Department of Water Resources
A daily compilation of significant news articles and comment
April 15, 2008
5. Agencies, Programs, People
FLOOD ZONE ISSUES:
Officials hit with flood of worries - Stockton Record
California earthquake probability study rejiggers Inland causes for concern - Riverside Press Enterprise
FINANCING ISSUES:
El Dorado County water agency plans to convert $100 million in debt; Move designed to avoid high interest rates on adjustable-rate bonds - Sacramento
NEW GENERAL MANAGER:
New IID general manager assumes post - Imperial Valley Press
FLOOD ZONE ISSUES:
Officials hit with flood of worries
By Alex Breitler, staff writer
And they took advantage.
Flood managers fielded dozens of questions from exasperated residents who crowded a sweltering church sanctuary for a crash course on levees, flood insurance and bureaucracy.
They were not satisfied with the answers.
"This is not about protecting us," said Don Coelho, who has lived along
The Federal Emergency Management Agency has drafted new maps that place thousands of homes in high-risk flood zones. The largest such area, with perhaps 5,000 homes, is south of the
Residents with federally backed mortgages who live in that zone will have to buy flood insurance as soon as 2009.
But that might not last forever, local officials said Monday. They're considering building a floodgate at the head of
"We've been scrambling, and we've been hustling" to find answers, said Steve Winkler,
Those answers could cost money. Several residents said they're willing to pay a one-time assessment if it means avoiding years and years of insurance premiums.
But central
"You've got senior citizens here on a fixed income, and you've got young couples going through foreclosure," said Jim Dunn, senior pastor at
Local officials have urged residents to buy flood insurance before the maps become final next spring.
If you wait too long, you could owe about $2,000 a year, they say; buying now could get you grandfathered in at about $1,200 - still significantly more than the roughly $400 that some homeowners voluntarily pay now.
If everyone owed $2,000 a year, that would be about $10million going toward flood insurance.
"Will that insurance keep my house from flooding?" 38-year resident Joe Dague asked. No, the county replied.
Engineers have said they believe
But the fact that homes in this older neighborhood are smack dab against the levee prevents the government from giving these flood protection barriers the OK.
Some historical perspective is helpful. An 87-year-old man who grew up in the Country Club neighborhood carefully stood up toward the end of Monday's meeting and proclaimed that never once has he seen
And the crowd applauded. #
http://www.recordnet.com/apps/pbcs.dll/article?AID=/20080415/A_NEWS/804150325
Riverside Press
By Jennifer Bowles, staff writer
Calling the report the first to forecast earthquake probability statewide, the seismologists from the U.S. Geological Survey, the California Geological Survey and academic institutions say their report will affect insurance rates, building codes and emergency planning.
Their model, which combined the most up-to-date geological and seismological data, downgraded by half the likelihood of a major earthquake in the next 30 years along two other major faults that thread through western
In 1995, seismologists thought the
The decrease is based partly on research that revealed that segments on those individual faults can rupture together, producing quakes of as much as magnitude 7.8, said Tom Jordan, director of the Southern California Earthquake Center at USC and one of the study's authors. With more energy being released through a rupture, the less frequently they occur,
Previously, it was thought that the most powerful quake on those faults could be in the magnitude range of 6.5 to 7.5.
In forecasting quake probabilities, the group looked at magnitude 6.7 because that was the power of the 1994 Northridge earthquake. They used at a 30-year period because that's the length of a typical home mortgage, Ned Field, a U.S. Geological Survey geophysicist and one of the study's authors, told reporters gathered at a news conference at USC in Los Angeles.
What's Next?
Emergency services officials in
"A lot of it is not new to us," Peter Lent, deputy director of the Riverside County Fire Department Office of Emergency Services, said of the report. "We plan for earthquakes. It is our one catastrophic event that could affect
Both Lent and Megan Blaney, spokeswoman for the San Bernardino County Fire Department Office of Emergency Services, said they hoped the report will prompt the public to become better prepared.
"As much planning as the county is doing, we're always trying to urge residents to be as prepared as much as possible and be responsible and know their evacuation routes, and have a disaster plan," Blaney said.
The San Bernardino County Board of Supervisors today is scheduled to vote on whether to station trailers in
State engineers developing a seismic retrofit for the two-mile-wide dam at
In 2005, they determined that the foundation of the earthen dam, which sits five miles from the
"The dam will likely still require foundation treatment and a berm, but it's possible the size of the berm could change a bit," said Teresa Engstrom, a supervising engineer with the California Department of Water Resources. The berm would be built beside the dam to create added support.
The California Earthquake Authority, which sets insurance rates in the state, partially funded the study and will use the information when conducting a rate review this summer, officials said.
"It allows us to more accurately price our product for the consumer," said Glenn Pomeroy, the authority's chief executive officer.
How It Works
Although large uncertainties remain in forecasting the probability of earthquakes, the seismologists say the southern half of the San Andreas fault, from Parkfield in central California to the Salton Sea, has the highest chance -- 59 percent -- of producing a 6.7-magnitude quake or larger in the next 30 years.
And part of that is just history, they said. Tension builds in faults and at some point needs to be released, they said. That stretch of the San Andreas hasn't had a big earthquake since 1857, when a 7.9-magnitude quake struck near Wrightwood in the
"Given the fact they'll erupt every 150 years, it means the probability is in the southern half of the state simply because of the 1906 earthquake in
Rupture Potential
The seismologists looked only at rupture potential onthe faults and not at the seismic waves they produce, which can cause damage several miles from the rupture, said Field, the U.S. Geological Survey geophysicist.
But, he said, the information in their report will be combined into models that forecast the amount of shaking that might occur with the quakes.
They also conceded that the unlikely can always occur. The 1999 Hector Mine earthquake in the
http://www.pe.com/localnews/inland/stories/PE_News_Local_D_quakes15.3b913d7.html
FINANCING ISSUES:
El Dorado County
Sacramento
By Cathy Locke, staff writer
El Dorado Irrigation District directors have moved to convert about $100 million in adjustable-rate bonds to avoid rising interest rates spawned by the subprime mortgage crisis.
The district provides water to about 100,000 residents of western
Board members stressed that the interest rate increases had nothing to do with the district's financial soundness or its bond rating, but rather with problems encountered by the bond insurer, Financial Guaranty Insurance Co.
The company was among bond insurance firms that provided coverage for collateralized debt obligations that included subprime mortgages. When the mortgages, failed, the bond insurers had to pay, and their capital fell to what rating agencies considered unacceptable levels.
The El Dorado Irrigation District board voted unanimously Monday to convert the auction-rate securities, issued in 2003 and 2004, to variable rate demand obligations.
Although both types of securities have adjustable interest rates, the variable rate demand obligations are supported by a letter of credit from a bank rather than bond insurance, according to a staff report.
Board president George Osborne said some people in the community think the district should convert all its bonds to fixed-rate securities. He asked what the rationale was for switching from one form of adjustable-rate security to another.
"We save $3 million annually if we go to variable rate vs. fixed rate," said Phil Knapik, district finance director.
That would amount to $75 million in savings over the 25-year life of the bonds, he said.
Knapik said the district saved $6 million in interest payments over the past five years by using auction-rate instead of fixed-rate securities. The interest rates on the auction-rate bonds began to rise in January because of the bond insurer's financial problems.
"Saving $3 million a year is a good thing," director Harry Norris said. "But what happens if the interest rate goes up? Can we get stung again?"
Dave Houston of Citigroup Global Markets, the district's bond underwriting firm, said the district would not be exempt from risk.
But the district has a reserve that is earning interest, he said, and increased interest income would help offset interest rate increases on the bonds.
"We're matching your assets and liabilities,"
The letter of credit will be issued by the French bank Dexia, which owns a bond insurance firm that has not been caught in the subprime market meltdown,
The El Dorado Irrigation District is one of numerous agencies and municipalities in
Doug Dove of Bartle Wells Associates, the district's financial adviser, said, "I fully support this conversion. It's about saving the ratepayers money."
To meet its bond obligations, the district must maintain at least a 1.25 debt service ratio, meaning total revenues must exceed operating expenditures, including debt payments, by 125 percent.
Knapik said the district's debt service coverage isn't expected to drop below 1.3 for the five-year period of 2008-2012.
The only time it dropped below the required level during the past five years was in 2004 when the state shifted tax revenues from enterprise districts to help balance the state budget.
The district responded by cutting operating costs and imposing a surcharge on water bills. That surcharge was discontinued this month.
Board members noted that they could face a similar situation if the Legislature approved a proposal by the Legislative Analyst's Office to transfer responsibility for a state felon parolee program to counties. To pay for the program, the proposal calls for transferring to counties property tax revenue that now goes to local water districts.
Board members asked whether it might be unconstitutional for the state to take away tax revenues, if doing so would impair the district's contractual obligations for bond financing.
Doug Brown, the district's bond counsel, said that argument probably would carry little weight because the district has other means to meet its contractual obligations.
"You have relatively unfettered ability to raise rates and charges," Brown said. #
http://www.sacbee.com/101/story/863583.html
NEW GENERAL MANAGER:
New IID general manager assumes post
By Brianna Lusk, staff writer
On his first day of work as general manager at the Imperial Irrigation District, Brian Brady stuck to the basics.
Meetings with executive management, introductions with the Imperial County Farm Bureau and finding the coffee pot are just the beginning.
His last meeting of the day started at 6 p.m.
“There’s more than an adequate amount of issues,” Brady said with a laugh. “I’m not in information overload but I’m pretty close.”
Brady took the helm of the district Monday after the position was vacant for more than eight months.
The previous general manager, Charles Hosken, was fired in the wake of an investigation into a gas hedging fiasco in July and the interim general manager, Elston Grubaugh, retired shortly thereafter.
Mike Campbell, the district’s information technology and general services manager, has been serving as the interim general manager since September.
Brady’s hiring comes as the district is facing a myriad of issues including proposed legislation that could see water and energy split off, transmission concerns and the implementation of a pilot water distribution program.
“I think everybody here at the IID is ready, willing and able to focus in on the big tasks ahead and work together,” Brady said.
It is unclear what will happen to contract negotiations that were under way for the energy manager candidate Frank Barbera.
In December a majority of the board moved to hire an energy manager before getting a general manager in place.
Now that Brady has taken the helm of the district, the contract that was voted on in January to reportedly hire Barbera is still up in the air.
Barbera is one of a few remaining IID employees involved in the failed natural gas hedging program.
Brady said he asked the board for time to evaluate the Energy Department but stopped short of saying the contract with Barbera would not be signed.
“The Energy Department is a top priority for me. I wanted 60 to 90 days to get in-depth briefings,” Brady said. “My deliverable back to the board after those days is my assessment of the department and whether it needs to be reshaped or if there’s an indication it needs to be split up.”
Though IID Director Stella Mendoza voted for the contract with Barbera, she said it is important the board support Brady.
“I believe it’s a prudent recommendation and I support him. Having said that, we have some very talented and capable staff in the Energy Department that can perform their duties,”
The months to come will give Brady time to decide who will continue to be part of the team and what needs to be added to the team, he said.
The outstanding contract negotiations, he added, “isn’t something I’m thinking about right now.”
IID board President John Pierre Menvielle, who voted against the contract with Barbera along with Director Anthony Sanchez, speculated there were no longer a majority of votes to ratify the contract with Barbera.
“I think it was the smart thing for the board to do. We got behind the general manager and let him take the bull by the horns. That’s what he got hired for,” Menvielle said.
The board was unanimous in its vote for hiring Brady, who was previously general manager of the Rancho California Water District in Temecula and has more than 35 years experience in water and energy.
He is making $275,000 a year on a four-year contract.
Despite IID’s challenges, Brady said he is looking forward to fulfilling his contract at the district.
“My whole career has been centered on strategic planning and there’s tremendous opportunity at IID,” Brady said.
http://www.ivpressonline.com/articles/2008/04/15/local_news/news03.txt
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