give them the authority and the
109
111
1
speak in opposition to the director's personal conduct.
1
funding to do it.
2
Everybody else who has complained has complained about
2
CHAIRMAN STEINBERG: I get your point, but this
3
the department, but they've accepted this person and
3
is not just sort of a generalized discussion about
4
said, "Hey." In fact, one man complained we're putting
4
philosophy or the direction of the department. There
5
a good man in a bad department. I think that's what we
5
was some specific things mentioned today.
6
want to do, and the sooner the better.
6
Tom Weseloh talked about a regulatory action
7
So I would rather see us vote this confirmation
7
before the Board of Forestry, allegedly, that the Bush
8
out this afternoon, say that we have a man here who is
8
administration strongly supported doing everything
9
capable of carrying the message of what I just read in
9
possible to restore the fisheries, and the department
10
the Cal Trout book here, and then if you want to have
10
sort of turned on a dime, apparently, and took a little
11
hearings -- but this is going to take legislation to do
11
bit more of a middle-ground position, let's say, is the
12
away with unfunded mandates and to give them the moral
12
way I interpreted it.
13
authority to become a regulatory agency.
13
Now, we don't know whether that was from
14
CHAIRMAN STEINBERG: Fair point.
14
Mr. Koch or higher up in the administration. We don't
15
Senator Oropeza.
15
know that, but that's something we can explore in the
16
SENATOR OROPEZA: Very briefly, I support the
16
short term.
17
approach of laying it over to the next meeting, to
17
The suction-dredge-mining issue is a timely
18
whenever, at some point that is timely. I do hope that
18
issue, and I'm still confused about the legal issues
19
in the course of the investigation that continues from
19
around whether or not an environmental impact report
20
here, that there be some attention given to the question
20
should be completed first before it's allowed, versus
21
that was raised about the interpretation of the laws
21
allowing it while the EIR is being done.
22
relative to someplace in between emergency and doing
22
Third, while although it seems to be going in
23
nothing, and what the authority is and all that. I
23
the right direction, there's the issue of connecting the
24
would really be grateful for that information.
24
pipe for the farm workers of Los Banos. These are three
25
CHAIRMAN STEINBERG: In response to Senator
25
things.
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1 I'm not saying that we terminate confirmation
2 necessarily based on these three things, but I do think
3 they are illustrative of some of the larger issues being
4 raised by members of the public. So it's not any
5 prejudice to Mr. Koch or his nomination. It is just to
6 take a breath, take a couple weeks. I want to meet with
7 the secretary, and I want to see where some of this
8 direction or lack of direction is coming from. I think
9 that's the prerogative of the Committee.
10 We do have other witnesses in opposition, but,
11 please, it's 4:30. We've heard it all, and there's
12 going to be another hearing, so....
13 MR. TUCKER: I'll go as fast as the reporter
14 will let me.
15 Senator, I appreciate the opportunity. I know
16 you guys have a reputation for having —
17 SENATOR CEDILLO: Can we also ask that
18 witnesses don't read. If you're going to give typed
19 documents, just give them to us to read.
20 CHAIRMAN STEINBERG: Submit it for the record.
21 Do the best you can to testify. We don't want to cut
22 you off, but you've got to read the Committee here, and
23 we're ready.
24 MR. TUCKER: I work for the Karuk Tribe. We're
25 the second biggest tribe in the State of California,
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1 further time to explore this.
2 Any other witnesses in opposition?
3 Is this the last witness? Okay. Last witness
4 in opposition
5 And briefly, sir. Thank you.
6 MR. BACHER: I have a letter I will submit. My
7 name is Dan Bacher. I'm the editor of Fish Sniffer
8 magazine, and I support many of the contentions the
9 people in opposition have mentioned, and, you know, I
10 oppose Koch's confirmation for a number of reasons.
11 I'll just list them real briefly.
12 First, I agree entirely with the Karuk Tribe
13 that the department, under his direction, has yet to
14 take any meaningful action to reverse the decline of
15 salmon.
16 Second, the DFG still hasn't started a process
17 to comply with the December 2006 court order to complete
18 an EIS and overhaul its regulations regarding suction
19 dredge mining.
20 Fourth, and this is something — these are —
21 The next couple things are something that haven't been
22 pointed out. Mr. Koch has failed to provide leadership
23 necessary to address litigation that the department
24 conduct an environmental review of his fish planting
25 programs. As a result, nearly 175 fish or lakes weren't
115
1 4200 members for the middle Klamath region. The
2 suction-dredge issue is phenomenally important to us.
3 Tribal holders tell me when there's no more salmon,
4 there's no more Karuk. That's why it's important.
5 The program is illegal by state rules and by
6 federal rules. You started out by reading Section 5953,
7 I think it is, that says "There will be no issuance of
8 permits unless you find that it's not deleterious to
9 fish." We have sworn affidavits from the department
10 saying it is deleterious to fish.
11 Also, DFG's own rules and regs say it has to
12 comply with federal law. In order to comply with
13 federal law, suction dredgers should have to have a
14 Section 402 water quality permit to comply with water
15 quality standards. There are no permits. This is
16 illegal.
17 So we think Mr. Koch has the authority right
18 now, today, to shut down suction dredge mining statewide
19 and refund the permits that have already been sold this
!0 year, and there's no reason that when we brought this
!1 issue in 2005 and won a lawsuit, we have not seen any
!2 change from status quo despite this activity being shown
!3 to be deleterious to fish in the utter collapse of our
<4 fishery. And I think I'll leave it at that.
!5 CHAIRMAN STEINBERG: Very good. We will have
114
1 being planted.
2 Fifth, the DFG did a fall 2008 midwater trawl
3 survey on the delta that documented the lowest-ever
4 recorded abundance of delta smelt, Sacramento splittail,
5 threadfin shad, and American shad, and an alarmingly low
6 abundance of longfin smelt and juvenile striped bass.
7 These fish are headed over the abyss of extinction
8 unless the DFG takes a more aggressive, more proactive
9 approach to dealing with the three main factors that are
10 responsible for this decline: increases in water
11 exports, toxics, and invasive species.
12 CHAIRMAN STEINBERG: Sum it up, please.
13 MR. BACHER: Sum it up.
14 In essence, this is — Like many of the other
15 speakers have talked about, this is not as much en
16 indictment on Mr. Koch, but on the department and its
17 actions over the past year and --
18 CHAIRMAN STEINBERG: Very good. Thank you,
19 sir.
20 Okay. Mr. Koch -- No more. That's it.
21 Mr. Koch, do you want -- You don't have to make
22 a closing statement. I don't know if you want to
23 respond or leave it alone for now, because you've done a
24 good job. But I think it is the best course here to
25 again put this over for a few weeks, and, you know,
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1
allow us to explore some of these issues. But the floor
1
-oOo-
2
is yours.
MR. KOCH: First of all, I'm certainly not
going to argue with you in terms of the decision.
I just want to close with two quick things,
2
I, INA C. LeBLANC, a Certified Shorthand
3
4
5
3
4
5
6
Reporter of the State of California, do hereby certify
that I am a disinterested person herein; that the
foregoing transcript of the Senate Rules Committee
hearing was reported verbatim in shorthand by me,
6
because everybody has to go. One is, I came back as a
7
INA C. LeBLANC, a Certified Shorthand Reporter of the
7
passion. I'm a biologist. I have always tried and will
8
State of California, and thereafter transcribed into
8
always try to make decisions based on sound science that
9
typewriting.
9
are durable, that get the biggest long-term benefit for
10
I further certify that I am not of counsel or
10
the fish.
11
attorney for any of the parties to said hearing, nor in
any way interested in the outcome of said hearing.
_ ,IN WITNESS WHEREOF, I have hereunto set my hand
this ^ davof HA^^id^U- .2009.
11
12
13
And the one thing -- and it's just a sensitive
thing, because I've been around for 30 years. We have
the greatest department employees on the face of the
12
13
14
15
14
earth, and they're all dedicated. So the department may
16
15
not please everybody all the time, but our folks, you're
17
3**. c.^mM—^
16
17
not going to find a finer crew.
CHAIRMAN STEINBERG: That says a lot about you
18
INA C. LeBLANC
18
as a leader right there.
CSR No. 6713
19
Anyway, we will put this over, and we will
19
20
21
notify you when it's time to reset it. We won't go
through the whole hearing, but we'll think about it a
20
21
22
-oOo-
22
little. But we appreciate very much your time and look
23
forward to seeing you again. Okay?
23
24
MR. KOCH: Thank you, Mr. Chairman.
24
25
CHAIRMAN STEINBERG: Thank you very much, sir.
25
117
119
1
Okay. Very good.
1 APPENDIX
2
Okay. Not required to appear, we've got file
2
3
items C through I. Is there a motion on items C through
3
4
I? Moved by Senator Oropeza.
4
5
Please call the roll.
5
6
MS. BROWN: Senator Cedillo.
6
7
SENATOR CEDILLO: Aye.
7
8
MS. BROWN: Cedillo aye.
9
9
Dutton.
10
10
SENATOR DUTTON: Aye.
11
11
MS. BROWN: Dutton aye.
12
12
Oropeza.
13
13
SENATOR OROPEZA: Aye.
14
14
MS. BROWN: Oropeza aye.
15
15
Aanestad.
IS
16
SENATOR AANESTAD: Aye.
17
IB
17
MS. BROWN: Aanestad aye.
19
18
Steinberg.
19
CHAIRMAN STEINBERG: Aye.
20
MS. BROWN: Steinberg aye.
22
21
CHAIRMAN STEINBERG: All right. That will pass
23
22
to the Senate floor.
24
23
(Thereupon, the Senate Rules Committee hearing
25
24
adjourned at 4:31 p.m.)
25
////
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32 of 32 sheets
$
TheHeartGroup
Cardiovascular Associates Inc.
Robert D. Chambers, M.D., F.A.C.C.
Rimvydas Plenys, M.D.
John 6. Telles, M.D., F.A.C.C
Dale L Merrill, M.D., F.A.C.C, F.S.C.A.I.
DalpmderS. Sandhu, M.D., F.A.C.C.
Tejwant 5. Dhillon, M.D.
February 10,2009
Senator Darrell Steinberg
Chairman, Senate Rules Committee
Room 420
State Capitol
Sacramento, California 95814
Dear Senator Steinberg,
I look forward to meeting you and other members of the Senate Rules Committee.
During the last 1 0 months that I have been a member of the San Joaquin Air Pollution
Control District and the California Air Resources Board I have developed a deeper
understanding and appreciation of Government and the difficult issues that the
Legislature and Governor face on a daily basis. I see my appointment to these Boards as
both a great honor and a great responsibility. The questions that the Senate rules
committee prepared are both fair and thorough. I hope that my answers will convey to
you my understanding and position on issues of air pollution and climate change with
which these Boards deal. With this letter I will supply written answers to the questions in
the letter you sent to me on January 22, 2009.
AIR REOURCES BOARD Questions
Background and goals
Question 1. Why did you believe that you were not the right person for the ARB? Do you
still believe so? Have you reconsidered your plans to resign?
At this time I have no plans to resign. In my first San Joaquin Valley Unified Air
Pollution Control District board meeting I stated that the ARB is a great training ground
for an aspiring local elected official who wants to learn about state wide issues. Since I
have no desire to become a publicly elected official I thought that my membership on the
ARB would be denying one of our elected officials that opportunity. Since making that
statement I have had overwhelming support by my community and my patients to remain
Senate Rules Committee
FEB l 2 2009
121
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Senator Darrell Steinberg
February 10, 2009
Page 2
on the board. As a physician and long standing valley resident I have seen the negative
health effects of air pollution on a daily basis and I can speak for the San Joaquin Valley
at the ARB level with great authority.
Question 2. If you do not plan to resign, what do you hope to accomplish during your
tenure as a member of ARB? What are your goals and objectives as a member of the
board? How will you measure your success? What specific policies do you promote to
maintain the boards tradition as a leader and pacesetter in clean air policy?
As a member of the ARB my primary goal is the same as my physician goal — that is to
improve the health of the people of the state of California by working to improve air
quality. I also believe that my generation is the trustee for the environment of the next
generation and that out of respect for our children we as a society must confront air
pollution and climate change. As a member of the ARB I eagerly look forward to
helping develop practical policy to address these challenges with full knowledge that
what we do at the ARB may be used as a blueprint for national policy. To accomplish
these goals I feel that the ARB needs to remain appreciative and respectful to the
industries that have built this great California economy so that we can move ahead with
plans which do not stifle economic growth and innovation. We need to work hard to
develop balanced approaches to move ahead. A necessary ingredient for our success is to
have the public and government behind us. It has been my observation that the public is
inadequately informed of the important direction and policies developed by ARB and that
we need to devise better tools to convey this progress to our ultimate appointing authority
i.e. The Public.
Question 3. How do you view your role as one of the state 's chief air regulators and as a
pleasure appointment of the Governor? Do you believe you have sufficient independence
to act in the public interest without undue interference from your appointing authority?
It was a great honor to be appointed by a governor who has shown such great leadership
in both air pollution and climate change issues. Certainly his passion and vision on these
issues is commendable and should be emulated. Having said that. I would like to point
out that the Governor's office has not given me any specific direction on any issues that
we deal with in any of the two Boards to which he appointed me. Furthermore I have no
political ambitions and I am not paid for these positions. I see my greatest authority -on
these boards is to independently act in the public interest.
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Senator Darrell Steinberg
February 10, 2009
Page 3
Attainment of State and Federal Air Standards
Question 4. Is the administration on track to meet this goal? If not, where does it stand?
What specific measures is the board taking to meet the Governor 's goal? Please specify
the emission reductions from each measure.
Question 5. What is the status of the state 's compliance with the State Implementation
Plan (SIP)? What additional measures need to be taken to achieve attainment of federal
ambient air standards to the SIP?
Question 6. How much longer is needed after 2017 to achieve the remaining 10 percent
compliance? Can it be done prior to the 2024 deadline? If so, should the deadline be
accelerated to an earlier date? What types of air pollution sources should be targeted in
order to achieve the remaining 10 percent?
For many years air pollution in the State has been aggressively attacked by both strict
regulations (as outlined in the State Implementation Plan) and incentives (such as Goods
Movement Funds and Carl Moyer funds). Theses tools have been effective in reducing
air pollution in some respects. For example, in the San Joaquin Valle> the number of
days over the 1 hour and 8 hour ozone standard has decreased by about 40% over the last
10 years. However the PM 2.5 three year annual average has not improved and has
actually worsened.
In April of this year ARB staff will update the Board on the status of the 2007 SIP. The
Board has asked to review in about six months The Heavy Duty Diesel Truck Rule, an
important recent addition to the SIP. Additional measure that need to be taken to achieve
attainment of federal ambient air standards to the SIP are such measures as the "Fast
Track Measures" outlined by a special task force reporting to the SJVAPCD. These
measures include such things as short sea shipping, high speed rail, inland ports and heat
island mitigation. Other important measures will be developing programs which assist
employers in encouraging ride sharing among their employees. If all these things are
done we may obtain attainment before the 2024 deadline.
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Heavy-Duty Diesel Trucks
Question 7. What factors did you consider in deciding to vote for this regulation? How
do you balance the need to protect the public health and the needs of business and
industry?
Question 8. What more should be done to lower emissions from heavy-duty diesel trucks?
Question 9. At the same hearing you mentioned the idea of implementing a tax on diesel
fuel as a means for raising revenue to help fund compliance with this regulation. Please
describe what the tax plan would entail and how the revenue would be allocated.
Since diesel trucks are responsible for more than 30% of the State's air pollution it has
been extremely important to target this emission source. The California trucking industry
is vital to our economy. There are almost 1 .000.000 large diesel trucks operating in
California. That is 1 truck for every 36 people in the State. There is probably no
economy in the world that has such a high ratio of trucks per capita. From a regulatory
point of view this industry is unique not only because of its size and importance to our
economy but also because over 30% of truckers are small business owners that have all
their life savings tied up in their truck. It would be bad public economic policy to write a
regulation that wipes out the economic future of all these small businesses. Furthermore
it would be bad public health policy to write a regulation that strangles this industry
because this would lead to wide spread unemployment and as a consequence increased
financial and emotional stress on a large segment of our population. This increased stress
would lead to deterioration of public health, and at the same time unemployment, and
thus a loss of health insurance leading to decreased access to health care. What I am
saying is that with this regulation we not only have to be sensitive to the economic health
of truckers but to be considerate also to their physical health.
The Truck Rule is aggressive and if it stays on target, it will meet our emission goals. I
am concerned that the rule is much more expensive than the 5.5 billion dollars that the
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Senator Darrell Steinberg
February 10, 2009
Page 5
staff estimated and that it has the potential to be derailed by the current severe economic
downturn. To help mitigate the cost of the rule some truckers have suggested to me that
there be an added tax to diesel fuel which goes specifically to help pay for the rule. The
tax revenue would be used for those truckers and bus companies (especially school
buses) who are having the most difficulty complying with the rule. At the ARB meeting
in December and the SJVAPCD meeting in January I proposed that such a tax be
pursued. The SJVAPCD Board voted this to be a legislative goal. Given that the
vehicle miles traveled per year for diesel trucks in California's 17 Billion miles, a 20 cent
tax per gallon would raise approximately 5.5 billion dollars over 5 years. Since the
December ARB meeting I have had conversations with truckers. My impression is that
unfortunately many of them feel that their attendance and testimony at the meeting was
not appreciated or respected. As a consequence it may be more difficult for the trucking
industry to buy into this concept of a diesel tax. Nevertheless, for the success of the rule
the tax should be pursued.
In regards to what can be done to lower emissions from heavy-duty diesel trucks, I think
an important initiative is to pursue transportation policy which allows our trucking
industry to move goods more efficiently. Major components of this policy would be
short sea shipping and greater use of "piggy back" containers on rail.
SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT Questions
Question 1. SB 719 (Machado), Chapter728, Statutes of 2007, created four new positions
on the SJVAPCD governing board that includes your new seat as a practicing physician
with expertise in the health effects of air pollution. What are your goals as one of the
two, new, non-local government positions on the districts governing board? How
will you measure your success?
As a physician on the SJVAPCD governing Board I have the unique opportunity to
directly inform my fellow board members of the health effects of air pollution. From my
medical and scientific background I feel that I can be a resource to fellow board members
to help them understand some of the complicated technical and health issues with which
we deal. On the other hand I have found board members very helpful in educating me on
complicated aspects of local land use, transportation and CEQA issues. I have been
impressed by the quality of our board members. As a physician who sees thousands of
patients a year and a life long valley resident with a web of contacts in different social
and economic levels, I have the unique opportunity to sample from the public its
perception of the operations, successes or failures of the district. My goal is to use all
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Senator Darrell Steinberg
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these experiences to help make the district function more effectively and efficiently. For
years in our area there has been an unhealthy and uncooperative relationship between
environmental/health groups and industry/agriculture interests. I see one of my roles to
be a bridge between these occasionally bellicose opponents and to thereby help create
inclusive policy that advances the interest of both groups. I will feel successful every
time I see two opposing groups sitting down in the same room together trying to
understand each other's issues and thereby coming up with something that works to
advance the public health.
Question 2. As a member of the district 's governing board, you are appointed because of
your medical expertise. As a member of the California Air Resources Board (ARB), you
are appointed to represent the SJVAPCD as a whole. How do you approach your dual
roles/responsibilities at the local and state levels regulating air quality? Do you
consider issues from the same perspective?
As a member of the SJVAPCD governing board I represent the SJVAPCD as a whole. I
go to ARB with full knowledge that the air pollution problems of our valley are the most
challenging in the state because of our unique meteorological conditions, our rapidly
expanding population and our lack of adequate funding to address this challenge. Since
most of our air pollution emissions are not from the stationary sources the district
regulates but from the mobile sources the state regulates it is very important that our
district have a strong voice in the State regulatory arena, i.e. ARB. As a physician that
can directly convey the health concerns of our district to the ARB, I think I will be
effective in getting this message to the state level. My approach to the state level is the
same as the local level. The building of consensus between the regulated industry and
health groups, environmental and environmental justice communities and local and state
government remains crucial to success.
As a member of ARB I represent not only the concerns of the San Joaquin Valley but the
interest of the entire state. This responsibility will require working with other ARB
members to fairly distribute the resources of the ARB throughout the state.
Over the recent years ARB has been given the responsibity to direct the Climate Change
Plan for our state, which will potentially be the blueprint for the federal plan. I strongly
believe that for this to work there has to be a buy-in by the public, industry and local
government. I do not think ARB is doing enough to keep these entities informed in this
process. As a representative of a local district I will continue to bring this message to the
ARB.
In summary then, I see it as my role to bring to ARB the local health concerns and
planning concerns to the state level.
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AGRICULTURE
Question 3. Please explain what you believe is a balanced approach for solving
agricultural air quality issues in the San Joaquin Valley.
Question 4. What steps does the agricultural industry need to take to help reduce its
share of air pollution? What should the district do to encourage or enforce these
actions?
Over a year ago in an interview with an environmental/health group I was asked, what is
the most effective way that agriculture can help reduce air pollution in the San Joaquin
Valley. My answer then was that agriculture has to stay economically as strong as
possible. If San Joaquin Valley agriculture falters it will not only have the financial
resources to apply air pollution control measures on the farms, but also the value of farm
land will plummet. With cheap land the San Joaquin Valley becomes a bigger target for
urban developers. If our valley is urbanized like other parts of the state, there will be no
amount of air pollution control measures sufficient to mitigate the effects of an even more
rapidly expanding population. There are technological solutions to agricultural generated
emissions. Farmers have rapidly changed out old diesel pumps on their farms for cleaner
diesel pumps or electric pumps. Change out to electric pumps has been slow because
many of our farms are not supplied from our local utilities adequate electricity to run
these large pumps. A few farmers without any financial subsidies have gotten around the
inadequate supply of electricity to their farm by generating their own electricity with
photovoltaic cells. Some dairy men are also generating there own electricity by
harvesting methane from their manure lagoons and using it to power generators to make
electricity. Methane harvesting on dairies not only reduces air polluting emission but
can also significantly reduce green house gas emission. There are also "green" tractors
being produced with Nox and particle filters. Unfortunately all these technologies are
expensive and at this time many San Joaquin Valley farmers are not financially capable
of acquiring this technology. The price of milk has drastically fallen. A former dairyman
told me that because of economic disaster three San Joaquin dairymen have recently
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committed suicide. Also, the biggest water district has announced it will not have any
water to deliver to its farmers. This will idle thousands of acres.
The farmers who do survive these natural and economic disasters will not have the
capital or ability to borrow to buy new equipment. With the deteriorating financial state
of our farms there have already been many layoffs of farm workers. A recent UC study
has suggested that because of lack of water over the next year the valley economy will
lose over 1.6 billion dollars and 60,000 agricultural based jobs. With this some of our
farm communities will be facing over 20% unemployment. Consequently, our farmers
will need a large source of funding to help them transition to less polluting farms.
Unfortunately at this time there is no funding available. I believe that both the SJVAPCD
and the ARB need to find this source of funding if they expect significant reductions in
agricultural emissions.
Now what do I mean by a balanced approach to addressing these problems? For years
there have been shots traded back and forth between farm groups and environmental
groups in the op-ed section of our local newspapers. To have a balanced approach these
two groups must respect each other. An environmentalist in a past op-ed article in one of
our local newspapers has implied that farmers have been willfully poisoning our air. A
farmer's response in a letter to the editor basically declares this environmentalist and the
like to be incompetents. None of these comments generate respect and mutual
cooperation. In that our economy is driven by agriculture, every one in the valley is an
agriculturist. In that the San Joaquin Valley has some of the worst air in the nation, every
one in the valley must be stewards of our air quality. A balanced approach is to have
these two groups work together to help clean our air. This can occur only with direct
communication between these groups.
Question 5 Are you still on the TR1 Farms or TRI Citrus boards of directors? If so, do
you believe there may be an occasion when a conflict of interest may arise? Who advises
the district 's board members of conflict of interest issues?
I have not been a member of these boards in over ten years. The district's legal
department advises board members on conflicts of interest.
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Public Health/Children's /Asthma
Question 6. As a physician, what do you believe is the most effective way for the district
to help these children diagnosed with asthma? What actions does the district plan to take
in 2009 to address this issue?
The most effective way the district can help children with asthma is to fulfill its mission
to improve the air quality.
Question 7 how does the district coordinate with local school districts to ensure that
children are not outdoors during bad ozone days? What are the most effective actions
the district can take to improve ozone and particulate matter air pollution?
The district informs schools of bad air days. The schools are to restrict outdoor activity
on bad air days. I have been informed by some of the volunteers that make this program
work that some school districts are less than cooperative. The SJAPCD needs to find
ways for this program to be functional and actively supported by every school in the
valley
The most effective action the district can take to improve ozone and particulate matter air
pollution is to make sure that the district's ozone and particulate plans succeed.
ENVIROMENTAL JUSTICE
Question 8. How do you factor the socioeconomic needs of the valley while fulfilling the
mission to improve public health through air quality control, particularly in
environmental justice communities.
Question 9 What steps do you support to reduce air pollution impacts in EJ
communities? What specific assessment and mitigation tools does the district use so EJ
communities do not suffer disproportionately from air pollution?
The recent "Hall" report suggests that environmental justice communities in the valley
are not as disproportionately affected as EJ communities is the South Bay Air Pollution
Control District. In the central valley, air pollution is more of an equal opportunity
health spoiler. Nevertheless, the more wealthy communities, because they have better
access to health care and air conditioning can deal better with the adverse impacts of air
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pollution. This disproportional protection from air pollution between wealthy and EJ
communities, has motivated the District to increase efforts to assure that pollution is
rapidly reduced in environmental justice communities. One way it tries to accomplish
this goal is to spend a disproportionately high amount of the Carl Moyer funds in EJ
communities and outreach to school districts in these areas to help them change out old
school buses.
If the air district makes such strict rules that businesses lay off people or leave the area,
this loss of employment would have a greater negative effect on health in EJ communities
than in wealthy communities. Because of this concern, air districts always have to move
cautiously to improve the air but not at the same time cause mass unemployment.
TRANSPORTATION: Proposition IB Funding
Question 10. What is the status of these funds? What is the most effective use of these
funds for the San Joaquin Valley? How much air pollution do you expect to be reduced
in the valley because of these funds?
Because of the current California State Budget crisis, bond money at this time is not
available. The IB Bond money the valley gets will help replace about 5000 heavy duty
diesel trucks. There are approximately 80,000 diesel trucks that transit through the
valley each day. Heavy duty diesel trucks are the biggest Nox producers in the valley at
approximately 170 tons per day. The $250,000,000 dollars of IB money available to the
valley will help and is much appreciated, but as you can see from these numbers we still
have a long way to go.
SJVAPCD's Climate change Action Plan
Question 11. Why did you change your position on the plan? Do you still have any of
the same concerns you raised in June?
Question 12. Do you believe this plan is prudent for the district to considering that ARB.
of which you are a member, just adopted the AB 32 Scoping Plan on December 11. 2008?
How does the CCAP work in relation to the AB 32 scoping Plan?
Question 13. How much funding and staff time has been redirected for purposes of the
CCAP? What is the projected amount of funding and staff time to be spent in 2009?
How should these funds and staff time be spent?
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Question 14. Have you addressed this issue to the state yet? Have you requested
additional help in funding? Given the current fiscal crisis of the state and the substantial
amount of funds appropriated to the district through various sources, such as Proposition
IB and the Carl Moyer Program, why should the state provide additional funding to the
district because the district decides to create a local climate change plan?
In the Climate Change Draft Scoping Plan released by CARB in June 2008 there was not
a clear delineation of the role Air Pollution Control Districts were to play in the
implementation of the Climate Change Plan. Because of local district expertise in
monitoring and regulating emissions, it was my feeling that Air Pollution Control
Districts would have a large role in the Climate Change Plan implementation. However,
in June it was premature for the district to move ahead with its own plan without
coordination with ARB. I did not want the district to go through the expense of
developing a plan that potentially would be rejected and not funded by CARB. At about
that time I phoned senior CARB executives and expressed my concern. These actions
helped spur Carb to incorporate a clearer role for the Air Pollution Control Districts in the
final rendition of the Climate Change Plan.
After discussion with SJVAPCD board members I came to the realization that it is
important for districts to help CARB develop policies which will deal with local land use
and transportation. Because of CEQA, local air districts will probably be the lead
agencies in evaluating carbon emissions and eventually verifying carbon banking. Local
districts must be at the table when techniques for accomplishing this goal are developed.
It will be important for all the Air Pollution Control Districts, CAPCOA, and ARB to
work closely on these issues to develop procedures which work statewide and reduce
inefficient redundancies. I have discussed with ARB senior staff both privately and
publicly at an ARB meeting the importance of funding local air district efforts to
participate in the climate change plan. This funding is important so that local air districts
do not divert funds away from their primary effort to reduce air pollution. It is only
reasonable that the State should reimburse the efforts of local districts since these districts
will be doing a lot of the foot work necessary to implement the California State Climate
Change Plan. This funding will most likely come from funds generated by CARB from a
carbon tax or cap and trade program.
The coordination of Local Air Pollution Control District climate change plans and ARB
climate change plan is still a work in progress.
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Question 16. Do you believe the definition of significance for GHG emissions should be
determined at the local or state level? For what reasons?
GHG emissions from whatever source are disruptive to world climate. Therefore in a
perfect world of justice and equality, each person in the world should be responsible for
reducing their carbon footprint to a level that will prevent catastrophic climate disruption.
This threshold would best be determined by an international organization such as the
International Panel on Climate Change (IPCC). GHG emission reduction goals for each
nation and each state should be detennined by current emissions of a population. IPCC
was not able to have participating countries come to such an agreement. Nevertheless
some countries have seen it as their responsibility to the world environment and human
health that their governments need to proceed with national climate change plans
designed to hit IPPC goals of reducing GHG emissions by 80% by 2050. For the United
States it would make most sense for these thresholds to be set by the national government
in coordination with state governments. Given that at this time there are no national
thresholds, each state is left to determine their thresholds themselves. This process will
obviously translate down to the local community level, and for the process to work, local
government have to be at the table to help figure out this difficult issue.
I hope that the above discourse has been helpful in your evaluation of my candidacy to
membership on both the San Joaquin Valley Air Pollution Control District and the
California Air Resources Board. I look forward to answering any further inquiries you
may have in regards to my understanding of and positions on any of these or related
issues.
Respectively Yours,
G. Telles M.D., FACC.
1313 t. Herndon, Suite 203 • Fresno. CA 93720 • T 559 439-6808 F 559 431-7225
132
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DEPARTMENT OF FISH AND CAME
http: / /www.dfq.ca.qov
1416 9th Street
Sacramento, CA 95814
916-653-7667
February 10, 2009
Honorable Darrell Steinberg, Chairman
Senate Rules Committee
State Capitol, Room 420
Sacramento, California 95814
Attn: Nettie Sabelhaus, Appointments Director
Dear Senator Steinberg:
The honor of Governor Schwarzenegger's appointment to serve as director of the
Department of Fish and Game brought me out of retirement and back to an organization
where I was fortunate to have had a career that spanned more than 30 years. During
that time I served as a wildlife biologist and held positions at various management levels
working with dedicated people to conserve the state's fish and wildlife resources. I
accepted the appointment to become director because I have an unwavering passion
for the department's mission and a deep personal concern for the natural resource
legacy that we will leave for future generations. I bring to this job a keen understanding
and firsthand perspective of the department's functions, challenges, and potential. I am
humbled by the trust and responsibility the position will afford me should the Senate
choose to confirm me.
Thank you for the opportunity to share with you my goals as director as well as other
information in response to the Committee's written questions. Also attached is my
updated Form 700, Statement of Economic Interest.
1 . What do you hope to accomplish during your tenure as Director of the
Department of Fish and Game? What goals do you have for the department,
and how will you accomplish them? How will you measure your success? "
My goal is to strengthen the department's ability to carry out its public trust obligation.
This requires significant attention to climate change, habitat and natural community
conservation planning and water management. It also requires finding stable funding,
developing future leaders within the Department, and cultivating constructive
relationships. During the past 10 months, I have taken several steps in this direction.
For example, I have established the Ecosystem Conservation Division within the
department to focus our commitment to large-scale, multi species habitat and natural
community conservation planning. The division also provides leadership in addressing
climate change impacts and promoting renewable energy in a manner that conserves
Seaaie M
Committee
Conserving California's <WiCddfe Since 1870 p^ -[ {j ~m
133
fish and wildlife resources. It includes the department's Water Branch, which plays a
key role in addressing water-related issues that affect fish and wildlife. The department
is also involved in important conservation efforts throughout the state, such as those
currently underway for the Delta and renewable energy projects. Additionally, I
established a drought task force to identify ways to minimize the impacts of drought on
fish and wildlife resources.
I am cultivating constructive relationships with a variety of constituencies. In order to
excel in its mission now and into the future, the department must have partners in
stakeholders and nongovernmental organizations, federal, state, and local
governments, and within the Legislature. We can accomplish more for our diverse
natural resources if we collaborate in finding solutions to the complex challenges we
face. The Klamath Agreement in Principle for the largest dam removal project in the
nation's history, the decommissioning offish barriers and improved flow in Battle Creek,
and the Lake Davis pike eradication project are recent examples of this.
I have also elevated the issue of workforce succession planning. The department needs
to expand its workforce leadership capabilities and I have initiated actions to begin
doing just that.
2. What do you believe are the most serious issues facing your department?
The department's responsibilities have significantly increased since it was created more
than 100 years ago. Although our mission remains the same, we are continuously
working to effectively adapt to our ever expanding role, the state's growing population,
and the diversity of our constituencies.
One of the most serious issues facing California's fish and wildlife is climate change.
Scientists suggest changes in precipitation patterns and more frequent droughts, like
the one we currently face, will change the landscape and place new pressures on the
state's fish and wildlife populations. In addition, impacts of climate change will likely
create conflicts among fish, wildlife, agricultural and urban water users. Effectively
adapting to these impacts will require close coordination and cooperation between a
diverse group of agencies and stakeholders.
Another serious issue is the department's lack of stable funding. The department is
blessed to have public-private partnerships that assist us in our efforts. However, we
need stable funding to support our mission and critical core functions.
Those functions, including monitoring and assessment offish, wildlife and their habitats,
cannot continue to be subject to fluctuating financial cycles and fiscal uncertainty. In
light of increasing human pressures and climate change, we must have reliable
information about those resources. While this subject matter might seem mundane, it is
fundamental to the department's success as a scientific organization charged with
public trust responsibilities.
134
Stable funding is also essential for the department's Law Enforcement Division. With
this in mind, we are educating district attorneys and judges on pertinent laws in an effort
to increase fines and enhance penalties for poaching and other violations. With ever
increasing mandates and an expanding human population, this core department
function must be adequately equipped to keep pace.
Succession planning must be a priority for the department to help ensure continuity and
stability in carrying out its public trust responsibilities in the years to come. The value
and dedication of the department's employees cannot be overstated. However,
approximately 19 percent of the department's workforce is 55 years of age and older.
Considering the statewide average retirement age of 60, these employees will likely
retire in the next three to five years. With these retirements go vast amounts of
institutional memory, experience, and connection to communities and stakeholders.
This seriously impacts the department's ability to carry out its public trust
responsibilities. Therefore, recruitment and retention of quality individuals, as well as
training, mentoring and development of the department's current workforce, is essential.
3. How do you stay informed of the fiscal resources available to your
department? How do you prioritize activities if not all can be undertaken?
What are your priorities?
I take responsibility for the department and its fiscal resources. The Chief Deputy
Director and Deputy Director for Administration assist me in that effort by keeping me
informed on a daily basis along with the Department of Finance and others in the
Administration.
Under the current budget and economic circumstances, prioritizing the department's
activities is a particularly sobering task. The department has a variety of responsibilities
and mandates (both funded and unfunded) and is supported by a variety of fiscal
resources, including dedicated and non-dedicated funds, fees, grants, and the state's
General Fund.
When prioritizing activities, my goal is to preserve the department's critical core
functions. We must get the "biggest bang for our buck" in terms of long-term benefits for
fish and wildlife. In prioritizing, I consider statutory constraints (e.g., dedicated funding,
fees), core functions, public health and safety, maintaining investments (e.g., wildlife
areas, ecological reserves) and revenue generation.
135
4. How do you grade your own department on how it has carried out its public
trust responsibilities? What areas do you believe need improvement so the
department can carry out its mission to "maintain native Fish, wildlife, plant
species and natural communities for their intrinsic and ecological value
and their benefits to people? This includes habitat protection and
maintenance in a sufficient amount and quality to ensure the survival of all
species and natural communities."
Given its available resources and the many demands placed upon it, I think that the
department does a very good job in carrying out its mission. We operate on many fronts
to achieve our mission with lands, water, fisheries, wildlife, conservation planning,
enforcement, and spill prevention and response programs. These operations have
contributed significantly to the conservation, protection, and management of the state's
native fish, wildlife, plants, and their habitats.
However, there is always room for us to improve and more must be done. With greater
emphasis on large-scale habitat and natural community conservation planning, climate
change adaptation, and water management, and by engaging with our various
constituencies in constructive problem solving, the Department can achieve more for
the state's natural resources with the limited resources it has. This is essential given the
demands of a growing population combined with the challenges of climate change
impacts and unpredictable budget cycles.
5. What percentage of your budget is supported by General Fund monies and
what percentage comes from fees and permit applications? Given the
reductions in General Fund support for the department, how do you
prioritize the many duties you have? Do you have any proposals for
increasing revenue to the department?
The General Fund portion of budget is decreasing while the Fish and Game
Preservation Fund (FGPF) portion is increasing. From this fiscal year to next, General
Fund support will be reduced from 17.9 percent to 16.5 percent of the budget, while
license fees and permits have increased from 22.5 percent to 25.8 percent. Thus far,
when the department's budget has been cut, we have been able to redirect critical
functions, such as enforcement, from the General Fund to FGPF.
Ensuring more stable funding for the department is essential to the department's ability
to carry out its public trust responsibilities. In the face of the state's fiscal crisis I am
welcoming discussion with all those who have a stake in the solution.
136
6. Please describe the department's activity in trying to. better understand the
open water fish decline.
The department is actively engaged in numerous activities to address the decline of
open water (pelagic) fishes. Our long-term monitoring surveys since the late 1950s were
instrumental in detecting the marked declines of four pelagic fishes in the upper San
Francisco Estuary. The department continues to conduct annual monitoring surveys.
Since 1972, the department has been a leader and major participant of the Interagency
Ecological Program (IEP), a collaboration of three state and six federal agency partners
working together in the San Francisco Estuary and Delta to coordinate monitoring and
research. The IEP formed a Pelagic Organism Decline work team to examine the
potential causes for the pelagic fish decline. The department is working tirelessly to
examine the interaction of multiple stressors in the Bay Delta and the decline of pelagic
fish populations.
7. When do you expect the department will have enough information to begin
adopting management strategies that will first stabilize and then recover
fishery populations? Is recovery of these species an identified objective of
the department, and if so, in which documents is this objective identified?
The department is already using several management strategies based on existing
information to recover fishery populations through its implementation of the CALFED
Ecosystem Restoration Program (ERP). The ERP has developed a conservation
strategy for the Bay Delta and Suisun Marsh, which includes recovery targets from
existing recovery plans that are being updated for Delta native fishes and developed for
Central Valley salmonids. The conservation strategy includes habitat restoration to
restore ecological processes and enhance productivity within the Delta. It also
addresses other stressors and recognizes the need to change where and how water is
exported from the Delta. The department supports the fish recovery goals of the ERP.
The department is also actively participating in the Bay Delta Conservation Plan
(BDCP). This effort is a multi-agency and stakeholder planning and environmental
permitting process, under the federal and state Endangered Species Acts and the
state's Natural Community Conservation Planning Act, to restore habitat for fisheries in
the Delta and improve water delivery reliability in California. The Delta Regional
Ecosystem Restoration Implementation Plan, consisting of conceptual models for many
aquatic species, habitats, and stressors in the Delta, is presently being used to test
potential BDCP conservation actions. These models incorporate the current state of
knowledge and understanding offish species and ecological processes.
8. Has your department been working with the state and regional water
boards to address the issue of increased ammonium in the Sacramento-
San Joaquin Delta? What are the possible solutions to address this issue?
The department, through its participation in the Interagency Ecological Program, has
been working with the State Water Resources Control Board and the Central Valley
137
Regional Water Quality Control Board to investigate if there is a link between the
Pelagic Organism Decline (POD) and ammonia. The department is participating in
discussions next month with the CALFED Science Program and the Central Valley
Regional Water Quality Control Board to determine future studies needed to better
assess the role of ammonia in the Delta. Finally, the department is joining other
agencies, including the State and Regional Water Quality Control Boards, in the
"Ammonia Summit" scheduled for June 2009.
The State Water Resources Control Board, along with the department, the Natural
Resources Agency, California Bay-Delta Authority, and the California Department of
Water Resources, is an active state participant on the BDCP Steering Committee.
Ammonia is one of a number of possible stressors that is being looked at within the
context of the BDCP process.
9. To what degree are headquarters and regional offices experiencing
retirements from top-management and manager-level employees? If such
retirements are occurring, do you have succession plans?
There are 98 employees in the department at supervisory and top management levels
who are over the age of 55. That is more than 30 percent of all supervisors and
managers. Since 2006, the department has experienced 32 retirements from first line to
senior management levels. This is approximately 16, or five percent of supervisors and
managers retiring per year.
As I've mentioned, the department's succession planning is one of my top priorities.
This includes leadership development and supervisory training, mentoring of up and
coming leaders, and filling positions as early as possible to allow for adequate
transition.
Under my direction, the department's succession planning activities are already
underway. The department's Human Resources Branch is actively working with
managers to develop the most effective methods to ensure the department's future
management team and workforce. I have also begun to expand this effort to include
internal and interagency cross-training opportunities where employees take temporary
assignments to gain different perspectives and learn about other functions within and
outside the department. During my tenure as director, employees will take advantage of
leadership training, temporary assignments and exchange opportunities that will afford
them a firsthand understanding of different points of view, roles, responsibilities, and
challenges.
10. Are headquarters and regional offices experiencing any problems with
employee retention or pay equity? Please describe how the department
plans to reconcile these issues.
138
Generally, the department has not lost a significant number of employees to other state
agencies or to other public or private sector jobs. However, pay equity continues to be a
concern with the Fish and Game Warden classification as compared to other state
peace officers including those in Bargaining Unit 7, Protective Services and Public
Safety. Fish and Game Warden salaries significantly lag behind other law enforcement
classifications that have the same responsibilities. Warden cadet recruitment would
improve and may bring in a more diverse group of individuals if the salaries were
comparable to other peace officers in the state.
Additionally, pay disparities for employees in the Biologist classification relative to
employees in Environmental Scientist classification is also a concern. Currently, pay for
Biologists lags behind pay for Environmental Scientists, although the responsibilities for
these classifications are very similar. In addition, much like the Warden classification,
pay for professional scientists lags well behind pay for state jobs and duties for
analogous scientific and technical classifications.
1 1 . What effect has the four-year pay increase had on retention and hiring of
new wardens? How many wardens are currently available in the field, and
what is the approximate size of the area each is expected to cover? Are you
satisfied with the current warden staffing levels? What should the warden
staffing level be to adequately protect the state's natural resources?
The four-year pay increase has had a positive impact on retention of wardens, most
notably in the ranks of those eligible to retire. Though the number of wardens eligible to
retire remains very high, (more than 60 wardens in the current year and an additional 36
wardens in the next three year period), the rate of retirement has slowed with the pay
incentive. However, the retention benefit with the salary increase will diminish at the end
of this calendar year for those 50 years of age and older.
Hiring of new wardens is at a slight increase due to a combination of factors. The
department has implemented an aggressive recruiting program. In addition, there was
the four-year pay increase. Although there remains a significant salary disparity
between wardens and other peace officers throughout the state, the salary increase
was helpful in attracting new recruits. Finally, the department's new Peace Office
Standards and Training Fish and Game Academy at Butte College offers an associate's
degree in Wildlife Law Enforcement to self-sponsored cadets, which is an added
incentive.
Wardens make, in many cases, in excess of 50 percent less in salary and benefits than
other state peace officers. With the 10 percent reduction in pay due to the recent
furlough, the Law Enforcement Division expects retention difficulties to increase. It will
force some wardens to migrate to more traditional and higher paying law enforcement
agencies.
Warden coverage varies greatly throughout the state. Some warden districts cover an
entire county, while others have several wardens assigned to a small geographic area
139
where there is a significant population requiring a tremendous workload and additional
staffing. The 370 allocated warden positions cover 159,000 square miles, including
30,000 miles of rivers and streams, 4,800 lakes, an 1 ,100 mile coastline with jurisdiction
that extends 200 miles from shore, 66,000 fish businesses, one million registered
vessels, habitat protection responsibilities to support all wildlife species, and all off-
highway pollution events impacting wildlife and waterways.
California ranks lowest in the nation for the number of wardens per capita and among
the lowest for the number of wardens per square mile of land. As examples, the State of
Florida has a similar marine component as California with Marine Protected Areas and
approximately the same number of registered boaters, but much less diversity of
ecosystems and land mass. Florida has only 15 million residents as opposed to
California's 38 million, but they have 753 game wardens. Texas, which has
approximately 80-90% of its land held privately, as opposed to California's similar
percentage in public land holdings, employs 540 wardens. If the department were to
have coverage equal to states of similar size and resources, we estimate that well over
1 ,000 wardens would be needed to protect the state's wildlife resources.
1 2. What is the extent of harmful algal blooms in inland and marine waters?
How serious are the negative effects that fisheries and marine mammals
experience?
Harmful and nuisance blue-green algal blooms have been known to occur in many
California inland waters during at least the past 50 years. Blue-green algal blooms
generally have the potential to cause indirect negative effects such as warmer
temperatures, higher turbidity, increased nutrient loads and organic matter, and lower
oxygen levels within reservoirs and the rivers they feed. These indirect effects can
adversely affect fish by impeding growth and decreasing survival.
Harmful algal blooms negatively affect California's marine environment by producing
certain algae of domoic acid or other toxins. These toxins subsequently build up in
shellfish and smaller fish that utilize the algae as a food source. These toxins then
bioaccumulate and can have lethal toxic effects on marine birds, mammals, and
humans. Other negative effects include oxygen depletion that can cause fish die-offs.
13. How does the department plan to address this issue of negative impacts to
inland and marine species?
With respect to addressing the inland waters issue, the department consults regularly
with state and federal agencies responsible for implementation of water quality
regulations. We actively engage the State Regional Water Quality Control Boards to
address sources of nutrients or contaminants in impaired waters such as the Klamath
River.
In the marine environment, the department often responds to fish kill events to
determine whether the fish kill was the result of a spill or a harmful algal bloom.
8
140
Additionally, the department assists the California Department of Public Health in
collecting water samples to help track biotoxin impacts.
1 4. Do you believe that the regulations adopted by the Board of Forestry and
Fire Protection are adequate to restore the Coho populations? If not, what
additional measures should be taken?
The department and the Board of Forestry and Fire Protection (Board) recognize that
restoring coho salmon populations will require additional measures. Currently the Board
is considering improvements to the Threatened and Impaired Watershed Rules. The
department is actively engaged in providing support to that process. We have reason to
be optimistic that these results will lead to better protection for coho salmon, as well as
an improved rate of recovery for coho salmon habitat. Improvements may include
measures to improve water temperature, large woody debris recruitment and reduction
of sediment delivery to streams from roads.
Additionally, earlier this month, the Board unanimously approved a revised Joint Policy
Statement on Pacific Salmon and Anadromous Trout, which establishes comprehensive
goals to recover anadromous fishes. The department was active in developing the
policy and supports it. I am requesting that the Fish and Game Commission consider it
for adoption at its March meeting.
15. What are the current explanations for the decline in the state's salmon and
trout populations? What can the department and other state agencies do to
restore the health of the state's native fishes?
Salmonid populations have declined within California due to a combination of factors
that have adversely impacted the quality and quantity of their habitat. These factors
include alteration of natural stream flow patterns, floodplains and channels, physical
impediments to fish passage, sedimentation, urban and rural waste discharges, loss of
genetic diversity, introduction of non-native species and poor ocean conditions.
While ocean conditions will always play a significant role in influencing salmon
population conditions, fresh water habitat protection and restoration is a key to restoring
salmonid populations statewide. The department shares this goal with landowners,
conservation, sport and commercial fishing interests, tribes, and federal, state, and local
agencies. The department is working with these interested stakeholders now to fund
and implement effective habitat restoration projects, conduct monitoring, and address
impacts of habitat conversion, water management, and other stressors. The department
is also implementing other recovery actions and developing conservation plans.
In conclusion, I am humbled by opportunity to serve as Director of the Department of
Fish and Game. I look forward to further addressing these issues and any other
concerns you may have during my confirmation hearing later this month.
141
Donald B. Koch
Attachment
cc: Hon. Sam Aanestad
Hon. Gilbert Cedillo
Hon. Robert Dutton
Hon. Jenny Oropeza
10
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01/04/2003 05:41 826-575-7514 PAGE 01
January 26, 2009
Nettie Sabelhaus
Appointments Director
Senate Rules Committee
Room 420, State Capitol
Sacramento, CA 95814-4900
Dear Ms Sabelhaus:
Per your request I am sending you my answer for the questions you have sent
me. Because I am a new appointee to the board I am not qualified to answer
some of the questions, however I did try to give my answers as much as I can.
If you have any question or need more information please feel free to contact me.
The original copy will be mailed to you today.
Thank you.
Sincerely,
-ZfL-
Charles Kim
Appointee
Acupuncture Board
Senate Riiies Committee
JAN 2 ? 2009
143
California Legislature
MEMBERS
SAM AANESTAD
VICE-CHAIR
GILBERT CEDILLO
ROBERT DUTTON
JENNY OROPEZA
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SECRETARY OF THE SENATE
NETTIE SABELHAUS
APPOINTMENTS DIRECTOR
Senate Rules Committee
DARRELL STEINBERG
CHAIRMAN
January 6, 2009
Charles J. Kim
Dear Mr. Kim:
The Senate Rules Committee will conduct a confirmation hearing on your appointment
as a member of the Acupuncture Board on Wednesday, February 18, 2009. You are not
required to appear, but we request that you respond in writing to the following
questions. Please provide your responses by January 27, 2009.
We would also like to receive an updated Form 700, Statement of Economic Interest, by
January 27th.
Goals
1. What are your goals and objectives as a member of the Acupuncture Board? What
do you hope to accomplish during your tenure? How will you measure your
success?
2. What are the highest priorities of the board? How will they be accomplished?
Public Outreach and Access
The Acupuncture Board has responsibility for licensing and disciplining acupuncturists.
Its 2007-08 annual report indicated that there were 8,500 licensed acupuncturists in the
state. By statute, protection of the public is the board's highest priority. Once considered
an alternative medicine, the use of acupuncture for ailments from migraines to sports
injuries is becoming more mainstream. This, in turn, has led to an increase in the
number of consumers seeking treatment, many of whom have little prior familiarity with
the practice.
STATE CAPITOL • ROOM 420 • SACRAMENTO, CALIFORNIA 95814-4900 • (916)651-4151 • FAX (916) 445-0596 — '
Charles Kim
January 6, 2009
Page 2
3. How does the board ensure that members of the public — including those with
limited English proficiency — can participate in or access information about its
activities? What effort does the board make to educate and inform consumers
regarding the regulation of acupuncture, where to file a complaint, check a license,
etc.?
4. The Acupuncture Board posts meeting agendas and minutes on its Web site;
meeting materials may be separately obtained upon request. Other boards, such
as the Board of Behavioral Sciences and the Board of Pharmacy, post their
meeting materials on their Web sites, in addition to agendas and minutes. Has the
board considered posting its meeting materials online? If not, why not?
Oversight Issues
In 2004 a Little Hoover Commission report urged the board to develop consumer
protections for herb products. Although the formal regulation of herbs is beyond the
board's purview, California does include herbs in the scope of practice for
acupuncturists. Acupuncturists are required to receive training in drug and herb
interactions as part of their core curriculum. Another section of the commission report
raised public safety concerns about disease protection. In response, the board banned
the use of reusable needles and now requires sterile, single-use, disposable needles.
5. How does the board enforce the single-use needle requirement? What staff are
available to you for enforcement?
6. Do you believe the board's enforcement program is meeting the board's public
protection mandate?
Board Member Training
Business and Professions Code Section 453 requires that every newly appointed board
member shall, within one year of assuming office, complete a specified training and
orientation program offered by the Department of Consumer Affairs. We are advised
that you have already attended the training.
7. What is your assessment of the usefulness of the training? Do you have
suggestions on how the training could be improved?
145
Charles Kim
January 6, 2009
Page 3
School Approvals
Current statute requires that an applicant for a California license to practice acupuncture
must complete an education and training program that is (1) approved by the board, and
(2) offered by a school that was approved by the former Bureau for Private
Postsecondary and Vocational Education. However, the bureau was sunset in 2007
and, therefore, no longer provides school approval services.
The Accreditation Commission of Acupuncture and Oriental Medicine (ACAOM) is the
nationally recognized accrediting agency for the field of acupuncture and oriental
medicine. While many other states defer to ACAOM accreditation as being a sufficient
condition for applicants to take the licensing exam in their states, California does not
accept accreditation by ACAOM, nor does it require graduation from an accredited
school as a condition of being eligible to take the licensing exam. Instead, it conducts its
own approval process of schools.
There are approximately 60 acupuncture schools throughout the U.S., 35 of which are
approved by the California Acupuncture Board. Nineteen of the California-approved
schools are located in California and 16 in other states.
8. What actions has the board taken in response to the sunset of the bureau?
9. How have acupuncture schools and students been affected by the bureau's
sunset?
Licensing Exam
The board currently develops and administers its own licensing exam. Conversely, most
states automatically accept applicants who have passed a national exam administered
by the National Certification Commission for Acupuncture and Oriental Medicine
(NCCAOM).
The California licensing exam is offered several times per year and is offered in
Mandarin, Korean, and English.
In 1991 the board rejected a recommendation of the Department of Consumer Affairs'
Office of Examination Resources to administer the exam in English only, but voted to
continue to evaluate issues stemming from administering the exam in languages other
than English, including the consistency of exam results. Despite continued disparity in
exam results, the board has continued to offer the exam in all three languages.
146
Charles Kim
January 6, 2009
Page 4
However, in response to concerns that lack of fluency in English could result in patient
harm, the board recently began efforts to add an English competency component to the
exam.
10. How does the board monitor public comment about the board's decision to require
an English competency exam?
11. Has the board identified any problems with administering the licensing exam in
languages besides English? If so, what steps is the board taking to address those
problems?
12. Do you believe the board should continue to offer the licensing exam in multiple
languages?
Please send your written answers to these questions to Nettie Sabelhaus, Senate Rules
Committee Appointments Director, Room 420, State Capitol, Sacramento, CA 95814.
Thank you for your help.
Sincerely,
Mi/
)ARRELL STEINBERG
DS:TS
cc: Acupuncture Board
147
Ku/uq/.iuad oa: qi b^b-s/b-/bl4 PAGE 02
Goals
1. What are your goals and objectives as a member of the Acupuncture
Board? What do vou hope to accomplish during your tenure? How will vou
measure vour success?
• Goals and Objectives
o Make sure that the public and the consumers are protected,
o Establish the policy guidelines and regulations for the schools to
provide quality education for acupuncture students and
practitioners,
o Implement the policies mandated by the legislature.
o Inform and seek support from legislators in the areas that need
new legislation.
o Continuously find ways to improve the quality of the medical
services.
o Improve and modify the enforcement procedures.
o Regularly review the contents of the licensing exam and adjust
to reflect the needs of the public and to improve the quality of
the exam.
o Monitor consumer complaints and make necessary adjustments.
• Hope to accomplish
o Improve the quality of the acupuncture schools by strengthening
the school recertification process and require ACAOM
accreditation as a requirement to teach acupuncture.
o Improve the quality of the licensing exam
o Improve English proficiency of the students by requiring higher
TOEFL test scores
o Promote better communication between the practitioners and
the consumers.
o Make sure that the materials are free from any chemical or toxic
contamination.
o Improve the quality of the website and make it more user
friendly.
• Measures your success?
o Compile and compare the key statistical information,
o Increasing number of English speaking practitioners and
consumers.
o Organize an annual acupuncture summit or retreat inviting all
the stakeholders.
o Strengthened and increased enforcement activcities.
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01/04/2003 05:41 626-575-7514 PAGE 03
2. What are the highest priorities of the board? How will they be
accomplished?
• Highest priorities
o School accreditation and the monitoring the quality of education
o Language proficiency.
o Eliminate/diffuse lack of communication between acupuncturists,
the public and the board.
o Address lack of information in English and Misinformation.
o Address lack of enforcement and quality control staffs.
o Improve inefficient board meeting and the quorum requirement -
all five members must attend, not majority.
o Making acupuncture as the secondary and alternative medicine
and getting mainstream recognition.
• How to accomplish?
o Strengthen the school approval process and strengthen the
recertification of existing schools.
o Require higher TOEFL scores
o Require wall information and regulation poster,
o Develop more English language information materials
o Increase the number of staffs by adding few more dollars to the
fee
o Change the quorum requirement from 5 members to simple
majority and hold board meetings at least 4 times per year if not
every two months,
o Convince mainstream insurance companies and western
medical centers to accept acupuncture as an alternative
medicine.
Public Outreach and Access
3. How does the board ensure that members of the public - including those
with limited English proficiency - can participate in or access information
about its activities? What effort does the board make to educate and
inform consumers regarding the regulation of acupuncture, where to file a
complaint, check a license, etc.?
• Information access
o Upgrade the acupuncture board website by adding Korean and
Chinese translation for the Korean/Chinese speaking consumers
and practitioners.
o Three language wall poster.
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01/04/2003 05:41 626-575-7514 PAGE 04
o Standard brochures and information literature in at least three
languages
o Email notification network
• Educate and Inform Consumers
o Require all clinics to post the rights and the responsibility paster
including self addressed envelops
o Maximize the ethnic media network for the dissemination of
recent press releases,
o Require practitioners to explain the treatment plan and the
complain
o Operate 24 hour hotline in three languages, English, Korean and
Chinese
4. The Acupuncture Board posts meeting agendas and minutes on its
website: meeting materials mavbe separately obtained upon request.
Other boards, such as the Board of Behavioral Science and the Board of
Pharmacy, post their meeting materials on their websites, in addition to
agendas and minutes. Has the board considered posting its meeting
materials online? If not, why not?
• Posting the board meeting material?
o Two board meetings I've attended, I don't believe the board
discussed this issue when I attended the meeting.
o Unless the legal counsel objects I don't have any problem
posting the meeting materials.
o Except some personnel and legal matters I do support uploading
the meeting materials
Oversight Issues
5. How does the board enforce the single-use needle reguirement? What
staff are available to vou for enforcement?
• Require the clinic to post the single-use needle requirement notice in
every treatment room. I don't think we have enough manpower to
enforce this requirement. We can only rely on the consumer's complain
and random site visits by the staff. Unless the requirement is well
communicated it is almost impossible for the board to monitor and
enforce the requirement. I really feel that we need more enforcement
staff to right the many wrongs.
6. Do vou believe the board's enforcement program is meeting the board's
public protection mandate?
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01/04/2003 05:41 626-575-7514 PAGE 05
• No. Not enough manpower and also hard to catch the violations. More
than anything else the materials to make herbal medicine are imported
from China. According to some of importers many are contaminated
with heavy meta! and sometimes fertilizers and other toxic materials.
• To guarantee the quality and safety of the materials FDA and the state
agencies need to closely monitor and find a way to protect the health of
the patients.
Board Member Training
7. What is your assessment of the usefulness of the training? Do vou have
suggestions on how the training could be improved?
• The usefulness of the training
o It was very useful for me to learn the do's and don'ts. Especially
the meeting rules and regulations, conflict of interests and also
meeting the staff in charge was helpful.
■ How to improve the training
o Too much information for me to digest in one day.
o Not enough time to ask more specific questions,
o Online refreshing course and update on the changes will be very
helpful.
School Approval
8. What action has the board taken in response to the sunset of the bureau?
• Any action for the sunset of the bureau
o As a newly appointed board member. I don't have any idea what
actions has been taken. Last two board meetings I've attended
the executive officer mentioned about the sunset of the bureau. I
am not sure the chair of the board is working on the sunset or
not. I do not have any knowledge about this
9. How have acupuncture schools and students been affected by the
bureau's sunset?
• impact on the schools and the students
o It will be detrimental to the future of the acupuncture profession,
especially the schools and the profession. Without the bureau
and the board it will be chaotic. The schools will not be able to
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81/04/2003 05:41 626-575-7514 PAGE 06
provide career guide for the future acupuncturists and the
students, the curriculums and the certification of the licensees
also will be affected,
o It took many years of struggles and fight for acupuncture to earn
this much respect and to stabilize as a source of alternative
medicine.
Licensing Exam
10. How does the board monitor public comment about the board's decision to
require an English competency exam?
• English competency exam
o There are mixed public opinions. Many are in favor of the
requirements and also there are many who oppose. Whenever
we have a board meeting many representatives come and join
us to express their support and opposition on certain matters. By
listening to the speakers we can learn a lot about public opinion.
o In general the public, especially Chinese and Koreans, feel that
Koreatown and Chinatown are overly saturated with
acupuncturists and herbal medical doctors.
o For the acupuncture industry to become a major medical
services provider certain level of minimum English requirement
is necessary in near future.
o The board already discussed the need to require higher TOEFL
score for the clinic. We really need acupuncturist who can
communicate in English fluently.
11. Has the board identified any problems with administering the licensing
exam in language besides English? If so, what steps is the board taking to
address those problems?
• Not that I know of. I know in the past there were some problems,
however, many students do learn better and understand better if they
are taught and took test in their own mother language.
12. Do you believe the board should continue to offer the licensing exam in
multiple languages?
• Yes. The student can learn better and the teachers can teach better. It
is important for a patient to meet a good doctor not necessarily a good
speaker. There are many good practitioners who can not communicate
in their own languages.
• At least Korean and Chinese language licensing exam should be there.
152
~^
MEMBERS
SAM AANESTAD
VICE-CHAIR
GILBERT CEDILLO
ROBERT DUTTON
JENNY OROPEZA
California Legislature
'■';■■- '.^-<.»....7 $;y '
GREGORY SCHMIDT
SECRETARY OF THE SENATE
NETTIE SABELHAUS
APPOINTMENTS DIRECTOR
Senate Rules Committee
DARRELL STEINBERG
CHAIRMAN
December 18, 2008
Judith N. Frank
Dear Ms. Frank:
The Senate Rules Committee will conduct a confirmation hearing on your
reappointment as a member of the California Health Facilities Financing Authority
(CHFFA) on February 18, 2009. You are not required to appear, but we request that you
respond in writing to the following questions. Please provide your responses by January
9, 2009.
We would also like to receive an updated Form 700, Statement of Economic Interest, by
January 9th.
Accomplishments and Goals
1. You previously served on this body from 2002-2004 and have recently served
since 2007. Please provide a brief statement of your accomplishments as a
member of CHFFA.
2. What are your goals and objectives as a member of CHFFA? What do you hope to
accomplish? What challenges do you anticipate to meeting these goals? How will
you measure your success?
3. What do you believe are the most pressing issues that CHFFA is currently facing?
STATE CAPITOL • ROOM 420 • SACRAMENTO, CALIFORNIA 95814-4900 • (916)651-4151 • FAX (916) 445-0596
153
Judith N. Frank
December 18, 2008
Page 2
Children's Hospital Bonds
Under the Children's Hospital Program, CHFFA awards grants to certain children's
hospitals to fund capital improvement projects. This program was created by:
■ Proposition 61 , passed by California voters on November 2, 2004, which enabled
the State of California to issue $750 million in General Obligation bonds.
■ Proposition 3, passed by California voters on November 4, 2008, which enables
the State of California to issue $980 million in General Obligation bonds.
4. How does CHFFA monitor the Children's Hospital Program?
5. Have all Proposition 61 funds been awarded? If not, what is the timeline for
awarding and issuing the remaining Proposition 61 funds?
6. What is the projected timeline for issuing Proposition 3 funds?
7. What projects are in the pipeline to receive these grant funds?
Please send your written answers to these questions to Nettie Sabelhaus, Senate Rules
Committee Appointments Director, Room 420, State Capitol, Sacramento, CA 95814.
Thank you for your help.
Sincerely,
Uvn Ima*)
DARRELL STEINBERG \J
DS:MB
cc: California Health Facilities Financing Authority
154
JUDITH FRANK
Januarys 2009
Nettie Sabelhaus
Senate Rules Committee Sei|ate Ru|M CmaM^
Appointments Director
Room 420 j^ft , ) a ^ggq
State Capitol
Sacramento, CA 95814 Appointmeatg
Dear Nettie:
As I enter my seventh year on CHFFA, I am amazed at the changes that have taken place over
the years. What started as a bit of a "rubber stamp" group has now emerged as a vital partner
in addressing the State's health care issues, financial problems, and administration of several
new funding programs entrusted to the Authority. More recently, we have found ourselves in
the middle of state and federal financial crises. I believe we have responded promptly, helping
our borrowers weather numerous storms.
In preparation for the Senate Rules Committee confirmation hearing on February 18, 2009, let
me respond to Mr. Steinberg's letter dated December 18, 2008.
Accomplishments, Goals, and Issues
CHFFA operates as a collaborative body among its voting members and the staff. The
accomplishments cited below reflect the results of this approach.
Accomplishments
• Participated in resolving a contentious and difficult issue related to pass-through
savings achieved by large hospitals through the issuance of CHFFA-approved tax
exempt financing.
• Increases loan amounts available through our HELP II Program. Over the years, the
HELP II program has been very successful in providing vital help to small health care
facilities throughout the State.
• Participated in establishing criteria and regulations for authorizing the issuance of
grants in connection with the Children's Hospital Bond. CHHFA acted very quickly after
Proposition 61 was passed (November 2004) to adopt and implement the enabling
regulations.
1/6/2009 a
155
Established applicant and administrative criteria for $40+ million Anthem-Wellpoint
Grant Program. Funds were distributed to 151 health care facilities in amounts
averaging approximately $275,000.
Provided emergency loans to several rural facilities during the 2008 budget crisis.
Borrowers promptly repaid these short term loans as soon as the State budget was
passed.
Participated in emergency meetings during 2008 to help our biggest and most
prestigious borrows weather the bond Insurance crisis.
Established new policies and procedures relative to public testimony and submission of
position papers during CHFFA meetings. These changes have given public comments
more balance and resulted in more cogent public presentations.
Reduced paperwork associated with HELP II application.
As interest rates dropped over the years, CHFFA actively assisted existing HELP II
borrowers lower their debt service by allowing them to re-finance as opportunities
arose. CHFFA fees were kept to a minimum so that the benefits of the refinancing could
be maximized.
Helped establish a "continuing education" policy for CHFFA members regarding
intrastate relationships such as Cal-Mortgage and external market forces such as bond
insurance issues. Briefing presentations are now a regular part of CHFFA meetings
Goals and Objectives
• Increase Outreach of Help II Program
• Prudently distribute the existing and new Children's Hospital Bond Fund
• Explore new program opportunities that traditionally have been outside the normal
scope of CHFFA's programs, particularly as other State funding programs face
challenges.
• Improve our oversight of real estate and facilities issues related to financing requests.
In many cases, it appears that applicants could improve their transactional and
regulatory skills if CHFFA presentations required slightly more information about these
aspects of the proposed financing.
Most Pressing Issues
Expand Bond Market Share
The most pressing issue we now face is how to prudently increase our 'market share' of
large bond offerings. CHFFA is, in a sense, a "Robin Hood" organization. We depend
on the bond fees generated by the large hospital bonds to fund CHFFA operations and
the HELP II program. Now that the uncertainty of the pass-through issue is generally
resolved, CHFFA needs to be sure that health care institutions know that CHFFA is once
again competitive and "open for business".
1/6/2009 2
156
• Vigilance of Financial Markets
Continued monitoring and vigilance of financial markets and the State's financial
condition.
Children's Hospital Bonds
CHFFA Monitoring Procedure
CHFFA monitors specific projects which are directly related to the Grant authorizations. This
consists of staff oversight and review. The Authority members do not typically get involved in
this procedure once the specific projects have been described to the members as part of the
application and funding approval process.
Proposition 61 Status
As of December 2008, a total of approximately $341 million or 50%of the available $750 million
had been distributed. The hospitals have until 2014 to request grant funds. UCI, UCSF, and
UCSF have not submitted applications for these funds. There are no current applications
pending for these remaining funds.
Proposition 3
CHHFA expects to use the same application procedure as was utilized for Proposition 61. As of
this date, there are no pending applications, although the Children's Hospital of Los Angeles
has indicated that it plans to file this month.
Please express my enthusiasm to the Senate Rules to continuing being a member of CHFFA. If
there are any additional questions, please be sure to call.
Very truly yours,
Judith Frank
1/6/2009 3
157
158
MEMBERS
SAM AANESTAD
VICE-CHAIR
GILBERT CEDILLO
ROBERT DUTTON
JENNY OROPEZA
GREGORY SCHMIDT
SECRETARY OF THE SENATE
NETTIE SABELHAUS
APPOINTMENTS DIRECTOR
California Legislature
Senate Rules Committee
DARRELL STEINBERG
CHAIRMAN
r
December 18, 2008
Ronald Joseph
Dear Mr. Joseph:
The Senate Rules Committee will conduct a confirmation hearing on your appointment
as a member of the California Health Facilities Financing Authority (CHFFA) on
February 18, 2009. You are not required to appear, but we request that you respond in
writing to the following questions. Please provide your responses by January 9, 2009.
We would also like to receive an updated Form 700, Statement of Economic Interest, by
January 9th.
Goals
1. What are your goals and objectives as a member of CHFFA? What do you hope to
accomplish? What challenges do you anticipate to meeting these goals? How will
you measure your success?
2. What do you believe are the most pressing issues that CHFFA is currently facing?
Children's Hospital Bonds
Under the Children's Hospital Program, CHFFA awards grants to certain children's
hospitals to fund capital improvement projects. This program was created by:
■ Proposition 61, passed by California voters on November 2, 2004, which enabled
the State of California to issue $750 million in General Obligation bonds.
STATE CAPITOL • ROOM 420 • SACRAMENTO, CALIFORNIA 95814-4900 • (916)651-4151 • FAX (916) 445-0596159"
Ronald Joseph
December 18, 2008
Page 2
■ Proposition 3, passed by California voters on November 4, 2008, which enables
the State of .California to issue $980 million in General Obligation bonds.
4. How does CHFFA monitor the Children's Hospital Program?
5. Have all Proposition 61 funds been awarded? If not, what is the timeline for
awarding and issuing the remaining Proposition 61 funds?
6. What is the projected timeline for issuing Proposition 3 funds?
7. What projects are in the pipeline to receive these grant funds?
Please send your written answers to these questions to Nettie Sabelhaus, Senate Rules
Committee Appointments Director, Room 420, State Capitol, Sacramento, CA 95814.
Thank you for your help.
Sincerely,
/
i^\jh<^c-
DARRELL STEINBERG
DS:MB
cc: California Health Facilities Financing Authority
160
The Honorable Darrel Steinberg January 9, 2009
Chairman
Senate Rules Committee
Saa"aSc,95814 ?»» T^
Dear Senator Steinberg,
I am pleased for the opportunity to present my views on the work of the California
Health Facilities Financing Authority (CHFFA] in response to your letter of December
18, 2008.
As a member of CHFFA, it is my goal to bring my experience in public health care
programs to positively impact delivery to California's residents. Within the context of
CHFFA programs, that can most directly be accomplished by working with my
colleagues to maintain the agency's momentum in building strong working
relationships with the community of health care providers that are served by its
programs. The CHFFA has made real strides in this effort, especially in its bond
financing program sector, and the result is an improved environment of opportunity
for the facilities that form a vital part of California's health care delivery system. I am
pleased to say that I have found the staff and its leadership in the State Treasurer's
Office to be dedicated to these principles. They have effectively promoted CHFFA
programs among public and non-profit health care providers by working to remove
barriers and make the programs more efficient in serving the aim of providing
adequate infrastructure for the delivery of health care. It is my intention to work
closely with staff and the provider community in order to assure that we maintain and
enhance the program efficiencies which best serve the public's interest.
Beyond this, I believe that CHFFA has a responsibility to recognize that the current
environment, both in health care and in the broader economy, will call on us be open to
offering unique solutions to issues that arise. A recent example of the type of creative
flexibility that must be pursued is found in the administration of CHFFA's HELP II Loan
Program. This program has historically operated to make loans available to eligible
facilities for capital expenditures, such as for the acquisition of equipment or for
construction. During the protracted budget impasse of 2008-09, many community
clinics and rural hospitals were facing severe hardship, and possible closure, because
of cash flow problems resulting from the interruption of their Medi-Cal
reimbursements. Working with these entities, CHFFA was able to make HELP II
resources available for the first time ever for the purpose of funding the operating
expenses that were necessary for these facilities to keep their doors open, while
avoiding the need for expensive commercial loans. This is the type of creative
partnership with the provider community that should become a standard for the
agency as we face the future.
^ 0 ft * 161
Clearly, the most pressing issues before CHFFA are the same as those faced by all
agencies that are dependent on a stable economic environment to best plan for the
future; i.e. the unsettled state of the economy and the credit markets upon which we
rely. While CHFFA is not in the position to influence the direction that those markets
take, it must certainly engage in an effort to evaluate likely events in the markets, and
determine how we can best work with, and advise, our clients as they establish their
plans for serving their communities.
Concerning bond funding made available to the thirteen Children's Hospitals through
Proposition 61, you are well aware that the amount of funding for each of the hospitals
was specified by the language of the proposition, which also specified that funds were
required to be committed by 2014. Currently, approximately $402 million of the
original $750 million has been scheduled for disbursement to the hospitals based upon
approved projects, with no applications currently pending approval by CHFFA. At this
time, only the Children's Hospital of Los Angeles has applied for all of its Proposition
61 funding. This reflects the complex planning that goes into hospital development, as
well as a measured approach being taken by the eligible hospitals in developing the
necessary plans to best serve the needs of their individual populations. CHFFA works
closely with the hospitals during each stage of project development leading up to the
application being submitted. That enables the actual application to be processed
expeditiously, once it has been receiveded. Once the project is underway, CHFFA staff
will monitor the project through review of records and through site visits in order to
assure that expenditures are being made in accordance with the approved application.
The timeline for scheduling disbursement of the remaining Proposition 61 allocations,
as well as all of those approved by Proposition 3 of 2008, which also allocated specific
amounts to the Children's Hospitals, is dependent upon the eligible hospitals
completing their planning processes and submitting proposals to CHFFA. CHFFA is in
regular contact with these hospitals concerning the status of their project planning and
the availability of funds, and also maintains ongoing communication with, and through,
the California Children's Hospital Association. At this time, CHFFA expects to receive
up to three applications for funding in January, 2009, with more anticipated
throughout the year.
Again, the coming years will almost certainly prove to be turbulent for the financial
markets, and for those who rely on those markets to deliver programs. It will be
incumbent upon public agencies, including CHFFA, to do their utmost to partner with
those who provide vital services to our residents, so that the programs deliver
maximum value. I hope to provide a positive contribution to that effort, and appreciate
your consideration of my appointment to the California Health Facilities Financing
Authority.
Ron Joseph
162
California Legislature
MEMBERS
SAM AANESTAD
VICE-CHAIR
if £Mm\ GREGORY SCHMIDT
' •*■ ' ';4L:1-W*fr i SECRETARY OF THE SENATE
Il4lm S^iSS^A NETTIE SABELHAUS
rim jRmEr*
GILBERT CEDILLO '*$&#"-' 'Mfc?
ROBERT DUTTON '"Dt&S :;
APPOINTMENTS DIRECTOR
JENNY OROPEZA
Senate Rules Committee
DARRELL STEINBERG
CHAIRMAN
January 15, 2009
Israel Rodriguez
Dear Mr. Rodriguez:
As you know, the Senate Rules Committee will conduct a confirmation hearing on your
appointment as a member of the California Student Aid Commission (CSAC) on
February 18, 2009. You are not required to appear, but we request that you respond in
writing to the following questions. Please provide your responses by February 3, 2009.
We would also like to receive an updated Form 700, Statement of Economic Interest, by
February 3rd.
Background
The California Student Aid Commission (CSAC) is the principal state agency
responsible for administering state and federal financial aid programs for students
attending public and private colleges and vocational schools in California. The
commission and its nonprofit loan auxiliary, EdFund, administer over $2.4 billion in
grants and loan guarantees.
Goals
1. Please provide a brief statement outlining the goals you hope to accomplish while
serving on the California Student Aid Commission. How will you measure your
success?
— STATE CAPITOL • ROOM 420 • SACRAMENTO, CALIFORNIA 95814-4900 • (916) 651-4151 • FAX (916) 445-0596 «g
Israel Rodriguez
January 15, 2009
Page 2
California State Budget Crisis
California's dire fiscal situation has affected all parts of state government.
2. How do you, as a commission member, stay informed of the fiscal resources
available to your commission? How does your commission prioritize activities if not
all can be undertaken? What are your priorities?
Rising Costs of Attending College
California financial aid policies historically have focused on providing financial
assistance to cover student fees. According to a report by the National Center for Public
Policy and Higher Education, non-fee costs of attending college are escalating. The
report cites that textbook costs for California community college students are roughly
equal to what a full-time student pays in annual fees.
3. Is the commission developing any policies that address the rising costs of attending
college in California, especially the growth of non-fee-related expenses? What
policy changes might CSAC consider in response to this growing need?
4. How does the commission determine the student budget for attending a
California college or university? How does this budget keep pace with the growth
of college-related expenses, such as books and supplies?
5. When developing the student budget for determining financial aid, does the
commission take into account the different costs of living in vahous parts of the
state?
6. Higher college costs and steep losses in college savings plans are forcing students
and their parents to borrow more money to finance their postsecondary education.
As a CSAC commissioner, do you believe there is a role for the commission in
addressing the borrowing and debt that many students and their families now
assume as a means for completing their college education? If so, what should the
role be?
The Future of State Financial Aid Programs
In 2001 the Cal Grant entitlement program went into effect. This program significantly
changed the Cal Grant A and B programs by guaranteeing an award to recent high
school graduates and community college transfer students if they meet specified
income and academic requirements. This guarantee has been a cornerstone of the
state financial aid program.
164
Israel Rodriguez
January 15, 2009
Page 3
A report prepared by the Institute for Higher Education Policy found that overwhelmingly
counselors and college-qualified students who did not enroll in college pointed to
college costs and the availability of financial aid as primary obstacles to college
enrollment. Barriers to college enrollment range from insufficient financial aid to mixed
messages about admission and financial-aid application processes to limited community
encouragement.
7. As a CSAC commissioner, what specific policy recommendation do you have for
making improvements to the Cat Grant A and B programs that will allow them to
more effectively serve California students?
8. What CSAC-sponsored outreach activities do you believe are most effective in
advising prospective college students about the Cal Grant and other financial aid
that is available to low- and moderate-income students?
9. How does CSAC measure the effectiveness of its financial aid programs? How do
you, as a board member, evaluate this effectiveness?
Federal Focus on College Affordability
Last year Congress passed and President Bush signed into law a major student aid
package, the College Cost Reduction and Access Act. The new law makes changes to
federal student aid programs by reducing lender subsidies to private lenders by
approximately $20 billion over five years and redirecting all but $750 million toward
student aid.
10. What are the major policy and fiscal implications for California's student aid
programs following the passage of this new law? Should California be made aware
of these changes?
Proposed Sale of EdFund
SB 89 (Committee on Budget and Fiscal Review), Chapter 182, Statutes of 2007,
authorized the director of the Department of Finance to either sell the state's student-
loan-guarantee program's assets and liabilities or enter into an alternative financial
arrangement regarding these assets and liabilities. Subsequent legislation — AB 519
(Committee on Budget), Chapter 757, Statutes of 2008 — extends the date by which the
Department of Finance is authorized to sell EdFund to January 201 1 .
165
Israel Rodriguez
January 15, 2009
Page 4
1 1. What effect, if any, has the proposed sale ofEdFund had on the commission's
ability to perform its daily activities, with respect to administering state and federal
financial aid programs and providing college-access outreach activities?
Please send your written answers to these questions to Nettie Sabelhaus, Senate Rules
Committee Appointments Director, Room 420, State Capitol, Sacramento, CA 95814.
Thank you for your help.
Sincerely,
DARRELL STEINBERG
DS:LG
cc: California Student Aid Commission
166
JjZra.eJ P&dt* ^wCL
RESPONSE TO THE SENATE RULES COMMITTEE'S QUESTIONS
FOR APPOINTMENT TO THE CALIFORNIA STUDENT AID COMMISSION
ISRAEL RODRIGUEZ
REPRESENTATIVE OF THE INDEPENDENT COLLEGES AND
UNIVERSITIES
GOALS
In my role as a commissioner overseeing and supporting the needs of the California
Student Aid Commission and other services provided by CSAC to students, I have
established do-able goals that I intend to accomplish during my term of service to the
state of California and the Commission. They are as follows:
1 . Represent the Association of Independent California and Universities (AICCU) at all
commission meetings, community outreach programs and conferences of the
California Association of Student Financial Aid Administrators (CASFAA).
2. Promote the importance of a college education among all students with emphasis on
students of low income and the first to go to college in their families.
3. Increase the number of low income California students who are academically prepared
to meet the curriculum challenges at the four year college level and require financial
assistance.
4. Inform students and their parents about educational opportunities available beyond
high school and the availability of financial assistance to meet the cost of education
according to their financial aid need.
5. Work collaboratively with members of segmental representatives, commissioners, and
commission staff to provide up to date information to all segments on matters that will
impact the student financial aid delivery.
6. My success as a commissioner will be determined by results from my performance in
carrying out goals and objectives that I have established. These goals may change from
time to time due to changes in federal and state regulations that are currently
unforeseen. My twenty two years as financial aid administrator at Pepperdine
University taught me the importance of being discipline-focused on my responsibilities
in serving the needs of students enrolled at the college level.
CALIFORNIA STATE BUDGET CRISIS...STAYING INFORMED
The following are activities and resources available to keep me and other commissioners
well informed on fiscal matters related to the functions and responsibilities of the
commission and commissioners. They are as follows:
1 . Weekly and sometimes more often reports and news items related to CSAC are
transmitted to the commissioners by e-mail. The executive director and commission
staff are diligent making sure that reports needed by commissioners are sent promptly.
2. Regular state budget updates are provided at commission meetings and/or sent by e-
mail before meetings by commission staff.
3. Regular legislative updates are also made available to commissioners on need basis.
4. In addition, I make it a point to stay in touch with members of the AICCU financiaLaid
senate Rules Committee
11 > 2U09
167
Appointments
professionals located in California to share updates or to inquire about their needs
related to the financial aid delivery programs.
RISING COST OF ATTENDING COLLEGE
1 . The California Student Aid Commission (CSAC) has supported efforts to increase the
size of access award to provide Cal Grant B recipients funds to cover the cost of
attendance beyond tuition and fees. The current Cal Grant B Access award has not
been increased from its current level of $1,551 for many years. The commission
supports current fee and policy that has sought to cover increases in tuition and fees
with increases in financial aid. The commission and the state should advocate for
increased higher education opportunities by providing all students financial access to a
postsecondary education of their choice. The cost of completing a postsecondary
education continues to rise and cultivate legislative and budget actions that protect,
strengthen, and increase the state's General Fund commitment to student financial aid
programs.
HOW DOES THE COMMISSION DETERMINE STUDENT BUDGET FOR A
CALIFORNIA COLLEGE?
1 . The commission in working with all five segments of California higher education
administers the Student Expense and Resource Survey (SEARS) to obtain data on
actual expenses and financial resources of California college students. This survey is
administered to approximately 70,000 college students attending Community College,
University of California, California State University, and Independent Colleges and
Universities and Private Career College. Data from the SEAR survey are used to
produce the Nine-Month student expense budget which includes room and board,
transportation, personal expenses, books and supplies, computer related expenses, etc.
The commission staff is in the process of reviewing the SEARS process and
questionnaire to determine its continued viability and possible alternatives.
DETERMINING STUDENT BUDGET BY COMMISSION STAFF
Data from SEARS is used to calculate average Nine-Month budgets for students living on
campus, off campus, and at home with parents. These Nine-Month Student Expense
Budgets are adjusted during the Non-Survey Years by using the California Consumer
Price Indices prepared by the Office of Finance. However, colleges and universities are
not required to use the budget established by the Commission, instead, each institution is
permitted to establish their own budget which can state actual students expenses in their
area.
HIGHER COLLEGE COST AND STUDENT LOAN BORROWING
1. Federal law guarantees the availability of a Federal Family Education Loan (FFEL) to
all eligible students. Students who are unable to secure a loan for credit reasons are
able to obtain a guaranteed student loan under the Lender of Last Resort (LLR)
program. The commission through its auxiliary, EdFund, designates eligible lenders to
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serve as LLR or the commission itself must serve in that capacity. The commission is
designated as the State's Guarantee Agency in conjunction with its auxiliary, EdFund,
is in compliance with directives relating to the LLR program issued by the U.S.
Department of Education. The Commission and EdFund have sent letters to California
institutions of higher learning assuring them that their student borrowers can secure
loans needed to complete their education.
THE FUTURE OF STATE FINANCIAL AID PROGRAMS
The commission has supported legislative efforts to increase the availability of Cal Grant
awards to students, most recently legislation by Assembly Member Hector De La Torre,
which increased from 24 to age 27, for Cal Grant Transfer Entitlement awards. These
kinds of efforts are needed to assist students who are struggling financially to complete
their academic goals. The following recommendations are now being proposed by the
financial aid community and supported by CSAC and commissioners. They are as
follows:
1 . The Free Application For Federal Student Aid (FAFSA) needs to be made more user
friendly (Simplified). The current form is cumbersome and intimidating even by
parents who completed their college education. This simplification will require the
support from the U. S. Department of Education and input from the financial aid
community.
2. Continue the effort of working with colleges and universities and high school
counselors to streamline the grant delivery process. For example, maximizing the use
of electronics in submitting grade point averages of high school student applicants for
Cal Grant A or B program.
3. Link the Cal Grant and application for specialized programs such as the Assumption
Loan Program for Education APLE, SNAPLE, etc. to FAFSA Website. The
commission is currently exploring these proposals with the U. S. Department of
Education and financial aid community.
Effective Sponsored Activities By CSAC
The California Student Aid Commission has been actively involved in promoting and
conducting several effective outreach programs intended to create a greater awareness of
the Cal Grant and other financial aid programs available to students. The following is a
brief summary:
1. CALIFORNIA CASH FOR COLLEGE. This is one of the most effective awareness
programs conducted each year to assist students and their parents apply for financial
assistance. The central mission is to help low-income and first generation students and
their parents complete the various forms needed to apply for financial aid programs.
More than 500 free California Cash For College workshops will be conducted
throughout the state from January 2, through March 2, 2009. These workshops are
conducted by partners from high schools, community colleges, universities, businesses,
and community groups. Approximately One Thousand Financial Aid Experts, outreach
staff, and trained community volunteers will assist in the completion of application for
financial aid. High school seniors who attend a 2009 Cash For College Workshop
could receive an extra $1,000.00 scholarship. These workshops have increased the
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number of Cal Grant recipients enrolling in college this coming academic year.
2. The commission also administers the California Student Opportunity and Access
Program (Cal-SOAP) which by statute requires Cal-SOAP projects be designed to
increase the accessibility of postsecondary educational opportunities for any of the
following elementary and secondary school students: A. Students who are from low-
income families. B. Students who will be the first in their families to attend college. C.
Students who are from schools or geographic regions with documented low-eligibility
or college participation rates. The commission currently funds 15 Cal-SOAP projects
or consortia throughout the state. These two major programs sponsored by the
California Student Aid Commission have increased the number of low-income
students who have been first students in their families to attend a college or university
of their choice.
FEDERAL FOCUS ON COLLEGE AFFORDABILITY
The following are changes to the Federal Student Aid program outlined in the College
Cost Reduction and Access Act (CCRAA).
1 . CCRAA eliminates the tuition sensitivity provision in the Higher Education Act (HEA)
and includes an appropriation of $1 1 million for academic year 2007-2008 to pay for
changes
2. Increases the Pell Grant awards, to be further increased by the Higher Education
Opportunity Act (HEOA), and possibly during the forthcoming federal economic
stimulus package.
3. Lowers the interest rate for a five year period for undergraduate subsidized Stafford
Student Loans for the FFEL and Direct Loan programs.
4. Provides Loan Forgiveness for public employees.
5. Increases the income protection allowance.
MAJOR POLICY AND FISCAL IMPLICATION FOR CALIFORNIA STUDENT AID
PROGRAMS.
Federal Issues
1 . Most nonprofit, private and state-based lenders in the student loan program employ
financial models similar to mortgage lenders to raise operating capital to make
additional student loans. These lenders have for the past two consecutive years
experienced significant reductions in the FFEL program subsidies from the federal
government as a result of the Higher Education Reconciliation Act and the College
Cost Reduction and Access Act.
2. The national economic conditions and associated credit crisis have drastically impacted
the willingness and ability of lenders to participate in the FFEL program.
3. Major national and regional lenders exiting the FFEL program are causing current
FFEL program schools to move or consider moving to the Federal Direct Loan
Program.
Voluntary Flexible Agreement (VFA)
4. Congress stipulates that VFA must be Cost Neutral and according to EdFund cuts to
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the financial model for guaranty agencies as part of the CCRAA means that existing
VFAs are no longer Cost Neutral.
In October of 2007, U.S. Department of Education had determined to terminate all
VFAs on December 31, 2007. However, Legislative language included in the Omnibus
Appropriation Bill led to the renegotiation of the VFAs with FFEL program guaranty
agencies no later than March 31, 2008. CSAC has taken the lead in the negotiations
and is confident of a successful conclusion.
Should California Be Made Aware Of These Changes?
6. Yes! The State of California should be made aware of these changes. The
Commission's Governmental Relations staff work to inform the legislators of these
changes and what they mean. Communications of these changes, in the past, have been
communicated to the financial aid community through training and Operational Alerts
provided to colleges and high school counselors and financial aid staff.
7. The commission's executive director communicates recent changes in financial aid
policy and operations through a regular electronic newsletter, FAST BLAST. This
electronic newsletter is transmitted statewide to the financial aid and outreach
communities. It is also available on the commission's website.
PROPOSED SALE OF EDFUND
The sale of EdFund will be difficult given the unstable national economy and credit
market crisis that has impacted the profit side of the student loan industry for private
investors. EdFund as an auxiliary unit of CSAC can be of great value in providing needed
loan services to students enrolled in colleges and universities in California. It is my
candid opinion that EdFund be kept operating at a high level of service to students and
CSAC thereby increasing its values to private investors in the future. The following is a
brief summary of the services provided by EdFund to CSAC:
1. EdFund continues to provide mailroom services to CSAC.
2. EdFund provides some needed support on the new telephone system that was
purchased because the shared system no longer worked after EdFund relocated to a
new building.
3. Technology services have been reduced because CSAC had to move its server to the
state data center to mitigate any problems due to the move of EdFund.
4. EdFund continues to support other necessary shared services that have been
customarily been provided.
As a commissioner and former University Financial Aid Director, I appreciate the
professional services provided by EdFund and CSAC to current and future students in
California. One of my objectives as a commissioner is to make the partnership between
EdFund and CSAC stronger and working in a spirit of collegiality in serving the needs of
all students enrolled in colleges and universities in our great State of California. It is also
important to recognize that if and when EdFund is sold CSAC will require additional
funds from the state to make up the loss of income and services now provided by EdFund.
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January 25, 2009
Nettie Sabelhaus, Appointments Director
Senate Rules Committee
Room 420, State Capitol
Sacramento, CA 95814
Dear Ms. Sabelhaus;
In response to your letter of January 8, I have provided my answers to the Rules
Committee's questions. Also included per your request is an updated Form 700,
Statement of Economic Interest. Please feel free to contact me if you or the Rules
Committee require any additional information for the confirmation hearing.
Statement of Goals
1. What are your goals and objectives as a member of the San Francisco Bay
Area Water Emergency Transportation Authority?
My goal is to move forward with the WETA mission of developing and operating a
comprehensive Bay Area public water transportation system and to provide water
transportation services in response to natural or manmade disasters. This will be
accomplished by establishing and operating a regional ferry system that connects
communities, reduces congestion, and provides an emergency response capability.
We developed this mission statement at our retreat last year.
My objectives include a commitment to:
• building the most environmentally friendly water-transit system in the country
using state of the art technology;
• operating a cost-effective, convenient, and reliable public water transit system to
increase Bay Area regional mobility and transportation options, starting with the
South San Francisco/Oakland service;
• providing a comprehensive and coordinated emergency water transportation
system in the event of a disaster within the San Francisco Bay Area by linking
our plan with those of other agencies and establishing MOU's with commercial
operators.
My experience, in many areas of the Maritime Industry and years of following the
progress of the Bay Area public water transportation system, can be utilized to good
effect as a member of the WETA Board of Directors. I have 25 years sailing
experience in the merchant marine, 5 years working in ship repair and construction,
3 years teaching experience at California Maritime Academy, and numerous
consulting projects including maritime security, emergency preparedness, business
continuity, and ship modernization.
Senate Rules Comm^- ■
JAN 3 0 7 ■■
ApptBlBtP'*^ : .: ... 173
2. What do you hope to accomplish during your tenure? How should we measure
your success?
Working diligently with the other Directors and WETA staff, I hope to accomplish the
following:
• Develop an Emergency Water Transportation Plan coordinating emergency
activities for all water transportation services in cooperation with other agencies.
This was one of my primary reasons for desiring to serve on the WETA.
• Consolidate the Vallejo and Alameda Ferry Services under WETA, per the
Transition Plan presently in development
• Increase regional transportation options by adding 7 new ferry routes to triple ferry
ridership by 2025. The immediate priorities are the South San Francisco to
Oakland and Berkeley/Albany to San Francisco ferry services.
Success should be measured by the accomplishment of the above items consistent
with the resources made available to accomplish them. Funding from the State may
be jeopardized by the current budget crisis. Other sources are being explored on
the Federal level, and an infusion of infrastructure development funds could allow us
to continue with projects that had to be put on hold by the withdrawal of State
funding. I have notified the Staff of points of contact in the Federal government who
may be able to assist with this. WETA is committed to reaching out to the
community, thereby building a strong base of stakeholders to support these efforts.
The lack of opposition is an indicator of the success of these efforts. The
overwhelming public support is perhaps a more vibrant measure of success.
Strategic Planning
3. Is WETA on track to complete the transition/consolidation plan and the
emergency water transportation system management plan by July I, 2009?
What steps have been taken to date?
WETA staff have been meeting with the Cities of Vallejo and Alameda and with the
Metropolitan Transportation Commission (MTC), among other stakeholders, to
develop the Transition Plan for transferring the City of Vallejo and the City of
Alameda ferry services to WETA. The Plan is on schedule to be completed and
adopted by July 1 , 2009. The internal draft is in preparation for internal review.
WETA staff should release the draft Transition Plan to the public for comment in
March.
The Emergency Water Transportation System Management Plan is also being
drafted with input from all stakeholders, including the State Office of Emergency
Services, and MTC, and Bay Area Emergency Management and Response
organizations. The internal draft is under review. This Plan is also on schedule to
be completed and adopted by July 1, 2009, with WETA staff releasing the draft Plan
to the public for comment in March.
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Local Concerns
4. Have the concerns of Vallejo and Alameda officials been addressed by SB
1093? Is WETA working with those officials to help facilitate a smooth
transition?
Since both cities supported passage of the legislation, I believe the cities' concerns
were addressed. Both cities agreed to the language in SB 1093 following extensive
discussions between representatives of the cities and WETA.
As mentioned above, the draft Transition Plan is being developed jointly by a core
planning team that includes the Cities of Vallejo and Alameda, as well as WETA and
MTC. WETA is committed to addressing the issues raised by all stakeholders and
reaching agreements that meet their needs. Public hearings on the Plan will also be
held in Vallejo, Alameda and San Francisco to provide broad public input.
5. At the August 21, 2008, meeting, the board conducted a closed session on the
Vallejo litigation. What is the status of the City of Vallejo 's lawsuit against the
state?
According to our lawyers, the lawsuit has been dismissed "with prejudice" against all
the defendants, including both the State and WETA. By dismissing the case "with
prejudice" the City of Vallejo has legally waived its right to file another lawsuit
asserting the same claims. The dismissal of the lawsuit followed a several month
period after the filing of the lawsuit during which the parties agreed to stay further
proceedings in the litigation, pending the outcome of the Legislature's deliberation on
SB 1093. Following enactment by the Legislature and signature by the Governor of
the bill, the parties agreed that since the legislation had substantially addressed the
issues raised in the litigation, the case should be dismissed.
Proposition 1 B Funding
6. Has WETA received these Proposition 1B funds? What is the status of the
projects that are targeted for Proposition 1B funding?
• WETA has received an award of $25 million Prop 1 B funds, but these funds are
available on a reimbursable basis, so only a portion of the $25 million has been
received to date. Through December 14, WETA had spent $785,000 on Prop 1 B
projects and had requested reimbursement for this amount.
• WETA received notice from OHS on December 23 that all Proposition 1 B funds were
suspended from December 15 forward. Because of this WETA has had to suspend
work on contracts with Proposition 1B funding. The affected projects include:
175
• Environmental studies of Richmond, Redwood City, Antioch and Martinez sen/ice
sites;
• Preliminary planning of the Central Bay Maintenance facility site and system floats
(maintenance barge and floats);
• South San Francisco terminal construction;
• South San Francisco vessel construction is proceeding with other funding
sources, but vessels delivery could be delayed without the Proposition 1 B funds.
• Planning continues for the North Bay/Vallejo maintenance facility site with other
funds but the project design must be suspended if Proposition 1 B funds are not
available;
• Final terminal design for the Berkeley or Hercules terminals is planned to begin as
early as Summer 2009 for Berkeley and in Winter 2009 for Hercules provided that
Proposition 1 B funds are available. At present they are still under environmental
review.
7. Does WETA plan to apply for additional Proposition 1B funding?
WETA has submitted timely applications with the Office of Homeland Security for an
additional $25 million ($50 million total) FY 2008/09 Proposition 1B funds to support
the following projects:
Project Amount
1. Preliminary Investigation/Environmental Review 1,250,000
Redwood City, Richmond, Antioch and Martinez
2. Final Design for Berkeley Terminal/Service 2,500,000
3. SF Berthing Facilities 4,000,000
4. Maintenance Barge and Berthing/Floats 10,250,000
5. Maintenance Facilities 7.000,000
Total 25,000,000
Project review by WETA and OHS staff was completed on December 19, but final
grant award was not been made by OHS due to the Proposition 1 B program
suspension.
Other Sources of Funding
8. Has WETA submitted an application to MTC for the $600,000 in Regional
Measure 2 funds? How quickly do you anticipate that MTC will allocate the
funds? Does WETA have a specific expenditure plan for these funds?
Yes, WETA has submitted an application for the $600,000 in RM2 funds to MTC,
who took action to allocate these funds to WETA on November 26, 2008.
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These funds will be used to support the transition expenses associated with the
consolidation of existing Vallejo and Alameda ferry systems under WETA
management.
The estimated allocation of the funds is as follows:
$250,000 Consultant Assistance
$325,000 Staff/Attorney Assistance
$ 25,000 Other Miscellaneous Expenses
9. Has WETA submitted an application to MTC for the $750,000 in Regional
Measure 2 funds? Please describe the Spare Vessels Program and how the
anticipated funds will be spent.
Yes, WETA submitted an application for the $750,000 in RM2 funds in order to
support the Spare Vessel Operating Program. This spare vessel utilization program
charters the WETA spare vessels to the City of Alameda for use in their contract
services with the Blue and Gold and Harbor Bay Maritime ferry services. The funds
will be spent on the following:
Harbor Bay maintenance dredging
Float/Ramp modifications
Float additions
Harbor Bay maintenance augmentation
Crew training
Urea storage and use
Hull insurance
An additional benefit of this program is that by preparing the facilities and personnel
to use WETA vessels, the vessels can be redeployed in an emergency to support
response measures.
10. Given that current statute does not provide for state funding for WETA, and
that the Legislature— for the second year in a row— redirected 2008-09 transit
funds to General Fund programs, what other sources of funding is WETA
pursuing at the local and regional levels?
According to our staff, current statutes do not prohibit WETA from receiving state
funding. State sources of funding such as the Transportation Development Act
(TDA) and State Transit Assistance (STA) funds are generally only available to
transit systems with operating services. As a result, WETA does not currently
receive TDA or STA funds, so the redirection of FY 2008/09 transit funds has not
had a direct impact on WETA's operating budget this year.
WETA had anticipated receiving a share of Revenue-based STA funds in future
years, to support the operating and capital needs associated with Vallejo and
Alameda ferry services that will be taken over by the organization. A permanent loss
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of STA funds for transit in general, would have an adverse impact on WETA's ability
to support the ongoing needs of these systems.
$18.3 million annual Regional Measure 2 operating funds were approved by the
voters for WETA ferry transit planning and operations. These funds are provided to
WETA by MTC through their annual allocation. Anticipating future operating
shortfalls associated with the Vallejo and Alameda ferry systems, WETA has
initiated discussions with MTC staff to obtain a higher level of future year RM2
operating funds over the next few years, with the provision that MTC allows for
maximum flexibility in the use of these funds.
Federal Economic Stimulus
11.1s WETA positioning itself to take advantage of an economic stimulus package
passed by the federal government in 2009? Has WETA begun identifying
projects or programs that such federal dollars could be used for in California?
If so, could you identify those priorities?
WETA is positioning itself to take full advantage of any economic stimulus package
developed in 2009. Projects have been identified and submitted to both our local
metropolitan planning organization, MTC, and to Caltrans.
The projects that could benefit from the Federal funding include:
• Ferry Vessel Repowering and Rehabilitation
• South San Francisco Ferry Terminal Construction (impacted by
the loss of Prop 1 B funds)
• South San Francisco Vessel Construction (impacted by the loss
of Prop 1 B funds)
• North San Francisco Bay Maintenance Facility Construction
• New Ferry Vessel Construction (for Berkeley/Albany - San
Francisco service)
• Ferry Terminal Construction (Berkeley/Albany)
• Rehabilitate/Replace existing Ferry Terminal Floats (impacted by
the loss of Prop 1 B funds)
• Central San Francisco Bay Maintenance Facility Construction
• San Francisco Ferry Terminal and Berthing Expansion (impacted
by the loss of Prop 1 B funds)
WETA is also working with our legislative advocate in Washington, DC, to help
ensure that the Federal Ferry Boat Discretionary Program is the recipient of a
portion of the Stimulus Package funds when they become available.
Transportation in a Post-AB 32 World
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12. Given the climate change goals of AB 32 and SB 375, as well as evidence of
the negative health effects of air pollution from mobile sources, how do you
recommend incorporating air quality and climate-change concerns into the
planning and programming of WETA projects?
Even before the passage of AB 32 and SB 375, WETA proved itself a leader in
emission reduction. In 2002 the WETA required that all newly constructed ferries
have exhaust emissions that were 85% better than EPA Tier II (2007) standards.
Please note that the California Air Resources Board (CARB) utilized the WETA
emission reduction specification as the standard for their newly enacted (01 January
2009) Commercial Harborcraft Regulation. WETA remains well ahead of all current
legislation in addressing climate-change by incorporating emission reduction
mandates into the planning all of WETA projects.
13. What role do you think WETA should play in helping to achieve the goals of A6
32 and SB 375?
During my tenure at WETA, we will continue being a leader in emission reduction in
the maritime community. Not only did WETA successfully implement the most
stringent emission reduction specifications for all our newly constructed ferries, but
WETA continues to research and test new technologies, such as fuel cells and solar
panels, to determine their technical feasibility, economic practicality, and
environmental responsiveness while operating in the harsh marine environment.
This was one of my fundamental motivations for desiring to serve on the WETA.
Thank you for your kind attention and please don't hesitate to contact me if you or the
Rules Committee require any additional information.
Sincerely,
Gerald Bellows
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JAN-27-2009 15 = 35 P • 02
January 27. 2009
Nettie Sabelhaus Senate IRnles Commute
Appointments Director
Senate Rules Committee iAN 2 7 2Ut u
Room 420, State Capitol
Sacramento, CA 95814 AppoinfflMMfS
Dear Ms. Sabelhaus:
This letter is in response to Senator Darrell Steinberg's letter of January 8. 2009, in which he
requested responses to the following questions. As requested, I have also attached an updated
Form 700 Statement of Economic Interest. Please do not hesitate to contact me should the
Rules Committee require any additional information prior to the February 1 1 confirmation
hearing.
Statement of Goals
1 . What are your goals and objectives as a member of the San Francisco Bay Area
Water Emergency Transportation Authority?
As a member of the WETA Board of Directors, it is my intention to move as quickly as
possible to expand ferry service in the Bay Area and, in so doing, relieve congestion,
promote smart growth and provide an enhanced emergency response capability. At a WETA
Board retreat held in July, 2008, the Board adopted a missioh statement that recognizes our
responsibility to develop and operate a comprehensive Bay Area public water transportation
system that can provide a response to natural or manmade disasters. The system we create
will increase regional mobility and transportation options in a cost-effective, convenient and
environmentally friendly manner. WETA is committed to building the cleanest water-transit
system in the world.
Specific priorities adopted at the aforementioned Board Retreat include the following:
• Increase regional mobility by adding 7 new ferry routes to triple ferry ridership by 2025.
Our initial focus is on SSF and Berkeley/Albany service
• Coordinate emergency activities for all water transportation services in cooperation with
MTC and other agencies consistent with the provisions of a Emergency Water
Transportation Plan to be adopted by July 1 , 2009
• Consolidate Vallejo and Alameda Ferry Service under WETA, consistent with the
provisions of a Transition Plan to be adopted by July 1 , 2009
• Provide the infrastructure to deliver the above priorities.
2. What do you hope to accomplish during your tenure? How should we measure your
success?
During my tenure on the Board of Directors, I hope to see significant progress in
implementing WETA's mandate to provide the type of regional water transportation system
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JAN-27-2009 15=35 p-03
envisioned in the current legislation. Our biggest challenge may be in developing the funds
needed to build and operate the system successfully. Success can also be measured by
the degree to which WETA moves forward to implement its plans, given its available
resources and WETA's success in identifying and pursuing new sources of funding to permit
both completion of new capital facilities and, most importantly, operation of the planned
services in a sustainable manner. The successful assumption of the existing ferry services
provided by Vallejo and Alameda and the creation of new services as provided in WETA's
Implementation and Operations Plan are additional ways to measure WETA's success over
the next several years. WETA's achievements in marketing ferry services on the Bay and
increasing ferry ridership over the same period can also be a significant measure of our
success.
WETA's progress can also be determined by our continuing to build a strong constituency of
stakeholders who are convinced that the ferry is a smart, efficient and environmentally
sound way to cross the Bay. WETA has continued with a Community Advisory Board, made
up of representatives of each of the major bay area cities and counties. WETA also enjoys
the broad-based support of the San Mateo County Transit Advocates, who provide input and
support for ferry service in San Mateo County. WETA will continue working with these
stakeholder groups and seek to form similar transit advocacy groups in Contra Costa County
and other counties as ferry services in these areas moves closer to reality.
3. Asa member of both the former San Francisco Bay Area Water Transit Authority
(WTA) and the new WETA, what do you see as the strengths and weaknesses of the
new authority as opposed to WTA?
The governing structure provided in the current legislation has increased our efficiency.
Additional changes may be required or helpful as the Authority matures. In addition,
WETA's expanded responsibilities regarding emergency response provide possible
enhanced funding opportunities. As our system grows, it will be important that WETA
remain accountable to the various stakeholders in the system, such as ferry passengers,
local governments and those organizations charged with response to manmade or natural
disasters.
Strategic Planning
4. Is WETA on track to complete the transition/consolidation plan and the emergency
water transportation system management plan by July I, 2009? What steps have been
taken to date?
• Yes, WETA is on track to complete both plans by July 1, 2009. As required by the
legislation, WETA is developing an internal draft of the Transition Plan for transfer of the
City of Vallejo and the City of Alameda ferry service assets to WETA, with input from the
primary stakeholders including the cities of Vallejo and Alameda and MTC. The Plan is
scheduled to be prepared and adopted by July 1 of this year under the requirements of SB
1093. Following completion of the internal document review, WETA staff will release the
draft Transition Plan to the public for comment in March.
• The Emergency Water Transportation System Management Plan is also being drafted
with input from a variety of Bay Area Emergency Management and Response
organizations, including the State Office of Emergency Services and MTC. Once the
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JAN-27-2009 15:35 P-04
internal draft and review is completed, this plan will also be released for public comment in
March.
Local Concerns
5. Have the concerns of Vallejo and Alameda officials been addressed by SB 1093? Is
WETA working with those officials to help facilitate a smooth transition?
• Yes, WETA is working with both cities to achieve a smooth transition. Both cities
ultimately agreed to the language in SB 1093, following extensive discussions between
representatives of the cities and WETA. We believe the cities' concerns were addressed
by the bill, since both cities supported passage of the legislation.
• With respect to the second question, we anticipate that the draft Transition Plan will
address substantially all the issues raised by the cities of Alameda and Vallejo and that,
subject to reaching agreement with the cities on any open issues, WETA will be
successful in meeting the deadline established by SB 1093.
• The Cities of Vallejo and Alameda are closely involved with WETA in preparing the
Transition Ran and, along with WETA and MTC, make up the core planning team
members. The Core Transition team has been meeting regularly as a group and
individually with our consultant to ensure their concerns are reflected in the Transition
Plan. Once the draft plan is completed, public hearings on the Plan will be held in
Vallejo, Alameda and San Francisco to solicit broad based public input.
6. At the August 21, 2008, meeting, the board conducted a closed session on the Vallejo
litigations What is the status of the City of Vallejo's lawsuit against the state?
The lawsuit has been dismissed "with prejudice" against all the defendants, including both
the state and WETA. By dismissing the case "with prejudice" the City of Vallejo has legally
waived its right to file another lawsuit asserting the same claims. The dismissal of the
lawsuit followed a several month period after the filing of the lawsuit during which the parties
agreed to stay further proceedings in the litigation, pending the outcome of the Legislature's
deliberation on SB 1 093. Following enactment by the Legislature and signature by the
Governor of the bill, the parties agreed that since the legislation had substantially addressed
the issues raised in the litigation, the case should be dismissed.
Proposition 1B Funding
7. Has WETA received these Proposition 1B funds? What is the status of the projects
that are targeted for Proposition IB funding?
• Yes, WETA has received an award of $25 million Prop 1 B funds to support the projects
outlined. However, these funds are available on a reimbursement basis, so only a portion
of the $25 million has been received to date.
• Through December 14, WETA spent $785,000 on Prop 1 B project activities and has
requested Proposition 1 B reimbursement for this same amount.
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• WETA received notice from OHS on December 23 that all Proposition 1 B funds were
suspended from December 15 forward. WETA has, in turn, suspended work on contracts
associated with projects funded with Proposition 1B. The effect of this is as follows:
• Environmental investigation of Richmond, Redwood City, Antioch and Martinez service
sites has been suspended;
• Preliminary investigation of a Central Bay Maintenance facility site and system floats
(maintenance barge and floats) has been suspended;
• South San Francisco terminal construction advertisement is on hold until funding
options or alternatives to Proposition 1 B can be identified and secured.
• South San Francisco vessel construction is proceeding with other funding sources for
now, but delivery of vessels could ultimately be delayed without Proposition 1B funds.
• WETA staff continues to work with Vallejo staff on finalizing plans for the North
Bay/Vallejo maintenance facility site. Sufficient other funds are available to keep the
project design moving forward in the short-term while Proposition 1 B funds are
suspended.
• Final terminal design work has not yet started for the Berkeley or Hercules projects as
they are still under environmental investigation and review. Provided that Proposition
1B funds are available, design work for Berkeley could begin as early as Summer 2009
for Berkeley and in Winter 2009 for Hercules.
8. Does WETA plan to apply for additional Proposition 1B funding?
•
Yes, consistent with the Office of Homeland Security's grant application process and
timeline, WETA submitted applications for an additional $25 million ($50 million total) FY
2008/09 Proposition 1B funds in December 2008, to support the following program of
projects:
Project Amount
1. Preliminary Investigation/Environmental Review 1 ,250,000
Redwood City, Richmond, Antioch and Martinez
2. Final Design for Berkeley Terminal/Service 2,500,000
3. SF Berthirg Facilities 4,000,000
4. Maintenance Barge and Berthing/Floats 10,250,000
5. Maintenance Facilities 7.000,000
Total 25,000.000
• This program largely compliments the FY 2007/08 program and serves to further
WETA's program to expand ferry operating capacity on the San Francisco Bay.
• Project review was completed with WETA and OHS staff on December 1 9. However,
final grant award has not been made by OHS due to the Proposition 1B program
suspension.
Other Sources of Funding
9. Has WETA submitted an application to MTC for the $600,000 in Regional Measure 2
funds? How quickly do you anticipate that MTC will allocate the funds? Does WETA
have a specific expenditure plan for these funds?
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JAN-27-2009 15=36 P-06
• Yes, WETA has submitted an application for the $600,000 in RM2 funds to support
Transition expenses associated with the consolidation of existing Vallejo Baylink and
AOFS ferry services under WETA management.
• MTC took action to allocate these funds to WETA on November 26, 2008.
• These funds will be used to pay for WETA and city staff time, attorneys and consultants
required to develop the transition plan, and any other reasonable expenses incurred by
the cities to support the transition effort, as required per SB 1093.
• While the funds allocated were flexible, WETA estimated the $600,000 expenses to be
approximately as follows:
$250,000 Consultant Assistance
$325,000 Staff/Attorney Assistance
$ 25,000 Other Miscellaneous Expenses
10. Has WETA submitted an application to MTC for the $750,000 in Regional Measure 2
funds? Please describe the Spare Vessels Program and how the anticipated funds
will be spent
• Yes, WETA has submitted an application for the $750,000 in RM2 funds to support the
Spare Vessel Operating Program and received an award of funds in November 2008.
• To provide some background, regional Measure 2 (RM 2) provided capital funds to
support construction of two spare vessels for use by WTA and/or other ferry operators in
the Bay Area providing public transit ferry services. In April 2006, WTA entered into a
contract with Nichols Brothers Boat Builders to build two 1 50-passenger ferry vessels to
serve as the spare vessels envisioned in RM2.
• At the time that the contract was awarded, WTA envisioned that the delivery date of these
vessels was such that they would likely first be used in WTA's new South San Francisco
(SSF) service until SSF vessels could be built. However, the SSF terminal construction
has been delayed and service will not likely start until late 2010, which required WETA to
develop an alternative plan for use of the spare vessels.
• WETA developed a spare vessel utilization plan that prioritizes providing the WETA spare
vessels to the City of Alameda for use in their contract services with Blue and Gold and
Harbor Bay Maritime for the provision of Alameda/Oakland and Harbor Bay ferry services,
respectively. WETA's bareboat charter agreement with the City of Alameda placed the
Gemini into Alameda/Oakland ferry service shortly after delivery in December 2008.
Gemini has also been used by Blue and Gold to support public transit ferry services
between Tiburon and San Francisco. The bareboat charter agreement for Pisces will
place it into Harbor Bay Ferry Service upon delivery in March 2009.
• WETA's interest in utilizing bareboat charters for the spare vessels is to ensure that the
vessels are operated in service during the first year warranty period. This will allow
identification and correction of any engineering or operating issues with the new vessels,
which, per the warranty, will be paid for by the vessel manufacturer. This also allows
WETA the opportunity to identify design changes to improve future vessel plans.
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• The Alameda/Oakland and Harbor Bay ferry services managed by the City of Alameda
have limited operating revenues to support day-to-day operations. WETA's approach to
the bareboat charter of its spare vessels have been to secure additional available RM2
funds to support the incremental cost of utilizing the spare vessels in the City of Alameda
services, so that this is a "no cost" endeavor for the City.
• The expense items associated with utilizing the spare vessels in City of Alameda services
include activities to modify terminal facilities to accommodate WETA vessel design and
the added cost of housing and operating these additional regional vessels. Identified cost
items are as follows:
i. Harbor Bay maintenance dredging
ii. Float/Ramp modifications
iii. Float additions
iv. Harbor Bay maintenance augmentation
v. Crew training
vi. Urea storage and use
vii. Hull insurance
• An additional benefit of the program is that by prepanng the facilities and services to use
WETA vessels, in the event of an emergency, the vessels will be available for
redeployment in support of emergency response measures.
11, Given that current statute does not provide for state funding for WETA, and that the
Legislature—for the second year In a row—redirected 2008-09 transit funds to General
Fund programs, what other sources of funding is WETA pursuing at the local and
regional levels?
• Current statute does not prohibit WETA from receiving state funding. However, state
sources such as Transportation Development Act (TDA) and State Transit Assistance
(STA) funds are generally only available to transit systems currently operating services.
As a result, WETA does not currently receive TDA or STA funds, so the redirection of FY
2008/09 transit funds has not had a direct impact on WETA's operating budget this year.
• WETA has anticipated receiving a share of Revenue-based State Transit Assistance
funds in future years, to support the operating and capital needs associated with Vallejo
and Alameda ferry services to be assumed by the organization. A permanent loss of
STA funds to transit in general, would have an adverse impact on WETA's ability to
support the ongoing needs of these systems.
• $18.3 million annual Regional Measure 2 operating funds were approved by the voters
for use to support WETA ferry transit planning and operations. These funds are
provided to WETA by the Metropolitan Transportation Commission through annual
allocation action. In order to address anticipated future operating needs and shortfalls
associated with the Vallejo and Alameda ferry operations, WETA has initiated
discussions with the Metropolitan Transportation Commission staff to secure a higher
level of future year RM2 operating funds than previously provided. These funds should
be sufficient to support system operation in the next few years, provided that MTC allows
for the maximum flexibility in the use of these funds.
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JAN-27-2009 15:36 P-08
Federal Economic Stimulus
12. Is WETA positioning itself to take advantage of an economic stimulus package
passed by the federal government in 2009? Has WETA begun Identifying projects or
programs that such federal dollars could be used for in California? If so, could you
identify those priorities?
• Yes, WETA is positioning the agency to take advantage of a future (2009) economic
stimulus package. Projects have been identified and submitted to both our local
metropolitan planning organization, MTC, and to Caltrans.
• The projects that have been submitted that would benefit from the federal dollars are:
i. Ferry Vessel Repower and Rehabilitation
ii. South San Francisco Ferry Terminal construction (impacted by the loss of Prop
1 B funds)
iii. South San Francisco Vessel construction (impacted by the loss of Prop 1B
funds)
iv. North San Francisco Bay Maintenance Facility construction
v. New Ferry Vessel construction (for Berkeley/Albany - San Francisco service)
vi. Ferry Terminal construction (Berkeley/Albany)
vii. Rehabilitate/Replace existing ferry terminal floats (impacted by the loss of Prop
1B funds)
viii. Central San Francisco Bay Maintenance Facility
ix. San Francisco Ferry Terminal and Berthing expansion (impacted by the loss of
Prop 1B funds)
•
WETA is also working with our legislative advocate in Washington, DC to help ensure that
the Federal Ferry Boat Discretionary Program is the recipient of a portion of the Stimulus
Package funds when they become available.
Transportation in a Post-AB 32 World
13. Given the climate change goals ofAB 32 and SB 375, as well as evidence of the
negative health effects of air pollution from mobile sources, how do you recommend
incorporating air quality and climate-change concerns into the planning and
programming of WETA projects?
• Prior to the passage of AB 32 and SB 375, WETA proved itself as a leader in emission
reduction as in 2002 the WETA required that all newly constructed ferryboats to have
exhaust emissions that were 85% better than EPA Tier II (2007) standards.
• It is important to note that even the California Air Resources Board (CARB) utilized the
WETA emission reduction mandate as the standard for their newly enacted (01 January
2009) Commercial Harborcraft Regulation.
• WETA is well ahead of the current legislation in addressing climate-change concerns by
incorporating emission reduction mandates into the planning and programming of WETA
projects.
14. What role do you think WETA should play in helping to achieve the goals ofA6 32 and
SB 375?
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P. 09
,^27-2009 15--36
The role WETA should play is to continue being a leader in emission reduction within the
maritime sector. Not only did WETA successfully implement the most stringent emission
reduction mandate on all our newly constructed ferries, but WETA also continues to
research new technologies such as fuel cells, and test existing technologies, such as solar
panels, to determine their technical feasibility, economic practicality and environmental
responsiveness operating in the hostile marine environment.
Again, please do not hesitate to contact me should you have any additional questions. I
appreciate the opportunity to serve on the WETA Board.
Sincerely,
Anthony J. Intintolt; Jr. Is
Vice Chair, WETA Board of Directors
TOTAL P.
V X ' i- U/ LVVO
wwz
A Professional Corporation
Law Offices
HALUSEY AND JOHNSON
300 Montgomery Street
San Francisco, California 94104
415-03-5300
January 28, 2009
Hon. Darrell Steinberg
President Pro Tern
Chair
Senate Rules Committee
Room 420, State Capitol
Sacramento, CA 95814
Attn: Nettie Sabelruuis
Appointments Director
Subject: Senate Rules Committee Confirmation Hearing of Chariene Haught
Johnson as Chair of the Board of Directors of the Water
Irinergency Transportation Authority
Dear Ms. Sabelhaus:
As requested by President Pro Tern and Chair of the Senate Rules, Hon. Darrell
Steinberg in his letter of January 8, 2009, please find enclosed my responses to the 14
questions propounded. I also include an updated Form 700 Statement of Economic
Interest which is atta cried.
Statement of Goals
1. What are your goals and objectives as a member of the San Francisco Bay
Area Water Eirnergency Transportation Authority?
The Board has recently adopted its mission statement which reflects my goals and that
of the Board.
"WETA is a regional agency with responsibility to develop and operate a
comprehensive EBay Area public water transportation system and to provide water
transportation services in response to natural or manmade disasters. We will
establish and operate regional ferry service that connects communities, reduces
congestion and provides an emergency response capability."
My objectives and goals to implement the mission statement are:
Senate Ruies Committee
29
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A. I want to establish an affordable world class commuter ferry service for the
Bay Area.
B. 1 want to increase the Bay Area's emergency response capabilities through
the availability and use of ferries for commuter service, and stand alone projects
designed specifically vor emergency response.
C. I want to consolidate the Vallejo and Alameda ferry services and all future
new commuter ferry s ervices under WETA
D. I want sufficient funds to accomplish all of the foregoing and enough money to
further expand the system as time goes by.
E. I want WETA to receive funding, like most transit agencies, up front rather
than on a reimbursatle basis in recognition of WETA's cash flow constraints. This
would allow WETA tc operate professionally and to expedite project delivery.
F.I want to Increase regional mobility by adding 7 new ferry routes to triple ferry
ridership by 2025. Our initial focus is on implementing ferry service from South San
Francisco to Oakland's Jack London Square and ferry service from Berkeley/Albany to
San Francisco.
G. Coordinate emergency activities for all water transportation services in
cooperation with MTC and other agencies consistent with the provisions of a
Emergency Water Tiansportation Plan to be adopted by July 1 , 2009
H. Consolidate Vallejo and Alameda Ferry Service under WETA, consistent with
the provisions of a Transition Plan to be adopted by July 1, 2009
I. Provide the infrastructure to deliver the above priorities. The infrastructure
includes additional docks at the San Francisco Ferry Terminal and Oakland's Jack
London Square, and additional fueling and maintenance facilities
2. What do you hope to accomplish during your tenure? How should we
measure your success?
I want to continus building public support for the commuter ferry service and an
awareness about :he importance of water transit for improved emergency response
and regional mobility. This means we must work to accomplish the following:
• Remain a leader in building the most environmentally friendly ferries in the
nation. In December, 2008, we held a highly successful press conference, boat
christening and open house to announce the launch of our first ferry, Gemini.
Congresswoman Barbara Lee, Matthew Bettenhausen, Director of the Governor's
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Office of Homeland Security, Bill Dodd, Chair of MTC's Board of Directors, and
Diane Howard, Chair of WETA's Community Advisory Board were on hand to
christen Gemini in San Francisco. In local, state, and national press Gemini has
been heralded es meeting the most stringent emissions requirement of ferry in the
nation. With the: arrival of our next ferry, Pisces, in March, 2009 and two more
vessels by the end of 2009, WETA will have built four new ferries- more than have
been built for th'2 bay area in the last 10 years. Gemini and Pisces will initially be
used on regular ferry runs on the Tiburon and Alameda/Oakland routes and as
spare vessels in the event of an emergency. The four WETA vessels will
eventually be available for use on the South San Francisco and Berkeley/Albany
ferry routes whein these ferry services begin.
Consolidate Vallejo and Alameda ferry services under WETA. As stated in
question # 4 below, the legislature mandated a Transition Plan which will be
completed by July, 2009. Working with the Cities of Vallejo and Alameda, we hope
to create a seamless and efficient transition that maintains and ultimately
increases ferry ridership. We want to continue the excitement around ferries for
water transit by focusing on ferry commuting as a smart and efficient transit option.
• Increase the role of ferries in improving regional mobility and our region's
emergency response capability. We will continue to work on delivering new ferry
routes, focusincj initially on South San Francisco and Berkeley/Albany ferry
services, and related infrastructure. The role of ferries in emergency response will
be highlighted in our Emergency Response Plan, which will be completed July,
2009.
• Continue building WETA's broad coalition of stakeholder support for ferries.
WETA has a Community Advisory Committee (CAC), made up of elected officials
from each of the major bay area cities and counties, which was established with
WTA. The CAC will continue to provide input to WETA has we move forward with
expanded and more comprehensive ferry service. WETA enjoys broad-based
support from county-wide water transit advocacy groups like the San Mateo
County Transit Advocates who provide input and support of ferry service. WETA
will continue to work with these advocacy and other stakeholder groups.
All of these goals; can only be realized if we can find additional funding sources. We
need additional capital funds to continue to build new ferries, terminals, docks
maintenance and Fueling facilities, and additional operating funds to operate existing
and expanded planned services in a sustainable manner. As discussed below, we
will continue to look for additional local, state and federal funding sources and in the
short term we hcpe that Prop 1 B funds are released soon so that our current
projects are not mpacted further or further delayed.
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3. As a member of both the former San Francisco Bay Area Water Transit
Authority (WT A) and the new WETA, what do you see as the strengths and
weaknesses c f the new authority as opposed to WTA?
I appreciated the leadership and support from the previous WTA Board, which included
a broad cross section of highly experienced elected officials, union leaders,
environmental and transit professionals. The broad perspective was important to
shaping the mission of WTA from infancy and, garnering stakeholder support. While we
now have a smaller board, the current WETA board members bring similar experiences.
Also the continuity provided by two additional former WTA Board members is a strength
of the current board. Given that our mission has expanded, a smaller board makes it
easier to leverage each other's strengths and move forward more efficiently. This
structure will be even more important as we work towards consolidating Vallejo and
Alameda ferry service. Our expanded stakeholders will include ferry passengers, more
local governments and those organizations charged with response to manmade or
natural disasters. Ar experienced, nimble Board will be critical to our success at being
responsive to their ne;eds.
Strategic Planning
4. Is WETA on truck to complete the transition/consolidation plan and the
emergency waiter transportation system management plan by July I, 2009?
What steps have been taken to date?
Yes, we are on track to complete both plans as required. Drafts of the Transition
Plan and Emergency Response Plans are nearing completion, with ongoing input
from the cities of Vallejo and Alameda, MTC and a variety of Bay Area Emergency
Management and Response organizations, including the State Office of Emergency
Services and MTC . Following completion of internal draft reviews and discussions at
a WETA Board meeting in early March, WETA will release the draft Transition and
Emergency Response Plans for public comment. Public hearings are scheduled in
Alameda, Vallejo and San Francisco (as part of WETA's Community Advisory
Committee meet ng) in March. Comments will then be incorporated and adopted by
July 1,2009.
Local Concerns
5. Have the concerns of Vallejo and Alameda officials been addressed by SB
1093? is WETA working with those officials to help facilitate a smooth
transition?
Yes, WETA worked closely with Vallejo and Alameda on the language in SB 1093,
which addressed Vallejo and Alameda concerns. In developing the Transition Plan,
WETA recognized that a smooth transition would only be possible if Alameda and
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Vallejo helped us to draft the Transition Plan. Hence, WETA staff and consultants
formed a Core Transiiion Team, comprised of the Cities of Vallejo, Alameda and MTC
who have been meethg regularly as a group and individually, on the Transition Plan
contents since we began. In this way we anticipate that the cities' concerns are being
addressed as the Transition Plan is being developed. Alameda and Vallejo staffs also
attend WETA Board meetings. We will continue to solicit input from Alameda and
Vallejo officials, ferry iders and community groups at the public hearings described
above.
6. At the August 21, 2008, meeting, the board conducted a closed session on the
Vallejo litigation. What is the status of the City of Vallejo's lawsuit against the
state?
Once SB 1093 passed the legislature and the Governor signed the bill, all parties
agreed that all issued raised in the litigation were addressed. Vallejo subsequently
dismissed its action 'Vith prejudice" In so doing Vallejo legally waived its right to file
another lawsuit asseiting the same claims.
Proposition 1 B Funding
7. Has WETA received these Proposition 1B funds? What is the status of the
projects that are targeted for Proposition 1B funding?
Yes.WETA has received an award of $25 million Prop 1B funds for fiscal year 07/08.
However, these funds are only available on a reimbursement basis. As of December 14,
2008 WETA had requested reimbursement for $785,000. On December 23, OHS
notified us that all Proposition 1B funds were suspended from December 15 forward.
WETA has, in turn, suspended work on contracts associated with projects funded with
Proposition 1B. The list of projects originally funded and the status is summarized
below:
• $5 million for environmental studies for Richmond, Redwood City, Antioch and
Martinez ferry service. The environmental studies are suspended.
• $ 5 million for Berkeley/Albany Ferry and Hercules Terminals. Final terminal
design work has not yet started for the Berkeley or Hercules projects as they
are still undisr environmental investigation and review. Provided that
Proposition 1 3 funds are available, design work for Berkeley could begin as
early as sunmer 2009 for Berkeley and in winter 2009 for Hercules.
• $10million for terminal and vessel construction for South San Francisco. South
San Francisco vessel construction is proceeding with other funding sources for
now, but delivery of vessels could ultimately be delayed without Proposition 1B
funds. South San Francisco terminal construction advertisement is on hold until
funding options or alternatives to Proposition 1B can be identified and secured.
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01-28/2009 18:19 FAX
©00'
•
•
$5 million for Maintenance Barges and Emergency Floats. Preliminary
investigation af a Central Bay Maintenance facility site and system floats
(maintenance! lor barge and floats) has been suspended;
$5 million for Maintenance Facility in Vallejo.WETA staff continues to work with
Vallejo staff on finalizing plans for the North Bay/Vallejo maintenance facility
site. Sufficie it other funds are available to keep the project design moving
forward in the short-term whilelB funds are suspended.
8. Does WET A plan to apply for additional Proposition 1B funding?
Yes. We applied lor additional Prop 1B funding for FY 2008/2009 for the following
projects totaling $25 million:
Project Amount
1. Preliminary nvestigation/Environmental Review 1,250,000
Redwood City, Richmond, Antioch and Martinez
2. Final Design :or Berkeley Terminal/Service 2,500.000
3. SF Berthing Facilities 4,000,000
4. Maintenance Barge and Berthing/Floats 10,250,000
5. Maintenance Facilities 7,000.000
Total 25,000,000
These projects build upon our mission of expanding ferry service and related
infrastructure to increase our region's emergency response capability. However, final
grant award is or liold due to the Proposition 1 B funds suspension.
Other Sources of Funding
9. Has WETA submitted an application to MTC for the $600,000 in Regional
Measure 2 fund s? How quickly do you anticipate that MTC will allocate the
funds? Does WETA have a specific expenditure plan for these funds?
Yes. WETA has submitted an application for the $600,000 in RM2 funds to support
Transition Plan expanses associated with the consolidation of existing Vallejo and
Alameda ferry servicer. MTC took action to allocate these funds to WETA on Novembe-
26, 2008.
These funds will be used to pay for WETA and city staff time, attorneys and consultants
required to develop the Transition Plan, and any other reasonable expenses incurred by
the cities to support the transition effort, as required per SB 1093. These expenses
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include: consultant expanses ($250,000); staff/attorney assistance ($325,000); and
other miscellaneous expenses ($25,000).
10. Has WETA submitted an application to MTC for the $750,000 in Regional
Measure 2 funds? Please describe the Spare Vessels Program and how the
anticipated fund:; will be spent.
Yes. WETA submitted an application for the $750,000 in Regional Measure 2 (RM2)
funds to support the Spare Vessel Operating Program. When RM2 was drafted, it
included capital fundi t to support construction of two spare vessels for use by WTA
and/or other ferry operators in the Bay Area providing public transit ferry services.
Hence WTA's first twD 149 passenger vessels- Gemini and Pisces- were to serve as the
spare vessels envisioned in RM2.
Originally, our intent was to put these two vessels into regular service on our new South
San Francisco (SSF) service until South San Francisco vessels could be built and they
would be available a:; spare vessels in the event of an emergency. However, the SSF
terminal construction has now been delayed, and this required WETA to develop an
alternative Spare Vessel Program for day to day use of the Spare Vessels.
Our Spare Vessel Program requires a bareboat charter agreement with the City of
Alameda. This agreement stipulates that WETA spare vessels will be used by the City of
Alameda in their contract services with Blue and Gold and Harbor Bay Maritime for the
provision of Alamedci/Oakland and Harbor Bay ferry services, respectively. This
agreement also ensures that the vessels are operated in service during the first year
warranty period. In 1 his way, engineering or operating issues with the new vessels will be
identified and corrected and design changes to improve new vessels will be identified.
The Alameda/Oakland and Harbor Bay ferry services managed by the City of Alameda
have limited operating revenues to support day-to-day operations. WETA is working to
secure additional available RM2 funds to support the incremental cost of utilizing the spare
vessels in the City of Alameda services so that there are no additional costs to the City.
The specific cost of Jiilizing WETA's spare vessels in Alameda's services is not certain.
WETA and City of Al&meda staffs have estimated the following potential cost items for
each vessel placement: Harbor Bay maintenance dredging; float/ramp modifications; float
additions; Harbor Bjiy maintenance augmentation; Crew training; urea storage and use;
and hull insurance
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11. Given that current statute does not provide for state funding for WETA, and
that the Legislature-for the second year in a row-redirected 2008-09 transit
funds to General Fund programs, what other sources of funding is WETA
pursuing at the local and regional levels?
As discussed above, funding is the primary challenge to our success. We have
staff, and state and federal lobbyists focused on trying to secure expanded revenue
sources. We also sngage the support of our stakeholder groups to work with us to
leverage more funding. Our local and regional funding sources include:
State Sources, Because Transportation Development Act (TDA) and State Transit
Assistance (STA) funds are generally only available to transit systems currently
operating service?., we do not get TDA or STA funds, so the redirection of FY
2008/09 transit funds has not had a direct impact on WETA's operating budget this
year. We do hope* to get a share of Revenue-based State Transit Assistance funds
in future years to support the operating and capital needs associated with Vallejo
and Alameda fern/ services to be assumed by the WETA. A permanent loss of STA
funds to transit in general, will have an adverse impact on WETA's ability to support
the ongoing needs of these systems.
Regional Funds. 2)1.18.3 million annual Regional Measure 2 operating funds were
approved by the voters for use to support WETA ferry transit planning and
operations. Thess funds are provided to WETA by MTC through annual allocation
action. In order to i3ddress anticipated future operating needs and shortfalls
associated with the Vallejo and Alameda ferry operations, WETA has initiated
discussions with MTC to secure a higher level of future year RM2 operating funds
than previously provided. These funds should be sufficient to support system
operation in the next few years, provided that MTC allows for the maximum flexibility
in the use of thess funds.
Local Sales Tax Funds. Ferry Service is included in two current county sales tax
measures; $30 million is included in the San Mateo County Measure A Program
for South San Francisco and Redwood City ferry service. $40 million is included in
the Contra Costa County Measure J sales tax measure for Richmond and/or
Hercules service. Our immediate priority is to secure $15 million in sales tax funding
for the South San Francisco ferry service and we are working closely with San
Mateo County Transportation Authority to secure this funding.
Federal Economic stimulus
12.1s WETA positio ring itself to take advantage of an economic stimulus package
passed by the forleral government in 2009? Has WETA begun identifying
projects or programs that such federal dollars could be used for in California?
If so, could you identify those priorities?
196
Yes. The following projects have been identified and submitted to MTC and to Caltrans
for consideration of 2009 Stimulus Package funds:
• Ferry Vessel Repower and Rehabilitation
• South San Francisco Ferry Terminal construction (impacted by the loss of Prop 1B
funds)
• South San Francisco Vessel construction (impacted by the loss of Prop 1B funds)
• North San Francisco Bay Maintenance Facility construction
• New Ferry Vessel construction (for Berkeley/Albany- San Francisco service)
• Ferry Terminal construction (Berkeley/Albany)
• Rehabilitate/Replace existing ferry terminal floats (impacted by the loss of Prop 1 B
funds)
• Central San Francisco Bay Maintenance Facility
• San Francisco Ferry Terminal and Berthing expansion (impacted by the loss of
Prop 1 B funds)
Transportation in a Fost-AB 32 World
13. Given the climate change goals of AB 32 and SB 375, as well as evidence of
the negative health effects of air pollution from mobile sources, how do you
recommend incorporating air quality and climate-change concerns into the
planning and programming of WETA projects?
Air quality and cliinate-change concerns are already incorporated into the planning
and programming of WETA projects. These concerns were fully addressed in WTA's
Final Implementation and Operations Plan approved by the California legislature in
July, 2003. This plan was built on our two major principles: taking the leadership role
in protecting the hay and developing clean marine technology. As a result WETA's
ferries are 10 timss cleaner than current ferries and achieve unprecedented engine
emissions reduction using existing technology. All newly constructed ferryboats
must include the following features:
• Exhaust emissions that are 85% better than EPA Tier II (2007) standards.
• Incorporate selective catalytic reduction and solar (renewable energy)
technology
• Operate on a blend of biodiesel and ultra low sulfur fuel
14. What role do yen think WETA should play in helping to achieve the goals of AH
32 and SB 375?
In developing our plan for expanding ferry service in the bay area, we built
partnerships with our supporters and found common ground with local environmental
activists and elected officials and other stakeholders to find innovative ways to
approach old problems. As a result, we are leading the nation with cost-effective,
achievable environmental solutions for the challenges of building and operating new
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ferries on the bay. With WETA's leadership, our region came together to develop
ferries that set the benchmark for the entire nation. In fact the California Air
Resources Board (GARB) utilized the WETA emission reduction mandate as the
standard for their n«wly enacted (01 January 2009) Commercial Harbor craft
Regulation.
WETA will continue to be play a leadership role in solving environmental
problems associated with the maritime industry. Our femes will achieve
unprecedented marine engine emissions reduction on all our newly constructed
ferries, and we wi I continue to research the applicability of fuel cells and other new
technologies while expanding the use of existing technologies, such as solar panels,
where applicable and economically feasible as we expand and consolidate bay area
ferry services.
Hopefully, my answers are fully responsive to Senator Steinberg's questions.
I appreciate your consideration and that of the entire Senate Rules Committee.
Should I be confirmed I would look forward to working with you and other elected
offlcals.
Please do not hesitate to contact me should you or the Rules Committee desire
any additional information prior to the February 11 confirmation hearing. I can be
reached at (415) 43c -5300 or hauahtiohnson(@vahoo.com.
Sincerely yours,
CHARLENE HAUGHT^GHNSON
198
Honorable Darrell Steinberg
Senate Rules Committee
State Capitol, Room 205
Sacramento, CA.
Re. February 25 Senate Confirmation hearing for DFG Director Don Koch.
I am writing you regarding Don Koch's confirmation as the Director of the Department
of Fish and Game by the Rules Committee.
I uge a no vote on Koch's confirmation for the following reasons.
First, Koch has failed to proactively address the biggest fisheries crisis in California
history. In 2008, recreational and commercial salmon fishing was closed for the first time
in history in ocean waters off the California and Oregon coast. Recreational salmon
fishing was also closed on the Central Valley rivers, with the exception of a two month
season on a short stretch of the Sacramento. It is expected that the same closures will be
implement this year, since only 66,264 natural and hatchery adult fall Chinooks returned
to the Sacramento River basin in 2008, a record low number.
Just two years earlier in 2006, commercial salmon fishing off California and southern
Oregon was severely restricted, due to the decline of Klamath River salmon spurred by
the Klamath fish kills of 2002, where hundreds thousands of juvenile salmon and over
68,000 adult salmon perished in low, warm conditions.
As part of his disaster proclamation, Governor Arnold Scharzenegger directed state
agencies and departments to take various actions in response to this crisis, including
directing the DFG and the Resources Agency to "address the long term restoration and
management of salmon in California.
I agree entirely with the Karuk Tribe that the Department under Koch's direction has yet
to take any meaningful action to reverse the decline of salmon.
Second, the DFG still has not started a process a process to comply with a December
2006 court order to complete an environmental analysis and overhaul of its regulations
governing suction dredging mining practices. To address the mining's impact upon coho
salmon and other ESA listed species, a coalition of fishery, tribal, environmental and
watershed groups petitioned the DFG for emergency interim rules.
However, the DFG Director denied the petition, in apparent denial of the dire strait of
California's steelhead and salmon populations.
Third, the DFG Director has refused to support long overdue logging reforms needed to
prevent the extinction of coho salmon in California, in spite of the fact that the National
Marine Fisheries Service has documented a 73 percent decline in returning adults in
2007-2008 compared to the same cohort in 2004-2005.
199
I agree entirely with California Trout that "Mr. Koch ignored sound science, capitulated
to the forestry industry, and allowed logging interests to supersede those of the natural
resources with which he is charged to protect and restore."
Fourth, Mr. Koch has failed to provide the leadership necessary to address litigation that
the Department conduct an environmental review of its fish planting programs. As a
result, nearly 175 lakes will no longer receive fish plants, creating economic devastation
to mountain and foothill communities that depend on trout fishing for their livelihood.
This could have been avoided if Mr. Koch had been "more pro-active, strategic and
forward looking," in the words of California Trout.
Fifth, the Department of Fish and Game's fall 2008 midwater trawl survey on the
California Delta documented the lowest ever recorded abundance of Delta smelt,
Sacramento splittail, threadfin shad and American shad and an alarmingly low abundance
of longfin smelt and juvenile striped bass. These fish are headed over the abyss of
extinction unless the DFG takes a more aggressive, more proactive approach to *Hfraag O :£>CSM-V
VjOV\ W the three main factors responsible for this decline (1) increases in water exports (2) toxics
and (invasive species).
I urge a no vote on Koch's confirmation for his failure to proactively address the salmon
crisis, support badly needed restrictions on suction dredge mining practices, adopt timber
harvest regulations that protect and restore coho salmon, conduct a timely review of trout
planting programs and take action to reverse the Delta Pelagic Organism Decline.
At the same time, I urge the Senate to conduct investigative hearings into Department of
Fish and Game operations and management structures in order to make the DFG a more
effective organization that better serves the public trust. After all, the mission of the DFG
is "to manage California's diverse fish, wildlife and plant resources and the habitats upon
which they depend, for their ecological values and for the use and enjoyment of the
public."
Perhaps the DFG needs to become separated from the Resources Agency so that the
Department of Water Resources doesn't play such as huge role in influencing DFG
decisions.
Thanks
Dan Bacher
Editor, Fish Sniffer Magazine
3201 Eastwood Road
Sacramento, CA. 95821
(o) 916-487-4905
200
BeDai-titjent of Natural Resources
JKsm
Orleans Medical Clinic
39051 Highway 96 ^-— — -^J— ^ -2^7-^3^ -2^T~^ 39051 HlghW&y %
Post Office Box 282 ^^^ ^^ -^^ ^*^ Post Office Box 282
Orleans, CA 95556 " O*1*™*' CA 95556
Phone:(530)627-3446 , . ..^tj., r «cp Phone:(530)627-3452
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Fax: (530) 627-3448 Phone:(530)493-1600 • Fax: (530) 493-5322 V '
64236 Second Avenue • Post Office Box 1016 • Happy Camp, CA 96039
February 25, 2009
Karuk Tribe Testimony before Senate Rules Committee
RE: Confirmation of Don Koch as California Fish and Game Director
Introduction
My name is S. Craig Tucker and I am a Natural Resources Policy Advisor for the Karuk
Tribe.
I have a Ph.D. in Biochemistry from Vanderbilt University but have worked for the past
ten years as an advocate for environmental and social justice for several organizations.
For the past five years I have been a full time employee of the Karuk Tribe, the second
largest federally recognized tribe in California with over 4,200 members.
Many Karuk Tribal members still reside in aboriginal territory which comprises over 1 .4
million acres of land in what is today Siskiyou and Humboldt counties. Over 90 miles of
the Klamath River and hundreds of miles of tributaries flow through Karuk aboriginal
territory. The Karuk Tribe was federally recognized in 1 979 however Tribal oral histories
as well as anthropological evidence indicate that the Karuk are among California's first
residents.
Fisheries in Decline
Today California's salmon and trout populations are in steep decline. Numerous recent
scientific studies and news reports tell us that many species are on the brink of extinction
and runs of commercially valuable fish are so low that recreational and commercial
fishing seasons are being restricted or completely banned regularly.
This has a significant economic impact on California at a time when state government
and local businesses struggle to contend with an international economic crisis. The
economic impacts from loss of sport-fishing opportunities alone may reach the billions of
dollars. According to the American Sport-fishing Alliance, There are 2.4 million licensed
anglers in California who support annual fishing equipment sales of $2.4 billion per year.
The sport fishing industry's economic impact on the state is $4.9 billion annually.
201
The sport- fishing industry supports a total of 43,000 jobs amounting to $1.3 billion in
wages and salaries annually.
The commercial fishing industry contributes billions more.
For Native Tribes such as the Karuk the loss transcends economics. The Karuk's cultural
identity is inseparable from the salmon. Karuk cultural and traditional religious practices
revolve around the annual returns of salmon, steelhead, sturgeon and lamprey. Many
members of the Karuk and neighboring tribes rely on subsistence fishing to keep food on
their families' dinner table.
Suction Dredge Mining
There are many factors contributing to the decline in fish populations and Mr. Koch
cannot solve the entire problem by himself. But he can take responsibility to address
factors under his control. In Mr. Koch's case, one such factor is suction dredge mining.
Suction dredges are powered by gas or diesel engines that are mounted on floating
pontoons in the river. Attached to the engine is a powerful vacuum hose which the
dredger uses to suction up the gravel and sand (sediment) from the bottom of the river.
The material passes through a sluice box where heavier gold particles can settle into a
series of riffles. The rest of the gravel is simply dumped back into the river. Often this
reintroduces mercury left over from historic mining operations to the water column
threatening communities downstream. Depending on size, location and density of these
machines they can turn a clear running mountain stream into a murky watercourse unfit
for swimming.
Suction dredge mining is almost exclusively a recreational activity popularized by mining
clubs.
Fish and Game's Suction Dredge Program does not comply with state law
Fish and Game Code Section 5653 authorizes the Department of Fish and Game to issue
permits for in-stream suction gold dredge mining, but only after it has determined that the
operation, pursuant to regulations it has adopted, will not be deleterious to fish and
amphibians.
In the last 1 5 years, a number of California species impacted by suction dredging have
been given special and protected status, including coho salmon, chinook salmon, some
runs of steelhead, green sturgeon, Klamath River lamprey, river lamprey, hardhead,
arroyo toad, speckled dace, red-legged frogs, and yellow-legged frogs. But the
regulations have not been changed to protect these fish and amphibians.
In 2006, the department itself admitted in sworn statements that suction dredge mining in
the Klamath, Scott and Salmon river watersheds under existing regulations was having a
deleterious effect on Coho salmon and therefore the department was "not in compliance"
with Section 5653 (attached).
202
The department agreed in a court settlement that it would revise the regulations by July
2008. The CEQA review for that revision has not even started; new regulations are years
away.
After filing suit over this issue in 2005, winning, and yet not realizing any immediate
changes to status quo mining operations to date, the Karuk Tribe along with Cal Trout
and others supported AB 1032 in 2007. This legislation would have essentially enacted
modest restrictions on where and when suction dredge mining could take place. The goal
of AB 1032 was to protect the most critical habitats of ESA listed species and species of
'special concern' under the California Endangered Species Act.
AB 1032 passed the legislature, but the Governor refused to sign it arguing that the
Department of Fish and Game already has authority to enact restrictions on suction
dredge mining. The Governor's veto message reads in part:
"Current law gives the Department of Fish and Game the necessary
authority to protect fish and wildlife resources from suction dredge
mining. It has promulgated regulations and issues permits for this
activity. Permits for suction dredge mining must ensure that these
operations are not deleterious to fish and allow the Department to specify
the type and size of equipment to be used. In its regulations, the
Department may also designate specific waters or areas that are closed to
dredging. "
So not only do we assert that as Fish and Game Director Mr. Koch has the legal authority
to protect fish from suction dredge mining, the Governor does too.
Fish and Game's Suction Dredge Program does not comply with federal law
In addition, the Department's own regulations require suction dredge permit holders to be
in compliance with federal law. This was a condition adopted in the 1993 DFG
biological opinion to avoid jeopardy to special status species. Suction dredging is an
activity regulated by the federal Clean Water Act, in particular section 402. No section
402 (discharge) permit has ever been issued, either on a general or individual basis, for
suction dredging activities in the state. This means that all permit holders have been in
violation of federal law, yet the Department has failed to enforce this condition and
continues to issue permits with full knowledge of this fact.
Taxpayers subsidize suction dredge program
Finally, it is worth noting that while we are the midst of not only a fisheries crisis but a
financial crisis, the Department operates the suction dredge program at a loss - the
Department has said that it spends $1.5 million annually administering the program, but
only takes in $200,000 in permit fees. This means that taxpayers are subsidizing the
destruction of their own fisheries resources!
203
While all of you were desperately finding ways to close the states budget gap, making
painful decisions on what programs to cut and how to increase revenues, the Department
failed to help by cutting the dredging program.
CEQA is not required to change suction dredge rules
Recently, it has come to our attention that some Department staff are arguing that they
can't change the rules or simply cut the program altogether without a CEQA process.
We assert that this is not a legally viable argument. Fish and Game Code sections 5653
and 5653.9 only authorize the issuance of permits if the Department first makes the
determination that no deleterious impact is caused to fish from suction dredge mining.
The Department has made the express determination that deleterious impact does, in fact,
cause harm to fish, including endangered fish such as the Coho salmon. Therefore the
Department does not have the authority to issue permits - and their continued issuance of
permits violates both the Fish and Game Code and CEQA.
An agency does not do a CEQA review to determine ifiX should comply with the law. It
does an environmental review to determine how to comply with the law.
Conclusion
For the above stated reasons, the Karuk Tribe humbly urges this committee to not take a
vote to confirm Mr. Koch until and unless he takes action to halt further issuance of
suction dredge permits and he rescinds and refunds any existing permits issued to miners
for ~ 2009.
204
»
State Water Resources Control Board
Executive Office
Tarn M. Doduc, Board Chair Arnold Schwarzenegger
Linda S. Adams ]00l ] s,,^ . Sacramento, California 95814 • (916) 341-5615 Governor
Secretary for Mailing Address: P.O. Box 100 • Sacramento. California • 95812-4)100
Environmental Protection Ftx (0,6) 341 -5621 • httpV/www waterboards.ca.gov
December 18, 2007
California Department of Fish and Game
Attn: Suction Dredge Mining Program
1416 Ninth St., 12th Floor
Sacramento, CA 95814
To Whom It May Concern:
RESPONSE TO DEPARTMENT OF FISH AND GAME REQUEST FOR INFORMATION
REGARDING SUCTION DREDGE MINING
Thank you for the opportunity to comment on the potential environmental impacts of
suction dredge mining on water quality. The State Water Resources Control Board (State
Water Board) and the nine Regional Water Quality Control Boards (Regional Water
Boards) implement programs established by Federal and State laws to protect beneficial
uses of California's surface water and groundwater. As such, we have become aware of
environmental concerns regarding pollution from suction dredge mining activity. In
response to these concerns, the State Water Board held a public workshop on June 12,
2007 to take public comment on the effects of suction dredge mining on water quality. The
workshop was well attended, and in conjunction with that workshop, the State Water Board
received nearly 200 written comments. We appreciate Department of Fish and Game
(Department) staffs attendance at that workshop.
Many of California's rivers and streams are listed as impaired under Clean Water Act
section 303(d) because they are not currently meeting water quality objectives for mercury
and sediment. There are approximately 6,900 stream miles that are listed as impaired for
mercury or sediment, most of which are listed as impaired for sediment. We are especially
concerned that no further degradation of water quality occur in these streams due to
suction dredging activities, which contribute to both mercury and sediment impairments.
Suction dredge mining should be regulated to control impacts to beneficial uses of the
State's waters. Many of these beneficial uses are based on the need to protect habitat of
fish, including rare, threatened, or endangered species. Suction dredging causes localized
California Environmental Protection Agency
£% Recycled Paper
205
To Whom It May Concern
plumes of sediment (turbidity plumes). Turbidity plumes are known to cause significant
environmental impacts in surface waters by burying or interfering with the life processes of
biota and otherwise contributing to sediment impairment. Suction dredging also results in
disturbance or removal of stream gravels, which eliminates spawning habitat, and may also
destroy juvenile fish or eggs within the gravels.
Suction dredging should also be regulated to control impacts from mercury remobilization
and transport in streams. We consider mercury pollution to be a high priority because of
health risks due to bioaccumulation in fish consumed by humans and wildlife. Additionally,
there are significant environmental justice concerns with respect to consumption of
contaminated fish. Mercury is both a naturally-occurring and human-added contaminant in
California's water bodies. Research suggests that most mercury is bound to sediment but
appreciable amounts are found as a liquid (its elemental state). Suction dredging re-
suspends mercury-enriched sediment and "flours" elemental mercury into tiny droplets
which are both easily transported downstream. This mercury can be expected to re-
deposit in environments where it is converted to methyimercury, which then enters the
benthic food web. Methyimercury is then concentrated as it is taken up through the food
chain beginning in bottom-dwelling organisms and eventually affecting fish that is
consumed by humans.
In October the Governor included the following message when he vetoed Assembly Bill
1032 (Wotk): "Permits for suction dredge mining must ensure that these operations are not
deleterious to fish and allow the Department to specify the type and size of equipment to
be used. In its regulations, the Department may also designate specific waters or areas
that are closed to dredging. It is unclear why this bill specifically targets a number of
specific waterways for closure or further restrictions. The listed waterways represent only a
small fraction of the waters in our State where suction dredging is occurring. The benefit or
protection from such a minor closure is negligible and supports the notion that scientific
environmental review should precede such decisions." State Water Board staff support the
Governor's message and are coordinating with the Department with the ultimate goal of
protecting all, not just a small fraction, of the waterways that are threatened by this activity.
We are pleased to have begun to explore with Department staff an integrated approach for
regulating suction dredge mining within available resources. While the Department's
program focuses on protecting fish and aquatic habitat (Fish & G. Code, § 5653.), the State
Water Board would pursue water quality protection based on the Clean Water Act
(33 U.S.C. § 1342(aX1)) and the Porter-Cologne Water Quality Control Act (Wat. Code,
§§ 13160, 13263, subd. (a).). By coordinating our regulatory programs, we hope to
achieve stronger protections for the aquatic environment, as is our mutual concern. We
also hope to accomplish administrative and enforcement efficiencies, given our limited
resources.
California Environmental Protection Agency
ffi Recycled Paper
206
To Whom It May Concern
Thank you again for the opportunity to comment. Should you have any questions or need
further assistance, this issue is under the direction of Ms. Elizabeth Haven, Acting Deputy
Director of the Division of Water Quality, State Water Board, and she can be reached at
(916) 341-5457 (lhaven@waterboards.ca.gov).
Sincerely,
Dorothy Rice
Executive Director
California Environmental Protection Agency
££ Recycled Paper
207
fom
Smallest fall run of Chinook salmon
recorded
Jane Kay, Chronicle Environment Writer
Wednesday, February 18, 2009
(02-18) 20:50 PST - The smallest number of Pacific Ocean salmon ever
recorded swam back to the Sacramento River via San Francisco Bay last fall, the
latest evidence of the decline of the storied fish along the West Coast, officials
said Wednesday.
The Pacific Fishery Management Council, a federal body that regulates
commercial and sport fishing, estimated that only 66,286 adult salmon returned
to the Sacramento River to spawn. Six years ago, the peak return was 13 times
higher.
In 2007, only 87,881 of the fish returned to spawn in the river, falling far short of
the agency's goal of 122,000 to 180,000 fish.
The latest count comes as officials consider imposing fishing restrictions off
California's coast again this summer.
Chinook - also known as king salmon - are the prized fish of Northern California
streams, once proliferating in four genetically distinct runs, or races.
For centuries, they have fought their way up the Sacramento and San Joaquin
rivers and their tributaries to bear young, which hatch in the rivers, swim through
the bay and live in the ocean until they return three years later to spawn and die
in their natal streams.
The fish have supported an economy worth hundreds of millions of dollars and
supplied restaurants and retailers with a local source of heart-healthy protein
famous for its rich, buttery flavor.
The Sacramento River fall run, the bread-and-butter chinook run, is the one
facing collapse, although Lagunitas Creek in Marin County this year had its
smallest run of coho salmon ever recorded.
208
Scientists believe warmer ocean conditions in 2005 and 2006 led to a lean food
supply as young salmon were entering the ocean. That played a part in the low
spawning returns in 2007 and 2008.
In addition, in 2004 and 2005, the years the chinook were born and traveled to
the ocean, the federal Central Valley Project and the State Water Project
exported record amounts of Sacramento-San Joaquin River Delta water to urban
and agricultural customers throughout the state, documents show.
Federal researchers also blame 50 years of water management in California for
the decline of the fish. The state and federal water projects constructed dams
and conveyance systems that separated the fish from their habitats. Pumps,
canals and hatcheries built to make up for lost water also depleted once-diverse
runs, at one time the pride of the state.
Next week, the management council, which is made up of representatives of
states and tribes as well as government agencies and fishing groups, is expected
to release numbers estimating the chinook salmon available in the ocean,
agency spokeswoman Jennifer Guilden said Wednesday.
Based on stock assessments from the National Marine Fisheries Service and
other federal agencies, the management council then will set quotas for the
fishing season, which typically begins in May.
Last year, the low estimates resulted in a ban on commercial fishing off California
and Oregon, the first time all seasons were closed in California history. Similar
restrictions are expected this year, according to officials who have seen the stock
assessments.
"Almost for certain there will be no fishing this year," said Zeke Grader, executive
director of the Pacific Federation of Fishermen's Associations, which represents
commercial fishermen. The industry has received some financial aid, which
Grader says may have to carry over to this season as well.
His group was lead plaintiff in a 2004 lawsuit asking the federal government to
deem the winter and spring runs of salmon in jeopardy of extinction. The fish are
listed under the federal Endangered Species Act.
The system in the Klamath and Trinity rivers had 31,000 returning spawners, a
better return than in the Central Valley, but still short of its management goal of
40,700 fish, according to the Pacific Fishery Management Council.
According to the National Oceanic and Atmospheric Administration's Southwest
Fisheries Science Center in Santa Cruz, the fall run appears to have suffered
from "poor ocean conditions when the juveniles left the fresh water to enter the
209
ocean," said Churchill Grimes, fishery biologist and a leader of the group
preparing a paper on causes of the decline.
But the ultimate cause of the decline is "sort of by 1 ,000 cuts" related to habitat
destruction of the delta, once 1,500 square kilometers of rearing habitat, he said.
"It was a huge marsh, habitat for all of the runs. Now it's been diked, levied and
rip-rapped until it's not more than a big ditch," Grimes said. Dams, pumping water
by the state and federal water projects and the operation of hatcheries all
contribute to the problem, he said.
E-mail Jane Kay at ikay@sfchronicle.com.
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/18/MN9H60HP4.DTL
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210
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BILL LOCKYER
Attorney General of the State of California
MARY HACKENBRACHT
Senior Assistant Attorney General
JOHN DAVIDSON
Supervising Deputy Attorney General
MARK W.POOLE. State Bar No. 194520
Deputy Attorney General
455 Golden Gate Avenue, Suite HOOD
San Francisco, CA 94102-7004
Telephone: (415) 703-5582
Facsimile: (415)703-5480
Attorneys for Defendants
SUPERIOR COURT OF CALIFORNIA
COUNTY OF ALAMEDA
KARUK TRIBE OF CALIFORNIA and LEAF
HELLMAN,
Plaintiff
CALIFORNIA DEPARTMENT OF FISH AND
GAME; and RYAN BRODDRICK, Director,
California Department of Fish and Game,
Defendants.
Case No. 05211597
DECLARATION OF NEIL
MANJI IN SUPPORT OF
OPPOSITION TO THE
OBJECTIONS OF THE NEW
49'ERS, INC., AND
RAYMOND W. KOONS TO
THE PROPOSED
STTPULATED JUDGMENT
Date: January 26, 2006
Time: 9:00 a.m.
Dept: 512 (Hayward)
The Honorable Bonnie Sabraw
Trial Date:
Action Filed; May 6, 2005
DECLARATION OF NEIL MANJI
CASE NO. 05211597
211
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DECLARATION OF NEIL MANJI IN SUPPORT
OF ENTRY OF STIPULATED JUDGMENT
I, Neil Manji, declare as follows:
1. I am currently employed by the California Department of Fish and Game
("Department") as a Supervising Biologist and I participated in settlement negotiations in the above
captioned matter in that capacity. The matters set forth in this declaration arc within my personal
knowledge and if called on to testify to these matters I would end could so testify.
2 . Inmy current j ob at the Department, I serve as the Fisheries Program Manager for the
eight counties that comprise the Northern California-North Coast Region ("Region") of the
Department. I oversee all fisheries programs within the Region, including programs involving: 1)
fisheries habitat restoration; 2) inland and anadromous fisheries resource assessment andmonitoring;
3) watershed assessment; and 4) salmon, steelhead and trout hatcheries. I hold a Bachelor of Science
(1986) with a major in Fisheries from Humboldt State University and have worked as a fishery
biologist since 1 989 . I worked on the Klamath River specifically in that capacity from 1984-1986,
and from 1 999 through present Among other work during that time, I conducted spawning ground
surveys and monitored adult and juvenile salmonids on the mainstera and tributaries to the Klamath
River. I have also reviewed and edited several manuscripts documenting research and monitoring
within the Klamath River Basin. Finally. I am amember of the Klamath Basin Fishery Task Force,
Klamath Fishery Management Council and Trinity River Management Council
3. Based on my experience with the Department, and in my professional opinion as a
fishery biologist, the existing regulations governing suction dredging, which axe found in sections
228 and 228.5 of Title 14 of the California Code of Regulations, serve to permit suction dredging
activities while, at the same tune, providing protection for spawning adult salmonids, including
chinook salmon, and the developing eggs and larvae of such species, which remain in the gravel
following spawning. The existing regulations provide this protection by esrabhshing watercourse-
specific closures and seasonal restrictions on suction dredging activities. For example, under the
existing regulations, suction dredging on the mainstem of the Klamath River is allowed from the
mouth of themainstern to the Salmon River from the fourth Saturday in May through September 30
DECLARATION OF NEEL MANJI
CASE NO. 05211597 1
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(Class G); from the Salmon River upstream to 500 feet downstream of the Scott River throughout
the year (Class H); from 500 feet downstream of the Scott River upstream to Iron Gate Dam from
the fourth Saturday in May through September 30 (Class G). From Iron Gate Dam to the Oregon
Border, no suction dredging is permitted at any time (Class A). (See Cal. Code Regs., tit. 14, §
228.5, subd. (d)(49).)
4. The additional restrictions agreed to by the Department in the Stipulated Judgment
at issue in this proceeding are structured in the same manner as the existing regulations. Those
restrictions are detailed in Exhibit 1 to the Proposed Stipulated Judgment, and the mfbrmation
document the Department is including with all 2006 suction dredge permit applications. A true and
correct copy of that document is attached hereto as Exhibit A.
5 . From abiological standpoint, the additional restrictions were designed to substantially
■ lessen the potential for significant impacts on various fish species that suction dredging could cause
in the Klamath, Scott, and Salmon River watersheds. In particular, the additional restrictions will
protect and benefit coho salmon, steelhead, green sturgeon, and lamprey.
Spawning
v -
6. Chinook and coho salmon and steelhead are anadromous salmonids that spawn in
gravel substrates throughout the Klamath Basin at various times of the year. Surveys conducted by
the Department and otherpublic agencies indicate that, in the Klamath Basin, chinook salmon spawn
from September through December, and coho spawn from November through January. Steelhead
can spawn over a longer temporal period from December through June. It is critical during those
periods that spawning adults and redds are not disturbed by instream activities, such as suction
dredging. Physical disturbance of adults and redds during pre- and post-spawning activities can
reduce the spawning success and subsequent survival of progeny.
7. Based on existing evidence regarding the distribution and abundance of coho salmon
and steelhead in the Klamath River Basin, the additional restrictions will reduce direct conflict
between suction dredging activity and spawning adult coho salmon and steelhead. Further, redds
created on dredge tailings have been shown to scour folio-wing high flow events moreso than redds
created on undisturbed substrates. Redd scouring will negatively affect the survival of incubating
DECLARATION OF NEIL MANJI r~~ ~~~
CASE NO. 05211597 2
213
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eggs. The additional restrictions are also expected to limit suction dredge-related disturbance to
spawning substrates immediately prior to spawning activity. This, the Department expects that the
additional restrictions will reduce the potential for such related incidental impacts.
Emergence
8. It can take several months for sahnonid eggs to develop and for the sac fry to emerge
from the gravel. Emergence of chinook fry occurs from November through March- Coho fry
emergence can occur fromFebruaiy through June. Steelhead emergence generally occurs from April
through July. As mentioned above, it is critical that the developing eggs and sac fry are not disturbed
during those emergence periods. The additional restrictions are intended to reduce those potential
impacts.
9. . Summer steelhead migrate to fresh water in late spring and oversummer in cool
tributaries until they spawn in early to mid-winter. Tributaries important to. summer steelhead were
identified and prioritized and classified accordingly based on summer steelhead abundance from
several years of surveys.
Juvenile Salmonids and Rearing Habitat
10. Unlike chinook salmon, juvenile coho reside in tributaries for a year or more before
migrating to the ocean. Due to a flexible life history, steelhead can reside for numerous years
without migrating to the ocean. Overs ummering habitat is thus critical to the survival of juvenile
coho and steelhead. Through reports, survey data, and other information available to Department
biologists and other fisheries scientists from other public agencies and Native American tribes,
tributaries in which j uvenile coho rear were identified. Many of the tributaries in the Klamath basin
either run dry by late summer or have temperatures that exceed the lethal threshold tor salmonids.
Prioritization of tributaries containing critical rearing habitat was based on professional judgment
and the presence of juvenile coho or steelhead and the quality of the habitat (e.g., a stream that
maintains connectivity with the main stem is of a higher quality than a stream that loses connectivity
or has high temperatures). The Department agreed to close to suction dredging (Class A) high
priority tributaries and habitats as part of the Stipulated Judgment to protect those habitats, as well
as to eliminate direct conflict between suction dredging activity and juvenile coho or steolhoad.
DECLARATION OF NEIL MANJI : ~~~
CASE NO. 05211597 3
214
»< uj.jj i m nnuuiiLi ui^t^iinij fAA mo. «j i 3 /UJ3300 f. UZ 1 / 1 b ^
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Sturgeon
1 1 . Sturgeon axe long-lived anadromous fish that reportedly reach reproductive maturity
at approximately 10-15 years of age. Like salmon, sturgeon spawn in fresh water streams and rivers.
Green sturgeon have been documented to occur and spawn successfully in the Salmon River, a
tributary to the Klamath River. Spawning occurs from April through July while emergence occurs
from April through August Again, it is critical that spawning adults and the developing eggs are
not disturbed. The additional closures and seasonal restrictions will protect the peak spawning
period of adult sturgeon in areas where spawning activity has been reported by Departed entbiologists
and other agency biologists and scientific literature. Recently emerged juveniles are reportedly poor
swimmers that remain close to cover while undergoing a downstream migration to rearing habitats.
The additional restrictions will reduce direct conflict of the early-emerged juveniles with suction
dredging activity and, where tributaries are now closed to suction dredging year round, protect
spawning, incubation, early life history stages, and juvenile rearing habitat
Lamprey
12. Lamprey are also anadromous fish that spawn in the gravel of streams and rivers.
Lamprey spawning occurs from April through July. It is critical that spawning adults are not
disturbed. The additional restrictions will reduce or eliminate conflict between spawning lamprey
and suction dredging activity, as well as provide protection for the developing eggs. The ammocetes
(i.e., lamprey larvae) can remain in the gravel for several years which makes them extremely
vulnerable to impacts caused by suction dredging. The additional restrictions will provide greater
protection for all freshwater life history stages, for lamprey.
Thermal Refugia
13. It has been documented that juvenile sahnonids use cold water thermal refugia around
the mouths of numerous tributaries to the Klamath, Shasta, Scott, and Salmon Rivers from about
May 15 through late September. As water temperature in the mainstem of the rivers reaches
critically high levels, these cold water refugia become extremely important to sahnonid survival.
Information from Department biologists identified thermal refugia areas during field investigations
that include fish kill investigations and juvenile fish surveys. In addition, there have been several
DECLARATION OF NEIL MANJI
CASE NO. 05211597 4
215
• *li«/ LU/ tUUW I Hi UJ-JJ I IK
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studies and observations conducted by other state, federal, and tribal biologists that have identified
and quantified thermal refugia within the Klamath River Basin. These summer rearing areas were
prioritized based on a review of current thermal refugia data and information from other agency
biologists, as well as professional judgment from direct observations. Designated thermal refugia
are closed to suction dredging year round under the additional restrictions to avoid potential
displacement or disturbance of juvenile coho or steelhead that may result from suction dredging
activities.
I declare under penalty of perjury that the foregoing is true and correct.
Executed in Redding, California on January 20, 2006.
Neil Manji
DECLARATION OF NEIL MANJI
CASE NO. 0521 1597
216
/mi/ lmi L\i\i\it 1'AI UJ.J'J rm HllUKIXfcl ULIXfcKHL
JAN-20-2006 FRl D] :5B PH DFG REDDING
l*AA No. 4IS'/UJJbI)B«
FAX NO. 530 225 23B1
F. 023/183
P. 07
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studies and observations conducted by other state, federal, and tribal biologists that have identified
and quantified thermal refugia within the Klamath River Basin. These summer rearing areas were
prioritized based an a review of current thermal refugia data and information from other agency
biologists, as Well as professional judgment from direct observations. Designated thermal refugia
are closed to suction dredging year round under the additional restrictions to avoid potential
displacement or disturbance of juvenile cpho or steelhead that may result from suction dredging
activities.
I declare under penalty of perjury that the foregoing is true and correct.
Executed in Redding. California on January 20, 2006.
.DECLARATION OF NEIL MANJl"
CASE NO. 05211597
217
miv tu; iuuu/ rai uj.ju rra
m 1 1 uaiNc i LjUhlkhl
rAA JVC. ^S/UttSBH
F. U24/l«a
DECLARATION OF SERVICE BY U.S. MAIL and FAX
Case Name: Karuk Tribe of California and Leaf Hillman
v. California Department of Fish and Game, et al.
I declare:
No.: 05 211597
I am employed in the Office of the Attorney General, which is the office of a member of the
California State Bar at which member's direction this service is made. I am 1 8 years of age or older
and not a party to this matter. I am familiar with the business practice at the Office of the Attorney
General for collection and processing of correspondence for mailing with the United States Postal
Service. Iq accordance with that practice, correspondence placed in the internal mail collection
system at the Office of the Attorney General is deposited with the United States Postal Service that
same day in the ordinary course of business.
On January 20. 2006. 1 served the attached
DECLARATION OF NEIL MANJ1 IN SUPPORT OF OPPOSITION TO THE
OBJECTIONS OF THE NEW 49rERS, INC, AND RAYMOND W. KOONS TO THE
PROPOSED STIPULATED JUDGMENT
by placing a true copy thereof enclosed in a sealed envelope with postage thereon fully prepaid,
in the internal mail collection system at the Office of the Attorney General at 455 Golden Gate
Avenue, Suite 11 000, San Francisco, Cahfornia 94102-7004, addressed as follows: .
Roger Beers
Law Offices of Roger Beers
2930 Lakeshore Ave., Suite 408
Oakland, CA 94610
(510) 835-9849
Neysa A. Fligor
Stein & Lubin LLP
600 Montgomery Street, 14* Floor
San Francisco, CA 94 1 1 1
(415) 981-4343
James Wheaton
Environmental Law Foundation
1736 Franklin Street, 9th Floor
Oakland, CA 94612
(510)208-4562
Additionally, I served a true copy by facsimile machine, pursuant to California Rules of Court,
rule 2008, in our facsimile -mar.Viinft at (415) 703-5480 and faxed the documents to ((5 10)
835-9849, (415) 981-4343, and (510) 208-4562. The facsimile machine I used complied with
Rule 2008, and no error was reported by the machine. Pursuant to Rule 2008, subdivision (e)(4),
I caused the machine to print a record of the transmission, a copy of which is attached to this
declaration.
I declare under penalty of perjury under the laws of the State of California the foregoing is true
and correct and that this declaration was executed on January 20. 2006. at San Francisco,
CaHfbrnia.
Elza Moreira
Declarant
Signature
218
I
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HEARING
SENATE RULES COMMITTEE
STATE OF CALIFORNIA
STATE CAPITOL
ROOM 113
SACRAMENTO, CALIFORNIA
WEDNESDAY, MARCH 4, 2009
1:43 P.M.
*M 1 8 2009
PU8UC UBRAf^
608-R
SENATE RULES COMMITTEE
STATE OF CALIFORNIA
- -0O0- -
HEARING
STATE CAPITOL
ROOM 113
SACRAMENTO, CALIFORNIA
- -0O0- -
WEDNESDAY, MARCH 4, 2 00 9
1:43 P.M.
- -oOo- -
Reported By: INA C. LeBLANC
Certified Shorthand Reporter
CSR No. 6713
SENATE RULES COMMITTEE
1
INDEX
STATE OF CALIFORNIA
- -0O0- -
2
3
P aa e
HEARING
4
5
6
7
8
9
Governor's Appointees:
BONNIE M. REISS, Member, The Regents of the
STATE CAPITOL
ROOM 113
INTRODUCTION BY SENATOR JACK SCOTT
2
3
5
SACRAMENTO, CALIFORNIA
- - 0O0 - -
INTRODUCTION BY SENATOR GEORGE RUNNER
INTRODUCTION BY SENATOR ROY ASHBURN
10
11
12
13
OPENING STATEMENT 7
WEDNESDAY. MARCH 4. 2009
14 3 P . M .
- -O0O- -
Question by SENATOR CEDILLO re:
Undocumented immigrants in the
14
Questions by SENATOR DUTTON re:
15
Gainful employment of undocumented
1fi
U.C. students 14
17
Rehiring U.C. employees after
Reported By: INA C LeBLANC
Certified Shorthand Reporter
CSR No. 6T13
18
19
20
21
22
23
24
voluntary s e p a ra t io n / e a r ly
retirement 15
Question by SENATOR AANESTAD re:
R e c r u it in g / re ta in in g faculty 17
Question by CHAIRMAN STEINBERG re:
Articulation between the K-12
system and the U.C. system 19
25
////
iii
APPEARANCES
MEMBERS PRESENT
1
Witnesses in SuDDort of BONNIE M. REISS:
2
JULIAN POSADAS, Vice President, AFSCME 3299
2 2
SENATOR DAKRELL STEINBERG, Chair
3
MICHAEL A. BOLDEN, AFSCME, AFL-CIO
24
SENATOR GIL CEDILLO
SENATOR SAMUEL AANESTAD
4
5
6
7
- -o 0 o - -
SENATOR ROBERT DUTTON
SENATOR JENNY OROPEZA
WILLIAM S. HARAF, Ph.D., Commissioner of
STAFF PRESENT
8
OPENING STATEMENT 26
9
Questions by CHAIRMAN STEINBERG re:
GREG SCHMIDT, Executive Officer
JANE LEONARD BROWN, Committee Assistan
t
n t
0
A D
10
11
12
13
14
15
Defining success or failure of
the Department of Financial
NETTIE SABELHAUS, Appointments Consulta
DAN SAVAGE, Assistant to SENATOR CEDILL
Meaning of "measured approach
BILL BAILEY, Assistant to SENATOR AANEST
Foreclosure statistics of
CHRIS BURNS, Assistant to SENATOR DUTTC
N
16
D F I - re g u la t e d institutions 32
BRENDAN HUGHES, Assistant to SENATOR 0
R 0 PE2 A
17
18
Appropriateness of measured
ALSO PRESENT
19
20
21
22
Implementation of SB 7 and
SB 1137 4 4
WILLIAM S. HARAF, Ph.D., Commissioner of
Financial Institutions
Questions by SENATOR OROPEZA re:
Assistance/protection for consumers
BOB CLARK, Director, Office of Real Estate A
ppraisers
th e
ii
23
24
25
of money-transmitter entities 35
IV
BONNIE M. REISS, Member, The Regents of
University of California
20 sheets
Page 1 to 4 of 6
03/09/2009 09:02:33 AM
1 Question by SENATOR AANESTAD re:
2 Bush administration's economic
3 stimulus package 40
4 Question by SENATOR DUTTON re:
5 Funding/budget 47
6 Witnesses in Support of WILLIAM S. HARAF. Ph.D.
7 MAURINE PADDEN, California Bankers
Association 49
8
EZRA LEVINE, The Money Services Round
9 Table 49
10 MARGARET GLADSTEIN, California Independent
Bankers 50
11
12 -oOo--
13
14 BOB CLARK, Office of Real Estate
Appraisers 52
15
16 OPENING STATEMENT 53
17 Questions by CHAIRMAN STEINBERG re:
18 Appraiser involvement in
19 fraudulent transactions 56
20 In-house legal counsel 58
21 Audit program 58
22 Legitimacy of accrediting and
23 educational courses for
24 appraisers 60
25 Scope of appraiser investigators . 63
1 PROCEEDINGS
2 CHAIRMAN STEINBERG: Call the Senate Rules
3 Committee to order. Good afternoon.
4 Please call the roll.
5 MS. BROWN: Senator Cedillo.
6 Dutton.
7 SENATOR DUTTON: Here.
8 MS. BROWN: Dutton here.
9 Oropeza.
10 SENATOR OROPEZA: Here.
11 MS. BROWN: Oropeza here.
12 Aanestad.
13 SENATOR AANESTAD: Here.
14 MS. BROWN: Aanestad here.
15 Steinberg.
16 CHAIRMAN STEINBERG: Here.
17 MS. BROWN: Steinberg here.
18 CHAIRMAN STEINBERG: Very good. Welcome to
19 everyone, Members, staff, members of the public.
20 Without objection, we want to start with number
21 two -- with number two, and start with Bonnie Reiss as a
22 member of The Regents of the University of California.
23 And I understand that Ms. Reiss has a couple of esteemed
24 people who want to introduce her, so please come on up.
25 Senator Ashburn, I understand you're here as
1
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2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Question by SENATOR OROPEZA re:
Ethics training 64
Questions by SENATOR DUTTON re:
Money owed the Office of Real
Estate Appraisers by the General
Fund 65
Performance of loan appraisals ...
STATEMENT BY CHAIRMAN STEINBERG ..
66
68
-oOo-
Proceedings Adjourned 71
Certificate of Reporter 72
APPENDIX (Written Responses of Appointees)
73
VI
1 well. We can find a third chair. Come right on up.
2 Good. Very good. Please.
3 Welcome to Senator Scott, President Scott,
4 Assembly Member Scott, Chancellor Scott.
5 SENATOR SCOTT: Yeah. Okay. Maybe one day I
6 can hold a job long enough to get a permanent title.
7 I really am extremely pleased today to
8 introduce Bonnie Reiss, who I think all of you know as a
9 Regent of the University of California.
10 The University of California is one of the
11 great treasures of the State of California. And we're
12 so proud of the research that's done there and the
13 education that occurs there, and I think Bonnie Reiss is
14 just ideal to be a Regent. She has a wealth of
15 experience.
16 I think a lot of us got very well acquainted
17 with her when she served in the governor's office, and I
18 did, certainly, as chair of the Education Committee in
19 the Senate, because she was such a firm supporter of
20 education and often had excellent ideas to offer to me,
21 and I would often bounce some things off of her and
22 always found her to be so thoughtful, intelligent,
23 pragmatic, and always optimistic.
24 Bonnie's that way. She has a long history.
25 She served as president of the Earth Communication
2
03/09/2009 09:02:33 AM
Page 5 to 2 of 6
2 Of 20 sheets
1
Office from 1988 to 1992; she's been very active in
1
work through issues, and, again, that skill — there's
2
environmental causes and, of course, is very active in
2
probably not a greater skill in almost any phase of
3
that today. But she also served on the Board of
3
operation in the state of California today, the
4
Education. And so she not only brings a grasp of higher
4
challenges that we face at every level in every
5
education, but she has this grasp of K through 12. And
5
institution, that ability to be a problem solver and how
6
linking K through 12 and the university system I think
6
to work through issues, and I have great confidence that
7
is terribly important.
7
that's the kind of skill that Bonnie brings to her role.
8
She has spearheaded and given a particular
8
And it's certainly a privilege for me to want to endorse
9
drive to after-school programs, first as president of
9
her confirmation.
0
the After-School All Stars and then by launching the
10
CHAIRMAN STEINBERG: Thank you very much,
1
governor's program. And she still serves on the board
11
Senator Runner.
2
of directors.
12
Senator Ashburn. Welcome.
3
I'm not going to go into all of the things that
13
SENATOR ASHBURN: Thank you. Mr. Chairman and
4
Bonnie Reiss has done, because we'd be here for a very
14
Members of the Rules Committee, I'm going to offer short
5
long time. But I can tell you as a former senator and
15
remarks. There's no one more qualified to offer short
6
as chancellor of California Community Colleges, I'm very
16
remarks.
7
proud to have Bonnie Reiss as a regent, and certainly I
17
CHAIRMAN STEINBERG: How many times have you
8
enthusiastically endorse her confirmation.
18
used that?
9
CHAIRMAN STEINBERG: Thank you very much,
19
SENATOR ASHBURN: Not nearly enough.
0
Senator Scott.
20
Bonnie Reiss is a — is someone I know, and
1
Senator Runner, welcome.
21
Bonnie Reiss is a friend of mine. And there's only one
2
SENATOR RUNNER: Thank you for letting me come
22
Bonnie Reiss. And that's why I wanted to be here today,
3
before you, and it certainly is a pleasure to be here
23
to urge your favorable consideration in her
4
for Bonnie Reiss.
24
confirmation.
5
You all know Bonnie and have worked with her.
3
25
First, you look for qualifications. Is Bonnie
5
1
My notes -- This is a thing that staff put together.
1
Reiss qualified to be a member of the Board of Regents?
2
More than 25 years' experience in business/entertainment
2
There's absolutely no question about the qualifications.
3
law, political organizing, finance, event production, as
3
Is she a person of integrity and honesty?
4
well as management of nonprofits.
4
Sometimes she's so honest that she makes the point. And
5
And I was just thinking, I don't remember being
5
so she's incredibly honest.
6
at any of those political organizing meetings with you
6
And, thirdly, Is she independent? And I think
7
earlier.
7
on a board like this where you have a strong
8
MS. REISS: It was all -
8
administrative structure, what you're looking for are
9
SENATOR RUNNER: No. Earlier. Earlier.
9
strong board members who are going to ask the tough
0
Earlier.
10
questions and hold people accountable. I have no doubt
1
So I got to know Bonnie in a much more
11
that Bonnie Reiss will ask those tough questions and
2
pragmatic way as she then represented the governor. And
12
hold people accountable, and for those reasons I ask for
3
I found with Bonnie an individual who was always willing
13
your favorable consideration.
4
to come and figure out how to get through an issue, was
14
CHAIRMAN STEINBERG: Thank you very much,
5
very open on issues, would be glad to tell you what she
15
Senators. All three. Appreciate it. Good
6
thinks about what's going on, but then very much one who
16
recommendations.
7
would listen too. So I appreciated that so much about
17
Ms. Reiss.
8
her.
18
MS. REISS: Thank you. Thank you, Senators.
9
And her ability to represent the governor well
19
CHAIRMAN STEINBERG: Bonnie, but for the
0
in a host of issues, and the ones primarily I think that
20
formality of the hearing.
1
we were dealing with were oftentimes around the issue of
21
MS. REISS: Thank you.
2
education, issues that she did so well with the governor
22
CHAIRMAN STEINBERG: We welcome you. Is there
3
in representing those areas of education.
23
anybody else before we begin that you want to introduce,
4
So I think, again, what I think is the skill
24
special guests or anybody else who is here? Family,
5
that she has is the ability to foresee issues, to try to
4
25
friend, foe?
6
3f 20 sheets
Page 3 to 6 of 73
03/09/2009 09:02:33 AM
1 MS. REISS: There are friends here. Thank you.
2 Jane Imperato, Nick Kislinger, Diane Griffiths, from
3 U.C., are friends of mine that are here today. Thank
4 you.
5 CHAIRMAN STEINBERG: Very very good. Very very
6 good.
7 Welcome to the Committee.
8 Would you like to make an opening statement?
9 MS. REISS: Thank you. First I want to, of
10 course, thank Senator George Runner and Roy Ashburn and
11 Jack Scott for the great honor they paid me, to be here
12 today to introduce me and support me for this position.
13 Leaders like that, that have worked and cared so much
14 about education issues, to come forward and show me the
15 respect of being here really means a lot to me, so I
16 want to thank them.
17 And I want to thank all of you for your time
18 and your consideration, and the time you each gave me in
19 private meetings that I had leading up to this.
20 I'll try to be brief in my opening comments out
21 of respect for your time and the other issues you have
22 to deal with. So I think the most important thing for
23 me to address in my opening comments would be why I want
24 to be a U.C. Regent, and why I'm passionate about it,
25 and why I think it's a very, very important position
7
1 in my family that got a postgraduate degree, law degree,
2 hopefully using it for good. And I just saw how,
3 really, firsthand, that opened the doors for me and for
4 my family.
5 I think it's — So I think on both levels, I
6 think a great public education is both important to
7 America, for democracy, for California, in every way, to
8 creating an informed citizenry and creating a citizenry
9 that's able to be competitive and to work in the jobs
10 and compete in the global marketplace, but also on the
11 individual level for people to be able to each achieve
12 their dreams. And, really, that's how it's done. So
13 that's what motivates me. That's why I find this so
14 important in general with education.
15 And U.C, of course, according to the master
16 plan, is supposed to be the institution in our state
17 that takes the top academically suited candidates and
18 gives them a great education. It's leading in research.
19 I know that decades ago -- In talking with some
20 of you, we talked about how decades ago, there was no
21 question that U.C. by far was the leading educational
22 institution in the country, and that's been somewhat
23 impacted in a negative way. And I want to vow to see
24 that I do all I can and bring everything I can and have
25 within me as I serve as a Regent to see that U.C.
9
1 that I will take very seriously, both the privilege and
2 the responsibility of it.
3 And that really deals with when I first studied
4 about the creation of our country and the debate, and
5 reading the Madison papers and the debate of our great
6 visionaries that started our country, and how Thomas
7 Jefferson spoke to — was the one who had the vision
8 saying that "For this emerging democracy to be great, we
9 need to provide an excellent public education, not just
10 for the rich and powerful landowners and children of
11 them, but for everybody." And I remember that struck me
12 then, and here we are hundreds of years later, and as
13 more -- the greater our population is, the more our
14 country has changed, nothing's remained more true.
15 I believe that there's probably nothing — If
16 this isn't the most important thing that's -- tenet
17 that's important for America to achieve its true promise
18 of democracy, to provide a great public education to the
19 children of this country, nothing else is more
20 important. K through 12, community college, Cal State,
21 U.C, all of that play into that.
22 In my own life, how that worked, my parents
23 were high-school graduates. They didn't go to college.
24 My dad was in World War II. And my sister got a college
25 education and became a teacher. And I was the first one
1 remains second to none in delivering a quality education
2 to undergraduates, graduates, continues to be a leader
3 in research and innovation. And that's what I pledge to
4 everyone here today and to the citizens -- to the
5 current students, future students, and citizens.
6 And with that, I thank you for your time, and I
7 will just open it up to comments and questions.
8 CHAIRMAN STEINBERG: Thank you very much,
9 Ms. Reiss.
10 This appointment is important for all the
11 reasons you just stated, but in addition it's a ten-year
12 appointment. Twelve. Serves until -- well, until
13 March 1st, 2020, so it's 11 to go, right? Eleven to go.
14 It's a 12-year appointment, so it's very significant
15 here.
16 Let's open it up to questions from the Members,
17 and I have a few myself, but I'll begin with --
18 SENATOR OROPEZA: Mr. Chair, I actually have no
19 questions for this applicant, because I know her well,
20 have worked with her and feel that -- as a former
21 trustee in the CSU, know when I see a good academic
22 leader. And I think she's one, so I've got no
23 questions.
24 CHAIRMAN STEINBERG: Very good. Very good.
25 Senator Cedillo.
10
03/09/2009 09:02:33 AM
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4 of 20 sheets
SENATOR CEDILLO: Obviously, I'll state -- I'm
a big fan, for the record, so I'll state the bias up
front.
Since there is this rare opportunity when we
have another meeting with a Regent later on today, let's
talk about this question of immigrants in the
U.C. system.
We've held hearings on the need, Del Meyers,
U.S.C., Peter Schregg, many others have written books on
the changing demographic and the changing economy and
the need for us to prepare the new workforce. That new
workforce, in large part, is going to be immigrant. And
a publication out of U.C.L.A. called "Underground
Undergrads" talks about AB 540 students within the U.C.
system. We have these dream students who invariably
seem to be the best and the brightest. As challenging
as their circumstances are, they invariably are the best
and the brightest.
The Regents have supported my legislation in
the past to permit them to apply for scholarships. That
effort has been frustrated. And so now we're at the
point, and this is a long-term appointment, immigration
reform will be on the horizon at some point. I trust it
will be accomplished before your term is up. But before
that, what are your thoughts on that situation and how
11
1 high drop-out rate that we're seeing, that if a student
2 is not only able to graduate a California high school,
3 but able to have the high academic standards to get into
4 U.C, I think that the State should be doing what it can
5 to support that student in getting through U.C. and
6 getting educated. I think on policy, I think it's
7 helpful to the state.
8 SENATOR CEDILLO: I -
9 CHAIRMAN STEINBERG: Okay. Thank you.
10 Senators Aanestad and Dutton.
11 SENATOR DUTTON: Yeah, I guess -
12 CHAIRMAN STEINBERG: No requirement to speak.
13 SENATOR DUTTON: I wasn't going to. I can't
14 resist now.
15 One of the challenges —
16 SENATOR CEDILLO: You should know this is not a
17 two-thirds.
18 SENATOR DUTTON: I understand, but it still
19 goes to a deeper issue, and that's a problem we do have
20 in court, issues taking place, and I'm not going to
21 bother asking you about that, because it's still pending
22 some legal determinations, which I find kind
23 of — Certainly, it tells another kind of story
24 altogether.
25 There is a bigger problem. Forget about the
13
we address it, how we make sure that these students are
given the resources, given that we are providing them
the opportunity to attend, and given that they are
performing well, and given that we anticipate they're
going to be leaders in our society.
MS. REISS: Senator, I'm assuming — allow me
to clarify. Are you referring to the undocumented
immigrants?
SENATOR CEDILLO: Yes.
MS. REISS: Well, I guess there's a few ways to
look at that. One, there's litigation going on now
about the issue of the in-state tuition, so I don't know
how that, obviously, is going to end up. That's a whole
legal issue where that goes, so let me address the
philosophy.
SENATOR CEDILLO: And the policy.
MS. REISS: Okay. Philosophically, I believe
that if a — I don't believe in punishing a child for
the acts of their parents, first of all. I believe in
doing things legally, in the right way, and going
through all the things you're supposed to do. With that
said, I don't -- but I don't believe that young people
should be punished for the acts of their parents.
Setting aside whatever the legal issues are, I
think that on policy in a state like California with the
12
1 issue of whether or not somebody who is undocumented or
2 not should be attending the college. One of the big
3 challenges that I'm hearing about, is that because they
4 have a questionable legal status, they have trouble even
5 obtaining a job once they do get trained and educated.
6 So it seems to me that it's kind of like putting the
7 cart before the horse. You might actually be causing
8 people who actually are here legally, whether they came
9 from immigration or not, it doesn't matter, but there is
10 this other problem, and we're using resources and stuff
11 to train somebody who can't actually get a job once
12 they're educated.
13 So do you have some type of system where you're
14 going to help them become legal so they can actually be
15 gainfully employed or --
16 MS. REISS: I wish I had the power to figure
17 out how to solve the immigration problem in the United
18 States.
19 SENATOR DUTTON: That's my point. I realize
20 it's a big job, but that really is the challenge.
21 That's why I have some concerns. And it also may end up
22 costing the state some substantial dollars if the legal
23 challenge goes against it, which it did once on appeal,
24 and it may go against us again.
25 The other thing I'm concerned about is —
14
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03/09/2009 09:02:33 AM
1 Recently, there was a story, I believe it was in
2 The Chronicle, about some recent discharges among
3 employees. They were given some kind of golden
4 handshake to leave the headquarters and they end up
5 going to someplace else. Now, whether this is
6 legitimate or not, I want to say that somehow we're
7 becoming more efficient, doesn't give me a great deal of
8 comfort to know that that kind of thing took place.
9 This is in San Francisco.
10 MS. REISS: This is the Linda Williams case.
11 SENATOR DUTTON: I wish you would maybe
12 comment --
13 MS. REISS: I actually do want to comment on
14 that, because I have a feeling we're probably all
15 unanimously equally opposed to what happened with that
16 situation.
17 The history of that was that Bob Dynes was
18 president of U.C. There was an effort to reduce the
19 staff in the president's office, and a voluntary
20 separation program was established by Bob Dynes. And
21 then when Mark Yudof came in — Mark Yudof came in about
22 the same time I was appointed to be a Regent.
23 A number of people took advantage of that
24 voluntary separation program, and a few of them, in
25 taking the voluntary separation program, then got
15
1 the new policy, and I support that fully.
2 SENATOR DUTTON: Thank you.
3 CHAIRMAN STEINBERG: Very good.
4 Senator Aanestad, do you have any questions?
5 SENATOR AANESTAD: I want to thank you for our
6 conversation earlier. We touched on a couple of things
7 of mutual interest and interesting in the University of
8 California. You didn't have to repeat decades and
9 decades in your opening statement when you were
10 referring to how long ago I went to school.
11 I'm concerned about faculty. I had, 40 years
12 ago, great faculty, Nobel Prize winners, teaching
13 assistants that won TA of the Year through the whole
14 university system, all of whom are either gone now or
15 gone to other great universities, no longer with U.C.
16 I'm wondering what your thoughts are
17 regarding -- I know the legislature and I especially
18 have differences of opinion regarding the conduct and
19 the philosophy of the administration, but they're not
20 the ones who teach those students. It's the faculty.
21 And when I went to U.C, it was — there was no
22 question — the premier university system in the world.
23 I think even over our Ivy League. I don't know if we
24 can say that today. And a lot of it has to do with our
25 ability to recruit and retain faculty. And I would just
17
1 rehired at a U.C. campus in another high executive
2 position.
3 I think that's wrong, and I know Mark Yudof as
4 well — the new president also thinks that's wrong.
5 The Linda Williams case is one, if you read the
6 paper correctly, that I'm further troubled by the fact
7 that it seems that the U.C. Berkeley spokesperson lied
8 about the situation as well. So that's another
9 troubling issue.
10 I don't think that -- I think that U.C, in
11 living up to its high reputation and in earning back
12 some of the respect with the citizens of California and
13 the legislative leaders of California, really can have a
14 zero tolerance for that.
15 President Yudof in his -- will be proposing new
16 policy, which, in talking with the president's office I
17 hear is thinking of -- you know, it's an open issue, and
18 whether he feels the Regents need to vote on it or not.
19 I feel the Regents should vote on it to show how
20 important we feel it is to say that if, in fact, you
21 take voluntary severance, voluntary early retirement,
22 that you do not get hired back.
23 CHAIRMAN STEINBERG: Or you get hired back and
24 you pay it back.
25 MS. REISS: Correct. And that's going to be
16
1 be interested in your thoughts.
2 MS. REISS: As we discussed in the meeting, I
3 100 percent agree with that.
4 What's interesting is, in the U.C. Regents
5 meetings that I've attended so far, the first thing when
6 there's the public comment period, and the students are
7 always a part of our public comment period, the students
8 agree with that. So even though the students are
9 opposed to tuition and fee increases, and they speak
10 about that and the hardships that creates, particularly
11 with the cost of housing and the other costs associated
12 while you're living in college, and they speak against
13 some of the executive compensation, they also support
14 the faculty. And they supported the lowest paid service
15 workers as well.
16 So it's interesting, because I think there is a
17 fair consensus of opinion when it comes to that. I
18 think it's very important. You know, again, it's a
19 budget issue. I know that when President Yudof put
20 forth the freeze on executive compensation, he exempted
21 faculty, because, again -- and I'm pleased, because I
22 think that does recognize the point you're making, is
23 that for U.C. to remain excellent, it better be able to
24 continue to attract great faculty.
25 And the other issue I've already started
18
03/09/2009 09:02:33 AM
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6 of 20 sheets
looking into since our meeting was -- Housing is a big
issue, particularly in many of the regions U.C. campuses
are at, and while U.C. has some programs where they help
some faculty, there might be more that can be done.
We were strategizing earlier that that spurred
a thought I had, that maybe in crises there's
opportunity. That maybe with all the federal money
going to bail out so many banks right now, and with
foreclosures, that maybe there's an opportunity for both
Cal State and U.C. to sit with some of these banks and
to see if part of that money connected with some of the
foreclosures can be turned into a program for faculty in
our state universities.
So I'm going to look into that and any other
way we can look at to see -- to remain competitive in
how we can make packages to attract faculty.
SENATOR AANESTAD: Thank you.
CHAIRMAN STEINBERG: Thank you. I have my one
question or one topic that I would like you, if you
would, to talk a little bit about, and that is the point
Senator Scott raised in his introduction, and that is
the articulation between the K-12 system and the U.C.
system.
Specifically, the University of California is
responsible for the promulgation for certifying
19
1 high school that have these A to G classes will, in
2 fact, be qualified to do well in college.
3 So if that's the goal of what A to G is
4 supposed to be, then rather than be rigid in educrat
5 thinking, we need to realize that in the global
6 marketplace we're living in, and in particular now with
7 the economy that we have, that California is an
8 innovative — the United States and California is a
9 meritocracy, and therefore it encourages innovation.
10 And innovation in this year we're living in and in a
11 global marketplace, and the look towards how to get off
12 dependence on Middle East oil, and renewable energy,
13 that we have to be open to exploring the dialogue for
14 what other kinds of classes teach algebra. Is there
15 only one kind of class to teach algebra, or are there
16 ten kinds of classes to teach algebra?
17 It's like the funny story I told you about what
18 Colonel Bucky Peterson said in our Troops to College
19 initiative, that, you know, "Are we so rigid that when
20 that soldier," he said, "came back from Iraq, after
21 studying all the computers and all the different
22 training that he had," he goes, "You know, just because
23 he didn't have that one blankety-blank algebra class,
24 does that mean he's not qualified to be in college?"
25 I think it's that, and it's a lot of other
21
so-called A to G courses, which are the prerequisites to
admission to the University of California, and there's
this dynamic tension between the advocates for career
technical education and the, quote, high standards
advocates as to what should be preeminent.
I believe, of course, it shouldn't be a choice
and that we have to be much -- U.C. has to be much more
aggressive about joining this movement to help develop
and then approve rigorous applied academic courses and
apply it to various career pathways. I said I was going
to ask a question, but I just made a statement.
Your thoughts on the relationship, because I
know when you were with the governor, Bonnie, you spent
so much of your time working on K-12 issues, K-14
issues, even. How do you see the relationship and how
do we create a much more dynamic partnership than what I
believe exists now?
MS. REISS: As you know from how excited I got
when you brought that up in the meeting, it is something
I feel very passionate about, that California can really
lead the country in this. And it really is recognizing
that we can keep A to G without reducing standards,
because what is the goal of A to G? The goal of A to G
is to say there are certain classes that must be taken
so we can be assured that the students graduating from
20
1 things. So I actually do believe that, and that's why
2 we discussed bringing in the academic senate, bringing
3 in the faculty, bringing in the people that understand
4 rigorous standards that are part of the U.C. group that
5 approves what are the A to G classes, so that this
6 dialog can start happening, because I actually think
7 that we could create a new model that will lead the
8 country in the next decades on this.
9 CHAIRMAN STEINBERG: Look forward to working
10 with you on that and more. Thank you very much.
11 Witnesses in support. Briefly. Yes.
12 Today I've chaired, now, four or five of these
13 meetings, and I'm learning as I go. We want to ask the
14 witnesses, especially those who are from in or around
15 Sacramento, to be brief in their testimony. If you've
16 come from out of town and you have something a little
17 longer to say, of course, please do so.
18 Go ahead.
19 MR. POSADAS: Good afternoon. My name is
20 Julian Posadas. I'm the executive vice president for
21 AFSCME Local 3299. I'm also a principal food service
22 worker at U.C. Santa Cruz.
23 Good afternoon, President Pro Tern, Senator and
24 Members of the Senate Rules Committee. It's a pleasure
25 to be here today. On behalf of 20,000-plus members of
22
)f 20 sheets
Page 19 to 22 of 73
03/09/2009 09:02:33 AM
1
AFSCME, which is American Federation of State, County,
1
Steinberg.
2
Municipal Employees, Local 3299, I would like to express
2
CHAIRMAN STEINBERG: Aye.
3
our support of the confirmation of Bonnie Reiss as a
3
MS. BROWN: Steinberg aye.
4
member of the University of California Board of Regents.
4
CHAIRMAN STEINBERG: Thank you very much. This
5
As many of you know, over the past 18 months,
5
will go to the Senate floor. And thank you for your
6
the members of AFSCME Local 3299 have been in contract
6
public service and for your commitment.
7
negotiations for 11,500 patient care and 8,500 service
7
MS. REISS: Thank you, Senator. Thank you all
8
workers. Throughout our contract fight, we have
8
for yours.
9
attempted to reach out and educate many of the U.C.
9
CHAIRMAN STEINBERG: Okay. Very good. Let us
10
Regents on our issues. Unfortunately, many of the
10
now move on — thank you — and ask Mr. William Haraf,
11
Regents chose not to meet with us and hear our story on
11
who is up for confirmation as commissioner of the
12
how poverty wages and short staffing at U.C. hospitals
12
Department of Financial Institutions.
13
were hurting U.C. in all of California.
13
Let me welcome you and ask you before you make
14
We were fortunate to meet with and discuss our
14
an opening statement if there's any member of your
15
issues with Regent Reiss. In our discussions, she
15
family or any special guests that you would like to
16
actually voiced her concern about our issues and said
16
introduce to the Committee.
17
that she believed workers deserved fair and just
17
MR. HARAF: Yes, Mr. Chairman. I'm really
18
contract settlement that would address these issues.
18
pleased to be able to introduce my wife of 34 years,
19
We feel that Regent Reiss is truly concerned
19
Jo Haraf. She's here with me, as well as many close
20
about everyone that makes up the U.C. family and that
20
best personal friends, Kay and Bob Hyatt, David
21
she is willing to engage on solving the tough issues
21
Greenberg, Kelly Fuller, Ted Young, and also some
22
that U.C. faces.
22
colleagues of mine from the department, and many
23
Based on our past interactions and future
23
associates and people that the department has occasion
24
interactions with Regent Reiss, we are pleased to be
24
to interact with in the course of our normal duties.
25
here today and support her confirmation to serve as a
25
CHAIRMAN STEINBERG: Very good. Welcome to all
23
25
1
member of the U.C. Board of Regents.
1
of you, and please proceed with a brief opening
2
CHAIRMAN STEINBERG: Thank you very much for
2
statement.
3
coming to testify. We appreciate it.
3
MR. HARAF: Thank you. I appreciate the
4
Next.
4
opportunity to testify before this Committee, and I'm
5
MR. BOLDEN: Good afternoon, Mr. Chair and
5
grateful to Governor Schwarzenegger for nominating me to
6
Members. Michael Bolden representing the American
6
this position. It's a big responsibility in this
7
Federation of State, County, and Municipal Employees
7
environment, and I take it very seriously.
8
also in support.
8
I joined the department in April of last year
9
CHAIRMAN STEINBERG: Thank you very much.
9
at a time when we were really in the early stages of
10
Other witnesses in support?
10
what's become a serious financial and economic crisis.
11
Are there any witnesses in opposition? If not,
11
The focus back then was on subprime and nontraditional
12
we will take a motion by Senator Oropeza.
12
mortgages, and I was pleased to learn our licensees, our
13
Please call the roll on the nomination.
13
banks and our credit unions, were really not very active
14
MS. BROWN: Senator Cedillo.
14
in that market.
15
SENATOR CEDILLO: Aye.
15
Since then, of course, the dimensions of this
16
MS. BROWN: Cedillo aye.
16
crisis have grown much broader and deeper, and more
17
Dutton.
17
global in nature, and all of our licensees are feeling
18
SENATOR DUTTON: Aye.
18
the impact. But despite everything that you've heard
19
MS. BROWN: Dutton aye.
19
about the condition of the largest banks in the country,
20
Oropeza.
20
the vast majority of the licensees of our department, of
21
SENATOR OROPEZA: Aye.
21
the financial institutions of our department, are
22
MS. BROWN: Oropeza aye.
22
healthy at this time. Even though many of them are
23
Aanestad.
23
losing some money in a very difficult environment, they
24
SENATOR AANESTAD: Aye.
24
came into this situation with a very healthy capital
25
MS. BROWN: Aanestad aye.
25
cushion, by and large, a healthy capital cushion that
24
26
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8 of 20 sheets
exceeds by a significant margin the capital cushions of
the very largest money center banks.
This is not to say there aren't any problems
out there. The environment is as difficult as anything
that we have seen in our lifetime. The number of
licensees that we have that are classified as problem
licensees has almost doubled. The number of enforcement
actions we put in place has risen commensurately. Over
the past year, four banks have failed, two credit unions
have failed, and we'll see more of those failures in the
future.
So with all of this going on, you may wonder
about the longer-term future of the smaller,
state-chartered banks, credit unions, money
transmitters, that we supervise. And let me say that
although they are facing stiff headwinds right now, they
are here to stay.
Our licensees serve people in every corner of
California, some focusing on cities, towns, and rural
communities, others focusing on ethnic populations of
almost every type.
Community banks and credit unions with their
relationship-based models of community involvement have
proven their value in this very difficult time. To
illustrate that, I recently completed a survey of all of
27
1 and procedures in the department, because I discovered
2 that some of those procedures and policies were way out
3 of date.
4 And then, finally, and perhaps most
5 importantly, I've devoted considerable personal time and
6 attention to institutions that are moving toward
7 failure, working with them and potential acquirers to
8 ensure that depositors, borrowers, and employees at the
9 failing institution get the best outcome possible, and
10 we've got a very good track record on that regard.
11 When I came to the department, I wasn't quite
12 sure what to expect about the quality of the people
13 there, and what I have come to appreciate is the high
14 level of integrity and the commitment of employees of
15 our department. We have a great responsibility,
16 especially in times like these, and I'm very proud of
17 the way everybody has stepped up and delivered in a
18 really difficult, challenging environment.
19 I'm happy to take any questions you may have.
20 CHAIRMAN STEINBERG: I have a few, but I have a
21 long list on the sheet here. I won't ask all of them.
22 I actually want to ask sort of an overriding question as
23 to how you define success or failure of the department.
24 Would you — If a state-regulated DFI fails, do
25 you view that as your department's failure, or are there
29
our licensees with respect to their mortgage exposure
and the extent of their foreclosures, and what we
discovered is that over the first three quarters of
2008, about one fifth of 1 percent of the mortgages
outstanding were in foreclosure. Of course, at that
period of time, a far smaller percentage from what we've
seen from the big, large, large-scale servicers
operating in California. And, by the way, those same
institutions modified about 3.3 times the number of
houses on which they foreclosed. So I think their track
record is very good.
Let me briefly conclude by talking about some
of the initiatives that I've taken since I've been at
the department. We've moved to a risk-based examination
calendar -- schedule rather than a calendar-focused
examination schedule in this environment. We've
enhanced our risk-screening methodologies off site to
enable us to focus in on the more troubled situations.
In addition, we have taken a more targeted approach to
the examinations we do perform, focusing much more
closely on safety and soundness issues.
I put in place a new policy toward enforcement
actions, and we substantially increased our usage of
enforcement actions since I've been on the job. And
I've initiated a complete review of all of our policies
28
1 things outside of your control, given staffing, given
2 the regulatory -- the tools that you have to deal with,
3 that might result in such a result even with you doing
4 everything in your power to stop it?
5 MR. HARAF: Mr. Chairman, the sad truth of it
6 is that the financial institution failures are a long
7 part of our history. They are inevitable. We can't
8 stop failures from occurring. In my view and the
9 department's view, the most important thing we need to
10 do is to make sure that the system overall is healthy
11 and is well-regulated. And when an institution does get
12 into trouble, we try our best to rehabilitate it; and if
13 that's not possible, we try to seek the best possible
14 outcome for those institutions.
15 I did have one of my people look into what was
16 happening back in the 1930s, and in 1933 alone, the
17 superintendent of banking failed 33 banks and conserved
18 22 others, quite a substantial workload, but that was in
19 the middle of the Great Depression.
20 I'm not predicting that we're going to see
21 anything like that rate of failure currently. In fact,
22 as I said in my opening statement, I feel pretty good
23 about the condition of our institutions; but the
24 economic environment and financial environment is such
25 that failures will occur.
30
of 20 sheets
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03/09/2009 09:02:33 AM
1
CHAIRMAN STEINBERG: In terms of your approach
1
MR. HARAF: Okay. Mr. Chairman, the statistics
2
to regulation, maybe one can read too much into
2
that you read are broader statistics about loan losses
3
adjectives, but your December 2008 monthly bulletin
3
across the loan portfolios of our banks and credit
4
says, and I quote, "DFI continues to offer the charter
4
unions and so on.
5
of choice in California as a result of its thoughtful
5
The statistics that I referenced in my opening
6
and measured approach to supervision."
6
statement refers to losses from mortgage portfolios and
7
The word "measured" bothered me just a little
7
foreclosures on residential mortgages. The conditions
8
bit. Given the — Just given the environment that we
8
of our institutions has taken a hit in this period of
9
are living through right now, what do you mean by that?
9
time; but, as I mentioned, they came into this period
10
MR. HARAF: Well, you know, what I am proudest
10
very well capitalized, far better capitalized than they
11
of in the way we approach the management of our
11
were in the last period of financial failures of banks
12
institutions is that we are not bureaucratic. We have a
12
in the late '80s and early '90s. They have a big
13
very good management team, a very thoughtful management
13
capital cushion in place, and it permits most of them to
14
team. We try to take each financial institution,
14
absorb substantial losses and still remain
15
evaluate the condition of that institution on its
15
well capitalized as defined under the federal
16
merits.
16
regulations.
17
We have deeper knowledge of those institutions,
17
So they're not at all contradictory. You can
18
because of our closeness to them, than you would
18
expect in an environment like this one that losses are
19
typically find among federal regulators of, say,
19
rising. Nonetheless, the capital cushions are such that
20
nationally chartered banks. And we have to make
20
they're able to absorb those losses and still remain
21
decisions every day about what is the right thing to do,
21
well capitalized.
22
and those decisions require a lot and, in my view, a
22
CHAIRMAN STEINBERG: So you don't expect
23
measured approach.
23
failures during the next period of time?
24
We don't want to be too hard on licensees that
24
MR. HARAF: No, to the contrary. I can foresee
25
are in a condition that can be rehabilitated on our own.
31
25
some failures in the near term. I don't foresee a very
33
1
We don't want to add unnecessary burdens; but when we
1
substantial number of failures at this time, but an
2
have to make tough choices, we will make those tough
2
awful lot depends on the economy, how deep this
3
choices.
3
recession becomes, and how long lasting it becomes.
4
CHAIRMAN STEINBERG: Now, I may not have heard
4
CHAIRMAN STEINBERG: Last question, and I'll
5
you correctly, but you talked in your opening statement
5
turn it over. Not to go round and round in this, but,
6
about a recent audit which indicated that the problem,
6
again if --
7
at least of foreclosure, among DFI-regulated
7
You're saying there's capital cushion; there
8
institutions was not nearly as bad as what one might
8
are some warning signs; and you, in fact, do expect some
9
expect. Is that right?
9
institutions, people's assets obviously being invested
10
MR. HARAF: That's correct.
10
in those institutions, to fail. So my last question
11
CHAIRMAN STEINBERG: The information I have in
11
gets back to this issue -- this adjective of a measured
12
front of me — Let me ask you to respond to the
12
approach.
13
following: The condition of DFI-regulated banks is
13
Why is a measured approach appropriate? Is it
14
weakening with an increase from 7 percent to 26 percent
14
not more appropriate to take an aggressive posture,
15
of banks rated less than satisfactory. There has been
15
especially with those institutions that you believe are
16
an increase in problem assets with past due loans and
16
more likely to fail?
17
leases from 5 percent of capital to 21 percent of
17
MR. HARAF: I absolutely agree. We should take
18
capital, that foreclosed property increased from
18
an aggressive posture with respect to those institutions
19
54 million as of December 31, 2006, to 427 million as of
19
that are likely to fail, and that's been the policy of
20
September 30th, 2008.
20
our department. Nonetheless, there are a lot of gray
21
Are those correct statistics?
21
areas that we have to deal with on an everyday measure.
22
MR. HARAF: Those are correct statistics.
22
The use of the term "measured" was intended to reflect
23
CHAIRMAN STEINBERG: So how do you reconcile
23
the thought we give to those gray situations.
24
the reduced rate of foreclosure, at least as you
24
CHAIRMAN STEINBERG: Fair enough.
25
described it, with these statistics?
25
Senator Oropeza.
32
34
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10 of 20 sheets
1 SENATOR OROPEZA: I wanted to ask you about --
2 In doing our homework on this, I was very interested in
3 two areas, and they actually sort of dovetail with each
% other. One is the area of money-transmitter entities,
5 and there — I understand there are 54 of them that are
5 licensed by your department.
T MR. HARAF: Um-hmm.
3 SENATOR OROPEZA: These are the companies that
9 wire money internationally often?
3 MR. HARAF: That's correct.
1 SENATOR OROPEZA: And I would say a fair number
2 of these customers are individuals of -- who are either
3 immigrants -- well, who are immigrants --
4 MR. HARAF: Yes.
5 SENATOR OROPEZA: -- who may not speak the
5 language well, English, may not speak English well, and
7 also may be economically challenged.
8 And so what is the role of the department once
9 the initial application is approved in terms of
0 providing any kind of assistance or protections for
1 these consumers?
2 MR. HARAF: Well, our primary role under the
3 statutes is really to ensure the safety and soundness of
4 those institutions and to ensure that they're in
5 compliance with federal and state laws.
35
1 though it is, about the customers of these institutions,
2 is the information flow about who is charging what and
3 whether you're going to get a fair deal from one
4 organization as compared to the next is pretty good.
5 And those institutions that haven't done a good job
6 serving their customers, or have gouged their customers,
7 have experienced substantial declines in the
8 transmission vibes. And the word on the street gets out
9 pretty quickly.
10 SENATOR OROPEZA: And you mentioned that you
11 receive complaints when there are problems.
12 MR. HARAF: Yes.
13 SENATOR OROPEZA: Some complaints. Ten percent
14 of your complaints, you say.
15 MR. HARAF: That's correct.
16 SENATOR OROPEZA: And it's my understanding
17 that in 2008, there were 1285 complaints and 802 calls.
18 Of those, it was gleaned that 351 of them were actually
19 licensees, DFI licensees --
20 MR. HARAF: That's correct.
21 SENATOR OROPEZA: -- who there were complaints
22 against.
23 I have to say we went online to look at the
24 complaint form.
25 MR. HARAF: Um-hmm.
37
1 We examine these institutions not just for
2 safety and soundness, but also for their -- their BSA
3 anti-money laundering programs and the like. And with
4 respect to consumer protections, we respond to consumer
5 complaints primarily. And I have to say we track our
6 consumer complaints by program, and the number of
7 consumer complaints we receive regarding our money-
8 transmitter program is about 10 percent of the total
9 number of complaints.
0 SENATOR OROPEZA: Well, I would just suggest to
1 you that it seems like there's a vulnerability there in
2 terms of the clientele, and that to the greatest extent
3 possible within the parameters of your charge, it seems
4 like there ought to be some oversight or some kind of
5 something that assures that people are not, for
6 instance, being charged outrageous fees.
7 I don't know the answer to that question, if
8 there are or aren't, but it just seems like sort of a
9 natural horse-sense kind of thing to be concerned about.
0 MR. HARAF: Sure. I appreciate your concern,
1 Senator, and we share that concern. The best data that
2 we have, though, shows that fees have been coming down.
3 In addition, we see a lot of different types of
4 providers operating in these markets. The market is
5 pretty competitive, in my own experience, anecdotal
36
1 SENATOR OROPEZA: I'll pass them around so that
2 Members can see what the form looks like.
3 I am a little troubled by the lack of contact
4 information for the department on this form. There's no
5 place on this form where somebody can call and talk to
6 somebody. There's also no place where you can request
7 an application in other than English. This document is
8 in English, and I wonder -- and also, there's no little
9 box to check under "Complaint Type" for what we were
10 just talking about.
11 So I can imagine there's only 10 percent,
12 because they really have to figure out the system in
13 order to complain on these kinds of transactions, these
14 money transmitters. Your complaint types are cash,
15 check cashing, consumer fraud, account charges, mortgage
16 loans, auto loans, general checking, and financial
17 privacy. So it's not even on the form. You really have
18 to sort of figure your way through it.
19 So have you all thought about the accessibility
20 of your forms and the accessibility of your programs and
21 maybe making some adjustments that might make it more
22 user friendly for Californians.
23 MR. HARAF: Senator, I haven't personally
24 reviewed the form since I became commissioner, but I
25 think you have some very good ideas, and we would be
38
of 20 sheets
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03/09/2009 09:02:33 AM
1 delighted to take a look at those ideas.
2 SENATOR OROPEZA: I'd love that. I think that
3 would be a very responsible thing to do. We'll give you
4 a copy.
5 MR. HARAF: I think I can get one. Thank you
6 very much.
7 SENATOR OROPEZA: You know, because there's
8 this thing called garbage in, garbage out. If you don't
9 have a system that is open to providing people the
10 access, then you get sort of garbage in terms of your
11 data on how many complaints and what the complaints are
12 about, because you don't really — you get my point,
13 right?
14 MR. HARAF: Yes.
15 SENATOR OROPEZA: Then the question is: What's
16 really happening out there?
17 So I would be very appreciative of you taking a
18 look at it and also considering the issue of language.
19 In the state of California today, with financial
20 institutions serving multilingual populations, that the
21 complaint form -- and also a contact number would be
22 good, or some kind of reference on there where people
23 can call. Not everybody is computer savvy. And also,
24 maybe they just have a question, you know.
25 MR. HARAF: You raise some very terrific and
39
1 institutions to the Treasury Department and offered them
2 a very substantial amount of money. My recollection is
3 something like $200 billion dollars, and this was,
4 "You must take the money. No questions asked. We're
5 not going to review your financial condition. Just take
6 it, and in exchange we will accept preferred stock in
7 your companies."
8 And later, the Treasury Department made the
9 announcement that this program would be available to
10 banks of all sizes, and later a set of policies were
11 established for submitting applications. And this was a
12 policy that was established and conducted through the
13 federal regulators into the Treasury Department.
14 The result of that process turned out to be
15 much more rigorous for the types of community banks we
16 generally supervise within the department, and the
17 standards to which banks were held in order to receive
18 that money was quite high. And in addition, there were
19 subsequent conditions that were imposed on the receipt
20 of this capital that made it unattractive to some of our
21 licensees.
22 So when the program was announced, I
23 encouraged, through communications to all of our bank
24 licensees, that they all apply for those capital
25 infusions. About 155 of our banks did make those
41
1 valid suggestions, and we will follow up on that.
2 SENATOR OROPEZA: Superb. You gave me the
3 right answer on that.
4 CHAIRMAN STEINBERG: That's one of the great
5 values of this process, actually.
6 Thank you for raising the issue, Senator.
7 Senator Aanestad.
8 SENATOR AANESTAD: In our conversation earlier,
9 I had asked the question, and the answer was a surprise,
10 and I just thought it was something that would be
11 interesting to other Members of the Committee.
12 Last October, the Bush administration passed
13 out the multibillion-dollar economic stimulus package.
14 I noted that of the 60-some banks in California that had
15 applied for, 22 had already received funding. And a
16 couple were in my district. And I was concerned that
17 the ones who had received funding from that package in
18 my district were in trouble, and yet you assured me that
19 probably the opposite was true.
20 Would you care to just give them a little
21 information how that process works.
22 MR. HARAF: Yes, Senator. Thank you.
23 You may recall back in the fall of last year,
24 the secretary of the treasury, the chairman of the
25 Federal Reserve, called nine large financial
40
1 original submissions out of 220 banks. Later, about
2 40 of those applications were withdrawn for a variety of
3 reasons. Some of them were forwarded along to Treasury
4 Department by the federal regulators. And, ultimately,
5 about 38 were approved, with a total of $1.7 billion
6 dollars in funding for those institutions in total.
7 So the program is rigorous in terms of the
8 evaluations that were applied. And the funding levels,
9 despite the amounts that were provided to the very large
10 institutions, were pretty small in relation to their
11 size.
12 SENATOR AANESTAD: But in effect, what you told
13 me -- and let me see if I have this straight -- is that
14 the banks that might need the money weren't stable
15 enough to get it, and the banks that did receive the
16 money in my district were probably the most solid banks.
17 MR. HARAF: Well, some of the banks that didn't
18 apply may not have applied for one of a couple of
19 reasons. They might not have applied because they
20 thought they were financially sound and didn't need the
21 capital and didn't want to pay the Treasury Department a
22 5 percent dividend. Some of them may have decided they
23 couldn't get through the process and didn't want to have
24 the embarrassment of being rejected.
25 So it's hard to read from the numbers exactly
42
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12 of 20 she
what the motivations were. But, in fact, you're exactly
right. The institutions that were funded among
community banks were institutions that were our
healthiest and well-capitalized institutions.
It's a very different process. The community
banking world, it's a tough world out there, and the
kinds of protections that have been provided to our very
largest financial institutions by and large are not
available to them.
SENATOR AANESTAD: Thank you.
I had that when I was young. I was a student,
I needed a car loan, and I couldn't get it. Now that I
don't need the money, I can get all the loans I want.
MR. HARAF: I can put you in touch with one of
our credit unions, Senator.
CHAIRMAN STEINBERG: Senator Dutton.
SENATOR DUTTON: More of a comment than
anything else.
In going over your resume I was so impressed.
I appreciate the time you spent with me going over —
there's a lot of different issues. I think your
background, both on the federal level as well as here in
the state, and your educational background and what
you've done as experience, as far as doing in the
economy and so forth, I think you're just the real right
43
1 foreclosure.
2 General question: What are you doing to
3 implement those laws since you do have regulatory
4 authority? And maybe as importantly, given the
5 difficult economic times and the risks, do you have
6 enough staff in order to be aggressive in implementing
7 these laws and performing the rest of your functions?
8 MR. HARAF: Yes. So with respect to our
9 ability to put in place a program to deal with the
10 foreclosure legislation, we met on Monday with the
11 Department of Corporations, Department of Real Estate,
12 to discuss matters in which — the steps that we will
13 need to take in order to implement this.
14 I have taken a personal interest in this,
15 especially because, as I mentioned, the foreclosure
16 rates among our licensees are really quite small, and in
17 particular I noted that 75 percent of our licensees have
18 fewer than 500 mortgages outstanding that they're either
19 servicing or that they own, and the foreclosure rates
20 among those institutions is really small.
21 So it's truly the case for those institutions.
22 They would be dealing with less than a handful of
23 foreclosures in a typical year, so for them in
24 particular, I want to make sure that we can establish a
25 process that doesn't put undue regulatory burden on
45
person for the job. So I just wanted to make that
comment, because we talked a little bit about some of
the issues, and your background is extremely impressive.
And if I was actually hiring you for my company, I would
hire you in a heartbeat.
MR. HARAF: Thank you, Senator. I appreciate
that.
CHAIRMAN STEINBERG: It's good to know that you
have another job offer.
MR. HARAF: I would be worried about Chris,
though.
CHAIRMAN STEINBERG: Senator Cedillo.
SENATOR CEDILLO: No, I don't have anything.
CHAIRMAN STEINBERG: One final question for
you, sir. And that is, as you know, the legislature
over the past six months or so has passed two very
significant foreclosure laws, one, SB 7, which was
passed two weeks ago tomorrow at 7:00 a.m. --
SENATOR AANESTAD: 5:30.
CHAIRMAN STEINBERG: 5:30. Sorry about that.
Time warp.
-- 90-day delay in foreclosure unless the loan
servicer has a copy of its loan modification file, and
of course last year, Senator Perata's bill, SB 1137,
requires servicers to contact borrowers prior to
44
1 these small institutions. And beyond that, we're
2 looking at ways to take advantage — to look at the law
3 and implement programs that make sense for our larger
4 institutions as well.
5 Regarding the staffing, we've been very
6 careful, long before I came into the department, about
7 staffing resources and making sure that we were
8 well-equipped for the changing environment we were
9 operating in. Over the past three years, we've had
10 several budget-change proposals in place that have led
11 to approvals for 44 additional positions. We fully
12 hired up in connection with those approvals.
13 We have an additional proposal in the
14 governor's budget for four additional bank examiner
15 positions, and we will probably revisit our staffing
16 needs again in the coming months in the light of this
17 foreclosure legislation and in the light of the
18 deteriorating situation in the economy. But for now I
19 think -- given the steps that I've taken to reallocate
20 resources and deal with our most pressing requirements,
21 I think we're going to be okay. We'll revisit it again
22 in a few months.
23 CHAIRMAN STEINBERG: We'll have our budget
24 committee take a close look at that and work with you,
25 Senator Oropeza.
46
of 20 sheets
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1 SENATOR OROPEZA: Just a very quick question on
2 staffing. Not including your support staff, can you
3 give me an idea of the gender balance?
4 MR. HARAF: Not off the top of my head,
5 Senator, but one of the things I'm most proud of is that
6 our department looks like the United Nations. We have
7 great ethnic diversity, a good balance between men and
8 women, and many, many language skills within the
9 department, and a lot of willingness on the part of our
10 employees to volunteer, using their language skills, to
11 help with foreclosure workshops, the Bank on California
12 and any other initiatives around the state.
13 SENATOR OROPEZA: Great. That's good to hear.
14 It won't be any trouble, then, translating that form.
15 CHAIRMAN STEINBERG: Exactly. I think that
16 will be done pretty quickly, actually.
17 Senator Dutton, last question.
18 SENATOR DUTTON: Yeah, just one follow-up.
19 Your department is actually primarily funded
20 with a special fund. It's not part of the general fund.
21 MR. HARAF: That's right.
22 SENATOR DUTTON: And your fund balance that you
23 have currently, you have sufficient money at this time
24 to actually hire any personnel you need to do things,
25 correct?
47
1 CHAIRMAN STEINBERG: Thank you.
2 Witnesses in support.
3 Welcome.
4 MS. PADDEN: Good afternoon, Senators.
5 Maurine Padden on behalf of California Bankers
6 Association representing over 80 percent of the banks
7 doing business in California.
8 On behalf of the state-chartered members, we
9 strongly support Bill Haraf for his qualifications and
10 urge you to vote in favor of his nomination as
11 commissioner of the Department of Financial
12 Institutions.
13 I can say personally, for the 20 years that
14 I've been doing business in and around the Capitol, I
15 have not seen a more qualified candidate for this very
16 important role as a supervision — a supervisory and
17 regulatory oversight that needs to be done today. We
18 strongly support his candidacy.
19 CHAIRMAN STEINBERG: Thank you very much for
20 your testimony.
21 Next.
22 MR. LEVINE: Mr. Chairman, Members of the
23 Committee. My name is Ezra Levine, and I am counsel to
24 The Money Services Round Table, which is the
25 organization representing the large national non-bank
49
1 MR. HARAF: At this time, that's right. We're
2 going to be reviewing our assessments again this spring,
3 in fact, next month.
4 SENATOR DUTTON: As I recall, there's quite a
5 few special funds that the State has transferred money
6 or borrowed. What is the status of the loan that's
7 outstanding from the general fund to your department?
8 MR. HARAF: The general fund in 2002-2003
9 budget year borrowed $2 million dollars from our banking
10 program and $2.7 million dollars from our credit union
11 program. The banking program was repaid out of the
12 general fund the next year, but the credit union loan
13 remains outstanding, and we're hopeful that we'll get
14 repaid in this budget year.
15 SENATOR DUTTON: Do you require those funds in
16 order to be able to hire the additional personnel to do
17 some of these —
18 MR. HARAF: Yes, sir.
19 SENATOR DUTTON: So it would behoove us to make
20 sure we get that back to you.
21 MR. HARAF: Yes, Senator.
22 CHAIRMAN STEINBERG: Let's make sure, Senator
23 Dutton, you're on the Budget Committee -- I'm serious --
24 that we look at that and make sure that we resolve that.
25 SENATOR DUTTON: I will.
48
1 money transmitters, and I'm here in support of the
2 confirmation. Thank you.
3 CHAIRMAN STEINBERG: Thank you, sir.
4 SENATOR OROPEZA: Transmitters.
5 MS. GLADSTEIN: Margaret Gladstein on behalf of
6 California Independent Bankers. We also support his
7 nomination. We think he has done an excellent job in
8 establishing relationships with our community banks. We
9 represent 150 community banks in California, and we've
10 had a -- our members have had a very good working
11 relationship with him. He's reached out to them,
12 establishing communications, and has been helpful for
13 institutions that do need assistance.
14 CHAIRMAN STEINBERG: Thank you. Appreciate it.
15 Any witnesses in opposition to the nomination? If not,
16 I'll say I'm pleased to support your nomination.
17 Senator Dutton said you have an outstanding
18 record, and we appreciate your responsiveness. We just
19 want to make sure you are not shy about asking for what
20 it is you need in order to do everything you can to
21 prevent failure, because I know failure may be
22 inevitable in some circumstances, but these are
23 people's -- you know, these are Californians' assets
24 here, and, you know, we would hope, especially in this
25 environment, that you would err on the side of being
50
03/09/2009 09:02:33 AM
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14 of 20 sheets
1
aggressive to prevent failure. That's one member's
1
up for confirmation as director of the Office of Real
2
opinion, the Chair's opinion too.
2
Estate Appraisers.
3
MR. HARAF: Mr. Chair, can I say something
3
Mr. Clark, welcome to you.
4
about that?
4
MR. CLARK: Thank you, Senator.
5
CHAIRMAN STEINBERG: Yes, please.
5
CHAIRMAN STEINBERG: Is there any member of
3
MR. HARAF: I take that responsibility very
6
your family or any special guest you would like to
7
seriously. Let me give you an example of a case that we
7
introduce?
8
just recently dealt with, the case of County Bank, a
8
MR. CLARK: Yes. I would like to introduce my
9
bank in the Central Valley with 40 branches, very
9
lovely wife, Carolyn.
0
important to the Central Valley economy, and
10
CHAIRMAN STEINBERG: Carolyn.
1
unfortunately it got into trouble with residential
11
MR. CLARK: Carolyn's encouragement and support
2
and construction lending, and we had to fail that bank.
12
allows me to have a public service career, and I love
3
I personally worked very hard to ensure that
13
her dearly.
4
the acquiring institution took all of the deposits, not
14
CHAIRMAN STEINBERG: Thank you very much, and
5
just the insured's deposits, the loans, the branches,
15
welcome to you.
6
the employees, and merged it into the acquiring
16
SENATOR OROPEZA: Very nice to hear.
7
institution, in this case, WestAmerica.
17
CHAIRMAN STEINBERG: All right, Mr. Clark. A
8
That transaction went very smoothly, and I
18
brief opening statement, and then we have some questions
9
think it's exactly the kind of thing we try to
19
for you.
0
accomplish in every one of these situations.
20
MR. CLARK: Thank you, Senator. Good
1
CHAIRMAN STEINBERG: Good. Troubleshoot.
21
afternoon, Mr. Chairman and Members of the Committee. I
2
All right. We have a motion in support by
22
appreciate the opportunity to appear before you today to
3
Senator Aanestad.
23
discuss my qualifications for leading the Office of Real
4
Please call the roll.
24
Estate Appraisers.
5
MS. BROWN: Senator Cedillo.
51
25
With the current condition of our state and
53
1
SENATOR CEDILLO: Aye.
1
national economies, it's imperative that OREA administer
2
MS. BROWN: Cedillo aye.
2
a vigorous appraiser enforcement program to ensure that
3
Dutton.
3
the public and business communities are protected from
4
SENATOR DUTTON: Aye.
4
incompetent and unethical appraisal practice.
5
MS. BROWN: Dutton aye.
5
I have a wide range of private- and
6
Oropeza.
6
public-sector experience that has prepared me to fulfill
7
SENATOR OROPEZA: Aye.
7
the requirements for this position. My appointment as
8
MS. BROWN: Oropeza aye.
8
director of OREA provides an opportunity to utilize the
9
Aanestad.
9
abilities I've developed over my business career to
0
SENATOR AANESTAD: Aye.
10
provide a positive impact on the appraisal profession
1
MS. BROWN: Aanestad aye.
11
and to contribute to the recovery of the real estate
2
Steinberg.
12
markets.
3
CHAIRMAN STEINBERG: Aye.
13
I spent the first 25 years of my career in the
4
MS. BROWN: Steinberg aye.
14
private sector working many of the disciplines of the
5
CHAIRMAN STEINBERG: Thank you. That will move
15
real estate profession, including multifamily
6
to the floor of the State Senate to be taken up within a
16
development, acquisitions, property management,
7
week -- two weeks. Two weeks.
17
brokerage, and commercial and residential appraisals.
8
MR. HARAF: Thank you.
18
I started my public service career in 1999 with
9
CHAIRMAN STEINBERG: Thank you very much,
19
the Sacramento Regional Transit District, worked for
0
Mr. Haraf. Appreciate it.
20
five years for the Department of General Services, and
1
We're going to take a five-minute break.
21
was employed by the Wildlife Conservation Board for over
2
(Recess taken.)
22
two and half years. My public agency experience has
3
CHAIRMAN STEINBERG: All right. We will
23
included real property acquisitions, management of
4
resume.
24
professional staff, as well as review and
5
I would like to welcome Mr. Bob Clark, who is
25
recommendations on urban, rural, and conservation land
52
54
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1 appraisals.
2 Integrity and ethics are what I most highly
3 value, focusing on a strong work ethic, example to my
4 colleagues, encouraging and empowering the staff for
5 which I'm responsible, always endeavoring to maximize
6 productivity while minimizing costs.
7 I have specific goals and ideas I wish to
8 implement at OREA to improve on the regulatory program
9 and successfully attain full compliance with the
10 standards of the appraisal subcommittee, the federal
11 oversight agency responsible for appraisal licensing and
12 enforcement. These ideas include measures to shorten
13 the time frame for enforcement-case closures,
14 enhancements to our information technology systems to
15 increase efficiencies and lower costs, and increasing
16 California's role in national appraisal issues by
17 expanding OREA's participation in the Association of
18 Appraisal Regulatory Officials.
19 Mr. Chairman, I'm honored by the opportunity to
20 be considered for confirmation, and with that I'm all
21 yours for any questions that you may have.
22 CHAIRMAN STEINBERG: Thank you very much,
23 Mr. Clark. I know I have a couple.
24 Interesting fact that was brought to our
25 attention, unrelated to you specifically, but it may
55
1 is your department doing proactively to address what you
2 report as an increase in these very disturbing patterns?
3 MR. CLARK: I would like to say we're going
4 after the bad guys, vigorous enforcement of the laws
5 that are in place.
6 We have struggled to complete a large number of
7 enforcement cases in large degree because of — well,
8 there are several factors. One, our staff has been
9 minimal. We have quite a high ratio of licensed
10 appraisers — I'm sorry — property appraisal
11 investigative staff to licensed appraisers.
12 We also have struggled with people being
13 willing to come forward and make complaints against
14 appraisers that have done unethical or fraudulent work.
15 We do have on our Web site -- which we have
16 improved in the last day to make it very clear to
17 complainants — as to how to file a complaint. We also
18 just -- We encourage anonymous complaints. We prefer,
19 obviously, if someone will come forth and testify for
20 us. That makes it easy for us to obtain a judgment
21 before the Office of Administrative Hearings. But if
22 someone comes forth with an anonymous complaint and they
23 have sufficient evidence, then we can proceed with an
24 action.
25 So vigorous enforcement is what we're going
57
1 speak to the commitment or lack of commitment that this
2 administration and previous administrations, frankly,
3 have had to this office.
4 You are the first director appointed since
5 1993, and the director's office has, in fact, been
6 vacant for ten years. There have been acting directors.
7 And so, again, in this very, very difficult economic
8 time that involves real estate, I'm glad we now have a
9 permanent director, but it's something that's very, very
10 noteworthy.
11 Here's — In your written responses to our
12 questions, you sort of laid out the challenges that your
13 department faces. You report to us that there has been
14 an increase in the past several years of appraiser
15 involvement in fraudulent transactions.
16 MR. CLARK: Yes, sir.
17 CHAIRMAN STEINBERG: No money down with cash
18 back to a buyer, straw buyers, flips, and stolen
19 identities. There's also been a significant increase in
20 the number of false certifications where a supervising
21 appraiser has falsely asserted inspection of a
22 property -- pretty outrageous. Didn't happen -- and of
23 electronic signature theft by trainee appraisers. And
24 you lay out a few other problems.
25 And I guess the opening question here is: What
56
1 for.
2 CHAIRMAN STEINBERG: Okay. You talked about
3 staff, and obviously when it comes to these sorts of
4 disturbing criminal violations, really, when these sorts
5 of things happen, you have no attorney on staff.
6 MR. CLARK: This is correct.
7 CHAIRMAN STEINBERG: You know, not just because
8 I'm an attorney do I think that's important. Yeah,
9 sure. But, I mean, that seems odd to me.
10 MR. CLARK: It's astounding to me, Senator, and
11 we have, in fact, asked in a budget change proposal
12 going forward for a staff legal counsel and also four
13 additional appraiser investigator positions.
14 CHAIRMAN STEINBERG: So that's another one,
15 Senator Dutton --
16 SENATOR DUTTON: I was going to ask.
17 CHAIRMAN STEINBERG: Mr. Watchdog here, let's
18 help the good director get what he needs here.
19 The other piece of that, and I don't know
20 whether the four additional investigators solves the
21 problem, but apparently you react to complaints as you
22 just described, but there is no audit program where you
23 sort of spot-check these appraisals.
24 MR. CLARK: The only form of an audit program
25 we presently have is the monitoring of individuals that
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16 of 20 sheets
have been disciplined where they have to submit a log of
appraisal experience every three months, and we pull
samples from that log and review that work. That's the
only auditing function we do right now. We haven't had
sufficient staff. It's my understanding that — I
think it was probably eight or ten years ago, they
started an audit program but did not have sufficient
staff to actually devote the resources to that effort.
CHAIRMAN STEINBERG: Are the five positions you
seek, in part, to remedy that?
MR. CLARK: Yes, sir.
CHAIRMAN STEINBERG: So you will be able to do
spot audits if you get the four additional
investigators?
MR. CLARK: We're actually in the BCP for three
additional investigators, Senator. We have to be
careful here, because we're seeing our licensing numbers
come down, and I don't want to be in a position a year
from now to be way on top of the enforcement program and
have too much staff.
There are two factors in this, not only
additional staff, but having in-house legal counsel
should help us to get more on top of this enforcement
program as well to triage the legal aspect of these
cases.
59
1 Appraisal Qualifications Board course approval program.
2 We go the extra step and also review those that have not
3 yet been approved by the AQB program.
4 CHAIRMAN STEINBERG: So your review is limited
5 to those that have not been reviewed by the --
6 MR. CLARK: I wouldn't say — we also review
7 the --
8 I would say there's not as in depth a review of
9 those course providers that have been approved by the
10 AQB program, but we do look at the course materials as
11 well there.
12 CHAIRMAN STEINBERG: You do look at the course
13 materials at the very beginning or sort of on a spot,
14 random basis after --
15 MR. CLARK: One of the things I've initiated
16 since I started, Senator, is all of our appraiser
17 investigators are licensees as well, and they must take
18 continuing education. And I put out a directive that
19 every appraiser investigator, when they take a
20 continuing education course, they must write a review,
21 an audit, if you will, an audit report on the course
22 provider's continuing education course.
23 CHAIRMAN STEINBERG: So your method is to hope
24 that the best in the business will report negatively, if
25 appropriate, that a particular continuing education
61
CHAIRMAN STEINBERG: Are you going to be able
to do random audits if you get the staff you requested
in this year's BCP?
MR. CLARK: I don't know yet. I want to start
that program. My most immediate concern is getting our
caseload down and getting within the appraisal
subcommittee guidelines of closing enforcement cases
within 12 months of receipt of complaint.
CHAIRMAN STEINBERG: That's all fine. I
just -- you know, I think by experience, when the
industry knows that they could be spot-checked --
MR. CLARK: Absolutely.
CHAIRMAN STEINBERG: -- I think that's a better
deterrent than just being complaint-driven.
MR. CLARK: I agree with you, I share your
concern, and it is a very important aspect of what we're
doing for me as well.
CHAIRMAN STEINBERG: What about accrediting and
educational courses for appraisers; do you check to see
whether those are legit?
MR. CLARK: Yes, sir. We -- There are quite a
number -- I forget exactly. There are 2,155 approved
appraisal courses with 196 approved appraisal education
providers that our staff has reviewed. A lot of those
course providers are actually approved under the
60
1 course is not up to standard?
2 MR. CLARK: If they're not up to standard, we
3 would take measures --
4 SENATOR OROPEZA: How would you know, though,
5 if they're not up to standard? Excuse me. I'm sorry.
6 CHAIRMAN STEINBERG: No, no. That's fine.
7 MR. CLARK: Based on an audit report that we
8 would have from our staff.
9 SENATOR OROPEZA: Do you do audits?
10 MR. CLARK: I'm sorry. Let me backtrack here.
11 When our appraiser investigative staff goes to
12 a continuing education course, the new directive is "Not
13 only do I want you to take the course and understand the
14 material, but I also want you to review and write an
15 audit report on that course provider's material for the
16 course." So it's kind of a first step into an audit
17 program, at least for the course providers.
18 CHAIRMAN STEINBERG: I think I understand.
19 SENATOR OROPEZA: I see.
20 CHAIRMAN STEINBERG: You're not relying on your
21 limited staff to provide you the report. You're
22 actually relying on the consumer to report back whether
23 they thought the audit -- it's like if you go to a
24 conference. It's the participants doing an evaluation.
25 MR. CLARK: It's the consumer that happens to
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of 20 sheets
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03/09/2009 09:02:33 AM
1 be one of our employees, an investigator. Those are the
2 individuals.
3 SENATOR OROPEZA: They send the investigators
4 to the courses.
5 CHAIRMAN STEINBERG: Oh, I see.
6 MR. CLARK: Our appraiser investigators are all
7 licensed appraisers themselves, and they have the
8 continuing education requirement. It is a —
9 CHAIRMAN STEINBERG: You have eight of them?
10 MR. CLARK: Yes, sir.
11 CHAIRMAN STEINBERG: How much -- What's their
12 breadth?
13 MR. CLARK: I'm sorry?
14 CHAIRMAN STEINBERG: How far and wide are they
15 able to get in terms of the numbers of ~
16 MR. CLARK: I'm not sure. I would have to get
17 back to you again on that.
18 CHAIRMAN STEINBERG: Again, it begs the
19 question about whether or not you are adequately staffed
20 to meet the new and emerging trend that you are seeing
21 in the business.
22 MR. CLARK: I would agree.
23 SENATOR OROPEZA: And I would say almost the
24 emergency situation in a sense — I mean, this has been
25 a piece — The appraisals of property has been a piece
63
1 SENATOR OROPEZA: In terms of their training --
2 You know, I don't know if everybody reads the whole
3 bible, but they certainly pass the test.
4 MR. CLARK: Senator, the Uniform Standards has
5 to be taken and retaken every two years. Appraisers are
6 required to.
7 SENATOR OROPEZA: Okay. So they have to be
8 able to basically say what those are.
9 MR. CLARK: Yes. That's correct.
10 SENATOR OROPEZA: Okay. All right.
11 CHAIRMAN STEINBERG: Okay. Questions.
12 SENATOR DUTTON: I have just a couple.
13 CHAIRMAN STEINBERG: Senator Dutton.
14 SENATOR DUTTON: Just following up with your
15 charge as the watchdog.
16 CHAIRMAN STEINBERG: You're the watchdog.
17 SENATOR DUTTON: What kind of money -- In your
18 department, you're also special fund. It's funded
19 solely by the fees that you're paid by licensees and so
20 forth. So what kind of dollars does the general fund
21 owe your department?
22 MR. CLARK: Right now, there is $19.6 million
23 dollars on loan to the general fund.
24 SENATOR DUTTON: Nineteen million?
25 THE WITNESS: Yes, sir.
65
1 and are a continuing piece of the challenging real
2 estate market now which is part of our whole economic
3 crisis. So I feel a sense of urgency, Mr. Chair, about,
4 you know, some accountability on the skill levels, the
5 appropriateness of the training, and I was going to
6 mention also that lack of ethics training as part of
7 what's required.
8 CHAIRMAN STEINBERG: Ethics for the staff or --
9 SENATOR OROPEZA: Ethics for appraisers. As I
10 understood it, it's not approved as any of the courses
11 that are required, ethics.
12 MR. CLARK: I misstated that in my meeting with
13 the Senate Rules staff the other day. Actually,
14 ethics -- Ethics is a huge thing in the Uniform
15 Standards of Professional Appraisal Practice. There are
16 four statements at the beginning of the Uniform
17 Standards, and the number one — There are four rules,
18 and the number one rule is the ethics rule, and it is
19 also covered in our basic education required of
20 appraisers. There's an appraisals principles course
21 that includes a module on appraisal ethics.
22 SENATOR OROPEZA: So there's a module of a
23 course on ethics?
24 MR. CLARK: And also in the Uniform Standards,
25 which is pretty much the appraiser bible.
64
1 SENATOR DUTTON: That will hire a lot of
2 investigators.
3 MR. CLARK: That would be great.
4 SENATOR DUTTON: We'll see if we can do
5 something about getting that money to you. You wouldn't
6 have to actually increase fees at this point if you got
7 that money back to fund your program.
8 MR. CLARK: That is correct. That is correct.
9 In fact, in this budget, we have a $5-million-dollar
10 payback if that is approved.
11 SENATOR DUTTON: Also, to carry on a little bit
12 more with Senator Oropeza's question regarding
13 appraisers who do loan appraisals, those appraisals
14 aren't so much about value as it is about justifying the
15 loan. I mean, it sounds kind of strange, but they're
16 generally hired by the underwriter, the mortgage broker.
17 They're not hired by the borrower. And, primarily,
18 based on guidelines that are handed out by Fannie Mae
19 or FHA and so forth, they write them based on those
20 guidelines, which for the most part seem like they're
21 almost having to deal with justifying the loan that's
22 being made more so than an actual true indication of
23 value.
24 MR. CLARK: What we're really talking about is
25 unlawful pressure on appraisers, which unfortunately
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1
does occur. I'm sure you're aware of SB 223 that was
1
I mean, it just should be — The public should
2
signed into law in October '07 that addresses that
2
be assured that you have the ability to be able to do
3
issue.
3
the job, not just reactively, but, frankly, proactively.
4
SENATOR DUTTON: That's where we need to have
4
You know, frankly, you have inherited a small,
5
some strict enforcement on that, because that's actually
5
and at least for the past ten years, a much too ignored
5
part of the staffing.
6
agency, a much too ignored entity. And my message to
7
MR. CLARK: One of the things I have initiated
7
the agency, and I'll transmit this to the governor and
8
since I started work at OREA is I met with the
8
his staff, is that we expect the administration to offer
9
commissioners of the Department of Financial
9
you more help. And I think we can say we would be in a
0
Institutions, Department of Real Estate, and the
10
position that we would support giving you more help, and
1
Department of Corporations, to come out with a combined
11
to make sure that they keep working at getting you that
2
statement of examples of what would actually constitute
12
help.
3
unlawful pressure on appraisers.
13
I want to ask Senator Negrete McLeod, in her
4
Most folks out there believe that, Well, that's
14
Business and Professions Committee, of which she is the
5
the appraisers' law, and so it's the appraisers that are
15
chair, to look deeper into this matter.
6
breaking that law. As a practical matter, it's more
16
Senator Dutton, again, as part of your
7
likely individuals that are licensees of those other
17
responsibilities with the Budget Committee, if you could
8
departments that are breaking the law, because they have
18
as well, because I'm just not convinced that the three
9
the interest in driving that value to make the loan.
19
FTEs plus the single attorney is enough. It may be, but
0
So my colleagues in the other departments have
20
I would like to see the spot checks and, you know, that
1
been very — they're just great to work with in putting
21
sort of proactive audit going on, because I don't think
2
together a combined effort to get that message out to
22
you've overstated the problem here. These are odd
3
our licensees.
23
times.
4
SENATOR DUTTON: It's important that we clean
24
So with that, I'm happy to support the
5
it up, because if we don't someone is going to clean it
67
25
nomination. Take a motion. Move to support by
69
1
up for us.
1
Senator Oropeza.
2
MR. CLARK: Absolutely.
2
MS. BROWN: Senator Cedillo.
3
SENATOR DUTTON: Thank you.
3
SENATOR CEDILLO: Cedillo aye.
4
CHAIRMAN STEINBERG: Any other questions?
4
MS. BROWN: Cedillo aye.
5
Senator Cedillo, Senator Aanestad?
5
Dutton.
6
I support your nomination. You're actually
6
SENATOR DUTTON: Aye.
7
very committed, and all the background checks out very
7
MS. BROWN: Dutton aye.
8
positively. And besides, you worked for Regional
8
Oropeza.
9
Transit in Sacramento. I was on that board for six
9
SENATOR OROPEZA: Aye.
0
years, so there we go.
10
MS. BROWN: Oropeza aye.
1
I do want to make a statement. Maybe it's less
11
Aanestad.
2
directed to you and maybe more to the agency under which
12
SENATOR AANESTAD: Aye.
3
this department exists, and that is BT&H. And the
13
MS. BROWN: Aanestad aye.
4
context of it is the fact that we brought out a moment
14
Steinberg.
5
ago that you're the first director appointed in ten
15
CHAIRMAN STEINBERG: Aye.
6
years.
16
MS. BROWN: Steinberg aye.
7
My message to BT&H, whoever may be watching
17
CHAIRMAN STEINBERG: Thank you very much,
8
this today, is that you need to provide more help to
18
Mr. Clark. Look forward to working with you.
9
this small office. I mean, with respect, you shouldn't
19
MR. CLARK: Thank you.
0
be sitting here worrying about whether or not the three
20
CHAIRMAN STEINBERG: Thank you.
1
FTEs plus the attorney you may get is going to be enough
21
This will go to the Senate floor and should be
2
to be able to do sort of spot random audits. That
22
taken up in the next two weeks.
3
should be a practice of the agency, especially as you
23
MR. CLARK: Thank you.
4
are reporting this increase of problematic behavior in
24
////
5
the midst of a real-estate foreclosure/financial crisis.
25
////
68
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1 (Thereupon, the Senate Rules Committee hearing
1
APPENDIX
2 adjourned at 3:27 p.m.)
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1 -oOo-
2 I, INA C. LeBLANC, a Certified Shorthand
3 Reporter of the State of California, do hereby certify
4 that I am a disinterested person herein; that the
5 foregoing transcript of the Senate Rules Committee
6 hearing was reported verbatim in shorthand by me,
7 INA C. LeBLANC, a Certified Shorthand Reporter of the
8 State of California, and thereafter transcribed into
9 typewriting.
10 I further certify that I am not of counsel or
1 1 attorney for any of the parties to said hearing, nor in
12 any way interested in the outcome of said hearing.
13 IN WITNESS WHEREOF, I have hereunto set my hand
14 this ^"fV davof "YV\#^<SU_^ .2009.
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17 ■ jt^c.-AM^
18 INA C. LeBLANC
CSR No. 6713
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H
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
5- '. I ~Z -- Pegasus Capital Advisors
Regent 3110 Main Street. Suite 220
Santa Monica. CA 90405
(310)581-5475
FAX: (310)583-6420
Februan 3. 2009
Nettie Sabelhaus
Appointments Director
Senate Rules Committee
State Capital. Room 420
Sacramento. CA 95814
Dear Ms. Sabelhaus:
In advance of my confirmation hearing before the Senate Ru.es Committee on Februan I 8.
2009. 1 have attached a copy of my responses to the questions posed by Senate President pro
Tempore Darrell Steinberg on behalf of the committee. I am remitting electronically and in hard
copy form (via Federal Express o\ernight delivery i my responses to the questions and my Form
700. Statement of Economic Interests, that was filed when I was appointed because there have
not been any substantive changes to my statement since that :ime.
1 hope that this is responsive to the request put forth by the Senate President pro Tempore, and 1
look forward to meeting with members of the committee on February 1 8,h. Should you have any
questions, feel free to reach me at C3 10) 292-01 18.
Bonnie Reiss
Senate Rules Committee
Attachments pr_b , , _, ?nnQ
Appointments
74
Goals
1. Please provide a brief statement of goals you hope to accomplish while serving on
the University of California Board of Regents. How will you measure your success?
First. I want to express what a great honor it is to serve on the University of California Board of
Regents. UC has a long and proud history dating to 1868 and has achieved the highest standards
in serving both students and the community. 1 pledge to honor this proud history and
commitment.
I believe that maintaining UC's reputation as a world-class education institution by offering the
best possible education to give our students the skills they will need to succeed at both the
undergraduate and postgraduate level is the most important goal as a Regent. Equally important
is making sure that UC remains accessible and affordable, reflects the diversity of our state, and
does not close the doors on any worthy student that is capable of meeting the highest standards
of UC. Another goal I have as a Regent is to support UC's success and unparalleled reputation
in the area of research and innovation. UC's leadership in this area has helped attract the most
talented students and faculty and has led UC to become a global leader in innovation. The UC
"hubs" of research excellence have also helped California attract innovative companies and
capital looking to leverage this talent, which has contributed much to the economy of the state.
I will measure my success by the achievement of these goals from tangible evidence of patents,
awards, advances in medicine and science and technology; improvements in the diversity of the
student body; accomplishments of the faculty; availability of financial aid packages. The less
tangible results are harder to measure, but equally as important.
2. You have been assigned to serve on the following committees: Compliance and
Audit, Educational Policy, Grounds and Buildings, Long Range Planning. What
specifically would you like to accomplish while serving on these committees?
Committee on Compliance and Audit
One of the critical reforms the Board instituted after UC's recent executive compensation crisis
was the establishment of a Senior Vice President for Compliance and Audit. This new position is
specifically authorized in the Bylaws to implement all necessary actions to ensure strong ethics,
compliance and audit programs.
Members of this Legislature have offered the opinion that the University is good at identifying
problems, but less adept at fixing them. My background in corporate audit taught me the critical
ingredient of following up on mechanisms put in place to address identified compliance failures.
As a Regent, I will work with the Chair of the Compliance and Audit Committee and the Senior
Vice President to ensure that the University's compliance efforts are robust, policies and
preventive mechanisms are in place, and the Board has sufficient reporting information to ensure
that problems have or will be addressed. I believe accountability and transparency are the most
important issues to address in this committee so UC lives up to its promise.
Senate Rules Committee
2 FhB (J 4 2finq
ADDointmeirte
75
Committee on Educational Policy
The University must offer each student the opportunity to achieve the best possible education
available. The Committee on Educational Policy offers a unique opportunity to work with the
University administration to ensure our educational mission remains committed to the highest
possible standards.
As a Regent. I want to ensure that all students, regardless of income, have access to the
University. The President's Blue and Gold Opportunity Plan is a significant demonstration of
the University's commitment to low-income students. All eligible financially needy
undergraduates with incomes up to the median for California households ($60,000) will have UC
systemwide fees covered by scholarship or grant awards. This is a substantial investment in
California's future. But we must remain mindful of middle-class students as well. The
University must not close the door on any student capable of meeting the highest standards of
UC. As a Regent, 1 will work with the President to ensure the University remains affordable for
all.
I will also continue to work with the President and my colleagues on the Board to improve the
diversity of the student body of the University.
Committee on Grounds and Buildings
1 wanted to serve on the Committee of Grounds and Buildings for a variety reasons. First and
probably most significant is my belief that strategically planning ahead to build the infrastructure
to meet the needs of our students in the next 30 years is critical to the success of UC and
incumbent upon us to serve both UC and California. Since there is not unlimited capital,
strategic decisions must be made as to what priorities we should fund. Issues such as: how
much student housing is needed to ensure we meet growing enrollment, as well as provide
affordable housing; do we need more laboratories and facilities for stem cell research, or for
supercomputers, nanotechnology, and renewable energy; do we need more medical schools and
medical centers and, if so, which communities have the greatest need.
In making these strategic decisions, I believe it is essential we do so in cooperation with the local
community and our state leaders, to make sure we are supportive of our shared goals and do so in
a fiscally responsible manner.
I'm also proud that UC has adopted a policy to follow sustainable practices and all new
construction seeks LEED certification. Building new construction that takes into account how to
be energy efficient and water efficient is both financially smart and environmentally important.
Committee on Long Range Planning
This committee is somewhat unique among Board committees: it has a wider horizon than most
and offers the opportunity for deliberate discussion and consideration of a range of issues. The
committee offers the Board the opportunity to identify - and hopefully address - issues on a
proactive basis, rather than reacting to the most pressing crisis. As a Regent, I will work to
76
strengthen the strategic planning process of the University so the regents can effectively shape
the future of the University without micromanaging the details of the administration of the
University.
While maintaining UC's high academic standards, we also have a responsibility to remain
accessible and affordable to all young people who can meet these standards. Like many state
universities, the financial support for the University of California from the State budget has been
decreasing as a percentage of the total need and this is a critical issue that must.be addressed in
long range planning.
UC cannot achieve any of its worthwhile goals — including student diversity, research, attracting
the best and brightest in students, faculty and staff, or paying service workers a fair wage — if we
cannot find the financial support.
3. The university plays a critical role in every part of California's cultural and economic
life. In a difficult economy and a time of state budget reductions, how do you, as a
regent, help the UC sustain its critical role? How are you able to focus on this
important "big picture" issue as a UC Regent?
The State of California's economic crisis is overwhelming. But the University is a key
ingredient in the solution and must be viewed as such. Constricting educational opportunity in
the name of budgetary expediency is deeply distressing, but that is exactly the dilemma every
member of the Board faced in the decision to cut student enrollment in 2009-2010. There are
more hard choices ahead but it is critical that members of the Legislature, business leaders, and
all stakeholders recognize that UC is a key economic engine of the State. UC is a global leader
in innovation and invention. The excellence of our faculty and the products of our campuses
have helped California attract visionary companies and capital looking to leverage that talent.
UC is highly regarded throughout the world; we have a large number of Nobel Prize winners,
authors, and we are playing a leading role in solving issues around climate change. We offer
hope to young people who see attending UC as a path to achieving their dreams. The Regents
must do all we can to make the case to the State's political leaders, US congressional leaders,
business leaders, and philanthropic leaders to maximize the financial support needed to continue
our great mission. Invest in UC and you invest in the future of the Stale of California.
4. Thousands of young people drop out of high school and middle school in
California. What role should the UC play in addressing this serious problem and
what role does it play? How do you, as a regent, weigh in on what should be done?
The issue of California high school dropouts is a $46 billion dollar-per-year problem, and
University of California researchers are deeply engaged in finding solutions to this crisis. The
California Dropout Research Project, a project of the California Linguistic Minority Research
Institute at UC Santa Barbara, recently conducted a review of 25 years of research — based on
203 published studies — to identify statistically significant individual and institutional predictors
of high school dropout or graduation. Four individual factors predicted whether students would
77
drop out or graduate: 1) educational performance, especially grades, beginning as early as
elementary school; 2) behaviors, such as student engagement — going to class, doing homework,
participating in extramural activities; 3) attitudes, specifically how far a student expected to go in
school; and 4) background, most significantly participation in preschool, which was highly
correlated with high school completion, as well as being cost-effective.
Several institutional factors — such as families and schools — also predicted dropout or
graduation. Positive family influences on graduation rates included having high educational
aspirations for their children, monitoring school progress, and communicating with the school.
School influences that improved high school graduation rates included small classes in grades K-
3 (15:1); strong academic climate, as measured by more students taking academic courses and
doing homework; and requiring students to attend school beyond age 16. Conversely, a poor
disciplinary climate, as measured by student disruptions in class or school, was correlated with
higher dropout rates.
I believe there is nothing more important to the good of a great democracy than a superb public
education system, K-12 and higher education. While California colleges are excellent, our own
K-12 system is failing way too many young people. While UC cannot solve the problems of K-
12, we certainly have a role to play. Having spent over 10 years running after-school programs
in the lowest-income schools and having served on the State Board of Education, I have a grasp
of the magnitude of the needs of the K-12 community. UC can look at adopting schools, perhaps
offering credits for students to "tutor and mentor" at failing schools, or sponsor charter schools
on or adjacent to some UC campuses. We can work more closely with State Board of Education,
CDE, CCC, and CSU to explore solutions to this problem in a more coordinated fashion.
The future of California's children is the future of California. The President is committing to
lead UC to address pressing K-12 issues. I serve on the Committee on Educational Policy, the
committee with jurisdiction for such programs, and look forward to working with President
Yudof, state leaders and the other higher education segments to address this pressing need.
Admission to the University
The UC admitted a record number of freshman students for the fall 2008 term.
Admission offers were sent to 60,008 California high school seniors, a 4.7 percent
increase of admitted students over the fall 2007 term. African Americans, American
Indians, and Chicano/Latinos make up 25.1 percent of the university admits, up from
22.9 percent from fall 2007. The fall 2008 freshman class was expected to be the
largest in the university's history.
5. The university decided to admit all eligible freshman this past fall, even without new
funding specifically for enrollment growth. How did this decision impact the number
of eligible transfer students that could be admitted? How do you as a regent
balance the needs of these two groups?
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UC sets separate targets for freshmen and transfers, acknowledging in both cases a number of
factors including policy goals (such as increasing transfer enrollments and our commitments
under the Master Plan); campus capacity in terms of both physical facilities and educational
resources such as teaching staff; and state funding levels. Targets are set before each year's
budget is known (for example, we set targets and made decisions for Fall 2008 in the winter of
2008, but final funding levels were not reached until October i. In 2008, we set targets assuming
that the enrollment levels in the Governor's compact would be funded. These targets provided
full access for eligible applicants at both the freshman and the transfer levels. For 2009, faced
with enrollment of 1 1.000 students for whom we receive NO state funding, the Regents have
endorsed President Yudof s recommendation that we begin to scale back at the freshman level -
curtailing freshman enrollment by 2,300 students in 2009-10 - while still providing a seat for all
eligible students who choose to enroll. At the transfer level, however, we are increasing our
enrollment targets by 500 students. (This would decrease freshman enrollment from around
37,600 new freshmen in 2008-09 to around 35,300 for 2009-1 0, while new transfer enrollments
would increase to about 16,300 in 2009-10.) This action recognizes the significant benefits to
the state of continuing to provide access to these students as well as a substantial increase in
transfer applications for Fall 2009. Transfer is a high priority for the President that 1 support for
a variety of reasons including improving student diversity.
6. What is the university doing to increase the number of competitively eligible
applicants to UC from disadvantaged backgrounds7 How do the regents monitor
the effectiveness of university K-12 academic outreach programs in prepahng
these students to become competitively eligible to attend UC campuses? Are you
satisfied that these programs are preparing students to succeed once enrolled at a
UC campus?
The University of California has a longstanding commitment to raise the academic achievement
of educationally disadvantaged students, offering programs and strategies (some reaching back
more than 30 years) that improve college opportunity for thousands of students.
In recent years, the University has revamped many of these programs and strategies to ensure
that they can continue to meet the academic preparation needs of California students. The
University's current goals, strategies and accountability expectations for its programs support K-
12 goals for student academic achievement while ensuring rigorous and centralized
accountability for all of its programs.
Each of the University's academic preparation programs operates in accordance with the Student
Academic Preparation and Educational Partnerships Accountability Framework, developed in
concert with state policymakers, which establishes common goals and assessment expectations
for the programs. The goals for these programs are focused on student achievement across a
broad range of academic preparation and college readiness indicators.
Program assessment and evaluation are integral to the University's academic preparation efforts,
and the University has made significant investments over time in data collection and systems,
data analysis and external evaluations. All programs are required to submit performance reports
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describing their progress toward meeting specific programmatic goals and objectives, and
individual programs are subject to comprehensive summative evaluations by both internal and
external evaluators as funding permits. While I have not yet reviewed this data I believe it is
important for Regents to exercise oversight to insure that our outreach programs are effective.
UC's programs are reaching students who attend the state's lowest performing schools, are
accountable for their efforts, and are achieving their goals. For example, 65% of students in our
academic preparation programs go on to postsecondary education compared to 46.3% of
California high school graduates, and their retention and graduation rates are similar to those of
similarly situated students who did not participate in these programs. Studies on the University's
programs have focused on more difficult but generally more rigorous longitudinal analysis of
program participants. These studies clearly document programs' effectiveness in promoting
student achievement, in fostering students1 rigorous course-taking patterns, and in promoting
their college enrollment.
In coming months the Board of Regents will discuss a proposal to revise university
admission requirements. This proposal was recently approved by the Board of
Admissions and Relations with Schools, which is comprised of faculty members.
Included in the proposal is the elimination of the requirement that applicants take two
SAT subject tests, and a revision of the guarantee of admission for those who are in the
top 12.5 percent of California high school graduates to instead apply to only about the
top 10 percent of graduates. The proposal would also allow individual campuses and
majors to recommend certain subject tests and guarantee that students who are
eliminated from consideration because of technical problems with their applications
(such as a failure to take an SAT subject test) would have their application reviewed
and evaluated.
7. Critics of the proposal worry that the plan could decrease diversity because the
number of underrepresented students who fall within the 12.5 percent guarantee
would decline under the more restrictive admissions pool. What are your views
regarding the proposed policy and its impact on underrepresented minority
students?
Although it is true that the pool of students guaranteed admission will be smaller and slightly
less diverse, many students will be selected from the larger, more diverse pool of students who
will be Entitled to a Review. The Academic Senate has studied this issue extensively and it is
their view that the proposal has the potential to expand access for underrepresented students by
bringing into that larger pool many thousands of underrepresented students who would not
previously have been guaranteed a full and comprehensive review. The President agrees with
this position and endorses the proposal as a way to expand access without diminishing the
quality of students who enroll. While I have not yet made up my mind on this proposal I support
comprehensive review as the fairest way to evaluate students. Comprehensive review provides
the opportunity to assess students in the context of opportunities and challenges they have
experienced. I will need to feel confident that the standards of UC are being maintained, that
there is transparency for all applying students and that the goals of the Master Plan are being
honored.
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8. The current admissions policy is fairly transparent in that applicants are considered
eligible for guaranteed admission to the UC system if they are in the top 12.5
percent of California high school graduates and they meet other specified criteria.
The new plan proposes that a smaller percentage of students be guaranteed
admission, but that another 12 percent or so of high school graduates be allowed
to apply without any promise of admission. How do you respond to concerns that
the proposed changes undermine the transparency in the UC admissions process
by making it more difficult to understand admission requirements and thereby
blurring the lines of eligibility?
I don't believe the differences between the two policies are significant in terms of transparency.
Most students understand that being eligible under the current policy does not guarantee them
admission at the campus of their choice, but rather ensures that if none of the campuses they
apply to admit them they will still receive an offer. They understand that to be admitted to the
campuses they want to attend, they still have to be competitive in each campus's comprehensive
review process. That will not change. What will change is that a slightly smaller percentage
( 10.1% rather than 13.4%) will also have the guarantee of admission through the referral pool.
Statistics show that only a small number of those offered referral admission accept that offer. It
can also be argued that the proposal simplifies our requirements by eliminating the SAT subject
examinations which few other institutions require and which many college-bound students don't
take.
Student Fees, Financial Aid, and College Affordability
In 2008 the UC Board of Regents approved a 7.4 percent student fee increase for the
2008-09 school year for undergraduate, graduate, and professional students. The
university will redirect 33 percent of revenues generated by the fee increase to financial
aid, supplementing other financial aid sources such as the Cal Grant program. The new
fees also include the continuation of a temporary $60 surcharge on all students for the
next five or six years to cover approximately $40 million the university lost as a result of
a court finding that it improperly imposed higher tuition five years ago on 46,000
students.
9. How is the UC addressing the growing concerns about college affordability? What
do you believe are the challenges in crafting a student fee and financial aid policy
that balances the need to keep fees reasonable, while providing sufficient financial
aid to help low- and moderate-income students?
The issue of approving a student fee increase was on the agenda of my first meeting as a Regent
and it was an extremely difficult vote.
I'm very concerned that student fees have increased almost every year over the past 10 years.
Although Cal Grants, Pell Grants, and UC grants generally cover fee increases for low-income
UC students, rising fees can discourage middle- and high-school students who are unaware of the
financial aid available to them, and who may feel that a UC education is not within their reach.
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UC currently does a good job of ensuring access for low-income students. Nearly 90% of all
grants and scholarships received by UC students are awarded based on financial need. Fees and
other types of student expenses have increased rapidly in recent years but increased resources for
financial aid have moderated the impact of these cost increases for many low- and middle-
income students. Grant and scholarship support for UC undergraduates grew from about $500
million in 2002-03 to nearly $900 million in 2007-08. When fees increased in 2008-09. the
University set aside one-third of all new fee revenue to augment its need-based grant program, as
it has in previous years. These funds, together with the State's Cal Grant program, provided
enough additional funding to cover the fee increase for low-income students. In addition, a
portion of the funds were used to cover one-half of the fee increase for students whose parents'
income was below $100,000 and whose fee increase was not otherwise covered by the Cal Grant
program or the University's primary grant program.
But it is not clear that families understand that a UC education is within reach of all capable
students. That's why The Regents will be considering the Blue and Gold Opportunity Plan at
our meeting this week. The Blue and Gold Plan, if approved, will send a clear message to these
families about the availability of grants and scholarships to fully cover fees for families earning
up to $60,000, the median household income in California. The Regents will also consider a
provision in the proposal to increase the amount of new fee revenue set aside for financial aid in
order to fully fund this program without reducing the aid available to other students. I believe
this is an important investment in expanding access to UC for low-income students.
1 am also concerned about the impact of fee increases on middle-income families. Families
earning between $60,000 and $100,000 get at least a portion of their fee increase covered, but a
portion of the increase may not be covered. When this fee increase is added to the cost of living,
many hard-working middle-class families are being 'priced out1 of UC. The fact that two parents
who might be nurses, teachers, small business owners, or state or county workers fall in this
middle income category and are not eligible for financial aid to cover these increases is a
problem for UC and for the State and one I hope to address as a Regent.
Obviously student fees are not just impacted by the University of California budget decisions,
including collective bargaining, but also by the level of State support. I will support and
encourage our new president to engage in meaningful discussions with legislative leaders about
the future of higher education in California, and how we can best achieve our mutual goal and
levels of funding needed to do this. 1 believe we should do this in cooperation with CSU and
CCC and have serious, honest, and open discussions about our future and the shared
responsibility in meeting our goals together.
10. Are the regents exploring what can be done to help students cover other fast-
growing, non-fee costs, such as books and supplies, room and board,
transportation, and health care? What options are you reviewing, if any?
The Regents understand that the total cost of attendance is a critical measure of affordability
since neither Federal Pell Grants or Cal Grants fully cover non-fee costs.
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Unlike tuition increases, which are covered by additional grants for lower income students, non-
fee cost increases impact all students, and can create a barrier for attending UC to middle and
lower income families. Family income defines eligibility for UC financial aid and grants. UC is
working to increase aid for all eligible students. Federal Pell Grants are typically available only
to families earning less than about $45,000 per year. The income ceiling for Cal Grants varies
by family size, but tops out at around $80,000.
But UC grants do not have a fixed-income ceiling - they are available to any student with
sufficient need that is not met from Pell Grants or Cal Grants. Most UC grant recipients have a
parent income below $60,000, but some UC grant recipients have incomes of $100,000 or
higher. These higher-income families typically have unusual circumstances (e.g., more than one
child in college at the same time). In general, higher-income families are expected to cover the
cost of attendance through their federal parent contribution and a manageable level of work and
borrowing by the student. Federal student and parent loans are available to students at every
income level. So-called "subsidized" loans (for which interest does not accrue while the student
is enrolled) are reserved for students with financial need - typically students with a family
income of less than $120,000 - but all federal loans are "subsidized" in the sense that they offer
below-market interest rates and other desirable features not available in the private loan
marketplace. Scholarships are also available to students at every income level.
In addition to expanding aid to students, UC is exploring other options to address cost increases
in other areas. For example, UCOP is exploring a system wide graduate student health insurance
plan.
In my capacity as a Regent serving on the Committee on Grounds and Building I would like to
look into prioritizing some low-cost student housing which can address one of the more
significant non-fee costs associated with room and board.
1 1 . Does the university take into consideration federal financial aid programs -
particularly the federal tax credit programs such as Hope and Lifetime Learning - in
setting fees?
The University's decisions about fees are based entirely on the need to maintain the quality of
the academic programs and services that it provides to students. When fees rise, a portion of the
new fee revenue is also set aside for financial aid in order to help maintain access to the
University for financially needy students.
While federal aid programs do not influence the University's fees, they play an important role in
the University's financial aid programs. At the undergraduate level, the University covers a
student's total cost of attendance - not just fees, but also room and board, books and supplies,
health care, and other expenses - through a combination of an expected parent contribution, a
student contribution from work and borrowing, and grant assistance from university, state, and
federal sources. This assistance included over $160 million in Pell Grants and $12 million in
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federal SEOG grants in 2007-08. In addition, UC undergraduates received nearly $20 million in
federal scholarships last year, which reduced their need to work and borrow.
UC does not generally view tax credits as a financial aid "program," but they do provide relief to
eligible middle-income families. The University tries to provide timely and helpful information
to students and families in order to help them apply for any education tax credits for which they
might be eligible. However, so many factors influence a family's eligibility for these credits that
the University cannot know how many UC families qualify for the credits or the total value of
the credits that they receive.
12. To what extent should the Legislature and Governor be part of UC's decisions
about fees?
Given the large influence that the Legislature has on UC's overall budget, it would seem that the
Legislature and the Governor already have significant impact on UC's decisions about setting
fees. As UC is a state university with significant responsibility to the people and future of
California, our relationship with the Governor and Legislature is very important. The issue of
fees is part of the larger issue of budget, UC's and the State's, and as such cannot be looked at in
isolation. UC, like other state universities, has seen ever-decreasing financial support from the
State over the past 20 years and, and this is a very alarming trend which must be discussed in a
thoughtful, open, and honest way with State leaders.
University of California Retirement Plan
In most public employment systems, the employer and the retirement board of the
associated retirement system are separate entities. Unlike other public systems,
the UC Regents have fiduciary responsibility over UC's retirement system. In 2007, the
Legislature passed SCR 52 (Yee), Resolution Chapter 126, Statutes of 2007, which
requests the Regents of the University of California to provide for shared governance of
the UC Retirement Plan (UCRP). The regents have responded by proposing to
establish a shared advisory structure for the UCRP to provide comment, advice, and
recommendations on the governance of UCRP.
13. How will the shared advisory structure be able to address issues such as conflicts
among fund managers, fund micromanagement, and the declining fund balance
that have plagued the UC retirement system in recent years?
In general, the Regents support a revised UCRP governance structure that will allow the different
employee groups with an obvious interest in the UCRP to have meaningful input, and I agree
with this.
1 believe the overall number one goal of the UCRP should be to get the greatest return on
investment and have a long-term financial plan that that provides the promised retirement
income. This must be done in a way that is open and transparent and avoids conflicts of interest
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and micromanagement. The following information was provided to me by the UC Office of the
President in response to these questions:
• The Regents' response to shared governance would be the creation of a University of
California Pension Benefits Board (UCPBB). The UC Pension Benefits Board would
replace the UC Retirement System Advisory Board. The Pension Benefits Board would
have 1 1 members, including faculty, management, retirees, represented staff, and non-
represented staff.
• This new body would provide recommendations on all operational aspects of UCRP to
the Board of Regents. This could include recommendations on plan administration,
benefits changes, the restart of employee contributions and the amount of employee
contributions. The UCPBB would also make a recommendation to the Board of Regents
for a person to be appointed as its representative to the Regents' Investment Advisory
Group. As is the case with the Committee on Investments, the Board of Regents, in its
role as Plan Sponsor and Fiduciary, would retain the responsibility to approve these
recommendations.
• There is a clear articulation of accountability for UCRP - the Board of Regents has the
ultimate fiduciary responsibility for the plan. The Regents set policy, guidelines, and
asset allocation for the investment portfolio of plan funds.
• The Office of the Treasurer's mission is to implement these policies and guidelines by
selecting, executing, and monitoring investment strategies designed to add value over
established benchmarks in a risk-controlled framework. The current structure prevents
perceived or actual conflicts of interest in the selection of fund managers and avoids fund
micromanagement.
• The UC Retirement Plan has paid out over $17 billion in benefits and has also avoided
normal cost plan contributions of more than an additional $17 billion since 1990 (all
amounts in 2007 dollars).
• While the funded ratio of the plan has declined, UCRP was still over-funded at the end of
our last fiscal year (103% as of 7/1/08). despite this combined $34 billion provided by the
fund's surplus over the past 1 8 years. However, it should be noted that the funded status
has declined significantly since 7/1/08 due to the sleep decline in financial markets.
UC Governance and Decision-Making
For the last several decades, the UC has been criticized for not fully disclosing
compensation packages provided to top management that have been well above the
amount publicly reported as their base salaries. In response, the university has
repeatedly committed to maintain full public disclosure, transparency, and
accountability. In early 2008, the Western Association of Schools and Colleges (WASC)
reported that the UC system has significant problems in governance, leadership, and
decision-making. It reported confusion surrounding the roles and responsibilities of the
university president, the regents, and the 10 campus chancellors.
As part of an effort to restructure and downsize the central administrative operations of
the UC system, the university offered a Voluntary Separation Program to employees at
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the Office of the President in January 2008. Some employees who accepted a financial
buyout to leave the Office of the President were immediately re-employed elsewhere in
the university with no impact on the amount of their buyout.
14. How do the regents stay informed of the university's compensation policies? What
is the university's policy regarding rehiring retired pensioners? Do you believe
regents are kept sufficiently informed regarding campus hiring practices7
The Regents review and approve all policies and compensation actions for members of the
University's Senior Management Group (SMG), as well as compensation actions for other
employees with salaries over $275,000. This amounts lo approximately 374 employees in senior
leadership positions. The Voluntary Separation Program (VSP) was a program designed to
reduce headcount and long-term salary costs specifically at the Office of the President, and was
not offered to SMG members or employees at the campuses. While The Regents were made
aware of this program, they did not need to approve it, nor were all the details shared with them
prior to implementation.
Upon learning of the situation where employees collected their VSP payments and then found
jobs at the campuses, I was concerned about the design of this plan feature, and 1 think the
message it sends regarding budget concerns is not a good one. 1 believe The Regents should be
kept better informed in the future about programs of this nature.
If this program is offered again in the future, the President and The Regents believe it should be
structured differently, and 1 agree. The President has said that if the program is offered again, we
will include provisions requiring repayment of any buyouts on a pro rata basis for employees
finding new work elsewhere within the University. Our Compensation Committee Chair had
suggested the same approach. 1 agree wholeheartedly with them that this action is important to
ensuring the public's trust in our stewardship of resources.
New Policy on Reemployment of Retired Employees
In order to ensure the effectiveness of UC's practices regarding the reemployment of retirees.
UC reviewed its policies governing such rehires, including the conditions under which retirees
may be rehired. The new policy on rehiring retirees was adopted by The Regents in September
2008 subject to Presidential review of Academic Senate comments. The Senate's comments
have been reviewed, and the amended policy is coming back to The Regents for approval at the
February 2009 meeting. Key elements of this policy are as follows:
• Limited appointment percentage
• Restricted duration of reemployment
• Required approvals
• Documentation of University needs
• Reporting
15. What remains to be done to meet the university's commitment to full public
disclosure, transparency, and accountability7
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While I am a newly appointed Regent, 1 am aware of the concern surrounding these issues
previously raised by the public and the Legislature in the past few years. 1 believe strongly in
full disclosure, transparency, and accountability and will do everything 1 can as a Regent to see
that UC properly addresses these issues on an ongoing basis.
To both be properly briefed and to be responsive to this question, I asked the Office of the
President to provide me an update on its progress in this area. Their response follows:
• The University of California continues the effort to fulfill its commitment to full
disclosure, transparency, and accountability; and to address the recommendations of the
Task Force on UC Compensation, Accountability and Transparency and related audits.
• Significantly reformed practices have been established to provide a basis for full and
proper disclosure, as described more fully in the March 2008 Legislative Report on
Compensation Policies and Practices. (This is an annual legislative report, and the March
2009 report will be provided next month.) These include:
o Use of a standardized definition of "total compensation" for clarity on the appropriate
elements of compensation and which elements require Regental approval.
o Continuation of the practice of voting on all compensation recommendations in open
session by the Regents' Committee on Compensation.
o Use of a systemic and rigorous process for collecting, validating and certifying of
individuals' total compensation information reported on the Annual Report on Total
Compensation.
o Collection of information from individuals for the preparation of the Annual Report
on Compensated Outside Professional Activities, which is certified as complete and
accurate by each individual required to report such activities to The Regents.
o Use of a standard template for reporting of total compensation for senior leaders.
o Public posting of all compensation actions approved by The Regents.
Annual Reporting on Total Compensation
• The University continues to use the new expanded format for the Annual Report on Total
Compensation, which is sent to The Regents and the Legislature each March.
• For 2007, this report included compensation details on 519 incumbents and former
incumbents in senior leadership positions, including those in acting capacities. The
report for 2008 will be sent to the Legislature following the March 2009 Regents
meeting.
Other Reforms
• On an ongoing basis, compliance with compensation and related policies will be a routine
part of the internal audit and compliance monitoring activities of the office of the Senior
Vice President - Chief Compliance and Audit Officer appointed in 2007. The findings of
these activities will be shared with senior leadership and the appropriate committees of
The Regents.
• During 2007, the University completed the rollout of the web-based ethics briefing to all
University employees. The training will continue as part of the UC-wide Ethics and
Compliance Program, also under the auspices of the Senior Vice President - Chief
Compliance and Audit Officer.
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• In September 2007, The Regents received and reviewed a report on actions taken under
both the University-wide Corrective Action Plan and the Cumpus/ Laboratory Corrective
Action Plans which addressed plans to correct specific and systemic errors in
compensation practices. Regular monitoring of these plans continues to be done at the
Office of the President.
New Accountability Program
• Additionally, President Yudof has launched an accountability program aimed at
providing better information to the public and policy-makers about the performance of
the UC system for the people of California.
• The effort will include an annual public report that will evaluate the University's
performance on a range of dimensions, including its management performance and
administrative operations.
16. What steps is the Board of Regents taking to address WASC's concerns regarding
UC's governance structure and business practices?
As a new Regent this was another question I needed to address to the University of California
Office of the President. The answer they provide follows:
The final report from the Western Association of Schools and Colleges (WASC)
commended the University for the many steps it has taken to address the compensation
issue raised in recent years and for its awareness of the need to maintain transparency and
conformity with policies while continuing to recruit the best personnel possible. In light
of that conclusion, the changes made are not detailed here, but can be provided if the
Committee so requests.
Regarding governance, the University commissioned a working group (chaired by a
campus chancellor and facilitated by an independent consultant) to evaluate the proper
roles of Regents, the President, and the campuses. The Board's Committee on
Governance endorsed this report in January 2008.
The Board created the Committee on Governance to re-evaluate Board governance
principles. As a result of the committee's work, the Board has adopted new policies
governing Regental education and evaluation as well as new standards governing
expectations of individual Regents and the Board.
The Board established a new senior vice president for compliance and audit as a direct
report to the Board for the specific purpose of ensuring a more robust audit system and
proper review of transactions for policy compliance.
The Board adopted a detailed process for evaluation of the President's performance (and
that of other direct reports to the Board).
Research Funding
According to information submitted to the Senate and Assembly Budget Committees,
the UC receives tens of millions of dollars a year in state funds (e.g., General Fund,
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Public Interest Energy Research Funds, Natural Gas PIER Funds, etc.) for energy,
climate, and clean-fuels-related research.
While there are excellent research projects funded through these programs, there does
not appear to be any overarching coordination between UC energy and climate-related
research and the key climate and energy research priorities established in law by the
Legislature.
Both the Governor and Legislature have articulated the importance of transitioning the
state from a high carbon economy to a new energy economy. Green technology may be
the next "high tech industry" that fuels California's economic engine. Yet there appears
to be a need for greater coordination and strategic investment of state research
development and demonstration funds to meet state energy and environmental
priorities.
1 7. Should the regents act to improve deployment and expenditure of state research,
development, and demonstration funds to meet state energy and environmental
challenges?
As a citizen of California I am very proud of our leadership in addressing energy and
environmental challenges. The challenges our state, nation and world are facing in climate
change, energy, water, ocean policy etc. are enormous, and so are the opportunities for our state
and UC to use our brilliance in innovation and research to find solutions. Many of these solutions
will not only help address climate change and improve our air quality and water quality, protect
our beautiful coast and oceans, but also address our need for water storage, energy independence
and renewable energy and in so doing create tremendous economic opportunity and job growth.
It is the responsibility of UC and Regents to make sure we do all we can to maximize every
dollar, federal, state, public or private, including the funding that we get for research and
development in the areas of energy and environmental research. The University's extensive
research in these areas can help the state meet its energy and environmental challenges,
particularly in coordination with the work being done by state agencies like the California Air
Resource Board, the California Energy Commission, that play a key role in shaping state
environmental and energy policy.
Last year, the University of California supported a legislative proposal that would have created a
California Climate Institute to catalyze and fund research and workforce education in areas
related to climate change. The institute could serve as a vehicle for extending and improving
deployment and expenditure of R&D funds in research areas that would help the state meet its
ambitious goals related to carbon reduction and climate change mitigation. That bill was not
signed into law, but I understand that there may be renewed efforts this year to create such an
Institute. Obviously, 1 do not yet have details about any such proposal, but this is one kind of
creative effort in which the University can be involved to help ensure that research funding is
directed toward areas that can help the state meet its energy and environmental challenges. 1
hope to be actively involved in the University's efforts on this front.
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18. What steps has the UC taken to coordinate private and publicly funded energy and
environment Research, Development, and Demonstration to ensure the state
achieves the greatest benefit from those expenditures?
Energy and environmental-related RD&D takes place throughout the University of California
system. Much of that research is funded by Federal funds (over half of total UC research
funding comes from the federal government and an additional 20% from private sources). For
federal funds, and for much of the privately funded research. University researchers prepare
research proposals in response to requests for proposals for research in a specific substantive
area. While issues of interest to the nation are likely also of interest to California, the University
does not have the flexibility to shift the emphasis of a research grant to allocate more research
funding to California priorities, such as climate and energy research.
Many of the existing energy and climate-related research projects conducted at the University do
focus on problems of relevance to California, since the results of investigations into broad areas
like alternative fuels and carbon emissions, for example, can be used to help address California
goals such as reducing carbon emissions. There are also more targeted R&D programs that focus
specifically on research questions of relevance to California- such as research funded by UC's
California Institute for Energy Efficiency, which has done work specifically related to
California's Global Warming Solutions Act, regional carbon sequestration projects, hydropower
within California, and many other research areas directly related to State needs.
I consulted with Vice President for Research and Graduate Studies Steven Beckwith, who
informed me that a number of coordinated UC research programs focus on issues relevant to
energy and climate change. Multi-campus research programs facilitate multidisciplinary and
collaborative research by faculty, professional researchers, postdoctoral scholars and scientists.
With core budgetary support from the University, multicampus research programs leverage
external funds from the federal government and various governmental agencies, private and
corporate foundations, and industry. This helps maximize and extend the benefits of state
expenditures. Because such programs facilitate systemwide communication and coordination on
these issues, and deploy expertise from multiple campuses, they provide a way to facilitate
coordinated responses to state needs. Although the University is in the process of conducting a
new competition to determine which new multicampus research programs and initiatives to
establish in the future, some of the current relevant coordinated programs include:
• University of California Energy Institute (UCEI) is a multi-campus research unit
(MRU) that started in 1980. Among its goals are to conduct interdisciplinary energy
research and policy-related studies on critical energy issues affecting California, the
nation, and the world. UCEI provides centers for discussion of energy issues and
dissemination of energy information through activities such as public lectures,
conferences, extension services, and studies. UCEI cooperates with other research
institutions and with state and federal agencies on studies aimed at solutions of energy
problems.
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• California Institute for Energy and the Environment (CIEE) is an innovative UC
partnership of energy agencies, utilities, building industry, non-profits, and research
entities designed to advance energy efficiency science and technology for the benefit of
California and other energy consumers and the environment. CIEE's mission is to support
public-interest energy research in California. CIEE accomplishes this mission through
research planning, research project administration, and technical coordination of research
projects.
• Institute of Geophysics and Planetary Physics (IGPP) includes branches at UCLA, UC
Riverside. UC San Diego, UC Santa Cruz, and the UC Department of Energy National
Laboratories at Los Alamos and Livermore. One focus of research concerns fundamental
questions of global environmental change, such as climate change and stratospheric
ozone depletion. IGPP is an integrated approach that combines field and laboratory
measurements with modeling and theoretical studies.
• The Institute of Transportation Studies (ITS), a University of California organized
research unit, with branches at UC Berkeley. UC Davis, UC Irvine, and UCLA, was
established to foster research, education, and training in the field of transportation. ITS is
also part of the UC Transportation Center (UCTC), one often federally-designated
centers for transportation research and education, and a member of the Council of
University Transportation Centers, (CUTC). Research at ITS covers a broad spectrum of
transportation issues, many with implications for energy and climate change (e.g.,
planning an evaluation of public transportation systems), and often includes work specific
to addressing California needs.
In order to ensure that such multicampus research programs meet the highest standards of
excellence, the University's Office of the President is using merit-based peer review as the basis
for selecting new programs for funding.. This kind of coordinated approach helps the University
ensure that state funds are being used wisely to support meritorious research programs.
19. How do you, as a regent, assure that UC's research agenda is robust and directed
at assisting in maintaining a strong California economy without interfering with
respected principles of academic freedom ? Please be as specific as possible.
I am proud to serve as a Regent for a university that is universally recognized as a world-class
research institution, with faculty who are leaders in their fields across a variety of disciplines. I
am also proud that University research has long played an important role in maintaining a strong
California economy, helping to develop new technologies, services, products, and medical
treatments that benefit the people of the state and also creating new jobs, spawning new
companies and even entirely new industries.
I believe that maintaining the strength of our faculty is the key to ensuring that the University's
research agenda remains robust, in the areas of both basic research and research that is more
applied. Academic freedom is, indeed, a core University value, and it is essential to ensure that
faculty are free to pursue and disseminate knowledge in their chosen areas of inquiry. As a
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Regent, I am committed to upholding that freedom, and I do not believe that conflicts with
ensuring that UC"s research agenda remains robust.
The University has been very successful in leveraging state funds, obtaining federal and private
funds to conduct research that benefits the State. Some research collaborations between UC
campuses and private enterprise have been deliberately cultivated through public-private
partnerships. For example, the four California Institutes of Science and Innovation are a good
example. They were launched with state matching funds to foster economic growth through
joint UC-industry research in biomedicine, nanotechnology. telecommunications, information
technology and other technologies.
Another mechanism for encouraging research in areas that can help address issues of critical
importance to California is through targeted funding for research initiatives. Clearly, the state's
current economic crisis is very serious, but it is my hope as a Regent that it may be possible in
the near future to include targeted research initiatives as part of future University of California
budget proposals. My belief is that funding for research is an excellent investment that
contributes to the state's economy and to the quality of life of its people.
Labor Negotiations
In September 2008 the UC presented the American Federation of State, County, and
Municipal Employees (AFSCME) with a package proposal that would provide a
minimum $20.3 million in wage increases for UC's 8,000 service employees over the
next 28 months. The following month, the university announced that it had reached a
tentative agreement with AFSCME's 1 1,000 patient-care employees for a new five-year
labor contract.
20. What is the current status of contract negotiations between the UC and AFSCME?
How are the regents kept informed of contract negotiations?
As a Regent, 1 believe we must be able to offer competitive salaries and benefits if we are to
attract the talent we need to remain a leader in higher education, patient care and research, and to
provide wages that employees can live on. I was very pleased that on January 28, 2009, UC and
AFSCME reached tentative agreement on a new, five-year labor contract for UC's more than
8.000 service employees which provides for wage increases totaling over $64 million over the
life of the contract, and increases in minimum hourly rates from $10.28 to $14.00 by the end of
the contract. In addition, when contributions to the UCRP resume, as with other employees,
service employees will have their current contributions to the UC Defined Contribution Plan
redirected to UCRP, thus resulting in no reduction in take home pay. Ratification of the tentative
agreement by AFSCME union membership is expected by mid-February.
The Regents are briefed on the state of collective bargaining during closed sessions at the
Regents meetings. I and other Regents ask many probing questions and receive responsive
answers. We are often kept apprised of pressing issues which arise during negotiations and
between Regents meetings via e-mail from the Office of the President.
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21. Will proposed mid-year budget cuts have an impact on the system's pending
contract negotiations? If so, how will the university reconcile the proposed cuts with
pending contract negotiations and agreements?
Because state funding is UC's single largest source of funding for systemwide salaries, wages for
campus-based employee groups are impacted both directly and indirectly by the state budget. As
you know, the University's budget from the State does not provide for salary increases in 2008-
09 and further mid-year budget cuts from the State are anticipated.
While I understand that UC has difficult budget decisions to make in light of the State's
reductions in financial support, the University must strike a delicate balance between the needs
of the UC and meeting its priority to pay competitive wages to its lowest earning employees. In
order to accomplish this, the wage increases recently negotiated with AFSCME are contingent
upon funding from the State in the latter years of the contract. This ability to revisit wage
increases in the absence of state funding is often negotiated into union contracts.
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Senate Rules Committee
Confirmation Questions and Answers
William S. Haraf
Commissioner, Department of Financial Institutions
1/27/08
Goals and Objectives
1 . What are your goals and objectives as commissioner of DFI? What do
you hope to accomplish? How will you measure your success?
As Commissioner of the Department of Financial Institutions (DFI), my goals are
to:
o Protect and serve California citizens through effective regulation and
supervision of DFI licensed financial institutions;
o Maintain public confidence and trust in the state financial services system;
o Provide leadership, direction and oversight to DFI management and staff
and to the management and boards of directors of our licensees when
needed; and
o Ensure that the DFI continues to be seen as a leading state bank regulator
known for effective and quality supervision.
Accomplishments to Achieve as Commissioner of DFI
o Provide a measured approach to the supervision of our licensees in a
challenging economic and financial environment;
o Bring prompt and appropriate attention to problem institutions through the
use of informal and formal enforcement actions and other mechanisms;
o Ensure that DFI is responsive to the concerns of consumers and other
customers of our licensees;
o Promote the Administration's "Bank on California" initiative and continue
DFI efforts to promote financial literacy and home preservation through
community outreach;
o Streamline processes and utilize technology to enhance efficiency and
reduce unnecessary regulatory burdens on licensees; and
o Improve communications with our various stakeholders, as well as DFI
executives and staff.
Measurements for success as Commissioner of DFI
The DFI measures its success through a combination of performance metrics
directly associated with established goals.
o Financial health and viability of DFI licensees as measured by a variety of
financial indicators,1 including a goal that at least 90% of bank licensees
are rated Satisfactory or better.
o Enforcement actions issued in a timely manner and in numbers
commensurate with the number of problem licensees:
o Exam reports issued within 30 days of the completion of the
examination; and Senate RnSes Committee
' As discussed later in this report, Attachments A and B provide an analysis ofJa\K 2 7 ?nnc
number of the critical metrics we track.
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o Enforcement actions issued or pending in relation to number of
problem institutions.
o Prompt attention to and appropriate resolution of consumer complaints,
including:
o Response to telephone calls within 48 hours and to written
complaints within five to seven business days.
o The level of satisfaction experienced by licensees with the examination
process:
o Goal is for 80% or more of our licensees to rate us in the top two
tiers for effectiveness of communication, the timing, objectives and
results of the examination, the competency and availability of
personnel, and the overall supervision of the examination process.
o Completion of the DFI's process improvement initiatives, including:
o Establishment of an application status monitor to ensure the timely
processing of applications; and
o An early warning system to alert management to deteriorating
licensee trends,
o Rated in the top decile in accreditation reviews of the DFI by the
Conference of State Bank Supervisors and the National Association of
State Credit Union Supervisors.
2. What are your top priorities for DFI in the next two to three years?
Top priorities for DFI in the next two to three years
o Enhance risk-based examination programs to ensure DFI resources are
deployed effectively based on the condition of our licensees in the current
economic and financial environment.
o During the past year, the banking, credit union and money
transmission programs have developed new risk-based
examination schedules and priorities. Resources are directed
toward financial institutions that are showing signs of financial
stress and the key risk areas in the current environment.
o These proactive regulatory measures are necessary to adequately
address the rapid decline in the health of the financial services
industry and to maintain the safety and soundness of the financial
institutions under DFIs' supervision.
o Implement a consistent system of post-examination follow-ups for
corrective action, standards for the imposition of formal and informal
enforcement actions and exception and escalation processes.
o Continue to participate in homeownership preservation efforts through the
Governor's Task Force and by attending community workshops to assist
homeowners.
o Implement Electronic Banking Program to enable DFI to provide oversight
and supervision of the electronic processes used in our licensees'
operations to ensure the integrity and privacy of customer data.
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Promote the Bank on California initiative and financial literacy through
education outreach efforts and partnerships with financial institutions,
government entities, and community based organizations. DFI will:
o coordinate the annual California Financial Literacy Month in April;
o continue to form new partnerships with state, federal, non-profit and
community organizations to increase education and outreach;
o continue to work with the Department of Corporations on financial
literacy tools; and
o continue to work with the California Council on Economic Education
(CCEE) to develop financial literacy information for consumers.
Monitoring Banks and Credit Unions
3. What is the overall status of the health of state chartered depository
institutions in California? How frequently does DFI evaluate the Health
of Depository Institutions?
DFI is experiencing a significant increase in problem licensees caused by the
slowing economy and significant disruptions in capital markets. This has resulted
in sharply lower earnings and a significant deterioration in asset quality.
However, relatively strong capital ratios at the majority of our depository
institutions have somewhat mitigated these effects to date.
State and federal financial institution regulatory agencies use a rating system
known as CAMELS (Capital, Assets, Management, Earnings, Liquidity,
Sensitivity) to evaluate the condition of a financial institution based on a scale of
1 to 5, with 1 and 2 rated financial institutions considered to be in satisfactory
condition and financial institutions rated 3 to 5 to be in from "less than
satisfactory" to "unsafe and unsound" condition.
Condition of State Chartered Banks
Since December 31 , 2007, the percentage of banks rated less than satisfactory
has increased from 7% of bank licensees to a current 26% of bank licensees.
We expect this percentage to continue to grow in the coming months. At this
time, it is unknown whether problem institutions will approach the 48% level of
1993 precipitated by the savings and loan crisis.
Capital
Generally strong bank equity capital ratios coming into the current economic
downturn have provided banks with some protection against operating losses.
However, deteriorating loan portfolios will result in increasing loan charge offs
and the need to further augment reserves. This will continue to put downward
pressure on capital ratios. The ratio of equity capital to assets for all bank
licensees was 12.8% as of December 31 , 2006, and it has declined to 1 1 .5% as
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of September 30, 2008. Additional information about the dispersion of capital
ratios and other key indicators of bank safety and soundness by quintile and by
asset size can be found in Attachment A.
Asset Quality
Banks have experienced substantial increases in problem assets. Total past due
loans and leases (loans and leases 30 days or more delinquent) have increased
from $1 .4 billion as of December 31 , 2006 (5% of capital) to $5.7 billion as of
September 30, 2008 (21% of capital). Foreclosed property increased from $54
million as of December 31 , 2006 to $427 million as of September 30, 2008.
Of particular concern are concentrations of commercial real estate, in general,
and construction and land development loans in particular. Banking regulators
have issued guidance for financial institutions with commercial real estate loan
concentrations in excess of 300% of equity capital and construction and
development loan concentrations in excess of 100% of equity capital. The
guidance requires more robust credit risk management practices and strong
capital and loan loss allowance levels. Attachment A shows the exposure of our
bank licensees to these lending categories as a share of their equity capital by
quintile. In sum, 65% of DFI licensed banks have commercial real estate
exposure greater than 300% of equity capital, and 42% have construction and
development loans in excess of 100% of equity capital.
Despite substantial increases in provisions for loan and lease losses, the reserve
for such losses has not kept pace with the increase in noncurrent loans. While
the reserve as a percentage on noncurrent loans was 241% on December 31 ,
2006, as of September 30, 2008 it represents only 68% of noncurrent loans and
would not cover substantial losses incurred on noncurrent loans.
Earnings
Profitability peaked in 2006 when DFI's bank licensees reported total net income
of $2.7 billion and a return on assets (ROA) of 1 .3%. Profitability slipped to $2.2
billion in 2007 and the ROA declined to 1 .0%. For the nine months ended
September 30, 2008, banks incurred a net loss of $478 million and a ROA of
minus 0.3%. The primary cause of the losses has been the substantial increase
in loan loss provisions from $237 million in 2006 to $566 million in 2007 and to
$1 .94 billion for the nine months ended September 30, 2008. Other items
affecting profitability include a decrease in non-interest income, largely
attributable to a decrease in loan fees, and an increase in non-interest expenses.
Liquidity
Liquidity refers to a financial institution's ability to meet its obligations as they
come due. Events over the past year, including the conservatorship of Indy Mac
Bank, have increased the level of public concern about the safety of their
deposits in banks. As a result, publicity about problems at particular institutions
has resulted in liquidity problems for them, requiring close monitoring to ensure
these institutions can meet deposit demands. Additionally, in recent years, many
banks have become more reliant on wholesale funding sources such as brokered
deposits and Federal Home Loan Bank advances to fund their operations. A
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bank's ability to access these sources of liquidity can become impaired if its
capital ratios and other indicators of financial health deteriorate.
Condition of State Chartered Credit Unions
The credit union industry in California has been adversely affected by the
significant decline in residential real estate values, household net worth and the
general economy. The percentage of credit unions rated less than satisfactory is
currently 22%. DFI anticipates that the number of problem credit unions will
continue to increase in the coming months.
Capital
The strong capital position of most credit unions coming into the current
economic downturn has provided them with some protection against operating
losses. The capital/asset ratio for all credit union licensees was 10.7% as of
December 31 , 2007, and has declined only marginally to 1 0.5% as of September
30, 2008. However, DFI expects that capital ratios will decline further as credit
unions recognize credit losses and add to their reserves in this challenging
environment. Additional information about the dispersion of credit union capital
ratios and other key indicators of credit union safety and soundness by quintile
and by asset size can be found in Attachment B.
Asset Quality
Credit unions have experienced a substantial increase in total delinquent loans,
defined as loans past-due 60 days or more. Delinquent loans have increased
from $245 million as of December 31 , 2006 to $673 million as of September 30,
2008. Foreclosed and repossessed assets increased from $22 million as of
December 31 , 2006 to $38 million as of September 30, 2008. While credit
delinquencies are increasing in most loan categories, of particular concern is the
existing portfolio of real estate loans and home equity lines of credit (HELOCs)
secured by single family residences.
Earnings
Credit union profitability peaked in 2003 when DFI's credit union licensees
reported total net income of $595 million and a ROA of 1.1%. Profitability
declined to $218 million in 2007 and ROA declined to 0.3%. For the nine months
ended September 30, 2008, credit unions had a profit of $33 million and a ROA
of 0.06%. The primary cause of the decline in earnings has been a substantive
increase in the loan loss provisions which increased from $226 million in 2003 to
$483 million in 2007 and to $627 million for the nine months ended September
30, 2008.
Evaluation Frequency
DFI uses several methods to evaluate the health of the depository institutions we
supervise. Licensees are required to file quarterly reports on their financial
condition. DFI has an Early Warning System which our managers use to analyze
unfavorable trends. Depending upon circumstances, licensees may be required
to submit financial information more frequently, including daily reporting on
liquidity when a licensee is experiencing difficulties. For licensees in satisfactory
condition, this information is reviewed by senior staff, including the
commissioner, at least quarterly, and more frequently when an institution is in
less than satisfactory condition.
Examinations, however, are the essential fact finding function of financial
institution supervision. The purpose of periodic examinations is to assess the
condition of a financial institution and to require management to take steps to
correct weaknesses or unsafe and unsound conditions when needed.
Examinations will help disclose:
o The current asset condition of the institution;
o The institution's ability to meet the demands of depositors and other
creditors;
o The adequacy of the institution's capital structure ;
o An institution's earnings ability and future prospects;
o The level of competency of management; and
o The extent of compliance with applicable laws and regulations.
DFI management assimilates the information obtained from examinations,
financial reports, and knowledge obtained from experiences with other
supervised financial institutions to determine the need for, and extent of,
supervisory actions. DFI coordinates extensively with our federal regulatory
counterparts on such matters. The extent of the corrective actions required or
supervisory advice given varies from institution to institution.
The Financial Code establishes DFI's authority to examine every bank and trust
company at least once every twelve to eighteen months. Banks ranging in
quality from less than satisfactory to banks in danger of failure are generally
examined at least annually and additional visitations are performed when
deemed necessary. Currently, CAMEL 3 rated banks are examined annually.
CAMEL 4 and 5 rated banks receive additional visitations as needed.
The Financial Code provides that the commissioner may at any time investigate
the affairs and examine the books, accounts, records, and files used in the
business of every credit union. The financial condition of all state chartered
credit unions is reviewed off-site on at least a quarterly basis, with the credit
unions of higher concern reviewed each month. On-site examinations are
conducted based on the assessed level of risk at a particular credit union, and
may occur as frequently as bi-monthly.
4. What steps has DFI taken to protect the financial interests of depositors,
borrows, shareholders, and consumers?
First, with respect to consumers, in 2008 DFI processed 802 calls and received
1,285 complaints by mail, 351 of the 1,285 were against DFI licensees. Through
the Department's complaint process, a total of $38,618 was reimbursed to
consumers in 2008. In addition, to better share information regarding consumer
complaints, DFI recently entered into an information sharing agreement with our gg
federal regulatory counterparts, the Office of the Comptroller of the Currency and
the Federal Deposit Insurance Corporation (FDIC).
Our Department has also taken firm action to deal with the decline in the
condition of our licensees in the current environment.
o DFI has taken a proactive and systematic approach to informal and
formal enforcement actions to ensure that our licensees address
significant problems noted in examination reports in an expeditious
manner. The goal of these actions is to ensure that management is
taking effective steps to stabilize and improve the condition of their
institutions so that they are healthy enough to help drive economic
development in California. Since December 2007, the number of
enforcement actions outstanding and/or pending has gone from 29 to
122 presently.
o In addition, on July 1, 2008, DFI directed managers and supervisors to
schedule and conduct examinations based on the Department's
assessment of the degree of risk at any particular institution rather than
to ensure compliance with the Financial Code.
o No financial institutions with composite ratings of 1 or 2, or with a
stable or improving 3, are examined simply because they are
statutorily required. Rather, DFI's limited resources are being directed
to examining financial institutions that are showing signs of financial
stress and/or a deteriorated financial condition. These proactive
regulatory measures are necessary to maintain the safety and
soundness of the financial institutions under our supervision in the
current environment.
o In addition, DFI's programs have reoriented exam priorities at each
institution to address the greatest risks. This has resulted in expanded
reviews of loan portfolios and lending policies and greater scrutiny of
liquidity risks and liquidity risk management processes.
5. What corrective actions does DFI take when it determines that a bank or
credit union does not meet solvency standards?
Banks
The Financial Code provides that the commissioner, whenever it appears to him
or her that any of the conditions described below exist, may take possession of
the property and business of the bank and retain possession until the bank
resumes business or its affairs are finally liquidated:
o The tangible shareholders' equity of the bank is less than: (1 ) In case the
bank is a commercial bank or industrial bank, the greater of three percent
of the bank's total assets or one million dollars; or (2) In case the bank is a
trust company other than a commercial bank authorized to engage in trust
business, one million dollars;
o The bank has violated its articles or any law of this state; 100
8
o The bank is conducting its business in an unsafe or unauthorized manner;
o The bank refuses to submit its books, papers, and affairs to the inspection
of any examiner;
o Any officer of the bank refuses to be examined upon oath touching the
concerns of the bank;
o The bank has failed to pay any of its obligations as they came due or that
is reasonably expected to be unable to pay its obligations as they come
due;
o The bank is in a condition that it is unsound, unsafe, or inexpedient for it to
transact business;
o The bank neglects or refuses to observe any order of the commissioner
made pursuant to Section 1913 unless the enforcement of the order is
restrained in a proceeding brought by the bank.
Normally, the Department takes possession of the bank, orders its liquidation and
then tenders the bank to the FDIC as receiver.
Credit Unions
The Financial Code provides that if the commissioner finds that any of the factors
set forth below are true with respect to a California credit union, he or she may by
order, without any prior notice or hearing, take possession of the property and
business of that credit union:
o The credit union has violated any provision of this division, of another
applicable law, of any order issued under this division, or of any written
agreement with the commissioner, or has committed a material violation of
any regulation of the commissioner;
o The credit union is conducting its business in an unsafe or unsound
manner;
o The credit union is in such condition that it is unsafe or unsound for it to
transact credit union business;
o The credit union has inadequate capital or is insolvent;
o The credit union failed to pay any of its obligations as they came due or is
reasonably expected to be unable to pay its obligations as they come due;
o The credit union has ceased to transact credit union business;
o The credit union has, with the approval of its board, requested the
commissioner to take possession of its property and business.
Similar to a bank closing, DFI normally takes possession of the credit union,
orders its liquidation and then tenders the credit union to the National Credit
Union Administration (NCUA) as receiver.
In 2008, DFI took possession of one bank, Security Pacific Bank, and three credit
unions, Cal State 9, Sterlent, and Valley Credit Union. These decisions were
made following close consultations and in cooperation with federal regulatory
counterparts. In each of these cases, most or all of the assets and liabilities were
transferred to another financial institution over the course of a weekend with no
disruption in service. Security Pacific Bank was absorbed by Pacific Western
Bank, Cal State 9 and Sterlent credit unions were absorbed by Patelco Credit
Union, and Valley Credit Union was absorbed by Citizens Equity First Credit
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Union. The Department expects to take an increased number of such actions in
2009.
6. What is necessary to ensure financial safety and security of state-
chartered financial institutions?
As discussed in answers to Questions 4 and 5, DFI must provide oversight and
leadership in regulatory matters, be responsive to the needs of its licensees,
protect the interests of depositors, creditors, customers and security holders of
licensees, and perform in an efficient, quality-conscious, cost-effective,
competitive and businesslike manner. Active regulatory supervision with timely
enforcement actions to correct deficiencies is the key. Additionally, maintaining a
strong focus on examiner education and training is important, especially in the
current high risk areas and troubled asset administration.
Underserved Areas
7. Do you believe small towns and rural customers in California are
underserved by banks? If so, what role can you play, if any, in
improving this situation?
There are communities in California that have challenges supporting a full-
service financial institution branch, as well as other service providers such as
medical, dental, legal or accounting practices.
To facilitate the ability of banks to meet community financial service needs, DFI
eliminated an application procedure to establish new branches and instead now
requires only a notification to the Department of the intent to establish a new
branch facility. Credit unions have similar notification only requirements.
In addition, when considering an application for a new charter, the Department
carefully assesses community needs and the availability of other financial
services providers.
DFI may also play a role when a bank files a notice to discontinue a branch. The
process is the same whether the branch is in an urban area or in a rural
environment. In most cases, but not all, there are alternative financial institutions
available in the vicinity of the branch. DFI considers many factors in attempting
to balance the right of a bank to make a business decision to discontinue a
branch versus the impact on public convenience or advantage. The Financial
Code and Federal law also require a bank to give notice of the discontinuance of
a branch office to its customers.
8. What is DFI doing to monitor and enforce the commitment of banks and
credit unions to rural and low-income communities?
The Community Reinvestment Act (CRA), enacted by Congress in 1977, requires
each appropriate federal financial regulator to assess an institution's record of
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helping to meet the credit needs of the communities in which the institution
operates, including low and moderate income neighborhoods, consistent with
safe and sound operations of the institution. The law applies to all banks and
thrifts that meet the asset size threshold (currently $1 .033 billion). The federal
regulatory agencies maintain examination staffs that specialize in such
compliance reviews.
An institution's CRA record is taken into account when regulators, including the
DFI consider an institution's application for deposit facilities, including mergers
and acquisitions. The DFI reviews all CRA compliance examinations reports
during our examination of financial institutions. DFI examination reports describe
financial institutions' efforts to comply with any federal directives for areas in
need of improvement.
In addition, in assessing applications for a new license, DFI is obligated by statue
to make a careful investigation of the need for new facilities, giving particular
consideration to the adequacy of existing facilities, and to determine that the
public convenience and advantage will be promoted by the establishment of the
proposed institution.
Credit unions are not subject to CRA. A credit union is a cooperative, organized
for the purposes of promoting thrift and savings among its members, creating a
source of credit for them at rates of interest set by the board of directors, and
providing an opportunity for them to use and control their own money on a
democratic basis in order to improve their economic and social conditions. As a
cooperative, a credit union conducts its business for the mutual benefit and
general welfare of its members with the earnings, savings, benefits, or services
of the credit union being distributed to its members as patrons.
Bank on California
9. What low-cost bank products and services will be offered?
"Bank on California" will help working families save money by allowing them to
reduce their reliance on high-cost financial services such as pay day lending and
affording them greater access to basic financial services that others may take for
granted. The purpose of the program is to help working families get ahead and
grow California's economy at the same time. "Bank on California" is a
collaborative voluntary initiative that involves financial institutions, city mayors,
federal bank regulatory agencies, and community groups. The initiative will:
o Develop and market starter accounts with features that work for unbanked
consumers;
o Educate Californians without bank accounts about the benefits of account
ownership and encourage them to open accounts;
o Help Californians build their money management skills;
o Form diverse coalitions of financial institutions, regulators, city mayors and
nonprofits in key markets statewide to market the accounts to unbanked
Californians. 103
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10. What role will DFI play in the Bank on California program? What is
your plan for outreach for participation in the program?
DFI promotes the Bank on California initiative, financial literacy and home
preservation through education outreach efforts. DFI became a partner of "Bank
on California" immediately following the Governor's announcement in January
2008. On December 12, 2008, DFI participated in a press conference at the
State Capitol held by Governor Arnold Schwarzenegger officially launching "Bank
on California," and hosted the chief banking supervisors from New York, North
Carolina, Pennsylvania and Washington at this event.
To date, five cities: Fresno, Los Angeles, Oakland, San Francisco, and San Jose,
are participating in the Bank on California program. Representatives from DFI,
including myself, have participated in several of these events. To date, thirty-two
financial institutions are officially participating in the Bank on California program.
Close to half of the participating financial institutions are state-chartered banks
and credit unions licensed and supervised by DFI.
Federal Economic Recovery Efforts
1 1. What role will DFI play in implementation of the Emergency Economic
Stabilization Act?
While the States have not been given a specific role under the terms of the Act,
we have been consulted by our federal regulatory counterparts regarding the
program and the applications of particular banks to participate in the Capital
Purchase Program (CPP). In addition, DFI must process all corporate
requirements for state-chartered banks to participate in the Troubled Asset Relief
Program (TARP). Those activities include processing amendments to articles of
incorporation, approval of certificates of determination to allow the banks to issue
preferred stock to the US Treasury, and an overall approval to consummate the
sale of stock by the bank to the federal government.
12. What steps has DFI taken in order to implement the act?
First, DFI issued a blanket order of exemption allowing its banks to issue stock to
the federal government, thereby streamlining the process for capital investment.
Second, DFI centralized the processing of related corporate requirements in its
Sacramento office increasing the efficiency of processing those documents and
allowing banks to quickly turn around processed documents for filing at the
Secretary of State's office in the same city as required by law.
Third, on January 23, 2009, DFI issued guidance to certain banks that require the
approval of the Commissioner to issue dividends. The California Financial Code
requires banks to obtain the prior approval of the Commissioner when they are
unprofitable. Many of the Department's new bank licensees are in this situation.
104
12
Due to the stabilizing effect of the CPP, the DFI determined that it would
generally be appropriate to approve a dividend distribution through a reduction of
contributed capital if the bank shows evidence of the following:
o The bank's shareholders' equity is adequate (as defined by California
Financial Code) after the distribution;
o The bank is "Well Capitalized" (as defined under Federal Prompt
Corrective Action) after the distribution;
o The bank's performance trends are positive; and
o The bank's shareholders have approved the distribution.
13. What effect, if any, has the TARP program had on California's state-
chartered banks?
It is too soon to tell what effect the TARP money will have on California state-
chartered banks. The processing of CPP applications has been slower than
anticipated. As of mid-January, 62 California licensed banks and 44 holding
companies of California licensed banks had informed us of their CPP
applications. Of those, 22 have received funding totaling $1.6 billion. You will
find their names in Attachment C. DFI licensed applicants that have been
approved for CPP investments account for less than 1% of the $187.5 billion
that the Treasury Department has committed to CPP.
Outreach- Financial Literacy and Foreclosures
14. What education and outreach efforts has DFI conducted since you
were appointed commissioner?
o DFI is a member of the Governor's Task Force on Non-Traditional
Mortgages. Since 2008, the Department has participated in 30
homeownership preservation/foreclosure prevention workshops.
o In addition, DFI has attended community events throughout California
providing information on DFI licensees, consumer services, federal
deposit insurance (FDIC, NCUA), homeownership preservation and other
financial literacy information.
o DFI coordinates the annual California Financial Literacy Month in April,
and we are working with the Department of Corporations and the
California Council on Economic Education (CCEE) to develop financial
literacy information for consumers.
o In partnership with The Center for Student Credit Card Education, Inc.
(CSCCE), DFI is currently distributing the 2009 edition of The ABCs of
Credit Card Finance (ABCs), a free credit card literacy program for high
school juniors, seniors and college freshmen.
o We continue to form new partnerships with state, federal, non-profit and
community organizations to increase education and outreach.
Attachment D has detailed information regarding our education and outreach
efforts.
105
13
15. Does the department have specific plans to conduct outreach on the
foreclosure crisis and/or bank closure?
DFI plans to continue participating in foreclosure prevention and homeownership
preservation events throughout the state in 2009. We will continue to
communicate to the public about these events through the DFI website and
community workshops.
It is worth noting that based on a survey DFI conducted a year ago, our bank and
credit union licensees have not been significant originators of nontraditional and
higher priced mortgage products -- about 40 banks and 80 credit unions had
some exposure to these products on their books. Together these licensees held
approximately $7.4 billion.
Workforce and Succession Planning
1 6. What proportion of management and other staff of DFI are expected to
retire in the next five years? Is DFI facing the same staffing shortages
caused by retirements that are affecting other departments?
As the charts below illustrate, the DFI is facing similar staffing shortages caused
by retirements to those affecting other departments.
Managers & Supervisors
76%
€
24%
Under 55 □ 55 or Over
Executives
54%
46%
Under 55 □ 55 or Over
17. What is DFI doing regarding succession planning to fill vacancies
due to expected retirements? Does DFI have a personnel succession
plan in place?
Recognizing the need to develop future leaders and retain highly trained
professional staff, DFI initiated measures to address succession planning and
workforce development. For example, we initiated a Leadership Academy in
2001 to systematically train potential leaders to ensure continuity for all key
positions within the department.
To date, a total of 71 employees have graduated from the DFI Leadership
Academy. A key aspect of our program is a requirement that each class work on
an identified DFI need and propose a solution to executive management for
implementation. Examples of this include streamlining application processes,
developing our new employee survey, developing critical examination manuals,
106
14
and implementing examination procedures for IT banking, bank secrecy, privacy,
and predatory lending laws.
The 2008 Leadership Academy Class focused on the issue of DFI's workforce
and succession planning needs. The class identified specific programmatic
workforce issues and gathered pertinent workforce data on examiner salary
disparities and turnover rates. The proposed solution included recommendations
to address the workforce/succession challenges.
Based on the recommendations of the class, the DFI implemented the following
measures including:
o Formal and on-the-job training for technical and "soft" skills;
o Developing strategies that promote retention and recruitment;
o Requesting the Strategic Planning Committee address workforce
development and succession planning as a department goal and
objective;
o Thorough analysis of our examiner's Individual Development Plans and
Performance Appraisal forms in order to determine where training is most
needed;
o Utilizing open selection systems for certain classifications to broaden
recruitment efforts;
o The creation of task forces and committees which help employees
network and practice leadership and project management skills;
o Opportunities for entry level examiners to transition into the roles of
examiner in charge, supervisor, technical expert, instructor, etc.;
o Regular employee opinion surveys; and
o Regular executive level meetings that focus on staffing needs and training.
107
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DFI - Consumers
Page 1 of 4
Welcome to the
*» STATE OF CALIFORNIA
ATTACHMENT D
Department of Financial Institution
THE DEPARTMENT OF FINANCIAL INSTITUTIONS HOME PRESERVATION
OUTREACH PROGRAM
August 2008
Consumer
Home Mortgage
Information
Governor's Task Force on Non-Traditional Mortgages
In 2007, Governor Schwarzenegger formed the Interdepartmental Task Force on Non-Traditional Mortgages making California one of the
first states in the nation to form a task force to examine the alarming developments in the non-traditional mortgage market. The task force
consists of leadership from two cabinet agencies - Business, Transportation & Housing Agency and State & Consumer Services Agency
- and numerous departments responsible for all aspects of this complex issue.
The task force successfully lobbied Congress to raise federal loan limits so that more California families can take advantage of these
secure products, rather than relying on subprime loans. Currently, the task force is working to ensure California homeowners and
organizations see their fair share of the recent federal counseling funding package. The task force will continue to advise the Governor on
ways to increase protections for Californians who own or plan to purchase homes and to expand affordable housing opportunities.
A consumer Web site was developed in English and Spanish:
www.yourhome.ca.gov
www.sucasa.ca.gov
Governor's Press Releases
12/11/2008
Governor Schwarzenegger Announces Additional $7.8 Million Federal Grant to Help California Homeowners
11/5/2008
Governor Schwarzenegger Prescribes Solutions to Keep Californians in their Homes
10/29/2008
Governor Schwarzenegger Highlights Subprime Mortgage Agreement's Progress in Preventing Foreclosures
7/21/2008
Governor Schwarzenegger Launches "Community Stabilization Home Loan Program" to Help Communities Hard-Hit by Foreclosures
7/8/2008
Governor Schwarzenegger Signs Legislation to Help Protect Homeowners from Foreclosure
7/2/2008
Gov. Schwarzenegger Issues Statement on Home Foreclosure Legislation
4/17/2008
Gov. Schwarzenegger Issues Statement Applauding Actions Boosting Mortgage Availability in California
3/19/2008
Gov. Schwarzenegger Applauds Federal Agreement to Provide Additional Financial Support to U.S. Mortgage Market
3/5/2008
Gov. Schwarzenegger Applauds Federal Announcement of Higher Loan Limits in California
2/27/2008
Gov. Schwarzenegger Announces :
Million Grant to Expand Counseling Services to Homeowners at Risk of Foreclosure
2/25/2008
Governor Schwarzenegger Pushes for Federal Action on Key Priorities for California
2/12/2008
Gov. Schwarzenegger Issues Statement Regarding Federal Mortgage Plan Announcement
1/30/2008
Gov. Schwarzenegger Announces More than $72 Million in Awards to Increase California Homeownership
Governor's Task Force Activities
California has been impacted more than any other state by the national home foreclosure crisis, and the state has taken aggressive steps
to help homeowners facing problems with their mortgages. To help those hit hard by the housing crisis, the Governor has:
■■» Signed legislation to help protect homeowners by requiring a mortgage holder to provide a 30-day notice to a borrower prior to filing
any default notice leading to the foreclosure. The new law also provides tenants of foreclosed properties a minimum of 60 days
notice to move and requires holders of foreclosed properties to maintain the property.
124
http : //www . dfi . ca. go v/consumers/dfi_outreach. asp
01/27/2009
DFI - Consumers Page 2 of 4
>y Awarded $73 million for affordable housing projects in Proposition 1C and Proposition 46 funds to help more than 1 ,600 California
families rent or purchase affordable housing.
■* Announced $69.5 million in permanent low-interest loans from the Proposition 1C housing bonds to jumpstart 14 affordable multi-
family projects up and down the state, helping more than 1,000 California families and individuals realize the dream of an
affordable rental home.
■* Announced $5.6 million to help mortgage and banking industry workers laid off as a result of the subprime crisis make career
transitions to high-demand jobs in other industries.
>v Announced more than $72 million in federal HOME Investment Partnerships Program funds to provide assistance to first-time
homebuyers, reduce the number of bank owned homes and increase the number of rental properties.
» Led a town hall meeting with U.S. Treasury Secretary Paulson in Stockton to discuss help for homeowners facing foreclosure.
"* Joined the OneCalifornia Foundation to announce a bridge loan fund for homeowners facing foreclosure in Oakland.
» Awarded $8 million to community based mortgage counseling providers around the state to help avoid foreclosures.
-» Launched a $1 .2 million public awareness campaign to help educate homeowners about options that can help them avoid losing
their homes to foreclosures.
■» Announced an agreement with major loan servicers to streamline the loan modification process for subprime borrowers living in
their homes.
» Established the Interdepartmental Task Force on Non-traditional Mortgages to ensure a comprehensive and coordinated approach
to the issues raised by subprime loans.
» Signed legislation to increase protections for Californians who own or plan to purchase homes and to expand affordable housing
opportunities.
Consumer Outreach
Business, Transportation and Housing Agency (BTH) departments, including the Department of Financial Institutions (DFI), Department of
Real Estate (DRE) and Department of Corporations (Corp) participated in events focusing on preventing foreclosures in dozens of cities
located throughout California that were hit hardest by the mortgage crisis.
Credit counselors, loan servicers and lenders as well as federal and state regulatory agencies offered on-site assistance and information.
Most events were hosted by district representatives. The events ranged in size from smaller events of 25 people to more average size
events with 200 people to very large events with over 800 people attending.
List of events that DFI attended in 2008.
December 2008
-» DFI participated in the HOPE NOW Homeownership Preservation Fair - Get Help to Save Your Home (Adobe PDF) event held on
December 4, 2008 at the Sacramento Convention Center, 1400 J Street, Ballroom, 3rd Floor, Sacramento, CA 95814. HOPE NOW
is a partnership between lenders and non-profit housing counselors.
November 2008
» DFI participated in a foreclosure prevention workshop hosted by the Los Angeles Neighborhood Housing Services (LANHS) in
Rancho Cucamonga, California on November 21, 2008.
September 2008
■» DFI participated in a foreclosure prevention workshop hosted by the Los Angeles Neighborhood Housing Services (LANHS) in
Reseda, California on September 12, 2008.
August 2008
» Los Angeles Neighborhood Housing Services (LANHS) in Culver City on August 2 and in Carson on August 13. There are several
events being coordinated by LANHS and DFI is coordinating participation with DRE. Daphne Porter, Financial Institutions Manager
represented the Department and provided information on DFI and its licensees.
July 2008
» DFI attended an event hosted by the Federal Reserve Bank of San Francisco, "Stabilizing Communities: Addressing the Negative
Impacts of Foreclosure" on July 15 and 16 in Los Angeles. This symposium is part of a broader Federal Reserve System series,
"Recovery-Renewal-Rebuilding," that seeks to develop and disseminate innovative strategies and policies that can help to
address the broad range of challenges related to the rise in mortgage delinquencies and foreclosures. Matthew Velasquez and
Kristine DeYoung represented DFI at the event.
DFI attended an event hosted by FDIC Chairman Sheila C. Bair, "Face Your Finances road show" on July 22 in San
Francisco. The meeting was with community leaders to discuss deposit insurance, the costs and benefits of banking
services, and the consumer protections resulting from federal regulation of the banking industry. Panel discussions also
addressed bank services as they relate to building assets and accessing mainstream credit services, including mortgage
loans.
http ://www . dfi. ca. go v/consumers/dfi_outreach . asp 0 1 12 7/2009
125
DFI - Consumers Page 3 of 4
June 2008
» DFI participated in the HOPE NOW Homeownership Preservation Workshop on Saturday June 14, 9:00 a.m. to 2:00 p.m.,
Cultural Arts Center, 183 N. Main Street, Lake Elsinore. Matthew Velasquez (bilingual English/Spanish) represented DFI and
provided information and materials for consumers on DFI and DFI licensees.
May 2008
• Assemblywoman Cathleen Galgiani, D-Livingston, has scheduled several workshops where free counseling will be offered.
Lenders also have been invited. DFI will participate in the May 3 event in Los Banos City Council Chambers, 520 J St., Los Banos,
CA. Matthew Velasquez, bilingual volunteer, represented DFI and provided information and materials.
» DFI participated in the foreclosure prevention consumer workshop hosted by Senator Denise Ducheny and Assemblymember Mary
Salas on Thursday, May 15, 4:00 p.m. to 8:00 p.m. at Rancho del Rey Middle School, 1 1 74 East J Street, Chula Vista, CA. Kain
Macy represented DFI and provided information and materials on DFI and its licensees.
» DFI participated in the Foreclosure Prevention Workshop hosted by Governor Schwarzenegger's Task Force on Non-Traditional
Mortgages, The City of Elk Grove, and Department of Real Estate on Thursday, May 29, 5:30 p.m. - 8:30 p.m., Wackford
Community Center, 9014 Bruceville Road, Elk Grove, CA 95758. Rachel Ruff, Consumer Services Representative, represented
DFI and provided information and materials for consumers on DFI and licensees.
» DFI participated in the Foreclosure Prevention Workshop hosted by Governor Schwarzenegger's Task Force on Non-Traditional
Mortgages, Senator Darrell Steinberg, County Supervisor Jimmie Yee, Sacramento Housing and Redevelopment Agency,
Councilwoman Lauren Hammond, Saturday, May 31, 10:00 a.m. - 1:00 p.m., Monsignor Kavanagh Community Center, 5905
Franklin Blvd., Sacramento CA 95824. Alana Golden, Public Information Officer, represented DFI and provided information and
materials for consumers on DFI and licensees.
April 2008
» DFI participated in a homeowners foreclosure workshop hosted by Assemblymember Maze in Visalia on Saturday, April 2, 10:00
a.m. - 12:00 p.m. at the Tulare and Kings Counties Builder's Exchange building located at 1223 South Lovers Lane, Visalia, CA
93292.
» DFI participated in a homeowners foreclosure workshop hosted by Assemblymember Maze in Visalia on Saturday, April 5, 10:00
a.m. - 12:00 p.m. at the Tulare and Kings Counties Builder's Exchange building located at 1223 South Lovers Lane, Visalia, CA
93292. DFI Assistant Chief Examiner Catherine Nahnsen-Robison provided a brief description of the Department and its licensees.
v> DFI participated in a homeowners foreclosure workshop hosted by Assemblymember Huffman in Rohnert Park on Saturday, April
12, 10:00 a.m. - 12:00 p.m. at the Rancho Cotate High School Multi-Use Room, 5450 Snyder Lane, Rohnert Park, CA 94928.
Matthew Velasquez represented DFI.
•■» Assemblywoman Cathleen Galgiani, D-Livingston, has scheduled several workshops where free counseling will be offered.
Lenders also have been invited. DFI will participate in the April 19 event in Los Banos City Council Chambers, 520 J St., Los
Banos, CA. Matthew Velasquez, bilingual volunteer, represented DFI and provided information and materials.
■* DFI Commissioner Haraf participated in the roundtable meeting (9:00 am) with FDIC Chairwoman Sheila Bair at the Foreclosure
Prevention Workshop hosted by Governor Schwarzenegger's Task Force on Non-Traditional Mortgages, April 26,California
Science Center, Wallis Annenberg Building, Erteszek Family Foundation Muses Roo at Exposition Park, Los Angeles, CA 90037.
» DFI participated in the Foreclosure Prevention Workshop hosted by Governor Schwarzenegger's Task Force on Non-Traditional
Mortgages, April 26 (10:00 am - 2:00 pm), California Science Center, Wallis Annenberg Building, Erteszek Family Foundation
Muses Roo at Exposition Park, Los Angeles, CA 90037. Daphne Porter, Manager, represented DFI and provided information and
materials.
March 2008
» DFI participated in the Foreclosure Prevention Consumer Workshop hosted by Senator Alex Padilla and Assemblymember Felipe
Fuentes on Saturday, March 15, 10:00 a.m. - 2:00 p.m., Cesar Chavez Recreation Park, 208 Park Ave., San Fernando, CA 91340.
DFI representative Matthew Velasquez (bilingual) attended and provided information and materials.
» DFI participated in a homeowners foreclosure workshop hosted by Assemblymember Maze in Visalia on Saturday, March 22,
10:00 a.m. - 12:00 p.m. at the Tulare and Kings Counties Builder's Exchange building located at 1223 South Lovers Lane, Visalia,
CA 93292.
» DFI participated in the Foreclosure Prevention Consumer Workshop hosted by the City of Modesto and The ModestoBee,
Saturday, March 29, 9:00 a.m. - 3:00 p.m., Modesto Centre Plaza, 1000 K St., Modesto, CA 95354. DFI representative Alana
Golden attended and provided information and materials.
February 2008
-» DFI participated in the Foreclosure Prevention Consumer Workshop hosted by Councilman Tony Young in San Diego on Saturday,
February 13. DFI representatives Carol Rhyne, Manager, San Diego Office and Rina Zepeda (bilingual) attended and provided
information and materials.
™» DFI participated in the Foreclosure Prevention Consumer Workshop hosted by Senator Darrell Steinberg in Sacramento on
http://www.dfi.ca.gov/consumers/dfi_outreach.asp 01/27/2009
126
DFI - Consumers Page 4 of 4
Saturday, February 16. DFI representative Alana Golden attended and provided information and materials.
DFI participated in the Foreclosure Prevention Consumer Workshop hosted by Senator Bob Dutton in Riverside on Saturday,
February 23. DFI representative Matthew Velasquez (bilingual) attended and provide information and materials.
January 2008
N> DFI Financial Institutions Manager, Daphne Porter, participated in a foreclosure prevention event sponsored by the LANHS in Los
Angeles on Saturday, January 12.
DFI participated in the Foreclosure Prevention Consumer Workshop hosted by Senator Roy Ashbum in Bakersfield on January 24.
DFI bilingual representative Matthew Velasquez attended and provided information and materials.
» DFI participated in the Foreclosure Prevention Consumer Workshop hosted by Assemblyman Mike Villines in Fresno on January
26. DFI bilingual representative Matthew Velasquez attended and provided information and materials.
Consumer events were also held during 2007.
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Copyright © 2008 State of California
127
uxtr. j.-.
DFI - Consumers Page 1 of 3
Welcome to the
STATE OF CALIFORNIA
Department of Financial Institutions
Consumer Events
DFI Home Preservation Outreach Program - California has been impacted more than any other state by the national home foreclosure
crisis, and the state has taken aggressive steps to help homeowners facing problems with their mortgages.
March 2009
March 26 - Elder Financial Protection Network - "Call to Action" Conference, San Francisco
March 7 (9:00 am - 3:00 pm) - DFI will participate in a foreclosure prevention workshop in Rancho Cucamonga, CA. The events is
sponsored by the Office of Senator Bob Dutton.
December 2008
-» December 6 (10:00 am to 2:00 pm) - Lanhs Foreclosure Prevention Workshops and Fairs (Adobe PDF) - Foreclosure Prevention
Fair, In partnership with Vermont Village CDC, and Crenshaw Christian Center , Barfield Elementary, 7901 South Vermont Avenue,
Los Angeles, CA 90010
■-» December 6 - Free Foreclosure Prevention Fairs (Adobe PDF) Hosted by Los Angeles Neighbohood Housing Services - Central
Los Angeles Foreclosure Prevention Fair. For information about any of these events, contact Ian McMahon or Nina Kihlman at
imcmahgnig) Ian hi sjgrg nki him a n @J an hs org .
■■» December 4, Thursday (3:00 pm to 9:00 pm) - Homeownership Preservation Fair - Get Help to Save Your Home (Adobe PDF) - No
fee - Sacramento Convention Center, 1400 J Street, Ballroom, 3rd Floor, Sacramento, CA 95814. HOPE NOW is a partnership
between lenders and non-profit housing counselors.
November 2008
» November 22 (9:00 am to 2:00 pm) - Foreclosure Prevention Town Hall, Celebration Hall at Victoria Gardens Cultural Center,
12505 Cultural Center Drive, Rancho Cucamonga, California. Sponsor by Senator Dutton, Assemblyman Emmerson, and City of
Rancho Cucamonga
» November 16 (6:00 pm to 8:30 pm) - Lanhs Foreclosure Prevention Workshops and Fairs (Adobe PDF) - Foreclosure Prevention
Clinic, In partnership with Congresswoman Grace Napolitano, Barfield Elementary, 2181 N. San Antonio Ave, Pomona, CA 91767
•■» November 13 (8:00 am - 5:30 pm) - Professional Business Women's Conference, Sacramento Convention Center, 1400 J St. - Fifth
annual conference for Professional Business Women of California. More info at www.pbwc.org or 1(888)554-2695. The conference
provides a a day of learning, networking and inspiration. Local and national experts will shared the latest strategies for career
advancement, leadership, communication, work/life balance, women's health, personal finance, entrepreneurship, and more.
Keynote speakers include Lisa Ling, Jackie Speir, Naomi Tutu, Lynne Twist and Stephanie Brown-Trafton.
* November 1 (10:00 am to 1:00 pm) - Lanhs Foreclosure Prevention Workshops and Fairs (Adobe PDF) - Foreclosure Prevention
Clinic (Registration begins at 9:30am), In partnership with West Angeles Community Development Corporation, West Angeles
Villas Senior Housing Facility, 6028 Crenshaw Blvd. Los Angeles, CA 90043
October 2008
■» October 21 - Financial Literacy Meeting - California JumpStart Coaltion Meeting, Los Angeles
■■» October 23 - Financial Literacy Meeting - California JumpStart Coaltion Meeting. San_Fra_ncjsco
» October 21and 22 - The California WomejVs Conference, Long Beach Convention Center, October 21 and 22, 2008. DFI will
participate as an exhibitor and provide information on state banks and credit unions, careers at DFI, deposit insurance, FDIC 75th
anniversary information and more.
September 2008
» September 20 - Homeownership. Preservation_Fair (Adobe PDF), Long Beach Converntion Center, 300 E. Ocean Blvd. Long
Beach, CA 90802
September 13 - Foreclosure Counseling Fair (English) (Spanjsh) (Adobe PDF), Free Event, Valley Vineyard Church, 6642 Reseda
Blvd., Reseda, CA 91335, 10:00 am to 1:00pm. Homeowner presentation at 10:15 am.
September 13 - Free Fpreclosure_Preve_ntJon Fairs Hosted by Los Angeles Neighbohood Housing Services - San Fernando Valley
Foreclosure Prevention Fair. For information about any of these events, contact Ian McMahon or Nina Kihlman at
imcmahon@lanhs. orgnkihlman@lanhs.org.
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rv 1 ^noAAn
DFI - Consumers Page 2 of 3
August 2008
August 18 (8:00 am - 5:00 pm) - White House Conference on Faith-Based and Community Initiatives Networking Session.
Sacramento Convention Center, 1400 J Street, Sacramento, CA 95814, 916-808-5291
August 13 - Free Foreclosure Prevention Fairs Hosted by Los Angeles Neighbohood Housing Services - Carson Foreclosure
Prevention Workshop. For information about any of these events, contact Ian McMahon or Nina Kihlman at
imcmahon@lanhs. orgnkihiman@lanhs.org.
> August 2 - Free Foreclosure Prevention Fairs Hosted by Los Angeles Neighbohood Housing Services - Culver City Foreclosure
Prevention Fair. Veteran's Auditorium. For information about any of these events, contact Ian McMahon or Nina Kihlman at
imcmahon@lanhs. orgnkihlman@lanhs.org.
June 2008
» June 14 (9:00 am - 2:00 pm) - HOPE NOW Homeownership Preservation Workshop (Adobe PDF)
May 2008
May 29 (5:30 pm - 8:30 pm) and May 31 (10:00 am - 1:00 pm) - Governor Schwarzenegger's Task Force on Non-Traditional
Mortgages is sponsoring 2 workshops at the end of May. One is in Elk_Groye (Adobe PDF) on May 29th and the other is in
Sacramento (Adobe PDF) on May 31st.
'■■ May 28 (6:00 pm - 7:00 pm) - Korean Churches for Community Development Provide Free Foreclosure Workshops in Los Angeles
County. Every second and fourth Wednesdays. KCCD Office, 3550 Wilshire Blvd., Ste 922, Los Angeles, CA 90010. Seats are
limited. Please call and make a reservation. Free Counseling and Assistance are Available: 213-985-1500.
» May 21 (10:00 am - 3:30 pm) - The California and Nevada Youth Involvement Network (CNYIN), free Train-the-Trainer" workshop,
at the California and Nevada Credit Union Leagues' offices, 9500 Cleveland Avenue, Suite 200 in Rancho Cucamonga. Workshop
is for teachers who currently use or would like to use the National Endowment for Financial Education's (NEFE) High School
Financial Planning Program (HSFPP). It also is open to CNYIN members. CNYIN board chairman Marissa Lott at (323) 930.3404
or by e-mail at mlott@fiqfcu.orq. Deadline to register is May 1 . For more information, contact Cathy Arra in the Leagues' Credit
Union Development Department at (800) 472.1702, ext. 3486, or by email at catherinea@ccul.org.
» May 15 (4:00 pm - 8:00 pm) - Chula Vista Foreclosure Prevention Workshop (Adobe PDF) with lenders and HUD approved credit
counselors, Hosted by Department of Real Estate, Senator Ducheny, and Assembly Member Mary Salas, Rancho Del Rey Middle
School, 1174 East J Street, Chula Vista, CA 91915
» May 6 (5:00 pm) - Book Drive Community Event, Teichert Branch Boys and Girls Club, 5212 Lemon Hill Avenue, Sacramento. CA
95824. Participating agencies include the CHP, Department of Housing and Community Development, and DFI. Participating
community organizations include the Stanford Home for Children; The Hmong Women's Heritage Association; La_Familia; and
Buena Vista Rancheria, Me-Wuk.
April 2008
» April 29 - National Teach Children to Save Day, Umpqua Bank Learn to Earn Program, Wheatland and Olivehurst Elementary
Schools.
-•» April 26 (10:00 am - 2:00 pm) - Hosted by Governor Schwarzenegger's Task Force on Non-Traditional Mortgages, California
Science Center, Wallis Annenberg Building, Erteszek Family Foundation Muses Roo at Exposition Park, Los Angeles, CA 90037.
>- April 23 - Homeowners' workshop - Home loan counselors from JPMorgan Chase will give advice on preventing mortgage default
and foreclosure from 6:30 p.m. to 8:30 p.m. April 23 at Regency Park Elementary School, 5901 Bridgecross Drive, Sacramento
The Sacramento Housing and Redevelopment Agency is sponsoring the event. Call the agency at (916) 264-1500 for more
information.
•» April 23 - California Summit on Financial Literacy at the Sacramento Convention Center
-» April 20 - 26 - Redwood CU Seminars (Adobe PDF) and Festivities (Adobe PDF) for National Credit Union Youth Week
April 19 - Foreclosure Prevention Workshop hosted by Assemblywoman Cathleen Galgiani. Free counseling will be offered
Lenders also have been invited. April 19 in Los Banos City Council Chambers, 520 J St., Los Banos, CA.
» April 17(12 noon - 1:30 pm) - Financial Literacy Seminar - Presentation by Ellen Seidman, Director of the New America
Foundation's Financial Services Project, on the state of consumer financial literacy in the nation in the Eureka Room (basement).
State Capitol, Sacramento. Please RSVP, California Research Bureau at 916-653-7843.
■-» April 12 - Home, Foreclosure Assistance Workshop hosted by Assembly Member Jared Huffman - Agenda, Press Release
-> April 10 and 26 - Consumer Workshops Focusing on Preventing Foreclosures
April 10 - Napa foreclosure prevention forum - A forum on preventing foreclosure for Napa County homeowners and tenants will be
held from 1:30-5 p.m. Sunday, April 13, at St. John the Baptist family hall, 924 Napa St., Napa. Free workshop and one-on-one
counseling sessions, presented in both Spanish and English. To register for the free workshop and reserve an individual counseling -j 29
session call 253-4219 or send an e-mail to ForeciosureForum@co.napa.ca.us; or contact Puertas Abiertas. 952 Napa St, Napa,
http://wWW.dfl. ca.20v/consiimpr«:/pvpntc qc«
DFI - Consumers Page 3 of 3
CA, at 224-1786; or Napa Valley Community Housing, 251-1064.
>- April 5 - Foreclosure Prevention Workshop hosted by Assemblymember Maze in Visalia on Saturday, April 5, 10.00 a.m. - 12:00
p.m. at the Tulare and Kings Counties Builder's Exchange building located at 1223 South Lovers Lane, Visalia, CA 93292.
•» April 2 (10:00 am - 12:00 pm) - Assemblyman Bill Maze will be hosting a Homeowner Foreclosure Workshop at the Tulare & Kings
Counties Builder's Exchange building located at 1223 South Lovers Lane, Visalia, CA 93292.
April 2 - State Controller's First Annual Financial Literacy Fair at the State Capitol, Sacramento (Invitation (Adobe PDF), Parking
Information (Adobe PDF))
March 2008
' March 29 - Consumer Workshop on Preventing Foreclosures, Saturday, March 29, 9 a.m. to 3 p.m., at Modesto Centre Plaza, 1000
K St., Modesto.
March 29 - Foreclosure Prevention Workshop hosted by the City of Modesto and The ModestoBee, Saturday, March 29, 9:00 a.m.
- 3:00 p.m., Modesto Centre Plaza, 1000 K St., Modesto, CA 95354.
* March 27 - Elder Financial Protection Network, "Call to Action". San Francisco, California
•* March 22 - Foreclosure Prevention Workshop hosted by Assemblymember Maze in Visalia on Saturday, March 22, 10:00 a.m. -
12:00 p.m. at the Tulare and Kings Counties Builder's Exchange building located at 1223 South Lovers Lane, Visalia, CA 93292.
•■» March 15 and 29 - Consumer Workshops Focusing on Preventing Foreclosures
'■' March 4-5, 2008 - Cyber Safe California Summit - Burbank Airport Marriott Hotel & Convention Center, Presented by California
Department of Consumer Affairs, California Office of Privacy Protection, State and Consumer Services Agency.
» March 3 - 7, 2008 - HOPE NOW, NejghborWorks® America and 90 Days of HOPE Homeownership Preservation forums (Adobe
PDF)
» March 2 - 8 - National Consumer Protection Week - Theme: Financial Literacy, a Sound Investment
February 2008
January/February - Statewide Foreclosure Prevention Consumer Workshops - Flyer (Adobe PDF)
January 2008
» January 26 - Housing Fair, County Fairgrounds in Victorville, sponsored by County of San Bernardino, Department of Community
Development and Housing; and Fair Housing Council of Riverside County, Inc.
•» January 26 - Foreclosure Prevention Seminar in Ontario, sponsored by County of San Bernardino, Department of Community
Development and Housing; and Fair Housing Council of Riverside County, Inc.
» January 12 - 10 am to 1 pm, Homeownership Fair, City of Inglewood. Sponsored by Los Angeles Neighborhood Housing Services
» January 12 - Foreclosure workshop, hosted by Mayor Ron Dellums, 10 a.m to 1 p.m. at City Hall, 1 Frank Ogawa Plaza, Oakland,
CA. Representatives from the State and Consumer Services Agency and the Business, Transportation and Housing Agency will
present workshops on preventing foreclosures.
Contact Kelly Raybum at 510-208-6435 or krayburnigbayareanewsgroupxpm.
■>: January 10 - Insurance Commissioner's Insurance Recovery Forum - Fixer (Adobe PDF)
December 2007
■» December 12 - Homeowners Mortgage Clinic (Adobe PDF), Rancho Cordova City Hall, sponsored by Ken Cooley, Councilmember
and the Neighborworks of Sacramento County and the County Human Rights and Fair Housing Commission.
November 2007
November 30 - 10 am to 1 pm, Congresswoman Maxine Waters will be hosting a congressional hearing and homeownership
preservation fair at the California Science Center
■■>■ November 17 - Alemany HjghSchool, Mission Hills
November 10 - San Bernardino VaJIey College
Conditions of Use | Privacy Policy 1 30
Copyright © 2008 State of California
htl7V//wWW Hfi m (tmf/^nnoinviov/ «-- —
Senate Rules Committee
Confirmation Questions and Answers
Bob Clark
Director, Office of Real Estate Appraisers
January 23, 2009
Goals
1. What are your goals and objectives as Director of the Office of Real Estate
Appraisers? What is your strategy for reaching your goals? How will you
measure your success?
My primary goal as Director of the Office of Real Estate Appraisers is to improve and
maintain the integrity of the appraisal profession by administering an effective licensing
and enforcement program. The main focus of this effort will be strong enforcement to
ensure compliance with the Real Estate Appraisers' Licensing and Certification Law and
the Uniform Standards of Professional Appraisal Practice (USPAP). Proper
professional education is also a critical factor in attaining this goal. If appraisal
professionals are properly educated and trained, we will realize a reduction in the
number of fraudulent and unethical appraisals being prepared.
Upon my appointment in April of 2008, I identified several key areas which OREA could
improve to better serve the public and its licensees including restructuring and
strengthening enforcement, improvement of IT systems, raising OREA's profile within
the Association of Appraiser Regulatory Officials (AARO), collaborating more closely
with other California authorities and increasing contact with the appraisal licensee
community.
Restructuring and Strengthening Enforcement. OREA enforcement staff initiates
disciplinary investigative cases upon receipt of formal complaints or upon notification of
possible violations of the law from public agencies, lending institutions, news reports,
etc. A confidential investigation is conducted, resulting in a report that either
recommends closing of the case, a warning, or disciplinary action. Disciplinary cases
are either settled with an appropriate sanction, or they are referred to the Office of the
Attorney General (AG) to initiate legal action under the Administrative Law process. If
an enforcement case results in such referral, this substantially increases the amount of
time it takes to complete the enforcement case. It is extremely rare for an enforcement
investigation that results in an administrative law hearing to be completed within a year
as required by the Appraisal Subcommittee (ASC).
Accordingly, OREA's most immediate objective is to reduce the timeframe for
completion of investigative cases and disciplinary actions to less than 12 months.
Several steps have been taken to address this issue, including the following.
Senate Rules Committee
JAN 2 3 20QS
Page 1 of 1 1
Appointments
131
• Sharpen Focus of Investigations. Management staff has been directed to
more clearly define the scope of investigation of enforcement cases,
concentrating on specific issues within a complaint or appraisal report that will
meet a standard of proof that is required by the administrative law process to
successfully prosecute a disciplinary action and to not delay completion of the
investigation over an in-depth investigation of other potential minor violations.
• Telecommuting. In conjunction with the Caltrans 'Fix 1-5' project in June and
July, a pilot telecommute program for five appraiser investigators was initiated,
authorizing them to work at home two days per week. The case closure average
for said staff has increased by more than 50% as a result of this program.
Because of this improvement, continuance of the telecommute program has
been authorized.
• Automated Data Collection. OREA recently negotiated a new contract for
residential comparable sales data that provides information that is critical to
completing enforcement investigations. This new data source not only improves
staff efficiencies in searching public records, but also provides a projected
savings of more than 60% from the previous data provider contract.
• Budget Change Proposal (BCP) for Three Investigators and Legal Counsel.
ASC has specifically questioned whether OREA's enforcement staffing was
adequate to meet the outstanding and increasing enforcement workload. OREA
has submitted, and Department of Finance has recommended approval of, a
BCP for fiscal year 2009-10 adding three property appraiser investigators and a
staff legal counsel. OREA currently has 17,545 licensees and only 8
investigators, a ratio of 2,193 to one. The three additional investigators
requested in the BCP would bring the ratio down to a more acceptable 1 ,595 to
one. By way of guidance, ASC has indicated that Texas was previously non-
compliant, but is now adequately staffed with 5 full-time investigators supervising
6,655 licensees, a ratio of 1,331 to one. Additionally, as stated above, referral to
the AG usually delays completion of the disciplinary action significantly beyond
the ASC-mandated 12 month period. Approximately one third of the disciplinary
actions taken by OREA are currently referred to the AG. The AG billed OREA
approximately $355,000 in 2007-08. The hiring of a staff legal counsel will
enable OREA to shorten the timeframe for legal action, specifically in the
settlement of enforcement cases and is expected to result in significant cost
savings to OREA. Should the additional recommended positions not be sufficient
to satisfy the ASC, an additional BCP may be forthcoming.
Improvement of IT Systems. OREA's next objective is to improve its use of
Information Technology (IT) by:
• Expanding its online license renewal capabilities to all initial and renewal license
applications (currently only one license application type of six types is processed
via the online system). Electronic processing of license applications will
eliminate a degree of possible data entry error and the need for paper file
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132
storage. It will also free up additional staff to focus on increased enforcement
and education.
• Initiating electronic storage of all licensing files to eliminate inefficient, costly
paper storage.
• Reconfiguring its current database system to eliminate multiple entries by
licensing staff, and to provide more efficient access to license and enforcement
records.
• Initiating an online notification system of course completion and examination
results by education and testing providers to further support electronic data
storage.
• Continuing improvements/enhancements to OREA's website, including the
recent initiation of an appraiser's e-mail subscription list in December 2008, that
is now being utilized to provide notifications of appraisal industry news bulletins.
An IT Feasibility Study Report was contracted for in June 2008, and the final report
contained recommendations that should enable OREA to complete IT projects within
existing budget authority to meet several specific objectives.
Raising OREA's Profile Within The Association Of Appraiser Regulatory Officials
(AARO). Another objective is for OREA to become more actively involved in national
appraisal issues by expanding its participation in AARO, the mission of which is to
improve the administration and enforcement of real estate appraisal laws in the United
States through communication, research, education and cooperation. Participation in
this organization provides significant contact with other state appraisal regulatory
agencies, the ASC and the Appraisal Foundation, which should enable California to
have more of a voice in national appraisal regulatory guidelines, education, and
enforcement issues. This increased involvement will also facilitate the exchange of best
regulatory practices.
Collaborating More Closely With Other California Authorities. Additionally, in order
for OREA to be more involved in the ongoing dialogue over the impact of the appraisal
profession on mortgage fraud, OREA's new Deputy Director and the Chief of Licensing
& Enforcement have been assigned to take part in a mortgage fraud task force recently
initiated by the U.S. Attorney's Office in Sacramento. The Chief has prepared a
presentation for the task force on appraisal enforcement issues that OREA is currently
experiencing. The Department also cooperates with city and county jurisdictions
throughout the state to assist and advise on appraisal regulatory and enforcement
issues. Additionally, OREA is working closely with the Department of Real Estate
(DRE), the Department of Corporations (DOC), and the Department of Financial
Institutions (DFI) to educate real estate professionals and the public on what constitutes
unlawful influence of appraisers to insure consistent application of SB 223 across
different licensee populations.
Increasing Contact With The Licensee Community. With the downturn in the real
market it is critical for OREA to effectively communicate to licensees, to other real
estate professionals, and to the public that our mission is to protect the public by
Page 3 of 11
ensuring the competency and integrity of licensed real estate appraisers, and that
effective, vigorous enforcement of the Real Estate Appraisers' Licensing and
Certification Law is the key to maintaining a high standard of professional appraisal
practice. While OREA also needs to convey a message of cooperation and service, it is
also incumbent upon the Department to consistently emphasize ethical appraisal
practice, compliance to USPAP, and to encourage reporting of violations of the law.
An important element of OREA's communication with appraisal professionals and the
public is to renew publication of The California Appraiser, scheduled to occur in April
2009. Due to staffing cutbacks and an increase in the licensing and enforcement
workloads, OREA discontinued this biannual publication three years ago. It will contain
important and relevant appraisal and real estate industry news, information on
education and any changes to federal requirements. It will also report the facts
surrounding disciplinary actions taken against appraisal licensees, alerting others to
potential pitfalls and providing deterrence.
OREA also participates in one or two public appearances per month before professional
appraisal organizations, updating them on current enforcement issues that OREA is
experiencing in its disciplinary efforts. This sort of public outreach will be increased as
staffing becomes available and will be expanded to other real estate professional
groups in the future, specifically to the end users of appraisal reports, in order to
educate such professionals about SB 223, and what is deemed improper influence of
appraisers.
Measurements. Success for the attainment of these goals and objectives will be
measured by:
• Reduction in the existing open enforcement caseload and a reduction of the
timeframe for closing complaints to less than 12 months, bringing OREA into
compliance with the federal mandate,
• Conversion of OREA's current paper filing storage to a secure data base,
eliminating the need for inefficient and costly file room storage,
• Availability of an online system for all appraisal license applications and for
payment of licensing fees,
• Electronic notification to OREA of the successful completion of all appraisal
education classes and of examination results, and
• Reduction in the number of enforcement complaints in the future, as a result of
OREA's public outreach and emphasis on vigorous enforcement and appropriate
appraisal education.
2. What are the highest priorities of OREA? How will they be accomplished?
As previously stated, OREA's highest priority is to reduce the enforcement case
backlog, and to resolve complaints in a timely manner and to comply with the ASC
guideline requiring enforcement case closure within 12 months of receipt of complaint.
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134
The other objectives mentioned above are also high priorities. Additionally OREA
continues to improve the quality of its investigations.
• Enforcement staff now opens an investigative case on every complaint received.
Previously, there was a screening process that did not always result in an
opened investigation. All complainants now receive a notification of the opened
investigation, and there is better case tracking within the enforcement database.
• Upon opening an investigation a demand letter requesting a respondent's
appraisal report and related work file is now immediately generated and tracked
by enforcement support staff to gather the most up to date evidence.
• All enforcement form letters have been automated and are contained in a
database that automatically fills out a respondent's name and address and other
pertinent information into the letters, increasing staff time efficiencies.
Previously, form letters were individually filled out by enforcement staff; this
function is now completed by support staff.
• OREA recently executed a contract with DMV that provides information on
appraisal licensees that have not informed OREA of address changes. This has
improved our ability to contact enforcement respondents that have not replied to
requests for information.
Another important priority is for OREA to interact with and support the Appraiser
Qualifications Board (AQB) and education providers in assuring that a high standard of
course offerings (both basic and continuing education) are maintained and available to
appraisal professionals. Appraisal educational requirements also need to be clearly
communicated to appraisal professionals.
3. Is the training/education of appraisers sufficient? What, if any, curriculum
changes would you recommend?
The education of appraisers is a continually evolving process. New AQB
mandated training and educational requirements just took effect in 2008 (limiting
the number of trainees that a certified appraiser can work with to three, and
increasing the educational requirements by 67% for new license applicants). The
new AQB examinations are more difficult than previous examinations, with an
emphasis on practice-based situations and questions. OREA should be able to
assess their sufficiency and make recommendations next year by comparing the
new examination results with the education completed by the applicants.
OREA will provide specific guidance to course providers, emphasizing compliance
with the new AQB guidelines, and will be more actively involved with the AQB and
AARO. If staffing becomes available, OREA may develop and offer courses in: a)
OREA's rules & regulations, b) the roles of supervising and trainee appraisal
licensees, c) enforcement issues, with an emphasis on specific issues that
appraisers need to avoid to comply with USPAP, and d) a USPAP renewal class
for appraisal licensees. OREA's Chief of Licensing & Enforcement is recognized
by the members of AARO and the AQB as an extremely qualified appraisal
Page 5 of 1 1
135
education resource, and he has been directed to take on a more active role in the
appraisal education dialogue.
OREA also intends to initiate an audit program of education providers. In
preparation, OREA's management staff has been directed to develop a reporting
format for our investigators to submit an audit report whenever they complete an
appraisal continuing education class, wherein they will critique the quality and
content of the course.
Mortgage Crisis
4. What role does OREA have in preventing over-infiated appraisals?
OREA's primary role in preventing over-inflated appraisals is to administer an
assertive enforcement program, and to continue the emphasis on appraisal
education. OREA keeps the appraisal industry informed regarding the compliance
issues that get appraisers in trouble, and continually encourages appraisers,
industry professionals, and the public to report illegal and unethical appraisal
practice. In fact, existing OREA regulations spell out a formal complaint process
that allows any person to allege the particular acts or omissions he/she believes
constitute unethical or unprofessional conduct by a licensed appraiser. Public
awareness of the disciplinary actions taken against unlawful appraisal practices will
be raised through postings on OREA's and ASC's websites, and through
appropriate press notifications, when warranted. OREA is also collaborating
closely with DRE, DOC, and DFI to implement SB 223 consistently and to provide
information and outreach to all licensees regarding what may constitute unlawful
influence of appraisers.
5. What efforts has OREA taken to assure appraisers are acting responsibly
and ethically when conducting appraisals?
OREA will continue to administer a strong enforcement effort, and to emphasize
education. Implementation of a new proactive audit program would help assure
that all appraisers are acting responsibly and ethically. Such an audit could consist
of contacting appraisal licensees by OREA enforcement staff, and a thorough
review of appraisal reports and work files, to assess compliance with USPAP and
appraisal law. However, staffing constraints have not allowed the start of such a
program in the past and investigations have been largely complaint driven. The
addition of enforcement staff in the next fiscal year may enable OREA to initiate an
audit program. Such program would likely improve appraisal performance, as any
appraiser could be asked by OREA at anytime to produce appraisal reports to
verify compliance with appraisal law.
6. What efforts has OREA made to assure appraiser independence,
consistency and competency?
Page 6 of 1 1
136
OREA focuses on the requirement for appraiser independence, consistency and
competency in presentations to professional appraisal organizations. The issues
of ethical standards, conformance with USPAP, and ongoing education are
particularly emphasized at such presentations. OREA also provides a significant
amount of information on its website, and consistently requests that licensees refer
to it for appraisal industry updates. OREA recently initiated an e-mail subscriber's
list in December, and has begun sending relevant notifications on industry issues
to appraisal licensees. Such notifications include updates on FHA appraisal
requirements, the implementation of the Home Valuation Code of Conduct, new
requirements promulgated by the AQB, how to report violations of SB 223, etc.
Additionally, renewed publication of The California Appraiser is planned this
Spring.
7. Have you noticed a trend in the type or number of complaints OREA has
received in the past three years?
There has been an increase in the past several years of appraiser involvement in
fraudulent transactions such as: a) no-money-down with cash back to a buyer, b)
straw buyers, c) flips, and d) stolen identity. There have also been a significant
number of false certifications (wherein a supervising appraiser has falsely asserted
inspection of a property), and of electronic signature theft by trainee appraisers.
There is a consistent pattern for years of inappropriate highest-and-best use
analysis, and the use of inappropriate comparable sales in appraisal reports. From
2002 until the beginning of 2007, the average number of open enforcement
complaints was approximately 200-220. This number has increased markedly in
the past year, with approximately 400 open complaints currently being
investigated. OREA's enforcement staff gives priority to the most egregious
violations, those that may include significant financial loss by lending institutions or
the public, and obvious cases of fraud. The department also cooperates with
inquiries from law enforcement agencies and other California departments.
Federal Appraisal Standards
8. If the guidelines are adopted as proposed, how would appraisal practices
change in California?
If adopted as proposed, the Proposed Interagency Appraisal and Evaluation
Guidelines contain no discernible changes in appraisal practice or methodology.
The guidelines mainly reinforce sound collateral valuation practices and the
importance of appraiser independence.
9. Does OREA intend to submit comments on the proposal?
OREA has submitted comments addressing the need for clarification of technical
appraisal issues and definitions. (These comments are attached hereto.)
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137
10. Does OREA intend to seek additional action at the state level to enhance
the federal effort?
No additional actions are anticipated by OREA at this time.
Reporting Improper Influence of Appraisers
11. In addition to the information on the OREA website, is OREA making
other efforts to educate its licensees regarding SB 223?
California appraisal licensees are very aware of SB 223; however, it is difficult to
prove violations of this law. Appraiser pressure typically occurs in a phone
conversation between the appraiser and the individual that orders the report. At all
public presentations, OREA encourages its licensees to report violations of SB
223, and has been working with DRE, DOC, and DFI to insure consistent
application of the law to all licensees and to provide information and outreach to all
licensees regarding what may constitute unlawful influence of appraisers.
12. Do you believe the law requiring licensees to report violations is
adequate or would you recommend changes? What would you recommend?
The law and regulations governing appraisal practice do not specifically "require"
licensees to report violations of appraisal law. Some individuals and business
entities are hesitant to file complaints against licensees, likely out of concern for
civil liability. OREA consistently encourages the reporting of violations by
licensees, real estate and lending professionals, and the public. We also accept
anonymous complaints as further incentive to enforce our laws and regulations.
OREA does not recommend any changes at this time. Mandatory reporting would
be extremely difficult to enforce, and the aforementioned civil liability issue could
discourage compliance.
13. How have you worked with the other state licensing entities to
implement SB 223?
I have personally been working with the Commissioners of DRE, DOC, and DFI to
develop specific examples of fact patterns that may constitute violations of SB 223
for distribution to all licensees and to the public as appropriate. This collaboration
is expected to be completed shortly. As a practical matter, it is most likely that few
appraisal licensees would be found in violation of SB 223. Appraisers can be
pressured, and such pressure may come from a mortgage broker, an Appraisal
Management Company, or a bank lending department. That is why it is important
that DRE, DOC, DFI and OREA are working closely together to consistently
enforce SB 223 across each department's licensee population.
Page 8 of 1 1
138
14. Is there anything else that you believe can be done to reduce the
incidence of improper influence between real estate appraisers and their
clientele/professional associates?
With the increasing use and influence of Appraisal Management Companies in the
real estate lending and appraisal business, there is a growing nationwide effort to
license or register them. OREA is reviewing this issue with specific concern over
circumstances where appraisers who have been disciplined or who have lost their
license go on establish, or to work for such companies.
15. Have you taken any disciplinary actions under the law?
OREA has not taken any disciplinary actions under SB 223. As stated above,
violation of this statute would most likely occur through improper influence of
appraisers by licensees of other state departments, not appraisal licensees.
Accordingly, as mentioned above, OREA is closely coordinating the
implementation of SB 223 with DRE, DOC, and DFI.
Real Estate Appraisers Recovery Account
16. What is the status of the Real Estate Appraisers Recovery Account and
the associated regulations?
Under B&P 11412, in 2002 OREA's former Director reviewed the number of cases
likely to have been eligible for recovery under such a fund and, at that time,
determined that such a fund was unnecessary. Accordingly, regulations were not
adopted. OREA is reviewing current market conditions to determine if they now
warrant issuance of regulations and will promptly issue them if appropriate. It is
anticipated that current market conditions are likely to support issuance.
17. Has the 5 percent reduction been placed into the Recovery Account? If
so, what is the balance on the account?
As stated in question #16, the Recovery Account has not been funded.
18. Have funds from the Recovery Account been expended? If so, on what
have they been spent?
As stated in question #16, the Recovery Account has not been funded.
Criminal Background Checks
19. Does OREA check the criminal history of all of its applicants and licensees,
or are those that were licensed prior to implementation overlooked?
Page 9 of 1 1
& 139
Since its inception, OREA has performed a criminal background check on every
applicant for appraisal licensing. We also receive Subsequent Arrest Notices from
the Department of Justice on all existing licensees and license upgrade applicants
in order to ensure that they are not in violation of criminal law.
20. If all prior licensees have not been screened, what steps have been taken
to correct the oversight?
Not applicable - see question #19.
Public Outreach and Enforcement
21. What other efforts has OREA made to educate and inform consumers
regarding the regulation of appraisers, where to file a complaint, check a
license, etc.?
The main source of information regarding OREA's licensees is provided on its
website, which lists appraisal licensee status, the complaint filing process, existing
laws and regulations, disciplinary actions taken, etc. We consistently seek
feedback on our website from appraisers and members of the public by including a
Customer Survey form. OREA staff answers the phone from 8:00 AM to 5:00 PM,
with no lunch hour interruption. At public presentations, we inform attendees of
existing appraisal laws, how to contact OREA, how to file a complaint, etc. As
additional staffing becomes available OREA also intends to attend various public
homebuyer events.
22. Given that OREA has licensed over 18,000 real estate appraisers, do
these statistics reflect an appropriately vigorous enforcement program?
What staff is available to you for enforcement purposes?
As previously stated, OREA has struggled with staffing issues and has a pending
BCP to add three investigators and a staff counsel. However, many increases in
efficiencies have already been achieved and many more are planned as detailed
above to continually enhance enforcement.
Workforce and Succession Planning
23. Is OREA facing the same staffing shortages caused by retirements that
are affecting other departments?
OREA is potentially facing an enforcement staff shortage within the next several years,
with approximately half of its investigators currently at, or exceeding retirement-eligible
age and the remaining half reaching this age within six years. However, OREA
retirements may be slower than other departments because, regardless of age, several
of the enforcement staff have only 1-3 years of state service credit.
Page 10 of 11
140
24. Does OREA have a personnel succession plan in place?
Upon the recent hiring of the new Deputy Director in November, I initiated a
leadership development program, initially focusing on supervisory staff leadership,
which will subsequently shift into identification of leadership potential within the
non-supervisory staff. Should OREA be successful in securing additional
enforcement staff in the next fiscal year, these new personnel will also be
encouraged to train and apply for promotions as seasoned personnel retire.
Page 11 of 11
= OF CALIFORNIA— BUSINESS. TRANSPORTATION AND HOUSING AGENCY
ARNOLD SCHWARZENEGGER, Governor
I
OFFICE OF REAL ESTATE APPRAISERS
_ 1 1 02 Q STREET. SUITE 41 00
f| SACRAMENTO, C A 95811-6539
January 16, 2009
Office of the Comptroller of the Currency
250 E Street, S.W.
Mail Stop 1-5
Washington, DC 20219
Re: Proposed Interagency Appraisal and Evaluation Guidelines
Docket ID OCC-2008-0021
To Whom It May Concern:
The State of California, Office of Real Estate Appraisers (OREA) appreciates the opportunity to
comment on the proposed Interagency Appraisal and Evaluation Guidelines that reaffirm
supervisory expectations for sound real estate appraisal and evaluation policies for federal financial
institutions. While we applaud the additional detail for expectations for appraisal independence, we
do have concerns over the following issues contained in the proposed guidelines:
• Under "Independence of the Appraisal and Evaluation Program" on page 20, the guidelines
address valuation processes for small or rural institutions. It is stated that "In such cases,
another loan officer, other officer, or director of the institution may be the only person
qualified to analyze the real estate collateral." This statement seems to indicate that a non-
appraiser could perform an appraisal. The actual performance of an appraisal should always
be by a licensed or certified appraiser.
• Under "Minimum Appraisal Standards" on page 26, the guidelines state that appropriate
deductions and discounts should be utilized in the analysis of raw land. Raw land is typically
identified as land with no approvals or entitlements for improvement. As a result, deductions
and discounts are not necessarily appropriate. A definition of raw land should be included in
the Glossary of Terms, Appendix C.
• Under "Appraisal Reports" on page 30, restricted appraisal reports are referenced as a
"....reporting option that merely states..." The verbiage states that "less detailed reports"
may be appropriate in certain cases, which is indicative of a restricted report. Please note
that for an appraiser to select this reporting option, they are asserting that there is only one
intended user of the report. This is a requirement of the Uniform Standards of Professional
Appraisal Practice (USPAP), and should be noted in the proposed language in order to clarify
this standard for the intended user.
142
Page 2
January 16, 2009
• Under "Evaluation Content" on page 34, the reference to "more detailed evaluations for
higher risk. . .transactions" is somewhat vague. There are no reporting options for
evaluations. It is recommended that a definition of "more detailed evaluations," and their
required contents, be included in Appendix B.
• On page 36, "Third Party Arrangements" are discussed. It is recommended that the term
Appraisal Management Company (AMC) be inserted in this paragraph as an alternative term
for third party arrangements. AMCs are currently the most notable example of a third party,
acting as agent for a financial institution.
• The section "Reviewing Appraisals and Evaluations" is discussed from page 36 to page 39,
wherein it is stated that an appraisal review must comply with USPAP. It is recommended
that this be edited to specifically state that the appraisal review must comply with Standards
Rule 3 of USPAP. From a state regulatory perspective and OREA's experience, appraisal
reviews are grossly misunderstood. We believe the specific reference to Standards Rule 3 is
an important element in encouraging appraisers to be competent and to act in compliance
with USPAP in the appraisal review process.
We respectfully request that you consider these comments in the final version of the Interagency
Appraisal and Evaluation Guidelines. Should you have any questions, or wish to discuss the issues
raised herein, please contact Mr. Greg Harding, Chief of Licensing, Enforcement and Education at
the address noted above, or by calling him at (916) 440-7874.
Sincerely,
Bob Clark
Director
Office of Real Estate Appraisers
92984 * 143
608-R
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