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Full text of "Hearing"

SAN FRANCISCO PUBLIC LIBRARY 



3 1223 08678 9006 




San Francisco Public Library 

Government Information Center 
San Franciscc Public Library 
100 Larkin Street, 5th Floor 
San Francisco, CA 94102 

REFERENCE BOOK 



Not to be taken from the Library 



HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, FEBRUARY 4, 2009 

1:32 P.M. 



GOVERNMENT 
DOCUMENTS DEPT 

M M 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 

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21 
25 



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37 
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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 //// 



46 



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02/10/2009 11:26:57 AM 



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 

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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. 

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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 

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6 

7 

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10 

11 

12 

13 

14 

15 

16 

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18 

19 

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21 

22 

23 

24 

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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 

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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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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 




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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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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. 




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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 

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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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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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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 remarks 7 

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02/10/2009 11:26:57 AM 



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 

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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 



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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 



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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. 



104 



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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 28 th . 



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 8 th and 9 th 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 8 th 
graders. The decision creates a de facto requirement that districts enroll all 8 th 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 8 th 
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 



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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 



605-R 

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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 




- -oOo- - 


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 



3 of 11 sheets 



Page 3 to 6 of 38 



02/12/2009 02:47:09 PI 



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 



Page 7 to 10 of 38 



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 



Page 11 to 14 of 38 



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. 

18 



2/12/2009 02:47:09 PM 



Page 15 to 18 of 38 



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 



7 of 11 sheets 



Page 19 to 22 of 38 



02/12/2009 02:47:09 PI 



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 




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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 


6 
7 


~oOo- 




6 

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9 

10 


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2S 


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II 



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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 th 
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 2 nd . 

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 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 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 ^tstfgSJ 8 




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 2 nd 

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 ?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 



82 



Carson water bubconcervancy District - Welcome! 



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Carson water bubconcervancy District - Welcome! 



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Carson Water 
Subconservancy District 




The Carson Water 

Subconservancy 

District, or CWSD, is a 

unique multi-county, bi- 

state agency dedicated 

to establishing a 

balance between the 

needs of the 

communities within the 

Carson River 

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. 



84 



Carson Water Subconservancy District 

777 E. William Street. Suite 1*1 OA 

Carson City. NV 89701 

(775)887-7450 



For information regarding this website please contact visionASP 



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Carson Water bubconcervancy District - Welcome! 



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Carson Water 
Subconservancy District 



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 



85 



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parson waier auoconcervancy .uisrnci - welcome: 



rage i 01 1 



Carson Water 
Subconservancy District 




Carson \\ ater Subconser\anc\ District 

777 E William Street. Suite I I0A 

Carson City. NV 8971)1 

(775)887-7450 



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Alpine Watershed Group | Alpine County Home 



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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 



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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 



87 



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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 14 th 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 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 

90 



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 
2 nd and November 10 th , 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 th , 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 



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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 



^ateRBieg Committ@g 



- - ; ' ; 3 ?009 



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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. 



11 



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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 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 



109 



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 



110 






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 1 th 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 



112 



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. 



113 



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 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 



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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 



117 



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 



118 









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. 



119 



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. 



120 



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^ c onunitfee 

l F6B ° 3 7flo S 

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 



126 



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. 



128 



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 



129 



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? 



130 



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. 



13 



135 



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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 



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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 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 



-o 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 o - - 

Proceedings Adjourned 118 

Certificate of Reporter 119 

APPENDIX (Responses of Appointees and 
Witness Statements) 120 



1 1 8 



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2 of 32 sheet 



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 



32 sheets 



Page 1 to 4 of 120 



03/03/2009 11:59:13 AM 



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 



03/03/2009 11:59:13 AM 



Page 5 to 8 of 120 



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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03/03/2009 11:59:13 AM 



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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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 



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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 



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 



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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 



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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 





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. 





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. 





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. 





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 



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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 




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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 




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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 

56 



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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, 

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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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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 

73 



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 

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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 

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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 

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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 

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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, 

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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. 

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 

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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 

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'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 

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. 

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. 

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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 

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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 

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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 

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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 

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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 

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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 

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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. 

102 



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 

108 



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03/03/2009 11:59:13 AM 



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. 




110 




112 



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30 of 32 sheet 



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, 

113 



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, 

116 



of 32 sheets 



Page 113 to 116 of 120 



03/03/2009 11:59:13 AM 



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 


//// 








118 




120 



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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 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. 



1313 E. Herndon. Suite 203 • Fresno, CA 93720 • T 559 439-6808 F 559 431-7225 



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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123 



Senator Darrell Steinberg 
February 10,2009 
Page 4 



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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124 



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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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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Senator Darrell Steinberg 
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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. 



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DEPARTMENT OF FISH AND CAME 

http: / /www.dfq.ca.qov 
1416 9 th 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 



142 



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 







i*" 






t 


? 


S 




■ 




■3- 


/•ij- 




l.,i 

w 



GREGORY SCHMIDT 

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 27 th . 



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. 






148 



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. 



149 



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? 



150 



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 



151 



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 9 th . 



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 9 th . 



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 

Sa a "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. 

^ 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 3 rd . 



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 



168 



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 



169 



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 



170 



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. 



171 



.1 



172 



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 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. 



174 



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. 



176 



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 



177 



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 



178 



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 



179 



180 



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 



181 



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 



182 



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. 



183 



JAN-27-2009 15= 36 P. 05 



• 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? 



184 



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. 






185 



JPlN-27-2009 15:36 p -0 7 



• 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. 



186 



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? 



187 



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 



189 



igJUUO 



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 






190 



lg|UU4 



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. 



191 



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 



192 



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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. 



193 



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 



194 



VLr £.0/ £VVi) 10,10 TAA 



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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 



195 



IgJUUJJ 



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 



197 



I4JU11 



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 

c /«m*07i/LiR "''■•"' —------' Fax:(530)627-3445 

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 

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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 

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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 

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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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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 SUPPO RT O F 
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 



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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 



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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 co ntaining 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 



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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 



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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 



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JAN-20-2006 FRl D] :5B PH DFG REDDING 



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FAX NO. 530 225 23B1 



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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 



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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 49 r ERS, 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 fac simil e -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 



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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 
PU 8UC 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- - 




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P aa e 




HEARING 




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Governor's Appointees: 

BONNIE M. REISS, Member, The Regents of the 




STATE CAPITOL 




ROOM 113 




INTRODUCTION BY SENATOR JACK SCOTT 


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5 


SACRAMENTO, CALIFORNIA 
- - 0O0 - - 


INTRODUCTION BY SENATOR GEORGE RUNNER 
INTRODUCTION BY SENATOR ROY ASHBURN 






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OPENING STATEMENT 7 




WEDNESDAY. MARCH 4. 2009 

14 3 P . M . 
- -O0O- - 


Question by SENATOR CEDILLO re: 

Undocumented immigrants in the 






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Questions by SENATOR DUTTON re: 








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Gainful employment of undocumented 








1fi 


U.C. students 14 








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Rehiring U.C. employees after 




Reported By: INA C LeBLANC 

Certified Shorthand Reporter 
CSR No. 6T13 




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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 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 

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 


R 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 



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 



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 



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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. 





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. 





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 





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 





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 



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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. 

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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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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 



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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 



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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 



03/09/2009 09:02:33 AM 



Page 23 to 26 of 73 



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 



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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 

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. 

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. 

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 



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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 

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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 



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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 

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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. 





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. 





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 





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 





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 




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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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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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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 





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 


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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 





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. 





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. 





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 


//// 




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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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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? 



78 



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 backgrounds 7 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 



79 



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 students 1 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. 



80 



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 out 1 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 practices 7 

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 accountability 7 



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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. 



19 92 



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. 

94 



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. 



95 



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 



96 



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 



97 



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 



101 



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 



10 

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 



11 



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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