LGR REPORT
January 2007
Be always at war with your vices, at peace with your neighbors,
and let each new year find you a better man.
~Benjamin Franklin
FEDERAL:
OFHEO Announces 2007 Fannie Mae/Freddie Mac Conforming Loan Limit
The Office of Federal Housing Enterprise Oversight (OFHEO) announced that the maximum 2007 conforming loan limits will remain at 2006 levels. The conforming loan limit defines the maximum mortgage size that Fannie Mae or Freddie Mac can buy or guarantee in the residential secondary mortgage market. A mortgage beyond that limit is in the jumbo market, which is reserved to private sector mortgage lenders. The new conforming loan limits are:
One-unit: $417,000
Two-unit: $533,850
Three-unit: $645,300
Four-unit: $801,950
Loan limits for one-to-four family home mortgages in Alaska, Guam, and the U.S. Virgin Islands are 50% higher than the conforming loan limit numbers above.
The FHA and VA loan floors and high cost limits will also remain at 2006 levels. Under the FHA program there is no nationwide limit. HUD must compute the individual limits for 3223 counties nationwide.
STATE:
The largest freshman class in state legislative history took oath on December 4th In one fell swoop, 36 new members will join the Assembly, just shy of half its total 80 members. Twelve of the 40 state senators are first-termers, though several of them are actually veteran legislators moving up from the Assembly.
The newcomers arrive as Gov. Arnold Schwarzenegger prepares to reveal an agenda that would test even the most battle-hardened legislator. Items will include overhauling health care, reforming prisons and dealing with a $5 billion budget deficit.
Because the freshman class is so large, an unprecedented number of freshmen will likely be assigned to chair committees. The incoming members, by and large, aren't new to government. Many have served local government as members of the County Board of Supervisors, City Councils and School Boards.
Legislative priorities include health care reform, education, immigration and issues surrounding diversity and government oversight. Governor Schwarzenegger also outlined his plan for re-districting the legislative districts. The Governors proposal is as follows:
An independent, politically balanced and diverse Citizens Redistricting Commission.
o The 11-person Commission will include four members from each of the two largest parties and three independent members.
o The proposal disqualifies those with potential conflicts of interest, including serving as an elected official within the past five years, holding lobbying jobs or having family ties to politicians. Qualifying criteria includes continuous party registration.
A fair selection process.
o Under the proposal, a panel of ten county clerks establishes a candidate pool. Legislative leaders can each strike two candidates from the pool before the Fair Political Practices Commission conducts a random drawing of 11 names.
Districts that respect existing law, state geography and California's communities.
o The Governor's proposal calls for boundaries that promote equal population, Voting Rights Act compliance, geographic contiguousness and compactness, and respect for communities of interest and municipal, county and geographical boundaries. Under the proposal, incumbent residence information may not be considered by the Commission.
Transparency and public accountability when redrawing map lines.
o The Commission must adhere to the Bagley-Keene Open Meeting Act, allow public review and comment, provide for limited interest group involvement and make documents available to the public.
Forthright enactment, court review and funding requirements.
o Any official Commission action will require six votes, and the public may appeal the Commission's decisions directly to the state Supreme Court.
Franchise Tax Board:
The state Franchise Tax Board voted unanimously on December 4th to make permanent a program that allows some low-income residents to file government-prepared tax returns, despite opposition from tax preparation software companies.
Taxpayer rights groups and makers of tax-return software believe the tax board acted illegally because the Legislature has not approved the expansion of the ReadyReturn program. Controller Steve Westly, who is an ex-officio member of the tax board, said ReadyReturn is effective and popular with taxpayers and cited a 96 percent favorable feedback.
ReadyReturn is available to single taxpayers who only have one source of income, claim no dependents and take the standard deduction. About 50,000 taxpayers participated in the pilot program and the tax board estimates 1 million people are eligible. The state mails taxpayers a completed return based on information from their W-2 form. If taxpayer agrees with the information on the return, they sign it and return it.
If economically feasible the program could lead to other ways the state could make filing taxes easier, eating into the market for tax preparation software. No ReadyReturn forms will be used in 2007, and would be available permanently starting in 2008, if the board action stands.
REGIONAL
Los Angeles County
The California Public Utilities Commission has approved a request by Southwest Water Company for an increase of 6.4% and two more increases of 2.9% and 2.6%. The latter will become effective July 2007 and July 2008 respectively. The first rate increase will generate about $3 million a year for system improvements and will boost the average residential bill by $2.40 to $42.40. Southwest Water Company is the parent company of West Covina based Suburban Water Systems. Suburban Water Systems supplies water to a 41 square mile area which includes all or part of Glendora, Covina, West Covina, La Puente, Hacienda Heights, Industry, Whittier, La Mirada, La Habra and Buena Park.
San Bernardino County:
County supervisors are expected to approve a settlement worth more than $100 million to end a long-running dispute with the Colonies Partners LP. The deal will include roughly $88 million in cash and $14 million worth of county-owned land in Rancho Cucamonga to settle lawsuits filed against the county by the Colonies, which contends the county shirked its duty to pay for flood-control improvements on the developer's Upland project. The Colonies case, which has passed through three courts in four years, is centered on the developer's allegation that San Bernardino County's Flood Control District built a storm drain that will divert millions of gallons of tainted water onto the Colonies' property in the event of a major storm, but did not build the 67-acre basin needed to contain the deluge. County attorneys have argued that the developer gave its consent for the project in a 1999 agreement.
Earlier this year, Warner blasted the county in a tentative decision, finding that the county had no rights to Colonies property and had fallen far short of its obligations. In the wake of Warner's decision, Colonies attorneys said they would seek as much as $300 million from the county in a separate damages lawsuit.
The county has filed its own complaint against the city of Upland, Caltrans and San Bernardino Associated Governments seeking payment from those agencies if Colonies prevails in its lawsuit against the county.
The costs of the expected settlement will be borne entirely by the county's Flood Control District, but how the agency will come up with the money is not yet clear. While the district receives around $32 million in property tax revenue countywide, Assistant County Administrator Norm Kanold said in an August interview that the majority of those funds are already devoted to staff salaries and maintaining the county's current facilities. A bond would be the most plausible way for the Flood Control District to pay for most of the $88 million cash component of the settlement, Biane said in an August interview. The county could bond for as much as $77 million, he said, making yearly debt payments of around $4.8 million.
LOCAL
AZUSA:
The 1,250-home Rosedale development in Azusa will remain uninhabited until July, but the first few homes on the massive construction site have already been sold.
Although the homes aren't expected to be complete until 2009, the number of people on the interest list for as-yet un-built homes outnumbers availability by roughly 5-to-1, said the developer's spokesman, Byron de Arakal. A handful of houses have been offered for sale, including 18 "luxury" homes starting at more than $1 million which went on the market in October. 25 more for $600,000 and up became available in late November and, 27 have been snapped up. More than 1,200 homes remain, but the interest list is overflowing with 6,000 names.
Most of the 518-acre site is still dirt, 172,000 cubic yards of which had to be trucked off-site. Sierra Madre Avenue has also been closed and won't fully reopen until June or July. Azusa Land Partners, expects to cover the remaining dirt in condos and houses. Building plans - call for everything from transit-friendly condos to seven-bedroom luxury homes. The developer is also building 10 new public parks and a community recreation center.
CHINO HILLS:
Incumbent Councilmembers Ed Graham and Bill Kruger were returned to office along with Parks and Recreation Commissioner Peter Rogers winning 29.21%, 24.77%, 20.47% of the votes respectively. Gary Larsen a 15 year incumbent chose not to run and support Rogers.
CLAREMONT:
Mayor Peter Yao and Councilwoman Jackie McHenry, who have served one term each, have filed to run for re-election in March. Other residents who have turned in paperwork are Michael Maglio, Linda Elderkin and past candidate Opanyi Nasiali. Three more candidates have picked up paperwork: Sam Pedroza, who finished third out of eight candidates in the 2005 council race for two open seats; Michael John Keenan, who finished last in that race; and Elliott Barkan, who ran unsuccessfully for Assembly as a Democrat in November. Two-term Councilwoman Sandy Baldonado has said she won't run, meaning the council is guaranteed at least one new member.
COVINA:
A proposal to extend the city's 6 percent utility tax is on its way to the voters. The City Council directed staff to bring back a resolution placing the tax extension on the March ballot.
The tax, first instituted in 1992, generates about $5.5 million each year, or roughly 20 percent of the city's general fund revenues. It is levied on gas, electric, telephone, cable TV and other utility bills in the city. But the tax sunsets in March 2009, leaving officials little choice but to either extend it or find other funding sources,
A survey conducted for the city by Oakland-based Tramutola LLC suggested the tax extension measure should receive more than the 51 percent majority needed.
But the survey also showed that an additional 2 percent tax specifically for street improvements would fall well short of the two-thirds majority needed for such a special tax to pass.
In other city business the cost to rebuild Citrus Valley Medical Center's Inter-Community Campus has risen to nearly $200million. Covina has a firm to look into financing options for the project. The Covina City Council approved a deal with the hospital in February 2005 to share in the planning costs for a new facility, with the city contributing $2.2 million for the endeavor. The cost for a new facility was estimated at $150million at the time.
Officials say a new building is needed to meet the more-stringent seismic safety requirements imposed after the 1994 Northridge earthquake. Inflation and additional construction plans have added to the $50million increase over last year's cost estimate. The hospital has until 2030 to meet the new seismic standards.
LA PUENTE:
For the next year, Councilman Louis Perez will hold the mayor's gavel.
During La Puente's annual reorganization of offices, the council voted 4-1 to appoint Louis Perez to the Mayor’s post after he was nominated by Councilman Louie Lujan. Perez, who has been on the council since 1990 and is on his sixth term as Mayor. In addition to the redevelopment projects, Perez said he will also continue to work on implementing the city's plans to upgrade its 50-year-old sewer system. The council also appointed Councilwoman Lola Storing, who has been on the council for nine years, as mayor pro tem. Storing was nominated by Perez but voted against him for Mayor. Storing has served as mayor once and is serving a second term as mayor pro tem.
LA VERNE:
In La Verne, Mayor Jon Blickenstaff is the only person to have filed paperwork to run for his seat as of this writing. This would be the second consecutive election he's run in unopposed. Incumbent council members Steven Johnson and Robert Rodriguez have filed to run for the other two open seats. Ron Ingels, who served as the city's police chief for 13 years, has also picked up paperwork from the city clerk.
ONTARIO:
The City Council approved a $10.3 million contract for concrete that will be used to build the Citizens Business Bank Arena. The contract with Corcoran-based Mid-State Precast ends a months-long delay in early construction work on the facility. City officials had hoped to sign contracts as early as last summer, but the process was delayed. In October, the council voted to reject all the construction bids it had received and re-bid the project. The arena, still anticipated to open in 2008, will seat as many as 11,000 and play host to minor-league sports teams as well as concerts and other events.
Incumbent Councilmember Alan Wapner was returned to office along with former Councilmember Jim Bowman securing 19.07 and 19.42% of the votes respectively. Incumbent Mayor Paul Leon won with 71.10% of the votes cast.
POMONA:
Two newcomers – Freddie Rodriguez District 2, and Stephen Atchley District 6, secured seats with 59.58%, and 46.29% of the votes respectively. Incumbent Councilmember Elliott Rothman – District 5 won his seat with 72.71% of the votes. Former Councilmember Cristina Carrizosa – District 3, won back her seat with 63.89% of the votes.
RANCHO CUCAMONGA:
After serving as mayor for 12 years, Bill Alexander was narrowly defeated by physician and former councilman Don Kurth. Alexander was first voted onto the City Council in 1988. Incumbents Rex Gutierrez and Diane Williams secured their seats, winning 29.26 percent and 25.05 percent of the votes, respectively.
ROSEMEAD:
Officials are questioning the costs of doing business with a contractor whose fees, they say, are eating away at the city's revenue.
Rosemead has contracted with Willdan, an engineering and planning firm, to run the city's building and safety department for several decades. According to city records it brings in about $1.3 million annually in fees, but the city pays Willdan $1.1 million for their services. According to the contract, the city pays Willdan nearly 67 percent of the fees coming into the building and safety department. The roughly $200,000 left over from the building fees also goes to Willdan for code enforcement services, officials said.
The City Council has asked for a full analysis of its contract with Willdan to figure out whether the city is paying too much for the services the contractor provides.
The City Council also awarded a lucrative contract to build a new bridge over the Rio Hondo channel. The current bridge, which connects Garvey Avenue between the cities of Rosemead and South El Monte, was built in the 1930s and is one of the most congested roadways in the city, officials said. With a $10.8 million price tag, the project is likely the largest public-improvement project in Rosemead's history. The yearlong process will also yield more congested conditions until the project is complete. The active Alhambra Wash fault line, which runs near the bridge, is a major concern for residents who claim the city did not do its homework with regard to existing fault lines. Money for the construction is coming from the Federal Highway Bridge Rehabilitation and Replacement Program and county transportation funds. . Although the bridge connects the two cities, it is solely a Rosemead-funded project.
San Dimas:
Mayor Curt Morris and Councilman John Ebiner have filed to run for re-election in March. Others who have picked up paperwork include Bonita Unified School Board member Jim Elliott; Planning Commission Chairman Emmett Badar; Public Safety Commissioner Bruce Colburn; Public Safety Commission Chairman Neil Oudejans; John Davis; and Earl Soundheim. Councilman Sandy McHenry announced a decision not to run again, but had indicated that he may file. As of this writing McHenry has not filed.
UPLAND:
The City Council is considering a revitalization plan for the heart of the city. At a workshop, developers from CIM and Torti Gallas and Partners architects presented a plan for downtown to councilmembers and residents. Additional housing units, commercial retail establishments, parking spaces and a mixed-use transit area are part of the plan, which would take 5 to 10 years to complete. Street grids and a main street would preserve the character of the current downtown.
Incumbent Councilmembers Ray Musser, Brendan Brandt and Tom Thomas retained their seats securing 23.87, 22.45 and 21.87% of the votes respectively.
WEST COVINA:
The City Council voted to appoint Councilman Mike Touhey as Mayor. The 4-0 decision, with Hernandez abstaining, was made after the council listened to pleas from 18 residents who wanted to see Roger Hernandez named mayor. Hernandez was first elected to the West Covina City Council in March 2003. Under the city's mayoral rotation ordinance, he was supposed to be appointed mayor pro tem last December and become mayor in March. Councilwoman Sherri Lane was named Mayor pro tem.