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IN THIS ISSUE – “Red Hot” Flips to Officially “Weak”
WATER & ENERGY & AIR
- Drinking Water Clean-Up Fund – Newsom’s “Proudest” Year One Achievement
- 1,000 Communities Lack Clean Water
- Governor Tours Oil Spill; Vows Closer Oversight But No Hard Stop
- Feds Vow to Override Air Board Emissions Deal With 4 Automakers
- Biogas Grows, Can Reduce GHG Emissions…Beginning Here
GOLDEN STATE CULTURE
- e-Scooter Scoopers…California Starts Yet Another Trend
- Bakersfield No Longer A “Pass-Through City”
- Condor Recovery Celebrates Chick #1,000
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.
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FOR THE WEEK ENDING JULY 26, 2019
Dept. of Finance
Preliminary General Fund agency cash for the entire 2018-19 fiscal year was $1.041 billion above the 2019-20 Budget Act forecast of $143.804 billion, or 0.7 percentage point above forecast. Revenues for June were $409 million above the month’s forecast of $19.387 billion, or 2.1 percent above forecast. June cash receipts represent the second estimated payment of 40 percent of liability due mid-month for personal income tax filers and calendar-year corporations.
nPersonal income tax revenues for the entire 2018-19 fiscal year were $523 million above the forecast of $98.505 billion. Cash receipts to the General Fund in June were $104 million above the month’s forecast of $12.776
billion. Withholding receipts were $184 million below the forecast of $5.115 billion. Other receipts were $132 million higher than the forecast of $8.405 billion. Refunds issued in June were $157 million below the expected $515
million. Proposition 63 requires that 1.76 percent of total monthly personal income tax collections be transferred to the Mental Health Services Fund (MHSF). The amount transferred to the MHSF in June was $2 million higher than the forecast of $229 million.
nSales and use tax revenues for the entire 2018-19 fiscal year were $170 million above the forecast of $26.954 billion. Revenues for June were $77 million below the month’s forecast of $2.688 million. June cash includes the second prepayment for second quarter taxable sales.
nCorporation tax revenues for the entire 2018-19 fiscal year were $179 million above the forecast of $13.633 billion. Revenues for June were $323 million above the month’s forecast of $3.196 billion. Estimated payments were $468 million above the forecast of $2.856 billion, and other payments were $124 million lower than the $416 million forecast. Total refunds for the month were $21 million higher than the forecast of $76 million.
California’s personal income grew 4.4 percent in the first quarter of 2019 while U.S. personal income increased 3.8 percent. Personal income growth for 2018 was 4.9 percent for California and 4.4 percent for the nation. Since 2010, California personal income has grown on average by 5.3 percent a year, while U.S. personal income has grown on average
4.3 percent a year.
In California, wages and salaries comprised 50.5 percent of the total personal income of $2.54 trillion in the first quarter of 2019. Wages and salaries increased 4.2 percent on a year- over-year basis while supplements to wages and salaries increased 3.6 percent. The other major components of personal income also grew: proprietor’s income increased
3.2 percent; dividends, interest, and rent increased 8.2 percent; and transfer receipts increased 3.4 percent.
Sacramento Bee & Legislative Analyst’s Office
The once red-hot California housing sales market is officially now “weak,” state analysts say, but the year-long flattening does not necessarily suggest the state is headed toward an economic downturn.
The state Legislative Analyst’s Office weighed in on the latest California home sales trends, noting that homes sales statewide in June were down from the same month last year, and notably lower than historic norms.
“Home sales were on a clear downward trend during the second half of 2018 and the beginning of 2019,” analysts wrote. “Sales seem to have stabilized in recent months and are no longer declining from month to month.
Based on data from Zillow, the California Association of Realtors and Moody’s Analytics, estimated 25,900 non-distressed home sales statewide in May. That is below the 28,000 sales number from June of 2018, and below the “long-term historical average of 31,400 sales per month.”
Similarly, sales numbers are low in recent months in Sacramento, and sales prices have flattened as well.
Housing prices statewide had been on a dramatic price run-up for seven years, after the recession years from 2007 to 2011, at first prompting increasing in sales as consumers sought homes before prices could go higher. Affordability levels dropped to their lowest levels in years in 2018, and by mid-year some potential buyers had backed out of the market, starting the latest cooling trend.
California’s governor on Wednesday signed a law that will take up to $130 million of state money each year that was supposed to clean up the air and instead use it to clean up drinking water.
Despite its status as the world’s fifth largest economy, California has struggled to provide the basic service of clean tap water to more than 1 million of its residents. The problem is most acute in the Central Valley, the heart of the state’s $20 billion agriculture industry, where large farms have polluted water sources for mostly rural communities.
The problem is so severe the state has a grant program to provide bottled water to some communities. As of June, the state was providing bottled water to about 18,000 Californians in 51 communities at a cost of about $4 million, said George Kostyrko of the State Water Resources Control Board. The state does not track the total number of bottles it hands out.
Shortly before signing the bill into law, Democratic Gov. Gavin Newsom spoke to some people in the city of Sanger in Fresno County who receive five 8-gallon (30 liter) jugs of water every two weeks through a grant program.
One woman speaking in Spanish told Newsom through an interpreter that she uses a jug of water for her son to take a shower, and that her son tries to save some of the water so she can bathe.
“Families shouldn’t have to dump water over their heads to shower every day,” Newsom said in a statement. “This funding is critically important to addressing California’s long-standing safe drinking water issues.”
California has grant programs that would fund infrastructure to deliver water to these rural communities, including a voter-approved $7.5 billion bond in 2014. But the state does not have a program to provide financing for cash-strapped water systems to operate that equipment, which can be a challenge for smaller systems lacking sufficient revenue.
Newsom proposed a tax on most residential water bills to fix this but the Democratic-controlled state legislature rejected that proposal. Instead, they authorized a plan to take up to $130 million a year over the next decade from a fund that was meant to help reduce greenhouse gas emissions.
That fund is part of the state’s cap and trade program, which requires the states’ biggest polluters — including oil refineries and farms — to buy credits that let them pollute. The program has generated more than $9.5 billion since its inception, and state officials are supposed to use that money to improve the environment.
The drinking water plan has alarmed some environmental groups, who worry it sets a precedent of the state using the cap and trade money for other purposes as the state struggles to meets its emission reduction goals.
“The gray lines which already existed just became grayer,” Democratic state Sen. Bob Wieckowski, who voted against the plan, said in an interview last month.
But supporters, including bill author Democratic Sen. Bill Monning, said the spending is appropriate because climate change has impacted drinking water by accelerating the decline of groundwater basins and increasing naturally occurring environmental contaminants.
The law also requires the State Water Resources Control Board to develop a plan on how to spend the money, including identifying failing water systems that need the most help.
COMPTON, Calif. — It was bath time and Rosalba Moralez heard a cry. She rushed to the bathroom and found her 7-year-old daughter, Alexxa, being doused with brown, putrid water.
“We kept running the tub, we turned on the sink, we flushed the toilet. All the water was coming out dirty,” Ms. Moralez said.
For more than a year, discolored water has regularly gushed from faucets in the family’s bathroom and kitchen, as in hundreds of other households here in Willowbrook, Calif., an unincorporated community near Compton in South Los Angeles.
The brown water, provided by the Sativa Los Angeles County Water District, first drew public outrage and local news media attention last year when customers began protesting over unexplained stomach pains and skin so itchy it had scarred from the scratching.
Elected officials were soon jolted into action. Sativa’s elected board of directors was disbanded and Los Angeles County took control of the water district. The county is now working furiously to replace dilapidated pipes and wells, and this week began new construction to reinforce Sativa’s system. But problems persist. Overhauling the district has taken far more time and money than anyone initially expected because, by the time the county stepped in last fall, the district’s infrastructure was on the brink of collapse.
Sativa is just one case, which erupted into public view after decades of neglect. The rot in California’s water system likely extends far beyond it.
As many as 1,000 community water systems in California may be at high risk of failing to deliver potable water — one out of every three — according to a previously undisclosed estimate by senior officials at the California State Water Resources Control Board, which regulates drinking water. These troubled districts, which include Sativa, often operate in mostly poor areas on thin budgets. With little oversight, they face problems ranging from bankruptcy to sudden interruptions in water capacity, to harmful toxins being delivered through taps.
Nationally, political leaders have struggled to reach consensus over how to rebuild America’s aging infrastructure, including the country’s drinking water systems, which the American Society of Civil Engineers gave a D rating in its 2017 report. In California, the abundance of small water districts, a fraught culture around water rights, and significant oversight gaps have exacerbated those problems.
California has one of the most byzantine drinking water systems in the country, and even in urban parts of the state some water systems are so small they struggle to sustain their maintenance budgets. The hodgepodge of small districts are overseen by local boards — often with little to no expertise in water management — making it difficult for the state to keep track of them.
Already, more than 300 public water systems in the state are out of compliance with federal drinking water safety standards, according to publicly available data, and an estimated one million Californians are exposed to unsafe drinking water each year. Those are the ones the state knows about because their water quality has already been tested as unsafe.
Often, the state water board does not collect enough information from public water systems to catch mismanagement until the systems are already failing, or are approaching that threshold like Sativa, according to interviews with several officials. The state agency does not keep a list of suspected high-risk systems. The limited information that is collected from water districts is often scattered across agencies and levels of government, including county boundary commissions, which may be either reluctant to become involved or lack the authority to do so.
“We didn’t know how bad the problems were,” said Russ Bryden, an engineer with the County of Los Angeles Department of Public Works, who took over day-to-day management of Sativa as an emergency administrator last fall. “You could not have known from the outside. Sativa was not supposed to be this bad.”
When Los Angeles County took control, officials discovered that the problems at Sativa ran even deeper than anyone knew. They found the system needed more than $10 million in urgent repairs to protect against it shutting down entirely, according to Mr. Bryden. They uncovered hundreds of thousands of dollars in unpaid bills and debts. And a rash of suspicious spending in 2017 had left the district with just $10,000, according to balances reviewed by The New York Times.
But no one wants to drink brown water, and residents have lost faith in the district’s promises that the water is safe to use. To them, the problems at Sativa are just another example of the growing inequality they see across California.
The seamstresses, chauffeurs and domestic workers who live in Willowbrook, a community in the district that is primarily Hispanic and where 70 percent of residents speak Spanish at home, maintain neat front-yard patios where bright purple and yellow flowers bloom. But their roads are lined with potholes, vacant businesses are a common sight and many street signs are so faded they are difficult to read.
Although one in four residents here live in poverty, those who do not want to drink from their taps — which they no longer trust, even when the water is not brown — spend more money on drinking water than many families do in Beverly Hills, 20 miles away. Ms. Moralez, a home health aide, estimates her family spends about $150 a month on bottled water in addition to the family’s $67 monthly payment to the water district, which it still must pay. The family currently lives on a single income.
Anticipating another surge of brown water caused by the new construction this week, the county stockpiled huge amounts of bottled water to hand out to residents.
The distrust among residents was decades in the making, but there were few legal pathways for government intervention.
The district was issued various citations over the years, which were later enumerated in the state water board’s own October 2018 order taking control of the district, including for repeatedly failing to adequately test water quality.
Staff at the county commission that reviews municipal services began to raise alarms about Sativa’s management practices as early as 2005. By 2012, after another service review, the commission discovered that Sativa had not carried out any financial audits in seven years, and it began to push for the district to consolidate with another water utility, said Paul Novak, the executive officer at the Los Angeles Local Agency Formation Commission.
McKITTRICK, Calif. — Gov. Gavin Newsom, in the Central Valley on Wednesday for a firsthand look at one of the largest oil spills in California history, vowed to go beyond the state’s already aggressive efforts to curtail the use of fossil fuels and seek a long-term strategy to reduce oil production.
Newsom also signaled a sharp break with that past by criticizing existing oversight of the oil industry as too permissive. He promised to begin by retooling the state’s top oil regulatory agency, state Division of Oil, Gas and Geothermal Resources.
The Democratic governor made the comments after arriving in the Kern County town of McKittrick on a 100-plus-degree afternoon, just a few miles from the Chevron oil well field where roughly a million gallons spilled into a dry creek bed. Chevron officials blamed the spill — with was about two-thirds water and one-third oil — on an old well that the company recently recapped.
Although Newsom called for greater oversight of oil production, he was careful not to cast himself as an industry opponent. He made note of the local jobs sustained by petroleum production, and he praised both Chevron and state agencies for working to stem and contain the seeping liquid. He added that there was no indication that the spill threatened wildlife or aquifers that supply drinking water for local communities.
Still, he said, another major seepage is always possible.
Newsom, who took office in January, said the spill had refocused attention on California’s billion-dollar oil industry and its place in a state striving to end its dependence on fossil fuels and convert to 100% renewable energy.
“I want to focus not just on demand but supply, and that, I think, is a new approach in this state with this new administration,” the governor told The Times.
Environmental groups have been lobbying Newsom to ban new wells and curtail oil production. The leadership of the governor’s own political party has called for the immediate end of the controversial fracking method of oil extraction, a process that uses drilling and large volumes of high-pressure water to pump oil and gas from the ground.
Newsom has rebuffed those efforts, saying any action the state takes must be thoughtful, realistic and account for thousands of Californians who depend on the oil industry to make a living.
The governor, who began his visit Wednesday at McKittrick Elementary School, noted that historical pictures of oil derricks lined the school’s hallways — evidence of how engrained the petroleum industry is in the local economy.
“With respect, drive around. There are not a lot of alternative strategies for economic growth here,” Newsom said. “Before we turn off the tap, what’s the plan to take care of the folks here? What’s the plan to take care of the workers? If you can’t look people in the eye and say you have an answer to that, then I think you’re doing a disservice to people in the community, and I can’t do that.”
Newsom emphasized that $1.5 million has been set aside in the state budget, approved by the Legislature and signed by him in June, to study ways to reduce petroleum demand and production in the state, taking into consideration the effects on the economy, jobs and Californians.
Kassie Siegel of the Center for Biological Diversity said the study is a good first step but added that California cannot afford to wait to take action. Siegel and other environmental leaders want Newsom to impose a moratorium on fracking and all new oil wells.
“When you’re in a hole, the first step is to stop digging,” Siegel said. “There should be no more expansion of oil production. There’s no way to keep California safe from this industry other than phasing it out.”
Newsom said state law prohibits him from doing that by executive fiat and that legislative action would be required.
The effort to sway Newsom follows an unsuccessful campaign by environmental activists, community groups and labor unions that tried to persuade then-Gov. Jerry Brown to freeze all new oil and gas drilling during his final year in office. While praised for helping California become a world leader in combating climate change, Brown has come under attack for not reining in the state’s oil industry.
“There’s been a cozy relationship that the Brown administration and California have had with the oil industry, and I think those days are gone,” said state Sen. Bob Wieckowski (D-Fremont).
Wieckowski wrote legislation that would charge a 10% tax on every barrel of oil pumped from the ground in California to bring in some $900 million annually, part of which can be used to increase regulatory oversight of oil production, he said.
Earlier this month, Newsom fired California’s top oil industry regulator for issuing too many permits for hydraulic fracturing, as fracking is formally known. He said he intends to reshape leadership of the agency to increase regulatory oversight of the oil industry.
California is one of the nation’s top petroleum-producing — and gasoline-consuming — states, pitting an essential ingredient of the California economy and everyday lifestyles against overwhelming public sentiment for curtailing the use of fossil fuels.
In 2018, Brown and the Legislature adopted an ambitious goal to covert California to a 100%, zero-carbon electrical supply by 2045. A 2016 poll by the Public Policy Institute of California found that most likely voters in the state opposed fracking and increased oil drilling off the coast. A vast majority also favored stricter emission limits on power plants in an effort to address climate change.
Still, California is home to 26 million vehicles with internal-combustion engines, and the oil industry helps support close to 368,000 blue-collar jobs in the state, according to the Western States Petroleum Assn.
California is home to 72,000 oil-producing wells that last year produced 165.3 million barrels of oil from onshore and offshore facilities, according to the California Department of Conservation. California also consumes more gasoline than any other state — 366,000 barrels in 2017, according to the U.S. Energy Information Administration.
According to the state Division of Oil, Gas and Geothermal Resources, known as DOGGR, more than 120,000 wells in the state have been plugged, the legacy of more than a century of oil drilling.
The Chevron-owned well where the spill occurred last drew oil in 2003 and was sealed with cement some time after, according to state data. It sits alongside more than 3,600 other plugged wells in the Cymric oil field in Kern County, most of which are Chevron’s.
An additional 400 wells in the field sit inactive, not producing oil and waiting to be sealed. Nearly all of the wells in the Cymric field are operated by some of the state’s biggest producers: Chevron, ExxonMobil, Shell and Sentinel Peak.
Wade Crowfoot, California secretary for natural resources, said the state is still trying to determine the cause of the spill and whether the oil company’s use of steam injection in the area was a contributing factor. State officials already have demanded all the data collected by Chevron about the spill to help with the state’s independent review of the incident.
Trump administration officials vowed on Thursday to proceed with a sweeping rule that will lower national standards on vehicle tailpipe emissions, dismissing a deal brokered by California with four of the world’s largest automakers meant to reduce air pollution.
The deal between California and Ford, Honda, BMW of North America and Volkswagen Group of America fuels a growing feud between the Trump administration and the automotive industry.
It also escalates a yearlong struggle between California and President Donald Trump over how much to raise standards on vehicular greenhouse gas emissions, a critical battlefront in the fight over climate change.
“The Trump administration believes strongly in a national fuel standard that promotes safer, cleaner, and more affordable vehicles,” White House deputy press secretary Judd Deere told McClatchy. “The federal government, not a single state, should set this standard. We are moving forward to finalize a rule for the benefit of all Americans.”
Trump’s dispute with the industry over tailpipe standards first boiled over in June, when 17 automakers wrote him a letter requesting he compromise with California over his administration’s plans to raise the fuel economy standards issued by his predecessor, Barack Obama.
The new rule, being written by the Department of Transportation and the Environmental Protection Agency, would revoke California’s long-standing ability to set its own emissions standards, ensuring a protracted legal battle that is already creating instability in the auto markets as manufacturers prepare to roll out their 2020 model year.
Under the Clean Air Act of 1970, California received a waiver allowing the state to set fuel economy standards that are stricter than those issued by the federal government. Thirteen other states and the District of Columbia followed California’s lead. In California alone, vehicle pollution represent 40 percent of the greenhouse gases emitted, the state says.
California Gov. Gavin Newsom told reporters that decreasing those emissions is “the most significant thing this state and this nation can do” to reduce human-made greenhouse gases, the “most significant driver of observed climate change,” according to the EPA.
Mary Nichols, chairwoman of the California Air Resources Board, said she was hopeful the development would compel the Trump administration to reconsider its approach and “change positions.” But officials from the White House, the EPA and the Transportation Department were united in their pushback.
“The Trump administration is pursuing one national standard and certainty for the entire auto market,” said EPA spokesman Michael Abboud. “This voluntary framework is a PR stunt that does nothing to further the one national standard that will provide certainty and relief for American consumers. As the administration stated earlier this year, despite our best efforts to reach a common-sense solution with [California Air Resources Board], they continually refused to produce reasonable and responsible proposals.”
Speaking with McClatchy, Trump officials were dismissive of concerns from automakers that their approach would raise prices and create two competing national standards for emissions, highlighting Ford’s failure to meet existing standards and questioning their ability to meet an even higher bar set in the Sacramento agreement.
“The proposal is more or less a floor – if some of the automakers want to go above and beyond, they can,” one administration official said.
The White House brought auto companies in one by one throughout March and April to discuss their positions and concerns, according to one industry source, who said that car companies remain largely in the dark over which standards will be included in the final rule.
Administration officials initially said they would publish Trump’s final rule on national emissions standards this summer, rolling back an Obama-era agreement that had earned hard-won support from skeptical manufacturers.
“We are assuming if it’s anything like the proposal we have seen in the past … we would be in court very shortly after they publish those rules, no matter what,” Nichols said.
EPA Administrator Andrew Wheeler recently said publication of the final rule might be delayed beyond September, with sources inside and outside the administration floating Labor Day as an unofficial deadline.
“The date keeps moving backwards,” observed Nichols. She alleged that “Some of their calculations, their math was wrong,” in the administration’s initial regulatory proposal. “So I’m sure they’re trying to clean that up before issuing the final rule.”
An administration official blamed the delay on the “complicated rulemaking process,” but said California’s announcement would have “no impact on our timing.”
The delay in the administration’s new rule and California’s new deal with the automakers created hope among some opponents of the Trump proposal that the administration might revisit negotiations with California, which it broke off in February. The blame for those failed talks was the subject of a very public round of fingerpointing when Nichols and Trump administration both testified before Congress last month.
“It’s clear these four automakers want a single national standard and will continue to work with California to build fuel efficient vehicles,” Sen. Dianne Feinstein, a California Democrat, said in a statement. “I encourage the administration to follow their lead and return to the negotiating table.”
The delay in issuing the rule also complicates the White House’s legal defense strategy, since it’s likely to push any Supreme Court decision on the issue past President Trump’s first term. If a Democrat is elected in 2020, it is all but certain he or she would revoke the current administration’s rollback.
Newsom and Nichols acknowledged the standards in the agreement – which applies to car models through 2026 – aren’t as stringent as the targets established by former President Barack Obama’s administration in 2012.
But Nichols said that with the deal, the state and others following its lead are “maintaining the momentum and making sure the gasoline cars built in that period continue to improve, their emissions profile continue to put on available tech and we don’t have a backslide.”
The carmakers in the agreement with California represent approximately 30% of the total U.S. car market, Nichols said. She and Newsom, a Democrat elected in 2018, said they anticipate additional auto manufacturers joining the agreement, which would go into effect if and when the administration issues its final rule.
“We hope and expect in the coming days that we will see other companies joining,” Nichols said.
Experts say that the growing utilization of biogas could help lower greenhouse gas emissions from some of the toughest sectors to decarbonize — transportation, industry, and heating buildings — even as it reduces heat-trapping methane emissions, keeps organic waste out of landfills, and prevents manure runoff into rivers and water supplies. Through anaerobic digestion, biogas can be made from any organic material — food scraps, agricultural residues, even the sludge left over from brewing beer. These materials are fed as a slurry into tanks where microbes feast on them in the absence of oxygen, destroying pathogens, producing methane and other gases, and leaving a nutrient-rich fertilizer as a byproduct.
In the field of renewable natural gas, the U.S. is playing catch up with Europe, which has more than 17,400 biogas plants and accounts for two-thirds of the world’s 15 gigawatts of biogas electricity capacity. Denmark alone, a country of 5.8 million people, has more than 160 biogas systems. For a period last summer, 18 percent of the gas consumed in Denmark came from RNG produced by its anaerobic digesters. Flush with their success, Danish bioenergy firms estimate it will be feasible to fully replace the country’s natural gas with renewable natural gas within 20 years.
The former manager of the EPA’s anaerobic digestion programs, Chris Voell, was so impressed with Denmark’s biogas operations — which are highly engineered to digest a mix of household food scraps, residuals from food processing businesses, and livestock manure — that he now works for the Danish Trade Council to introduce Danish digester technology and business models to the U.S market.
As with most climate initiatives, California is leading biogas efforts in the U.S. The state’s Low Carbon Fuel Standard (LCFS) — which provides incentives for fuel producers to increase the amount of low-carbon or renewable fuels they supply and sell — is a key component of the state’s ambitious climate plan and has catalyzed the rapid growth of a new, lucrative market for RNG as a vehicle fuel.
Companies like Maas Energy Works and California Bioenergy have responded to these incentives by installing digesters at California’s dairy farms at a rapid clip. Maas has built 17 so far, with 12 more under construction and 32 others in development, according to its website. Both companies are racing to take advantage of valuable LCFS incentives.
There are more electric scooters than people in Pacific Beach, a crowded neighborhood in San Diego known for its bars, surf, attractive college students, and increasingly unaffordable rent. Scooters from Lime, Bird, Lyft, Uber, and Razor are parked along the main path. People can even rent tiny electric bikes from a company called Wheels.
John Heinkel, a professional repo man with a full head of graying hair and a small and scrappy build, hoists a Lime scooter on its back wheel, setting off the alarm underneath the scooter’s brake. Heinkel muffles the annoying sound with his hand.
“You want to throw a couple?” he offers at one point, gesturing toward the dumpster, halfway jokingly.
Dan Borelli, his business partner, says that towing scooters is no different than writing parking tickets. “We aren’t just grabbing scooters off the street and throwing them in a yard,” Borelli insists. “We write a parking ticket for every single one we have.”
Together, the two men run an operation called ScootScoop. They say that they have impounded thousands of dockless e-scooters around San Diego on behalf of business owners and landlords who are fed up with the deluge of dockless two-wheelers.
ScootScoop is a simple, low-budget concept, making use of a tow yard and flatbed truck that Heinkel already owns. Their advertising is word-of-mouth. They have no employees and no outside funding. But they seem to pose an existential threat to the multibillion-dollar scooter industry.
First came the lawsuits. Heinkel and Borelli are accused in a lawsuit filed in California Superior Court in late March of improperly impounding Bird’s scooters and then ransoming them back to the $2 billion company. Lime filed a nearly identical suit soon after.
The same companies that had raised hundreds of millions of dollars working around any local permits or regulations are now demanding protections under the California Vehicle Code, asking a judge to intervene and save their dockless scooters from ScootScoop. Depositions are scheduled to take place at the end of July.
“The people of San Diego are being bamboozled by a local tow company scheme,” Bird’s press team says in an emailed statement. “Scooter Removal aka ScootScoop, orchestrated by Talon Auto Adjusters,” the name of Heinkel’s repossession business, “is unlawfully impounding micro-mobility devices and demanding a ransom for their return.”
Ransom is a word “that we don’t really particularly like,” Borelli told me. “It’s a fake bully word that’s been made up to make our character look worse.”
Then came the chargers, or the freelance contractors who work in the cutthroat industry of charging scooters with low batteries. (Lime calls its contractors “juicers, while Bird calls them “hunters”). Heinkel and Borelli and one of their ScootScoop clients tell me that they’ve recently caught juicers breaking into a ScootScoop impound storage unit, going after the Lime scooters specifically. The juicers allegedly became violent when confronted. (“This is a disturbing report and such aggressive behavior is never tolerated on the Lime platform,” Lime said in a statement.)
But today, on this sunny afternoon in April, with scooters zipping by everywhere, it’s hard to imagine how a device that was supposed to be fun and healthy took such a dark turn.
“Their app specifically says you can ride it ‘anywhere’ and leave it ‘anywhere,’” Borelli says as he pushes a Bird scooter through the Pacific Beach neighborhood. If he sounds slightly bitter, it’s only because he owns a bike shop nearby and believes that dockless scooter companies are trying to steal his customers.
Nobody cares or tries to stop the men as they push the scooters along. There are too many scooters in circulation for anyone to miss these two. In fact, a few minutes later, a construction worker cheers Heinkel and Borelli on. “Those things are annoying!” he yells. “They started showing up at my house. I live in the suburbs, I was like…” He shakes his head disapprovingly.
Borelli says the experience is universal. “Everybody says, ‘Where did they come from?’”
BAKERSFIELD, Calif. — For this pass-through city, long a favorite target for jokes from late-night comedians, the small stuff turns out not to be small at all.
Highway 99 races through almond groves and oil fields here, then bends north toward Fresno and the flat croplands of the Central Valley. This high-speed vantage provides the blurry view of bobbing derricks, fuel storage tanks and fast-food billboards that has defined the city for Californians and tourists traveling between the sunny coast and the Sierra.
There’s a relatively new side-of-the-highway sign that now notifies drivers that maybe, just maybe, there is something more here than the freeway vista offers. It reads, “Bakersfield — Next 13 Exits,” a kind of invitation to a large and growing city once shorthand for a place to avoid.
Many Californians often dismiss inland cities such as Bakersfield, Fresno, Merced and other drive-through towns that seldom made the state’s tourism maps, languishing behind the allure of the coast. But there’s a transformation happening in the Central Valley. These second-tier cities, once known primarily as the core of the nation’s agricultural engine, are drawing new businesses and young people away from cosmopolitan enclaves, where the high cost of living has priced them out.
The dynamic underscores a priority of Gov. Gavin Newsom’s relatively new administration: In recent years, California’s traditional north-south rivalry has given way to an east-west divide over government policy and resources. Newsom, a Bay Area liberal, pledged during last year’s campaign to make closing that gap a priority.
Soon after taking office, Newsom (D) placed the coastal leg of the state’s proposed high-speed rail system on hold. At the same time, he affirmed that the 119-mile stretch linking Bakersfield and the Central Valley city of Merced will be the first to proceed. The project will cost $20.4 billion and take at least seven years to complete.
“We can’t have two Californias,” said Lenny Mendonca, Newsom’s chief economic and business adviser, who was raised in Turlock, just up Highway 99 from here. “We have to have more housing development on the coast where the jobs are arriving, and we need more job production in parts of the state where the population is growing. And that is in the diverse, interesting east of the state that people usually fly over.”
California’s population grew 0.47 percent last year, the lowest rate in state history. But here in Bakersfield, the growth rate was more than double that, making the city of nearly 400,000 the second-fastest-growing of the state’s large metro areas. Sacramento, also far from the coast, was first.
Many of those arriving — and staying — are young people. The median age of Bakersfield residents is just over 30 years old.
The youth migration is infusing this traditionally conservative area with a new ethic — part cowboy, part craft cocktail — that is propelling a revival of downtown districts.
There always has been a country culture here, marked for decades by the “Bakersfield sound” of Buck Owens and Merle Haggard, whose names adorn major avenues and landmarks. How to make the era of “Hee Haw” — the twangy variety show Owens co-hosted for nearly two decades — into something more modern is the challenge for developers.
A Lululemon yoga apparel store has opened downtown, and a vintage former bank building has been restored skillfully into a hot new restaurant of exposed brick walls and standing-room-only crowds.
But longtime landmarks such as Zombie Apocalypse Gear and beer-for-breakfast Guthrie’s Alley Cat bar remain fixtures on the urban landscape, which probably will not be too difficult to keep weird.
“Our community needs to learn to love itself,” said Jacquelyn Kitchen, a Bakersfield native and proud millennial who at age 35 was just named Bakersfield’s assistant city manager. “We’re our own toughest critic on social media and beyond.”
There are challenges to Bakersfield’s new appeal. The weather is wood-oven hot in the summer, the air quality often abysmal with oil-field pollution caught between the Sierra and coastal ranges. The place gets shaken, as it was twice recently by major earthquakes, which knocked out power in more remote parts of the county.
There is a drug problem and a homicide problem and a homelessness problem, which last year prompted usually conservative voters to approve a sales-tax increase to address them. It was revealed this month that more than 13,000 barrels of oil and water have spilled since May from a Chevron-run field outside Bakersfield.
The changes are apparent, too.
Bakersfield’s emerging frontier hipness can be seen in the Padre Hotel, a historic landmark with a red-neon sign that is the primary feature of the evening skyline in a city that has always grown out, never up.
San Diego, along with the Los Angeles and San Francisco metro areas, posted the highest inflation rates of any cities in the country during the past year. Housing prices, in particular, are driving the increases. The median home price in Bakersfield is $237,000; in San Francisco, it’s $1.2 million. Recently, a start-up began offering a bunk in a bunk bed in San Francisco for $1,200 a month.
Parlier missed home. The nowhere-better chicken-fried steak. Her family. What she calls the “big city, country feeling” that is Bakersfield’s signature.
“We’re growing so fast now I don’t know if we’ll keep that country feeling,” she said. “I guess we’ll see.”
Indeed, the Padre will soon have more competition.
Three hotels are being built across the city and three more are in the planning stage. The surge has made Bakersfield the hottest hotel construction market in California.
This in a city that, for decades, Johnny Carson ridiculed on “The Tonight Show” as the definition of provincial dullness. Carson admitted that he once bombed in a Bakersfield nightclub and never entirely forgave the city.
“We’ve always been extremely defensive when people say negative things about our community,” said Nicholas Ortiz, president of the Bakersfield Chamber of Commerce. “Traditionally, inland California has been a part of California, but also apart from California.”
Ortiz, 37, was born and raised in Bakersfield, then headed — without a thought of returning — to school at the University of California at Santa Cruz. He met his future wife there, also a Bakersfield native, and the two began careers in the tech mecca of San Jose.
At the time, a little more than a decade ago, the couple was paying $1,100 a month for a 900-square-foot apartment. Ortiz said it was a stretch.
He visited San Jose recently. The same unit is renting for three times that amount, while he and his wife are paying less for a 2,700-square-foot home with a pool in Bakersfield. Ortiz and his wife have two children, now 6 and 7 years old, and Ortiz said that if they had remained in Silicon Valley, they probably would only now be considering starting a family.
Among other projects, Ortiz has been working with city officials on a new Bakersfield branding campaign. It will be a way to sell the city to those who still think of it as the butt of a joke.
The goal is to broaden an economy still largely reliant on the volatile agriculture and oil industries, appealing in part to a tech sector that is finding its political stock falling in many coastal communities. Bakersfield’s oil fields — and those of surrounding Kern County — account for more than half of California’s oil production.
“How much do we move toward an urban-L.A.-type model while respecting the fact that our resource-intensive economy is what we rely on?” Ortiz said. “At the same time, how do we diversify our industries to protect against downturns?”
The city’s fledgling tech industry received an enormous vote of confidence last month when Bitwise, a Fresno-based technology hub, announced plans to open a new operation in Bakersfield.
Irma Olguin Jr., 38, was born in a small town outside Fresno. She co-founded Bitwise in 2013, and it has since trained 4,000 students in coding and brought 1,000 tech jobs to Fresno. The company announced recently that it had secured $27 million in new investment, which will finance its expansion here.
“The story of Bakersfield and the problems it has faced are so similar to the ones Fresno faces,” Olguin said, adding that the “grittiness and scrappiness of the people resonates.”
“For too long young people in the Central Valley left to pursue their careers,” she said. “We want to make sure they don’t have to do that anymore.”
Young people like fun, never something Bakersfield exuded. But if the microbrew metric is any measure, the city is evolving quickly along with its population.
Temblor is more San Francisco than Central Valley, with its stainless-steel tanks and leather couches. It hosts the Bakersfield Jazz Workshop on Tuesday nights.
“The more young people that move in, the more demand there is for better restaurants and beer and other things bigger cities have,” said Francesca Colombo, Temblor’s 31-year-old operations manager, who moved back to Bakersfield from San Francisco.
Since Temblor opened four years ago, three other local breweries have started up across the city. Colombo doesn’t mind the competition because of what it says about Bakersfield and where it is heading.
“It’s just not as boring here as it used to be,” Colombo said.
The California condor, North America’s largest bird, once ruled the American Southwest and California’s coastal mountains. The vulture-like bird was revered by Native Americans and was believed to contain spiritual powers.
Hundreds of years later, its future seemed all but certain. Defying odds, conservation efforts brought the species back and prevented it from joining the dodo in extinction.
Now, condor reintroduction celebrates a milestone: Chick No. 1,000 has hatched.
In the 1980s, fewer than two dozen condors were left in the world. Conservationists rounded up the remaining condors and began breeding them in captivity.
According to the International Union for Conservation of Nature, the condor became critically endangered in the 20th century — one classification behind extinct in the wild. The decline came from poaching, habitat destruction and lead poisoning as condors scavenged for carrion containing lead shots.
Today, more than 300 California condors exist in the wild. Including captivity breeding programs, there are more than 500 in the world, says Tim Hauck, the condor program manager at the Peregrine Fund.
The 1,000th successful birth signifies an optimistic future for the condor recovery mission.
“We’re seeing more chicks born in the wild than we ever have before,” Hauck told NPR’s Scott Simon. “And that’s just a step towards success for the condor and achieving a sustainable population.”
The hatchling is currently in Zion National Park — it emerged from its shell in May, but its survival was just confirmed in July. The chick, whose sex cannot be identified without a blood test, will fledge or take flight for the first time in November.
If the chick successfully leaves the nest, it can expect to someday grow up to have a 10-foot wingspan, or the size of a 6-foot-tall man. The bird’s average lifespan is 60 years, one of the world’s longest-living bird species.
Beyond its outsize proportions, the California condor is special for a number of reasons.
“Condors are one of the very unique species of birds in North America and in the world, for that matter. They’re extremely personable,” Hauck says. “They’ll have individual personalities. And as biologists, we really get to know these birds on a one-to-one level, so they end up meaning quite a bit to us, and we get quite attached.”
His work in withstanding condor extinction is far from over, but for now, Hauck is celebrating.
“Here’s to seeing that population increase every year,” Hauck says.