• From suburb to basket case: How California city traveled the road to ruin

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    Anthony Russell, 21, sits in the deserted Carousel shopping mall in San Bernardino, Calif., on Sept. 11.

    By Tim Reid, Cezary Podkul and Ryan McNeill
    Reuters

    SAN BERNARDINO, Calif. -- When this sun-drenched exurb east of Los Angeles filed for bankruptcy protection in August, the city attorney suggested fraudulent accounting was the root of the problem.

    The mayor blamed a dysfunctional city council and greedy police and fire unions. The unions blamed the mayor. Even now, there is little agreement on how the city got into this crisis or how it can extricate itself.

    "It's total political chaos," said John Husing, a former San Bernardino resident and regional economist. "There is no solution. They'll never fix anything."

    Yet on close examination, the city's decades-long journey from prosperous, middle-class community to bankrupt, crime-ridden, foreclosure-blighted basket case is straightforward — and alarmingly similar to the path traveled by many municipalities around America's largest state. San Bernardino succumbed to a vicious circle of self-interests among city workers, local politicians and state pension overseers.

    Little by little, over many years, the salaries and retirement benefits of San Bernardino's city workers — and especially its police and firemen — grew richer and richer, even as the city lost its major employers and gradually got poorer and poorer.

    Unions poured money into City Council elections, and the City Council poured money into union pay and pensions. The California Public Employees' Retirement System (Calpers), which manages pension plans for San Bernardino and many other cities, encouraged ever-sweeter benefits. Investment bankers sold clever bond deals to pay for them. Meanwhile, state law made it impossible to raise local property taxes and difficult to boost any other kind.

    No single deal or decision involving benefits and wages over the years killed the city. But cumulatively, they built a pension-fueled financial time-bomb that finally exploded.

    In bankrupt San Bernardino, a third of the city's 210,000 people live below the poverty line, making it the poorest city of its size in California. But a police lieutenant can retire in his 50s and take home $230,000 in one-time payouts on his last day, before settling in with a guaranteed $128,000-a-year pension. Forty-six retired city employees receive over $100,000 a year in pensions.

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    Firefighter Captain Tim Smith, 41, puts on his boots to answer a call in San Bernardino, Calif.

    Almost 75 percent of the city's general fund is now spent solely on the police and fire departments, according to a Reuters analysis of city bankruptcy documents -- most of that on wages and pension costs.

    In the dark
    San Bernardino's biggest creditor, by far, is Calpers, the public-employee pension fund. The city says it owes Calpers $143 million; using a different calculation, Calpers says the city would have to pay $320 million if it left the plan immediately.

    Second on the city's list of creditors are holders of $46 million worth of pension bonds -- money borrowed in 2005 to pay off Calpers. The total pension-related debts are more than double the $92 million owed to the city's next 18 largest creditors combined.

    Complicating matters were obscure budgeting procedures that left residents in the dark. The word "pension" doesn't appear once in the most recent 642-page budget, and retiree costs are buried in detailed departmental line items.

    "I've been asking for years for the pension costs," said Tobin Brinker, a former council member and pension-reform advocate, who lost his seat last year to a challenger backed by nearly $100,000 in contributions from the fire and police unions. "I still don't know the number."

    James Penman, the longtime city attorney who critics say is closely aligned with the unions, alleged during a council meeting this summer that 13 of the past 16 city budgets had been falsified. He has refused to elaborate on that accusation since, but told Reuters that he hasn't retracted it either.

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    James Penman, attorney general of San Bernardino city, talks to the media at the City Council chambers on July 11.

    The Securities and Exchange Commission has opened an informal inquiry into the San Bernardino situation because of the city's bond obligations. The federal Department of Housing and Urban Development, which has provided funds to the city in the past, says it is conducting a routine periodic audit of the city's books that began before the bankruptcy.

    No regulatory or law-enforcement agency has announced any criminal probe. Recently hired city finance officers do say they have found evidence of terrible accounting and record-keeping.

    But unlike in the small Southern California cities of Bell, where eight city officials face trial on allegations that they stole from the public, and Vernon, where three officials have been convicted of corruption, San Bernardino's problems appear to be mainly the result of back-scratching on an epic scale.

    It's a pattern common throughout the Golden State  -- and while the particulars are quite different, it is akin to what happened in other states with severe financial crises, such as Illinois and Pennsylvania.

    ‘2.5 AT 55’
    By the time San Bernardino's council met behind closed doors on Sept. 17, 2007, it was already clear the city was in trouble.

    Just six months earlier, a report by consulting firm Management Partners showed that spending was outpacing revenue, pension costs were escalating and the city was quickly accumulating unfunded retirement liabilities.

    Last decade's housing boom had papered over the deep economic problems stemming from the shutdowns of a huge steel mill in the 1980s and the Norton Air Force Base in the 1990s. Now the boom was over. Tax revenues were poised for a big fall: Between 2007 and 2011, they dropped 30 percent, according to Husing, the regional economist.

    Yet on this day in 2007, the city was about to raise pension benefits again, in a deal allowing non-public-safety workers to retire at  55 with a pension equal to three-quarters of their salary. Called "2.5 at 55," it calculated annual pensions at 2.5 percentage points of final salary for each year worked -- 75 percent for 30 years.

    It wasn't nearly as good a deal as the one police and firefighters enjoyed - a "3 percent at 50" plan passed a year earlier. That enabled the public-safety workers to retire at 50 with a pension of up to 90 percent of their final salary. Regardless, "2.5 at 55" was what union negotiators had asked for, and the council was poised to rubber-stamp it.

    But then something happened. And in a city which has a particularly toxic brand of politics, what transpired depends on who you talk to.

    According to four people present at the meeting, Penman, the city attorney, brought a pregnant co-worker to the session. By their account, Penman's co-worker made an emotional case for an even more generous pension deal. Otherwise, she said, she would be forced to leave San Bernardino and seek work in a city with better benefits. She had her family to consider, she said.

    Penman vehemently denies that any of this took place. "Welcome to San Bernardino politics," he said.

    Runaway train
    That afternoon, in public session, the council unanimously voted to award its non-safety workers 2.7 percent at 55 - more even than the union sought. That tiny fraction could raise the pension on a $100,000 salary by $6,000 per year. Penman, in office since 1987, earned $164,799 last year, according to city payroll data.

    "In hindsight I am not proud of this vote," said Brinker, who was on the City Council at the time. "The recession hit barely a year later. This was one more log on the pension bonfire."

    Meanwhile, San Bernardino continued to boost wages along with benefits. The average salary for a full-time San Bernardino firefighter in 1997 was $75,610, adjusted for inflation into 2010 dollars. By 2010, it was nearly $147,000, according to a Reuters analysis of Census Bureau data.

    City wages were a runaway train, according to the Management Partners report. The city charter automatically calculated police and firefighter pay using a formula linked to wages offered by comparably sized cities -- most of which were much wealthier than San Bernardino. Efforts to amend the charter were strongly opposed by the safety unions and voted down by the council earlier this year.

    City workers took advantage of compensation rules, common among public employees in California, that made retirement deals even better. Key to this was boosting an employee's eve-of-retirement wages, which form the basis of the pension calculations.

    Mike Conrad, chief of the fire department from 2006 to 2012, said he saw managers negotiate a promotion in their final year, to boost their final salary. It was not uncommon for someone to move into a position with a $30,000 annual pay rise shortly before retirement, he said.

    Retiring employees are also able to extract big one-time "cash outs." In San Bernardino, eight hours per month of unused sick time can be rolled over and saved year after year, without limit. Come retirement, 50 percent of the total can be taken in cash. The same goes for unused vacation time: up to 460 accrued hours of vacation -- nearly three months of salary -- can be cashed in at the fire department, Conrad said.

    The police have a similar deal. In 2009, patrol Lt. Richard Taack retired at the age of 59, after 37 years of service. He took home $389,727 that year, including $194,820 in unused sick time and $33,721 for unused vacation time, according to city payroll records. Shortly after Taack retired -- on an annual lifetime pension of $128,000 -- he was hired part-time by Penman's city attorney's office, at $32 an hour.

    Potholes and empty lots
    Taack's 2009 income was nearly double that of the city's entire street-sweeping department. In 2011, overtime pay alone for the police department -- $2,766,175 -- exceeded the total payroll of 12 other San Bernardino city departments, according to the Reuters analysis of payroll data. Taack didn't respond to requests for comment.

    "I can't begrudge the man for receiving what he's entitled to under the contract," said David Green, the head road sweeper, who has seen his department cut to five people from 13 when he joined in 1995. But he said there should be a better balance between the safety forces and other departments. "Nobody wants to drive a car and have to hit a three-foot pothole."

    Indeed, potholes scar downtown San Bernardino. Many stores are shuttered. Abandoned lots sit unkempt. Since the bankruptcy filing, city finance officials have put forward proposals to close libraries, senior centers and a cemetery.

    Andrea Travis-Miller, interim city manager, told the council this summer that 250 non-safety positions had been eliminated in the past three years to save money -- and implied that police and fire benefits were crowding out other essential services. "I believe that city buildings, roads, trees and parks that have begun to show neglect would deteriorate further if more cuts are made," Travis-Miller said.

    The police and fire unions fiercely dispute the charge that large salaries and pensions are to blame for the predicament. They point to the housing crash, which left the city with the fourth-worst foreclosure rate in the country.

    Scott Moss, head of the firefighters union, said 20 positions had already been cut from the Fire Department, leaving about 120 people.

    "There's been mismanagement for years," Moss said, over coffee in a local restaurant. He noted that Mayor Patrick Morris had majority support on the City Council for six years until union-backed members regained a majority in March. "The mayor and his people are trying to make us look bad."

    Moss, 46, a fire paramedic, said he might retire at 53. Payroll records show a base pay of $94,500, and total 2011 wages, with overtime, of about $147,000. Moss confirmed the base figure but didn't comment on the overtime number.

    Sick of the blame
    Moss said he is sick of people blaming pensions. "You go to bankruptcy, you got to blame somebody. So they say it's the benefits, it's the overtime -- it's everybody but them," Moss said. "But what have they been doing these last six years?"

    On sick-pay cash-outs, Moss said: "If you call in sick, you're a bad employee. So my guys don't call in sick. Then you get all this time you are owed -- and you get vilified."

    He added: "This is a dangerous city. It's an old, decayed city. It burns. There are gangs. The pay and benefits attract the police and firefighters it needs. Without them, you lose all the good ones. That's the balance."

    Crime and gangs are real dangers in San Bernardino. In 2010, according to Federal Bureau of Investigation data, the rate of known violent crimes -- 8.15 per 1,000 people -- was higher than in any other city in the region.

    A five-minute drive from City Hall, on a residential street, sit flowers and homemade signs next to a picture of Angel Cortez. The 22-year-old was shot in the back of the head in May in what police suspect was a "gang-related" murder. His body was found in the backyard of a vacant home. His killers had first tried stuffing his body into a trash can, then returned to dig a hole, before unsuccessfully attempting to burn his body, police said.

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    Mayor Patrick J. Morris poses for a photo in San Bernardino, Calif., in July 2012.

    Mayor Morris, a 74-year-old former judge who's been in office six years, is scathing about the power he says the unions have over much of the city council. The unions, he said, "wag the dog." (Council members are paid just $50 a month for their service, but also receive a car allowance worth $600 a month).

    He rejects Moss's argument that he should take responsibility for the financial crisis. He is particularly critical of his two-time challenger for the mayorship, city attorney Penman, who he said "has blocked all efforts to reform the budget" on behalf of the unions.

    Morris added: "I have no vote on the council. I can only veto a vote if it is 4 to 3. All I have is the power of persuasion. I've told them a bunch of times to be far more conservative, not to be so generous with our unions, and it's advice they have largely ignored."

    'Mean, divisive, corrosive'
    Morris isn't running for re-election when his term expires a year from now. "The politics of this place are and have been for decades mean-spirited, divisive, and it's corrosive to the extreme," he said.

    Penman denies being influenced by the unions. He said he takes campaign contributions from the police and firefighters like most other elected officials in California. He said he actually split with the police union in 2007 -- a rupture reported at the time -- and wasn't endorsed by them again until his last re-election bid in 2011. Campaign finance records show that he received $30,000 in contributions from the police and fire unions in 2011.

    Of his critics, Penman said: "You are hearing from some people whose ethics and honesty are very much in doubt."

    A key facilitator of San Bernardino's generous retirement packages was Calpers, which manages pensions both for state workers and for many city and county employees across California.

    Led by a board of directors who are all themselves members of the pension plan, Calpers has for decades pushed to sweeten benefits for retirees.

    A 1999 law championed by Calpers, known as SB 400, cut the retirement age five years and increased benefits for state workers, all on the premise that a rising stock market meant benefits could be juiced up at little or no cost. Many cities and counties, though not required to go along, were happy to heed Calpers' analysis. About half -- including San Bernardino — adopted the richer benefit formula.

    When the stock market tumbled in 2000, cities and towns suddenly had to ramp up payments to Calpers to make up for the hit to their fund balances, which were heavily invested in shares. Fee-hungry investment bankers stepped into the breach.

    Led by the now-defunct Lehman Brothers, they persuaded many cities -- including San Bernardino and Stockton, which is also in bankruptcy -- that the best way to satisfy growing obligations to Calpers was to borrow the money via so-called pension obligation bonds. San Bernardino raised $50 million in 2005 by issuing these notes. Between 1999 and 2009, 26 California cities sold about $1.7 billion of debt to fund their pensions, including bond issues that were used to pay off earlier debt.

    'Calpers versus Wall Street’
    Yet even in bankruptcy, reducing pension costs by cutting benefits is not an option - at least according to Calpers.

    The pension agency says the benefits are carved in stone, arguing that from the day a worker is hired, the pension plan in place on that day for that person can never be reduced in value under any circumstances, including municipal bankruptcy.

    That argument has never been tested in court: When the Bay Area city of Vallejo went bankrupt in 2008, it declined to challenge the pension payments to Calpers, in part because of the daunting legal costs involved.

    But the pension-bond insurers who are now on the hook for defaulted bonds in both Stockton and San Bernardino have signaled their intention to do battle with Calpers in bankruptcy court. San Bernardino, in an unprecedented move, has already stopped making payments to Calpers.

    "Calpers is the 800-pound gorilla in the room," said Michael Sweet, a bankruptcy attorney at Fox Rothschild, which is not representing any parties in the San Bernardino bankruptcy. "No one has yet taken on Calpers. This is going to be a huge fight, and it's going to be Calpers versus Wall Street."

    Calpers says it wasn't responsible for the decisions made in San Bernardino. Alan Milligan, chief actuary at Calpers, said the 1999 legislation "provided options to cities and agencies to change their retirement benefits, but it did not encourage or force them" to do so. "Calpers does not give advice about how an agency should pay for their retirement benefits."

    Brad Pacheco, a spokesman for Calpers, said San Bernardino lost major employers in recent years and was one of the U.S. cities hardest hit by the foreclosure crisis. He said San Bernardino's annual pension costs account for just 10 percent of the total city budget.

    Those figures, however, exclude the city's $46 million in pension-bond debt plus its unfunded debt to Calpers. The city in its bankruptcy filing says it is $143 million in the hole to Calpers. Calpers says that if San Bernardino pulled out of the plan, it would owe $320 million to cover its current and future obligations.

    Miserable company
    San Bernardino and Stockton are hardly alone. A handful of other small California cities, including Atwater, Hercules and Compton, are teetering near bankruptcy.

    Big California cities that run their own pension plans also have deep problems. San Jose, hub of Silicon Valley, and San Diego, biotech center of California, both passed pension reforms in June in the face of unmanageable retirement benefits. they are now defending those measures in court against public-employee lawsuits.

    In Los Angeles, Mayor Antonio Villaraigosa, a former labor organizer, led a push to raise the retirement age and cut pensions for new, non-safety city staff. He exempted police and fire employees. A ballot measure sponsored by former Mayor Richard Riordan aims to include them in the cuts, too.

    And while California has the biggest pension debt in the United States in dollar terms, it's not the worst off. Illinois and Kentucky plans are battling for the dubious distinction of having the lowest ratio of assets to liabilities, according to the Center for Retirement Research at Boston College.

    The chronic mismanagement in San Bernardino, though, is a common feature of local government in California and around the United States. Much power over municipal finance lies in the hands of those with the most at stake — city employees, elected officials and others who depend directly on government for their livelihood. And California is moving to put even more responsibility and funds, not less, in their hands.

    One of Gov. Jerry Brown's marquee initiatives is "realignment," an effort to move more public-safety, welfare and prison services from state control to the cities and counties. Local governments are more flexible and more responsive to local issues, Brown argues, and thus able to make better decisions.

    Charles McNeely, who served three years as San Bernardino's city manager after 13 years in the same post in Reno, Nev., quit last March, citing the "toxic" atmosphere on the council. He had warned repeatedly that without change, the city faced ruin. In a presentation to the City Council in August 2010, he said spending was far outpacing revenue and predicted a budget deficit of $40 million for this fiscal year.

    "I don't know how you could come out of that meeting not understanding we had a serious problem," McNeely said in an interview. "I told them, 'You're headed for trouble, it's a train wreck. You can't keep doing business this way.'"

    Additional reporting by Peter Henderson and Jim Christie in San Francisco.

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  • Calif. sues major veterans charity for millions, alleges fraud and self-dealing

    By NBC News wire services

    California's attorney general sued a major veterans charity on Thursday, accusing the officers and directors of engaging in self-dealing and fraudulent fundraising, and paying excessive compensation.

    The suit seeks to remove the officers and recover $4.3 million that it claims was improperly diverted from Help Hospitalized Veterans. The charity in Winchester, Calif., was founded in 1971 to provide therapeutic arts and craft activities for patients receiving care in Veterans Affairs hospitals, military hospitals and state veterans homes, according to its website.

    "What makes this case so egregious is our military servicemen and women are willing to sacrifice their lives for our country and for us as Americans, and when they are in need of help and support we should give it to them and not manipulate charitable people and then personally profit from them," state Attorney General Kamala D. Harris told The Associated Press.

    The charity raised more than $108 million in contributions over the last three years, it said in tax filings and on its website, with 33.8 percent going toward its programs. The suit alleges that it filed "false and misleading" tax returns that inflated program expenses and reduced its actual fundraising costs to "less than 30 percent."

    Afghan suicide bomber kills senior Army leader, 2 majors


    Based on its reported fundraising, Help Hospitalized Veterans ranks among the top 1 percent of charities in the United States. The group once was endorsed by retired Gen. Tommy Franks, who later distanced himself from the charity.

    At the same time, it has ranked for more than a decade at the bottom of lists by watchdog groups that rate nonprofit organizations based on their financial management and abilities to use most of their donations toward their causes. CharityWatch says about 35 percent of Help Hospitalized Veterans' funds go toward programs to aid veterans. The recommended standard is about 65 percent.

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    The California lawsuit said the charity's president, Michael Lynch, received excessive compensation of $900,000.

    The complaint said that former president Roger Chapin, who during a 2008 U.S. congressional hearing about his management of the charity called himself the "the most honest person in this room," retired the following year with a nearly $2 million pension plan. The suit alleges that the group's board members retroactively spiked Chapin's earnings to justify the inflated amount for his retirement.

    Social impact investing catches on in the US

    Chapin is also accused of diverting the charity's funds through a separate charity called Conquer Cancer and Alzheimer's Now.

    Chapin was accused of paying himself more than $493,000 from the cancer charity. That charity received the money from American Target Advertising, a fund-raising firm run by conservative political fundraiser Richard Viguerie, who is not named in the suit.

    More charity news in NBCNews.com's Giving section

    'It's surprising it's taken this long'
    Viguerie, who is identified in the suit as Chapin's long-time friend, is said to have deposited funds into the account of Conquer Cancer and Alzheimer's Now from $800,000 that Help Hospitalized Veterans had lent ATA and was not repaid.

    "It's surprising it's taken this long for something to happen with all the serious problems that were brought up in the (2008 congressional) hearing," said Daniel Borochoff of CharityWatch, which monitors the financial records of nonprofit groups. "What's more, this information did not filter down to donors."

    But he added: "Mr. Chapin spun a complex web to confuse well-intentioned donors and make it difficult for regulators to untangle."

    Afghan officials: 3 US special forces troops slain

    Calls to Help Hospitalized Veterans and Lynch's office were not returned. Viguerie did not immediately respond to phone and email messages seeking comment. Reuters was unable to contact Chapin on Thursday evening.

    Borochoff said the complaint sends a strong message to unscrupulous charities.

    "It's about $2 billion that is raised on behalf of veterans charity, and unfortunately a lot of that's being wasted and not being used to help our veterans," Borochoff said. "It's really ludicrous what's going on. It's out of control, there's such great waste. It's a national disgrace that people are allowed to exploit veterans for their own personal financial benefit, or benefit of their company."

    More Southern California coverage from NBCLosAngeles.com

    According to Charity Navigator, a third of the 50 military veterans charities it evaluates rate poorly and 20 percent either got a zero for their financial management or a "donor advisory" tag, which indicates the organizations are being investigated by authorities.

    That compares to 2 percent for other kinds of charities, said Ken Berger, the president of the Washington-based group that evaluates 5,500 charities.

    Reuters and The Associated Press contributed to this report.

     

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  • Teen son in 'the box': California rejects limit on solitary confinement

    By Susan Ferriss
    Center for Public Integrity
    At the first-ever congressional hearing on the subject of solitary confinement, Sen. Dick Durbin of Illinois recently observed that it’s not always “the worst of the worst” who are subjected to the practice. Mentally-ill inmates, immigrants and juvenile offenders are put in solitary as well. And perhaps, said a series of witnesses at the hearing, the time has come to rethink the issue. 

    Many states are now doing just that. But the debate is not devoid of its own unique politics. 

    In California, for instance, an effort to require every-four-hour mental-health evaluations of minors who are “segregated” from other wards died a quick death this spring — even though the Golden State’s legislature is one of the nation’s most liberal and the measure was endorsed by The Los Angeles Times. The legislation failed by one vote to move beyond the seven-member state Senate Public Safety Committee. Three of five Democrats voted for the bill, including the Senate’s top leader, Democrat Darrell Steinberg of Sacramento. But two Democrats and the committee’s only two Republicans voted against it. 

    Follow Open Channel on Twitter and Facebook.

    Depending on who’s talking, the idea faltered because it was flawed, unnecessary and would cost the Golden State money it doesn’t have — or it died because law-enforcement groups with savvy lobbying and financial clout leaned on key legislators to kill it. The dispute is the latest in a series of Sacramento battles over policies pitting liberal juvenile-justice reformers against cops and corrections officers. 

    'There is no solitary confinement'
    Others states have been forced into statewide restrictions. Last year, in response to a lawsuit, Mississippi agreed to tight limits on solitary confinement for juveniles who are in adult prison. Montana settled a lawsuit by adopting strict terms, including a requirement that wardens approve putting juveniles into solitary or “behavior management” isolation for more than 72 hours. In April, West Virginia joined six other states in prohibiting solitary confinement as a way to punish minors in detention. 

    That same month, the American Academy of Child & Adolescent Psychiatry announced its opposition to solitary confinement for juvenile offenders, warning that the practice deepens depression, psychosis and suicidal tendencies. Indeed, a 2009 U.S. Department of Justice study showed that half of the 110 suicides by juvenile wards over a four-year period in the late 1990s were committed by those in solitary confinement. More than two-thirds had been put into facilities for non-violent offenses. 

    Adult inmates in California who’ve been held in solitary for years as a way to sever gang ties are currently suing the state, arguing that solitary’s corrosive psychological impact undermines their ability to re-enter society. 

    Against this backdrop, earlier this year the Ella Baker Center for Human Rights, a small Oakland, Calif., nonprofit that works with parents of juvenile offenders, approached state Sen. Leland Yee, a San Francisco Democrat, about the possibility of sponsoring legislation that would put limits on solitary for juveniles. 

    Yee’s bill, introduced in February, called for licensed mental-health clinicians to evaluate minors placed in isolation within an hour’s time and then every four hours afterward. Staff would have to create intervention plans before putting any minor identified as suicidal in isolation. Staff would also need a supervisor’s written permission before isolating wards for more than 24 hours straight in a one-week period. 

    The regulations would have applied to state institutions, where mostly more serious or violent juvenile offenders — about 1,000 now — are held, as well as to county facilities, where many thousands more mostly lower-level wards are now housed. 

    “We spend so much money locking up kids,” said Jennifer Kim, a legislative advocate for the Ella Baker Center for Human Rights. “Let’s divert some of that to make sure that we not exacerbating mental-health issues.” 

    Bill Sessa, a spokesman for the state Division of Juvenile Justice, strongly disputed the need for the bill, calling it a “solution looking for problem that doesn’t exist,” at least in state juvenile-offender facilities. The state’s three facilities are now under strict court orders, and treatment of offenders is monitored by outside auditors and highly prescribed, he said. “There is no solitary confinement,” Sessa said. 

    Teenage son put in 'the box'
    But Lina Roldan, a Southern California mother, says that in late 2010 her teenage son was put into isolation after using a plastic fork to try to cut his neck at a California state-run correctional facility in the city of Stockton. In response, she said, guards put the teen into a room she said wards called “the box” for 24 hours. Another time, Roldan said, her son was in isolation in a room for 48 hours straight. She claims he received no mental-health help. 

    “They waited until he cut his head open, hitting it against the wall, and then they sent him to a hospital,” she said in an interview. 

    Sessa said he couldn’t discuss a specific case. But he called Roldan’s characterization “untrue,” and said rules require wards to get mental-health assessments when they enter facilities and to benefit from frequent psychological aid if their condition requires it. “There is no ‘box,’ “he said. “This isn’t the Shawshank Redemption.” 

    In 2005, state juvenile facilities came under attack after an 18-year-old ward, Joseph Daniel Maldonado, hanged himself in the same youth facility where Roldan said her son was isolated in 2010. A state inspector general report, also in 2005, blamed staff for failing to respond to respond to Maldonado’s pleas for psychological help and for failing to enter his room quickly after knocks on his door went unanswered during guard rounds. The report revealed how Maldonado and other wards had been confined to their cells all day for eight weeks. The previous year, guards had been filmed punching and kicking wards. 

    For the safety of other wards and guards, Sessa said, guards do move to segregate offenders in their cells if they become violent or disruptive. Counselors are now required, he said, to immediately approach youths who’ve been segregated to try to get them talk through what might be causing outbursts. Wards showing any indication of suicidal tendencies can also be segregated in special cells, under close watch. 

    Sessa accused the Ella Baker Center of spreading “misinformation,” and of wrongly suggesting that California’s three state juvenile facilities — there used to be a dozen — remain as rife with scandalous practices as was alleged in lawsuits that led to court-ordered changes beginning in 2004. 

    “The courts are practically running the facilities,” he said. 

    Still, last year a state audit found nearly 250 violations of California’s state juvenile system’s guidelines, not regulations, against isolating wards for more than 21 hours straight. Court orders require that 40 to 70 percent of wards’ waking hours are spent in constructive activities, said Sara Norman of the Prison Law Office, which sued state juvenile prisons. 

    Sessa did not contest the audit’s findings. But the violations, he said, largely involved a small number of wards with violent tendencies, some with gang affiliations. 

    Barry Krisberg, a criminal-justice expert at the University of California at Berkeley School of Law, said he is more concerned now about the county facilities than the state institutions. “There could be whole wings where they could be spending days in confinement. Nobody knows,” said Krisberg, who has served as a monitor of court orders at state facilities. 

    Regulations that govern counties are vague, Krisberg said, and give wide latitude for facility supervisors to set rules for isolating wards for up to 24 hours for a minor violation of facility rules, or longer for a major offense. 

    In April, as Yee’s bill went before the public safety committee, the Los Angeles Times published a spirited editorial that urged legislators to approve the measure. The Times called solitary confinement a practice that remains “as dark as ever” and stands in contrast to California’s progress in improving rehabilitation of young offenders. The editorial also singled out two Los Angeles Democrats who had abstained on a first round of voting on and pressed them to embrace the measure. 

    Unaffordable? 
    As debate on Yee’s bill began, Gov. Jerry Brown’s administration and juvenile-justice officials did not take a position. But law-enforcement unions and associations, representing state and county and local police, deputies and probation officers, weighed in against it. 

    The California Correctional Peace Officers Association, the state prison guards’ union, summed up its opposition in testimony at a committee hearing and in a letter to legislators. “We recognize that many parties believed that solitary confinement was overused in the past” at state facilities, the guards said. However, the union said, court orders have produced reforms. Yee’s bill would “far exceed” those reforms and “compromise the programming of the ward population,” the guards said, as well as the safety of guards and other wards. 

    The prison guards are a powerful force at the state capitol. Their clout in Sacramento stretches back to the 1980s, when the union first became heavily involved in law-and-order campaigns. It financed a big chunk of the state’s 1994 landmark Three Strikes ballot initiative, which began filling prisons. The union has continued to enjoy a prominent role publicly and in negotiations among lawmakers over public safety reforms and correctional spending. With the state facing lawsuits over overcrowded prisons and pressure to cut costs, the union has often offered its own “blueprints” for change. 

    “They’re the highest paid guards in the country,” said Krisberg of UC Berkeley. And even though the state’s fiscal crisis has required the union to accept hits in employee benefits, he said, “they got everything they wanted this year” at the capitol.

    Krisberg said that local law enforcement is enjoying extra clout right now because the state, in cost-cutting reforms, is transferring responsibility for many adult state inmates to local control. 

    The California State Sheriff’s Association, one of those local interest groups, argued that the definition of solitary in Yee’s bill was too vague and would leave counties vulnerable to lawsuits and the cost of new training. The Peace Officers Research Association of California, with more than 63,000 members, said the bill “would put an additional burden on counties and raise the cost of housing juveniles.” The Chief Probation Officers of California, whose members are now responsible for most young offenders, added that “counties and state facilities do not have licensed mental health staff working 24/7 to perform this function.” 

    Complaints about costs are especially potent right now in California. The state’s fiscal problems have resulted in deep budget cuts that have chopped spending locally and statewide. This year, legislators have wrestled over how to bridge a $16 billion budget deficit. 

    Yee’s bill died before its costs were estimated as part of the legislative process. Kim of the Ella Baker Center said that mental-health evaluations shouldn’t be a cost problem given that taxpayers already spend $185,000 a year on each ward in state custody. Sessa didn’t disagree. 

    David Steinhart, director of the Commonweal Juvenile Justice Program in the Bay Area and a longtime collaborator with staff officials on reforms, said county probation departments have more reason to be concerned about costs — but only to a point. 

    California’s counties are getting a “big state payout” as part of a dramatic juvenile-justice shift that legislators voted for in 2007. The idea was to start requiring that the state’s 58 counties take responsibility for most wards rather than the state. Community-based rehabilitation programs seemed to work better at less cost. 

    Legislators in 2007 gave counties $117,000 for each ward they took, plus $300 million in construction money. Counties have continued to split almost $100 million more a year from the state. This year Gov. Jerry Brown proposed distributing another $200 million to counties if legislators would authorize shutting down the last three state-run facilities and transfer all wards to local custody. Probation chiefs and corrections officers — even union teachers at state facilities — fought the idea, arguing counties were ill-prepared to take more offenders. Brown dropped the idea. 

    Mark Varela, Ventura County’s probation chief and the probation chiefs’ legislative chair, told the Center that his county actually could have handled the mental-health evaluations of wards that Yee’s bill required. Ventura, he said, is using various streams of state money to pay for a “crisis team” that probation can turn to in mental-health emergencies. That move was in line with the recommendations of a statewide task force last year. But Varela conceded that other counties may be facing other kinds of fiscal problems. 

    Wielding power in Sacramento
    The Ella Baker Center advocates say they can’t help but think that debate over proposals like theirs is clouded by the campaign-donations and high-priced lobbying game at the Capitol. Law-enforcement associations “always seem to seem to have unlimited resources to influence politicians,” Kim said. 

    To compete, the Ella Baker Center spent about $115,110 last year and through this past March on lobbying to push Yee’s solitary-confinement bill, among other criminal-justice proposals. At the same time, the California Correctional Peace Officers Association spent more than $421,511 lobbying on an array of bills. The Chief Probation Officers group also spent nearly $370,000 to push its view on the budget and other proposed measures, according to state lobbying records. 

    The correctional guards union has also given California politicians or committees more than $12.4 million in contributions since 2003, according to the National Institute on Money and State Politics. 

    On March 16, state records show, the guards union gave the California Democratic Party $60,000. On March 9, it gave the California Republican Party $15,000. And on May 30, it gave $10,000 to a newly minted California Black Political Action Committee, which is based in Los Angeles. 

    The three Democrats who voted for Yee’s bill and two who voted against it have all received donations from prison guards or other law-enforcement groups during their careers. But none have received more from the prison guards than Sen. Ron Calderon, Democrat of Los Angeles. He cast one of the votes against Yee’s bill after initially abstaining. 

    Between 2004 and 2010, Calderon received $14,050 in donations from the guards union. In March of this year, he reported a $3,900 donation pledged last July from the guards union, records show. The donation went to Calderon’s committee for a run at state controller in 2014. 

    Rocky Rushing, Calderon’s chief of staff, said Calderon’s vote had nothing to do with donations. “It’s not like that at all,” he said. “We were supportive of the intent of the legislation.” The costs of mental-health evaluations of wards every four hours, which Yee’s bill required, would have been “astronomical,” Rushing said. Advocates refused to budge on this matter, he said. Kim of the Baker Center said she felt that delineating a specific number of hours was necessary or checks might not happen. 

    Sen. Curren Price, the other Los Angeles Democrat and committee member — who also abstained before voting against Yee’s bill — said in a statement that he considered Yee’s bill “a provocation” that could have “compromised safety inside juvenile facilities …by ignoring the concerns of rank-and-file personnel.” 

    Price, who is the chair of the Legislative Black Caucus, additionally said the measure would have interfered with court-ordered improvements, and burdened counties. He’s “sympathetic to the issue,” however, and said he’s willing to consider alternatives to regulating solitary confinement of minors. The Ella Baker advocates, who submitted written testimony to Durbin’s office for the June 19 Congressional hearing, said they will try again to get strict, statewide regulations or to stop solitary confinement of juveniles.

  • SF Bay Bridge may have been lost jobs opportunity

    Justin Sullivan / Getty Images

    The span of the San Francisco-Oakland Bay Bridge is an engineering marvel. Its construction has been a sore point for some American contractors.

    By Scott Cohn, CNBC.com

    It is designed to be an icon — and unlike any bridge in the country.

    After years of debate and delays, the dramatic new eastern span of the San Francisco-Oakland Bay Bridge is finally taking shape.

    At the heart of the project is a unique “self-anchored suspension span” — twin roadways linked to a soaring, 500-foot tower by a single, mile-long cable.

    A little over a year before the bridge’s scheduled opening, the bridge is already a conversation piece, though not for the reasons planners had hoped.

    Instead of marveling at the design, what many are talking about is the fact that the suspension portion of the bridge was made in China.

    Critics say the decision to outsource the span — the central tower and the two 1,500 foot steel road decks were fabricated in a specially-built factory in China and shipped to San Francisco Bay — was a missed opportunity to create thousands of American manufacturing jobs.

    California officials contend the U.S. does not have the manufacturing capacity or the workforce to build such a project on its own.

    A CNBC Investigations Inc. review of the process has found miscommunication, misconceptions and missteps that have, at the very least, tainted what planners had hoped would be an architectural and engineering triumph.

    “The Bay Bridge: 100% foreign steel,” proclaim billboards along the freeways approaching the bridge. To be accurate, the suspension span of the bridge is only about 80 percent foreign steel according to the California Department of Transportation (also known as CalTrans), and the entire eastern span, from Yerba Buena Island to Oakland, is about 20 percent foreign.

    The Alliance for American Manufacturing, which sponsored the billboard campaign, says whatever the actual content, the decision to use Chinese steel was scandalous.

    “I think every California taxpayer should be outraged by this,” says executive director Scott Paul.

    But the outrage extends beyond California.

    “What is it about American regulations, American taxation, American labor cost and attitudes that makes it cheaper to go to China,” asked former House Speaker Newt Gingrich when asked about the bridge at a CNBC Republican Presidential Debate in November.

    “It is good for America to have free trade,” said former Massachusetts Governor Mitt Romney — now the presumptive GOP nominee — at the debate. “But China is playing by different rules.”

    Slideshow: San Francisco: City by the Bay

    Justin Sullivan / Getty Images

    San Francisco's unique mix of physical characteristics, landmarks and attractions make it one of the most popular cities in the United States.

    Launch slideshow

    CalTrans Bay Bridge Program Manager Anthony Anziano told CNBC in an interview that the state had no choice but to go overseas.

    “The largest companies in this country just simply didn’t have the capacity to be able to do that work in the time that we required,” he said.

    That point remains a subject of bitter debate. And with the project now near completion, it is not clear the decision to outsource the span yielded anything close to the savings officials had hoped for.

    Now budgeted at more than $1.75 billion for the suspension span alone, the section has encountered nearly $300 million in overruns. And while officials recently moved up the projected opening of the bridge to Labor Day 2013, it is still as much as a year behind the schedule that was planned when the contract was awarded.

    In the end, the time and budget is nearly identical to the single bid the state received to build the bridge with American steel: a five-year, $1.8 billion proposal by a joint venture of American Bridge Company and Fluor Corporation that the state rejected in 2004.

    There is no way of knowing what overruns that proposal would have encountered, and it, too, contemplated buying some of the steel from overseas. But independent steel industry analyst Michelle Applebaum says American firms have a better track record than the Chinese when it comes to bringing in large projects without major overruns.

    “Just looking at dollars and sense, there was a much better argument for this to be done domestically,” says Applebaum, who describes herself as an ardent free-trader. 

    And she says any cost advantage the Chinese might have had would easily have been made up by the benefits to the U.S. economy. She believes officials in California fell victim to a mindset that says China is automatically cheaper.

    “We shot ourselves in the foot,” Applebaum said. “We never even took seriously the domestic bid.”

    Not so, says Anziano. But with only one domestic bid, which came in at more than double the CalTrans engineers’ estimate, the state had a duty to look elsewhere.

    “That’s telling you there’s something wrong. You’re not getting competitive bidding,” he said.

    Opening the project to foreign competition was not a simple matter. It required some fancy legislative footwork that still angers some U.S. manufacturers, who saw the Bay Bridge as a unique opportunity to revitalize American manufacturing just as the nation was heading into a recession.

    Early on, some in California saw the Bay Bridge project — necessitated when the existing bridge was damaged in the 1989 Loma Prieta earthquake — as a potential job creator.

    Flush with wealth from the dot-com bubble, the state and Bay Area leaders mandated the new bridge be “iconic” in its design. The costs — and potential benefits to the winning bidders —ballooned.

    After lobbying from labor and industry groups, then-governor Gray Davis won federal funding for the bridge. That meant the project was covered by a 1982 “Buy America” law requiring the state to give preference to American contractors.

    But then the 2004 bid came in, just months after the new governor, Arnold Schwarzenegger, took office. Hit by sticker shock, the Schwarzenegger administration decided to regroup.

    “One of the things that stuck out was the Buy America component,” Anziano said. “That was restricting, and we heard this loud and clear from the construction community.”

    So the administration reconfigured the funding formula for the 16 separate contracts that made up the Bay Bridge project. While most of the contracts would continue to receive federal funds and be subject to the Buy America requirement, the self-anchored suspension span — the signature segment of the project and by far the most lucrative — would be paid for with state and local funds, exempting it from the requirement.

    Last month, the U.S. House of Representatives passed a bill that would ban such a maneuver in the future. It faces an uncertain future in the Senate. Regardless, it comes years too late for some who had hoped to win the Bay Bridge project, until the state changed the rules.

    “We thought it was gamesmanship, that it was a way of getting around the system,” says Thomas Hickman, a vice president at Oregon Iron Works outside Portland.

    CNBC.com: Jobs employers can't fill

    His firm was part of a consortium, Bay Bridge Fabricators, that had been preparing a bid for the project. The proposal included a new, state-of-the-art fabrication plant to be built at the port of Vancouver, Washington. Hickman says the factory would have been a huge boost to U.S. manufacturing capacity, allowing American firms to compete for even bigger projects around the world.

    “The impact on the economy throughout this country would have been tremendous,” he said.

    But when state officials announced in 2005 that the suspension span would no longer be subject to the Buy America requirement, the plan died.

    “At that point, we all looked at each other and said it's really time to go home,” said Hickman, “Because they're determined to go to China, or Korea, or somewhere other than the U.S. for this bridge.”

    “That was not part of the thinking — let’s just send it overseas,” said Anziano. “It was the reality of the market.”

    Nonetheless, Schwarzenegger and his administration began actively courting foreign bidders. In 2005, Schwarzenegger traveled to China on a trade mission. During the visit, state transportation secretary Sunne Wright McPeak ceremonially presented officials with a set of CDs including bidding specifications for the Bay Bridge project.

    From the state’s standpoint, the strategy worked as planned — increasing competition. When the project was rebid in 2006, the American Bridge-Fluor joint venture won out. Unencumbered by the Buy America law this time, the group bid $1.43 billion, nearly $400 million below its 2004 bid. After winning the contract, the group promptly subcontracted the steel fabrication to ZPMC, a Shanghai-based firm whose primary expertise is building cranes.

    “I don't believe they ever really took a fair look at what was available here in the United States before they made the decision to effectively abandon the U.S. as a supplier of the structural steel for the bridge,” Hickman said. “I don't mean that to sound harsh, but at the same time, that's really exactly what they did.”

    CNBC.com: Worst jobs for 2012

    His firm did win a contract to build some components of the Bay Bridge, but he says it is nothing compared to the contract for the suspension span.

    State officials say the bidding results proved the U.S. did not have the capacity to build the bridge on time and at a reasonable cost, and they could not rely on a hypothetical U.S. factory to build such a vital span. But it is not clear China had the capacity either.

    Soon after winning the contract, ZPMC built its own new factory in China, just as Hickman’s consortium had planned to do in the U.S. And more than 200 American experts and engineers traveled to China to help supervise the project.

    “Building a new facility, which they had to do, training their people, which they had to do, all of those were an investment in China that in my mind should've been done here,” Hickman said.

    “It's not quite that simple,” said Anziano, who says it is unfair to blame CalTrans for the work going to China. “You have to keep in mind, first of all, that the capacity situation that we have in this country is something that has evolved over decades. You can't fix it overnight. You really can't fix it on the back of one single project.”

    Besides, the Chinese managed tobuild their plant in just eleven months, American Bridge’s then-CEO Robert Luffy told a Congressional committee in 2007.

    CNBC.com: Ultra wealthy shunning stocks

    “Believe me, they have the capacity,” Luffy testified. “It is beyond your comprehension if you haven’t been there.”

    But he acknowledged that had the state approved the venture’s initial bid in 2004, it would have added the capacity in the U.S.

    “A lot of additional capacity,” he said.

    Today, one more major Bay Bridge contract has yet to be awarded: a five-year, quarter billion dollar project to tear down the existing bridge. Among the rumored bidders: a firm from China. 

    This story originally appeared on CNBC.com.

     

    CNBC's Scott Cohn looks at the controversy surrounding how some of the parts of the spectacular structure were built overseas and why those decisions were made.

     

  • Farming communities facing crisis over nitrate pollution, study says

    Paolo Vescia/FERNnews

    "People were dying, and we didn't know who was going to be next," Sonia Lopez, shown with and her son, Leonardo, said of the health problems that she saw in the years after the family moved into the San Jerardo Cooperative in Salinas, Calif.

    By Stett Holbrook
    Food & Environment Reporting Network

    Nitrate contamination in groundwater from fertilizer and animal manure is severe and getting worse for hundreds of thousands of residents in California’s Central Valley farming communities, according to a study released Tuesday by researchers at the University of California, Davis.

    Nearly 10 percent of the 2.6 million people living in the Tulare Lake Basin and Salinas Valley might be drinking nitrate-contaminated water, researchers found. And if nothing is done to stem the problem, the report warns, nearly 80 percent of residents could be at risk of health and financial problems by 2050.

    High nitrate levels in drinking water have been linked to thyroid cancer, skin rashes, hair loss, birth defects and “blue baby syndrome,” a potentially fatal blood disorder in infants.

    The report is the most comprehensive assessment so far of nitrate contamination in California’s agricultural areas. 

    The problem is much, much, much worse than we thought,” said Angela Schroeter, agricultural regulatory program manager for the Central Coast Regional Water Quality Control Board, a state water agency.

    Nitrate-contaminated water is a well-documented fact in many of California’s farming communities. The agricultural industry, however, has maintained that it is not solely responsible because nitrates come from many sources. But, according to the UC Davis report, 96 percent of nitrate contamination comes from agriculture and only 4 percent can be traced to water treatment plants, septic systems, food processing, landscaping and other sources. While the report focused on California, nitrates in groundwater is a problem that plagues farming communities around the U.S. 
     
    A financial hit as well
    In addition to health risks, tainted water will exact a growing financial toll, the report said. The researchers project that utilities and citizens in the two regions will pay $20 million to $36 million per year for water treatment and alternative supplies for the next 20 years or more. 
    According to the study, more than 1.3 million people in the two areas currently face increased costs as residents seek alternative sources of water and providers pass on the costs of treatment to ratepayers. 
    The five counties in the study area – among the top 10 agricultural producing counties in the United States – include about 40 percent of California’s irrigated cropland and more than half of its dairy herds, representing a $13.7 billion slice of the state’s economy. 

    Paolo Vescia/FERNnews

    Water pours from a kitchen tap in a San Jerardo Cooperative home near Salinas, Calif.

    The Central Coast Regional Water Quality Control Board has produced several reports of its own that show “large-scale degradation” of drinking water aquifers due to nitrates from fertilizer. 

    “If we don’t address this, we’re going to have a very serious issue in California,” Schroeter said.

    Nitrates are odorless, tasteless compounds that form when nitrogen from ammonia and other sources mix with water. While nitrogen and nitrates occur naturally, the advent of synthetic fertilizer has coincided with a dramatic increase in nitrates in drinking water. 

    Rural residents are at greater risk because they depend on private wells, which are often shallower and not monitored to the same degree as public water sources. Current contamination likely came from nitrates introduced into the soil decades ago. That means even if nitrates were dramatically reduced today, groundwater would still remain polluted for decades to come. 

    According to the report, removing nitrates from large groundwater basins is extremely costly and not technically feasible. One relatively low-cost alternative is called “pump and fertilize:” Pulling nitrate-saturated water out of the ground and applying it to crops at the right time to ensure more complete nitrate uptake. 

    Representatives of the California Farm Bureau Federation, the state’s largest agricultural association, would not comment on the report until it was released. But in a written statement, spokesman Dave Kranz said farmers and ranchers have worked on better nitrate management for years.  

    “Clean drinking water is a high priority for everyone, especially people who live in rural areas,” Kranz said. “Most farmers live where they work and want to be certain that they, their families, their employees, and their neighbors have access to safe water.”   

    Farmers and ranchers will continue to adapt to new information, technology and science to address nitrate problems, he said. But he said it’s important to “make sure nitrate management programs look at all possible sources to achieve the goal of safe drinking water.” 

    The safety of groundwater, which is the largest source of drinking water, is managed through the state’s Clean Water Act. But each source of contamination is handled differently, says Schroeter of the Central Coast water board, and agriculture is more lightly regulated than other industries. 

    'People were dying'
    For the 250 people living in San Jerardo, a farmworker cooperative southeast of Salinas, the threat posed by nitrates is all too familiar. San Jerardo residents live in refurbished old barracks that have been converted into tidy homes.

    Sonia Lopez moved into San Jerardo with her parents and five siblings in 1987. The four-bedroom, four-bathroom house was a big improvement over the two-bedroom apartment they once shared. “This was our American dream,” she said. 

    But something went wrong about nine years ago. Her skin became red and itchy. Her eyes burned. Her hair started falling out. Her family had the same symptoms, and she learned other San Jerardo residents were afflicted, too. 

    “I got very concerned because some of the residents started passing away from cancers,” she said. “People were dying, and we didn’t know who was going to be next.” 

    Paolo Vescia/FERNnews

    Horacio Amezquita stands beside the water supply for San Jerardo Cooperative in Salinas, Calif. The water is piped in from a clean well two miles away.

    While they did not find a cause for the cancers, Lopez and fellow resident Horacio Amezquita learned from health officials that nitrates in their well water had made their eyes red and their hair fall out. 

    The community also learned that its water had been contaminated with nitrates since at least 1990; over the years, three wells had been drilled and eventually were found to be tainted. Drinking water regulations limit nitrates to less than 45 parts per million. One well measured 106 ppm, or more than double the limit. 

    After repeatedly asking Monterey County officials to help, Lopez and Amezquita finally got a filtration system in 2006, and in 2010, the community connected to a new well two miles away that doesn’t need to be purified. The cost to Monterey County was about $5 million. San Jerardo residents used to pay about $25 a month for water; now, they pay as much as $130 a month. 

    Lopez still worries about her health, and like the UC Davis researchers, she warns the nitrate problem will only get worse. 

    “Our problem is going to be your problem,” she said. “It’s everyone’s problem. There are solutions, but we need the people in charge of our communities to do something about it.” 

    UC Davis hydrologist Thomas Harter led the team of researchers from the Center for Watershed Sciences that prepared the report, which took 20 months to complete and involved 26 scientists. The report had been requested by the Legislature in 2008. 

    Water-quality experts said the study provides a new and comprehensive look into the sources of the contamination, the chemicals in the water and the people affected.

    Laurel Firestone, co-executive director of Tulare County’s Community Water Center, a nonprofit that helps communities with poor drinking water, said not only does the study show that the nitrate problem isn’t limited to a few isolated rural communities, but it also places responsibility squarely on agriculture’s shoulders. Firestone hopes there will now be the political will to tackle the issue. 

    “This isn’t a new problem,” she said. “We’ve known it for decades, but we’ve failed to do anything about it.” 

    Fertilizer fee suggested
    The report lists a few potential solutions to help pay for the cleanup of contaminated water, including a fee on fertilizer sales and greater “mill fees” on the production of fertilizer. In California, farmers do not pay sales tax on fertilizer, while water districts and communities bear the cost of cleaning up tainted wells. 

    Firestone said a fertilizer fee could be a powerful tool because there’s currently no disincentive to use fertilizer and few incentives to switch to safer agricultural practices. 

    “I think it’s clear that to address this problem, we need agriculture to lead the way,” she said. 

    Because of the might of the state’s agricultural industry, there has been little political will to tackle the nitrate problem. It will be up to the Legislature to decide how to respond to Harter’s report, but regulatory change might be coming as soon as this week. 

    The Central Coast water board, one of several regional water agencies that enforce the state’s Clean Water Act, will hold a highly anticipated meeting on Wednesday to decide on new agricultural regulations aimed at reducing the release of nitrates, pesticides and other chemicals into aquifers, as well as creeks, rivers, lakes and the Pacific Ocean. 

    “We justify these regulations based on very severe threats to water quality,” said Schroeter.  “We have the most toxic water in the state.” 

    Despite the report’s grim news, water policy expert Jennifer Clary said she believes change is coming. She is a program manager for Clean Water Action, a national environmental advocacy group. She said the Central Coast water board’s plan would be a first step toward regulating groundwater contamination. 

    While she said the proposed rules aren’t perfect, “It’s going to be better than nothing. You can’t continue with nothing.” 

    Harter, the UC Davis researcher, said the study’s long-term projections for nitrate contamination reveal “just how extensive and interconnected these impacts are.” While his report outlined a number of policy choices, he doesn’t recommend one particular course of action. 

    “We can certainly do better, but it’s going to take an investment that we will all have to share. … That’s a discussion I hope we have.” 

    This article was produced by the Food & Environment Reporting Network, an independent and nonprofit investigative news organization.