Six Rivers Bank CEO Resigns
A series of loans made to Northcoast Hardwoods, Inc. of Arcata, a company that filed bankruptcy last November, has cost Six Rivers National Bank President John E. Burger his job and forced the bank to charge off $1.1 million in bad debt.
Burger, chief executive officer since March 1992 and one of the original Six Rivers investors in 1989 when the bank was formed, resigned Wednesday, Sept. 9.
Six Rivers stock, which had been trading as high as $16-$17 per share in recent weeks, dipped as low as 9-3/4 in trading during that day before gaining. The price has since stabilized at about $11 per share, according to one local stockbroker.
The bank announced on the Dow Jones business wire last Wednesday that it was revising second-quarter earnings and will charge-off "problem loans, (made) to a single borrowing entity, that currently is subject to bankruptcy court proceedings."
Earnings for the second quarter now show a loss of $499,000, or 33 cents per share, compared to a previously reported profit of $395,000, or 26 cents per share.
Chief financial officer Michael W. Martinez was named interim CEO and Sheldon Francis, a 25-year banking veteran and turnaround specialist, was hired as chief lending officer. The former chief lending officer had stepped down in April because of the troubled loans, according to a report Monday in American Banker, a financial newspaper published daily in New York.
The earnings revision was the second in six months for Six Rivers. In March, it reduced reported 1997 net income by nearly $300,000.
American Banker reported that "Six Rivers directors tried to bail out the bank by repurchasing about $400,000 of the loan. But late last year, (Northcoast Hardwoods) filed for bankruptcy, leaving Six Rivers in the lurch.
"Under its latest balance sheet adjustment, Six Rivers said it would boost loan-loss provisions by $1 million, to $1.3 million, and increase expenses by $445,000, to $1.2 million, to cover legal, accounting, and administrative costs," according to the report.
Bank directors and other officials have spent numerous hours on the telephone with clients and shareholders this past week, trying to calm fears.
One analyst quoted in American Banker said, "This loan problem has plagued and distracted management for more than a year. This lets them move forward."
"It's been frustrating, dealing with all the rumors," said interim CEO Martinez. "This is not a safety and soundness issue. As part of the banking business, we expect losses but generally not of this size."
Just who's lived here longer?
As far as Republican state Senate candidate John Jordan is concerned, his opponent is a permanent resident of Sacramento. At least that's what he wants voters to think.
But Democrat Chesbro says if residency is the issue, it should be noted that he's actually lived in the district he seeks to represent much longer than his opponent 12 years longer, he says.
The controversy centers around Chesbro's eight years with the state Integrated Waste Management Board, during which time he and his family lived in Sacramento. He owns a home in the state capital, as well as in Arcata.
Jordan's camp made Chesbro's residence an issue in August when a subcontractor hired by Jordan was caught by police tailing a woman he had mistaken for Chesbro's wife. He had been hired to find out where Chesbro and his wife worked, according to a statement the man made to police.
Jordan is also running a sarcastic radio advertisement that refers to Chesbro as a "virtual senator."
"Wes Chesbro moved to Sacramento eight years ago and win or lose he's not coming back. But now, thanks to cyberspace, all our senators can come from Sacramento, which will be very convenient and save on gas."
Chesbro responded with a press release that says Arcata has been his home for 28 years. He also fired back with some accusations of his own.
Since he was 14 years old, Chesbro says, the 26-year-old Jordan has only lived in the 2nd Senate District three years.
Jordan went to a private prep school in Mendocino before heading off to college in Southern California. But Healdsburg, where he grew up, was still his permanent home, he said.
"When you go away to school your family is always here, your residence is always here. That's a different animal," Jordan said.
But Chesbro doesn't see the difference, and at least one newspaper agreed.
In an editorial, The Press Democrat of Santa Rosa wrote: "Among campaign consultants, this a familiar ploy trotted out whenever a campaign wants to exploit popular dissatisfaction with government.
"The facts about Chesbro are: He served six years on the Arcata City Council and 10 years on the Humboldt County Board of Supervisors. In 1990, he accepted a political appointment to the state Solid Waste Management Board, a commission headquartered in Sacramento. ...
"Like countless Republicans or Democrats before him, if elected, Jordan will find a place to live in Sacramento, and it won't make him a bad person."
That's just one editorial writer's opinion, countered Jordan, who believes voters are interested in and have a right to know where political candidates reside.
"This is a point of principle here," he said. "What's the point of having representative government at all?"
Arcata council oks trash site
The long search for a new place to deposit Humboldt County's trash may be reaching a conclusion this week. But in Arcata, resentment will likely fester for a long time over the hurried decision to site a county-wide trash transfer station on Samoa Boulevard.
The Arcata City Council approved the location of the facility at the dormant Northcoast Hardwoods for two years. The state Integrated Waste Management Board will consider granting the facility a permit at its meeting this week or next.
With council members Jason Kirkpatrick and Jennifer Hanan dissenting, the Arcata City Council overruled its own Planning Commission to approve the project Aug. 19.
Despite the fact that the council added new "mitigations" for possible noise, odor and pollution problems, angry neighbors have banded together as the United Neighborhood Alliance of Humboldt County to keep the transfer station out.
"We feel like we're being sold a bad used car, `This offer is only good for today,'" said group member Patti Stammer. Like other citizens, Stammer is angry about the hurried approval process, saying that the project should have been subject to a full environmental impact report.
The council's vote was indeed taken in a high-pressure situation. Ongoing toxic pollution problems at the Cummings Road landfill had driven local governments to search for new landfill capacity. More than a year ago, the incorporated cities and the county banded together as a Joint Powers Authority and sought new bids from waste haulers. They selected East Carbon Development Corp., which proposed hauling local trash by truck and rail to landfills in Medford, Ore., and Fairfield, Calif.
In choosing ECDC, the JPA rejected other suitors, including City Garbage Co., which owns Cummings Road Landfill and the region's largest transfer station on Hawthorne Street in Eureka.
To complete the new waste-disposal package, the JPA needed a site for a new transfer station and quickly since the county's contract with City Garbage expires Sept. 30 and the jilted company was not about to process its competitor's trash.
Hence, the rush, which fueled anger from some Arcatans. "The project was a done deal from the get-go," wrote Planning Commissioner Dwain Goforth in the Sept. 8 Arcata Eye newspaper. Goforth challenges the entire notion that county waste must be shipped over the mountains.
"The JPA will tell you there is no appropriate site for a landfill in Humboldt County. I say they didn't look hard enough."
But others familiar with solid waste issues say the JPA was right. "There's too much rain, too many hillsides that pitch into the creeks, too much wetlands, too much landsliding, earthquake faults and tsunami possibilities," said Kaye Strickland, a former county solid waste commissioner.
"The county spent three years in a very expensive search throughout Humboldt County to find a landfill site, and it was unsuccessful," echoed Arcata Mayor Jim Test, who also sits on the JPA board. "The landfills that are being proposed (to take county trash) are the least environmentally harmful that we could find. From an environmental standpoint it's the most reasonable way to handle things."
County residents may be looking at the prospect of a 10-day garbage strike at the beginning of October. The JPA's controversial facility in Arcata isn't expected to go on-line until Oct. 11, more than 10 days after City Garbage's contract expires.
One garbage expert thinks the inconvenience could be educational. "We should have a press conference and declare October a waste-reduction month," said Liz Citrino, solid waste contract manager for the county. Through composting and recycling, she keeps her trash down to one 30-gallon can per month.
"About the only thing I throw away is plastic."
Logging resumes, then halted
Humboldt County Superior Court Judge Timothy Cissna disappointed some Freshwater residents and pleased Pacific Lumber Co. last Thursday when he allowed the company to resume logging on one contested timber harvest plan.
An 18-person logging crew went back to work Friday but by Tuesday another temporary restraining order was in place and logging was again halted, this time by a state appeals court in San Francisco.
"In his ruling (Judge Cissna) said that he did not believe there would be any environmental harm from this timber harvest plan," said Palco spokeswoman Mary Bullwinkel.
But a growing group of Freshwater residents disagree and have challenged Palco's logging plans in their basin. They say the company is logging too much territory too quickly.
"The road I live on used to flood once every three years," said Alan Cook. "In the past year we had five flood events, the year before we had nine days of flooding, and the flood intensity was greater than that of the 1964 flood, according to my neighbors who have been here 40-plus years." Palco has until Sept. 22 to file its answer to the plaintiffs' brief.
Coastal panel bans vehicles
The California Coastal Commission gave the final nod last week to a Bureau of Land Management plan to bar vehicles from a 3.5-mile stretch of beach on the Lost Coast. Black Sands Beach was the last section of beach in the King Range National Conservation Area open to vehicles.
The BLM decided to eliminate vehicles from the beach because of the overwhelming popularity of hiking there and the agency's desire to manage the entire west slope of the King Range as wilderness. Off-highway vehicle enthusiasts were disappointed in the decision.
"It violates requirements for maximum public access," Jim Branham, member of the state Off-Highway Motor Vehicle Commission, was quoted as saying in the Times-Standard.
Eureka Mayor Nancy Flemming, a member of the commission, cast the only dissenting vote She cited access concerns for handicapped people and owners of property in the King Range.
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