April 5, 2019 – News & Notes

For Clients & Friends of The Gualco Group, Inc.

IN THIS ISSUE – A Dog House With No Canines




Capital News & Notes (CN&N) harvests California legislative and regulatory insights from dozens of media and official sources for the past week, tailored to your business and advocacy interests.  Please feel free to forward.

 Stay current daily!  For our focused updates via Twitter: @jrgualco / @robertjgore / @gualcogroup




Snow Pack at 4th-Highest Record Level

Already having soared past average statewide snow-water levels for the calendar year, Tuesday saw some more good news for California’s water health.

Department of Water Resources officials announced a measurement of 106.5 inches of snow at Phillips Station, good for a snow-water equivalent of 51 inches. Tuesday’s result marked the fourth-highest level ever recorded at that location to kick off April.

Just like the three prior months’ manual surveys at the station near Echo Summit, the results align with a continued statewide boost as snowy weather has been present virtually all of 2019.

At 45.1 inches of average snow-water equivalent statewide, California is now 162 percent of normal for the start of April, according to DWR’s data center. The Phillips Station was a full 200 percent of normal — in other words, double the average snow-water equivalent.

“It’s been a great, great winter,” DWR Chief of Hydrology and Flood Operations John Pasch said, “but it’s not all fun and games.”

Water managers will need to analyze data to make decisions about runoff releases. Manual snow surveys like Tuesday’s are critical in that regard, Pasch said.

The healthy snowpack is also well-distributed. The northern two-thirds of the Sierra are about 165 percent of average, and the southern Sierra is 153 percent of average, data show.

January through March saw sustained moderate to heavy storm systems drop consistent blankets of snow throughout Northern California. A total of at least 30 atmospheric river systems in California has contributed to some of those storms.

Moderate snow storms have continued into April, with 1 to 2 feet of snow expected this weekend in parts of the Sierra.


Dept. of Water Resources snow data webpage:



Oroville Dam Spillway Meets First Test

The reconstructed Oroville Dam spillway was used Tuesday for the first time since the spillway split open in February 2017.

Water first went down the spillway shortly before 11 a.m., following a 9 a.m. press briefing at the state Department of Water Resources field division office in Oroville. Department officials said they planned for releases from the spillway to reach about 8,300 cubic feet per second, or cfs, by early afternoon.

Officials said the main spillway was ready for use since Nov. 1, though minor work including site cleanup continued after that time.

Work on the emergency spillway also continued past Nov. 1. Jeff Petersen, senior vice president for Kiewit Infrastructure West Co. and Oroville project director, said after the press briefing Tuesday morning that there were just a few concrete slabs left to lay on top of the new concrete buttress adjacent to the existing concrete weir.

The emergency spillway was used for the first time in history during the Oroville Dam crisis of February 2017. At that time, it consisted only of the concrete weir and an unlined hillside, and “headcutting” occurred — a dangerous type of erosion that sent water headed down the hill back up toward its source.

Now there are several erosion-reducing measures in place, should the emergency structure ever be used again, including the buttress, a concrete “splash pad” and an underground cutoff wall drilled deep into bedrock.

“The normal operation is to keep using the main spillway to manage reservoirs; therefore we don’t intend to use the emergency spillway,” said Joel Ledesma, deputy director of the State Water Project.

Ledesma said the emergency spillway was constructed to “full functionality.” Erin Mellon, assistant director of public affairs for DWR, added that full functionality meant the ability to handle flows of 100,000 cfs.

DWR says the new main spillway contains 12.4 million pounds of reinforcing steel and has an average concrete thickness of 7.5 feet. It is designed to pass flows of 269,000 cfs, but DWR’s operations plan calls for a maximum release of 150,000 cfs, Ledesma said.

A gaping hole in the spillway was first discovered on Feb. 7, 2017 and continued to grow, with the situation escalating into evacuation orders for over 180,000 downstream residents on Feb. 12. Before department workers realized the spillway was compromised, water was coming down the spillway at 55,000 cfs.

An independent forensic report released in January 2018 found that “long-term systemic failure” and poor design, construction and maintenance led to water seeping through cracks and joints in the main spillway floor.

The bill to totally repair the spillways came in at $1.1 billion. DWR is getting some financial assistance from the Federal Emergency Management Agency, but not as much as DWR hoped, and the department is now appealing FEMA’s decision on reimbursement.

Lake Oroville was at 854 feet of its 900-feet capacity at last check.


Live stream of the spillway:



Trial Run of Prime Time Driving Fee in Big Apple

Wall Street Journal except, April 1

New York City is set to become the first big city in the country to put in place a charge on vehicles entering its most congested streets, and it took a booming economy, grinding traffic and a subway crisis to seal the deal.

Drivers will pay a fee to enter a zone in Manhattan’s business district with the expectation it will reduce gridlock while raising billions of dollars needed to restore the city’s struggling mass transit system. A decade after Mayor Michael Bloomberg failed in his bid to establish a charge, New York lawmakers on Sunday approved the fee as part of the state’s latest budget with many details still to come. It is expected to begin in 2021.

The congestion fee will be set by a panel to be established by the state-controlled Metropolitan Transportation Authority, which runs New York’s subway, buses and commuter rail. A panel convened by New York Gov. Andrew Cuomo suggested last year, a flat, per day fee of $11.52 for cars and $25.34 for trucks. But the budget directed that the fee should be variable, most likely depending upon traffic volume.

On many days in Midtown Manhattan, it is quicker to walk than to catch a bus. Streets have been choked off by construction, illegally parked service and delivery vans and an influx over the past five years of about 80,000 ride-sharing cars, mainly for Uber and Lyft.

New York City’s “experience will be an important precedent for the conversations happening in other U.S. cities,” said Corinne Kisner, executive director of the National Association of City Transportation Officials. Ms. Kisner said momentum is building across the country for street pricing. Other states and cities, in particular San Francisco and Los Angeles, are weighing options for a similar system.

Some legislators opposed the fee. During a debate on Sunday evening, Sen. Andrew Lanza, a Republican from Staten Island, questioned why legislators were asked to approve a charge without knowing how much people would pay. “This is a targeted tax on people who have nothing but the gall to travel within their own city,” he said.

Collection methods may vary. But many agencies have already done away with toll booths, relying on a mix of transponders and license plate readers to collect fees on highways and at bridges and tunnels.

New York is more than a decade behind major cities such as London and Stockholm, which have used so-called congestion pricing to reduce traffic while raising funds for public transit, bike lanes, pedestrian safety and roads. London’s congestion zone, established in 2003, led to average speeds increasing by 30% and an 11% shift from car use to mass transit, cycling and walking, said Paul Cowperthwaite, an official with Transport for London.

Although several U.S. cities and states are exploring pricing proposals, they remain years behind New York. Some officials say a lack of familiarity with the concept of charging vehicles to enter a city zone as well as a lack of political will remain stumbling blocks.

Several groups in California are studying congestion pricing among a raft of measures to reduce traffic in and around Los Angeles and San Francisco. The Southern California Association of Governments, a metropolitan planning organization, released a report March 28, suggesting a $4 fee for cars to enter part of West Los Angeles during peak periods in the morning and evening.

Tilly Chang, executive director of the San Francisco County Transportation Authority, which is also studying congestion pricing, said West Coast cities don’t have a transit crisis on the same scale as New York’s.

Although traffic in New York has grown worse in recent years, the congestion-pricing debate there has been dominated by the need to raise revenue for the subway, which has suffered a steep decline in reliability.

Go to the fifth floor of the Capitol, turn left at the elevators and make another left until you hit Room 5126.


Texas Billionaire Fights California’s Carbon Standard

California has positioned itself as a leader in the fight against climate change. It leads the nation by far in solar power. And it is working to reduce carbon emissions throughout the energy sector, with a goal of making the electricity grid carbon-free within a generation.

But its clean-energy goals are colliding with a Texas billionaire who has staked a fossil-fuel claim in California and is aiming to get federal regulators on his side.

The Texan, Andrew Beal, parlayed financial and real estate deals into an estimated personal worth of more than $8 billion and a bank bearing his name. Along the way, he became a business associate of President Trump, providing financing for Mr. Trump’s Atlantic City casinos, and has been an economic adviser and a major donor.

He has also been involved in some of the single largest hands of poker ever played in Las Vegas, against Olympian talent, and has often come away a winner.

“He’s the smartest guy in the room, every room he goes to,” said Dary Stone, a former member of the Texas Finance Commission, the state’s banking regulator, who has known Mr. Beal for decades.

Now Mr. Beal, 66, is betting that he can turn back the inroads of alternative energy. He is arguing before federal regulators that California policies discriminate against generators powered by fossil fuels like natural gas and coal as the state promotes sources like solar and wind power.

Mr. Beal’s interest arises from his 2017 purchase — through Beal Bank — of the La Paloma natural gas power plant in California’s Central Valley, which had fallen into bankruptcy as the state faced a glut of generating power.

A decision in Mr. Beal’s favor could further the administration’s energy agenda, giving new life to coal, natural gas and nuclear power throughout the United States. It could also upend California’s recently enacted mandate for 100 percent carbon-free electricity as well as efforts nationwide to curb carbon emissions.

Mr. Beal declined to be interviewed for this article.

Opponents of his complaint fear a fossil-fuel resurgence and higher consumer costs as well as increased carbon emissions at a time of grueling heat waves, record droughts, catastrophic wildfires and devastating hurricanes that are being cited as signs of climate change.

“I see La Paloma as a frontal assault,” Loretta Lynch, a lawyer and former president of the California Public Utilities Commission, said of the bid before federal regulators. “La Paloma is throwing a stick of dynamite into California’s policies.”

For California’s energy goals, Mr. Beal’s success would be a stunning setback.

“La Paloma is manufacturing a problem that does not exist in order to obtain a policy result that favors it,” said Ms. Lynch.

For one thing, she said, a Beal victory would force utilities to contract with power sources that can operate at any time — like natural-gas or coal plants — whether they use that power or not. Such requirements are likely to result in oversupply and higher electricity costs because of the additional payments to operate plants, like La Paloma, that otherwise would face going out of business, she said.

“This overbuying and overpaying will mean a lot less money will be available to use to reach California’s clean-energy goals,” Ms. Lynch said, calling it “a double economic whammy” for the state.

A decision on Mr. Beal’s appeal could come within months.

The commission has recently shown signs that it might be sympathetic to fossil-fuel interests. In a decision involving the nation’s largest wholesale energy market, which includes the Mid-Atlantic region, regulators determined in June that clean-energy providers had been receiving unfair subsidies that allowed them to submit low bids to power purchasers. The commission ordered solar, wind and some nuclear sources to increase their bids, putting conventional power plants on a firmer footing.

If you feel the planet is at stake, you might cast Mr. Beal as a villain of big-screen proportions. But those who know him see something simpler: the calculations of a man who likes big bets.

He placed his wager on La Paloma when Beal Bank, a creditor, acquired the plant out of bankruptcy with a $150 million credit bid — a bid made with debt it was owed. Demand for the plant’s output had declined as new solar and wind power came online and prices began to fall in the electricity market.

Looking to change that equation, Mr. Beal turned to the Federal Energy Regulatory Commission. The agency regulates services like interstate power transmission and the wholesale market for electricity, and approves acquisitions like Mr. Beal’s takeover of La Paloma.

The La Paloma complaint builds on that argument. It contends that subsidies and mandates for solar and wind power — including rebates for residential solar-panel programs and requirements that growing percentages of utility-scale systems come from carbon-free sources — have left California dependent on energy sources that are unreliable for round-the-clock power.

Critics say Mr. Beal wants the commission to create a subsidy for fossil-fuel plants, paid for by utility customers in their rates, and effectively remove the cost advantage that renewable-energy plants now have. Fossil-fuel plants are better able to ensure a continuous supply of electricity because storage capacity is not yet sufficient to keep solar or wind energy flowing when the sun isn’t shining or the wind abates. And one of the commission’s primary responsibilities is to ensure the reliability of the grid.

Opposition to the Beal effort has poured in from energy markets in the Eastern and Northeastern United States, California regulators, the state attorney general, environmentalists and consumer groups. They are troubled by the potential impact of a decision siding with Mr. Beal and the possibility that regulators could apply it nationwide.

Despite his low profile, there is little question of Mr. Beal’s political leanings. He created a pro-Trump super PAC, Save America From Its Government, which published a 2016 newspaper advertisement that was headlined “Obamacare: A Crash Course in Government Inefficiency” and asked, “Is America a communist country?” During the presidential campaign that year, Mr. Trump listed him as one of his economic advisers.

And in a post-election interview with The Dallas Morning News, while describing himself as “a Democrat on virtually all social issues,” Mr. Beal said Mr. Trump’s victory was “the first time in my lifetime where a step in the right direction has been taken to reduce the government and get it out of people’s lives.”

“That’s all we need to thrive,” he said.

But Tyson Slocum, director of the energy program at the nonprofit consumer-advocacy organization Public Citizen, said he had not seen evidence of Mr. Beal’s pursuing an ideological agenda in the La Paloma case so much as a financial one.

“I see it as his self-interest,” Mr. Slocum said. “If it were broader-based, he would be funding a group that would make some sort of filing in all markets. Beal’s been limited. It’s all about the bottom line here.”

The Federal Energy Regulatory Commission rejected Mr. Beal’s complaint in November, saying La Paloma had failed to identify any specific unjust or unreasonable fees that harmed fossil-fuel plants. But he is appealing, and the panel’s makeup is changing.

In early December, the Senate confirmed a new commission member, Bernard L. McNamee, an Energy Department official who oversaw an abortive effort to shore up the coal and nuclear industries. The panel is now split evenly between Democratic and Republican members, with another vacancy for Mr. Trump to fill.

To those who have known Mr. Beal, acquiring La Paloma and filing the complaint with federal regulators is not just happenstance.

“I promise you, he sees something,” said Mr. Stone, the former Texas banking regulator, whose children grew up with Mr. Beal’s children. “Just bet on it.”

Mr. Stone was a member of the Texas Finance Commission when Mr. Beal opened Beal Bank in 1988. He said he had watched Mr. Beal develop over the years into a crafty businessman who went against conventional thinking.

Mr. Beal’s representatives insist that his objectives in the case before the Federal Energy Regulatory Commission are limited.

In a response to opponents of the complaint, lawyers for La Paloma said the goal was not “a bailout, a subsidy, preferential treatment or any guaranteed level of profits.” They said the complaint aimed to create a fair market and ensure system reliability, not to impede California’s transition to a carbon-free electric grid.

“La Paloma is asking for an even playing field and an opportunity to compete in a just and reasonable and not unduly discriminatory market,” they wrote.



Homeless Hospital Visits Up 28% in 2 Years

Homeless patients made about 100,000 visits to California hospitals in 2017, marking a 28% rise from two years earlier, according to the most recent state discharge data.

More than a third of those visits involved a diagnosis of mental illness, according to the Office of Statewide Health Planning and Development. By contrast, 6% of all hospital discharges in California during that time involved a mental health diagnosis.

Health officials and homeless advocates attribute the trend to the surging number of people living homeless in California in recent years. From 2015 to 2017, the state’s homeless population grew by about 16%, to 134,000, according to point-in-time reports compiled by the U.S. Department of Housing and Urban Development. Those figures cover only a single day, and homeless advocates arguefar more Californians experience homelessness at some point over the course of a year.

Many researchers say California’s skyrocketing housing costs have helped drive the overall spike in homelessness. Studies also indicate that more than a quarter of people living on the streets are dealing with mental illness.

Besides mental illness, a disproportionate number of homeless were hospitalized for treatment of HIV infections, alcohol and drug addictions, skin disorders, burns, drug overdoses and traumatic injuries.

Los Angeles County saw the most discharges involving homeless patients in 2017, with 35,234, followed by San Diego, Sacramento, Orange and San Francisco counties. The number of homeless patients treated in L.A. County grew by about 7,500 from 2015 to 2017, the largest numerical increase in the state. (That is largely due to the county’s size; the percentage growth in L.A. County homeless discharges was similar to the state average.)

Among places with at least 5,000 hospital discharges in 2017, the counties with the highest proportion of discharges involving homeless patients were San Francisco, Yolo, Santa Cruz and Humboldt. In all four counties, homeless discharges made up at least 4% of all hospital discharges.

“There is no housing out here,” said Nicole Ring-Collins, who manages a winter shelter program for Mercy Coalition of West Sacramento in Yolo County. “It is so expensive.”

Providers who work with homeless people say it is no surprise they end up hospitalized at disproportionate rates. Living in deep poverty can lead to health problems. Many homeless people are driven to the streets by health issues, particularly mental illness and drug addiction. Most of their inpatient health care is paid for through Medi-Cal, the state-federal insurance program for the poor, or Medicare, the government insurance program for seniors and people with disabilities.

“When folks are forced to live outside with no shelter, the trauma they experience can result in more medical issues,” said Noel Kammermann, executive director of Loaves and Fishes, a homeless services agency in Sacramento.

Often, people living homeless do not see the doctor until they have a serious problem, Kammermann said. That lack of preventive care can lead to hospital stays. And living on the streets makes it all the more challenging to follow post-discharge instructions for rehabilitation and recovery.



The Speaker’s Dog House is Not for Pets

Walk inside, locate a tiny two-person cubicle and take a few steps to enter an intimate room barely able to fit a conference table. That concludes your tour of the most desolate space a California lawmaker could have.

The cramped corner office dubbed “the dog house” is now home to a Republican who offended the top Democrat in the California Assembly.

During a March 27 education hearing, Assemblyman Kevin Kiley, R-Granite Bay, lashed out over a Democratic proposal to prevent Teach for America members from working in the state’s poorest schools.

Assemblywoman Cristina Garcia, D-Bell Gardens, proposed the bill because she worried that Teach for America does more harm than good by enabling schools to cycle inexperienced educators into classrooms. Teach for America is a nonprofit organization that recruits college graduates for two-year positions in public schools.

A Teach for America alum himself, Kiley grilled Garcia, for 20 minutes, accusing her of drafting an unconstitutional bill that would discourage aspiring teachers from entering the workforce.

“We have 7,000 TFA alums in California who know better than anyone that our public education system is failing our kids,” Kiley said at the hearing. “We have a committee here and a Legislature that is not focused on kids and that operates a default mode of policymaking that’s anti-student, anti-teacher and anti-equity.”

Garcia’s responses seemed to irk Kiley.

“I’m not (going to) commit to completely changing my bill to please you today,” Garcia replied at one point.

Assemblyman Patrick O’Donnell, D-Long Beach, also chided Kiley during the hearing.

“This line of questioning is continuing on forever and going nowhere,” O’Donnell, the committee’s chairman, said.

After the hearing, Assembly Speaker Anthony Rendon used his leadership powers to reassign the Republican to the “dog house.”

“No Assembly member is guaranteed a particular office,” Rendon’s office said of the decision to move Kiley, adding that Rendon has no position on Garcia’s bill.

Kiley said he doesn’t care where he works, though he’s frustrated he’ll no longer have enough space to accommodate an intern who had been scheduled to start work very soon. He accused Rendon of dismissing his larger concerns about the state’s education system.

“Rendon would rather people not talk about the fact that we’re failing kids in low-income communities in California,” Kiley said.

Garcia didn’t comment directly on Rendon’s decision but said in a statement that “all stakeholders and members must share our viewpoints with respect and dignity.”

The “dog house” is a must-avoid spot that is all-too-familiar for incoming Republicans and those who frustrate Democratic leadership. There is no person more happy with Rendon’s decision than Assemblyman Tyler Diep, a Republican from Westminster who had been in the office since he was sworn in on December 2018.

Diep said he got a call Sunday notifying him that he’d been relocated. While he initially feared he’d been kicked out of the Capitol Building, he was relieved when he showed up to work on Monday with a fourth floor office that allowed him to stretch his arms without crashing them into a wall.

“The first quarter of 2019 was definitely daunting,” Diep said. “But every time I walk in and out of the office, people always tease me, ‘How much longer are you gonna be there?’ My response was, ‘Not long because someone else is likely to piss off the speaker.’”

Kiley, who is running neck-and-neck for an open senate seat against fellow Republican Assemblyman Brian Dahle, could find himself out of Rendon’s clutches if he wins in June. If not, his dog days could be far from over.



DMV’s Capitol Office: Hidden Service or Public Service?

It’s all but impossible to find for those who don’t know what they’re looking for.

Room 121 rests at the end of an isolated hallway across the street from the Capitol, is locked at all times and has no signage whatsoever. The only indicator of its existence is a peephole outside the front door.

The special Department of Motor Vehicles office is closed to the public, and if one Republican gets his way, it will be closed to the lawmakers and Capitol staff members using it.

“There’s a secret DMV across from the state Capitol with streamlined service that’s only available to members of the Legislature and a select group of political insiders,” said Republican Assemblyman Kevin Kiley of Granite Bay. “This is supposed to be a government of the people, by the people and for the people, not an oligarchy where a gilded political class enjoys privileges that aren’t available to the people that we represent.”

The three workers inside the office serve an important purpose, though. Despite perceptions that lawmakers flood into the office to renew their licenses and enjoy special perks, the vast majority of their time is spent addressing concerns from Californians who ask their state lawmakers for help sorting out their problems with the DMV.

While it wouldn’t comment on Assembly Bill 862, the DMV said in a statement the office “serves as a primary point of contact for more than 10,000 constituent services questions and concerns sent to legislative offices each year.”

The department added that about 90 percent of the work the staff does in the office “is related to assisting customers who have contacted their state representatives to resolve DMV issues.” Among many things, the employees review records, assist with license suspension issues and help customers make appointments.

Kiley’s proposal would prevent the DMV from operating any office that is closed to the public. He still wants the DMV to handle concerns lawmakers get from their constituents, but he wants the employees transferred from the “secret” office to DMV headquarters in Sacramento.

“We are closing down the office as much as it operates as a DMV field office,” Kiley said. “But in terms of fielding constituent concerns, that is a more general function that will continue to operate.”

Kiley is in the midst of a special election campaign against fellow Republican Assemblyman Brian Dahle for the Senate seat vacated by Board of Equalization member Ted Gaines. Their election is scheduled for June 4.

Even if the bill passes and the office closes, there’s nothing that would prevent lawmakers from accessing special DMV privileges. They’d still be able to make what some describe as “manager’s appointments,” which allows them to bypass long lines.

Still, these special appointments are mostly given to ordinary DMV customers who bring their concerns to lawmakers and staff members. Many lawmakers, including Kiley, Assemblyman Jim Patterson, R-Fresno, and Assemblyman Phil Ting, D-San Francisco, refuse to take advantage of the perks and instead choose to wait in regular DMV offices.


By | 2019-04-05T09:46:58-07:00 April 5th, 2019|Air Quality|