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May 19, 2005
Inc. -- the corporate parent of Pacific Lumber -- filed its quarterly
financial statement with the Securities and Exchange Commission
last week. The statement, known as a 10-Q, showed that the company
lost $16.3 million in the first three months of 2005, with $2.8
million of that attributable to actual losses from business operations.
Palco shipped 33 million board-feet of Douglas fir lumber in
the first quarter, nearly double what it had the previous year.
Redwood sales were down slightly. The company again warned shareholders
that it might not be able to meet a June 20 payment on its long-term
debt, with possible consequences ranging from more layoffs to
a sale of assets to bankruptcy. And on Monday, the staff of the
State Water Resources Control Board issued a recommendation that
the agency permit no new timber harvest plans in the Freshwater
and Elk River watersheds before new waste discharge permits are
designed, which may not happen until September. The board will
consider whether to approve the staff report at its meeting on
MAY SHOWERS: Humboldt County
could be in for one of its wettest Mays since the 1800s. With
3 inches of rain so far this month, Brett Lutz of the National
Weather Service office on Woodley Island said average precipitation
is almost double the May average of 1.62 inches. Last year Humboldt
County had just .08 inches at this point in the month, and 1.37
inches total in May. The most rain ever recorded in May was 7.2
inches in 1889. Lutz doesn't expect the current storm to cease
until Friday, bringing a possible three to four inches of rain.
"That would be one of the wettest Mays we've seen,"
STOEN TO MENDOCINO?: Is Deputy
District Attorney Tim Stoen headed to Mendocino County? Probably
not, he says. He did apply for a job as Mendocino's county counsel
a couple of months ago at the suggestion of his former boss,
Mendocino County District Attorney Norm Vroman. But he listed
in his conditions that he would be allowed to return to Humboldt
County in order to prosecute the county's fraud lawsuit against
Pacific Lumber Co. He hasn't heard back. "I would imagine
it's more likely than not that I'll be staying here, and just
being a run-of-the-mill prosecuting attorney on special cases,"
Stoen said. Last week, in an administrative reshuffling of the
District Attorney's Office, Stoen stepped down from his previous
post as assistant district attorney, an administrative post that
was reassigned to long-time Deputy DA Wes Keat.
PULP MILL HEARING: Evergreen Pulp will be back before the North Coast
Unified Air Quality Management District on Friday, seeking a
variance to allow it to exceed its permitted air pollution levels
until the end of the year. In an appearance before the district's
hearing board in March, the company explained that it needed
the variance to continue operations while two defective pieces
of equipment at the mill are repaired or replaced. The meeting
is scheduled for 10 a.m. Friday in the Eureka City Council Chambers,
531 K St. at the corner of Fifth.
TRINITY WATER RESTORED:
Following through with its promise
to restore flows to the lower reaches of the Trinity River to
protect spawning fish, the federal Bureau of Reclamation opened
the gates to the Lewiston Dam last week, the bureau reported.
Flows of 7,000 cubic feet per second surged down the Trinity
through May 13 and will be kept at 2,000 cfs through July 9.
Safety officials are cautioning the public to be mindful of the
high, cold flows and to keep a close eye on children when near
the river. Visit www.usbr.gov/mp/cvo/vungvari/trinsch.pdf for
a complete schedule of flows on the Trinity.
NO CHOICE ON FEES: HSU President Rollin Richmond passed a $44 per
semester student health fee Friday, overturning a student vote
last month that narrowly rejected the fee and a recommendation
by the Student Fee Advisory Committee to let the vote stand.
More than 5,000 students visit HSU's campus health center each
year -- the highest per capita use rate of the 23 CSU campuses,
university officials said. Without the fee, students would have
faced slower, much more expensive health services at HSU, said
Health Center Director Rebecca Stauffer. The facility would also
have stopped operating at full hours, five days a week. Of the
788 students who cast ballots on the fee, 361 voted in favor
of it, while 427 or 54 percent voted against it, leaving a winning
margin of just 66 students. The overall turnout, less than 14
percent, was typical of student elections, which attracted just
12 percent of the student population last year. The student vote
served only as an advisory to Richmond, who has the authority
to make the final decision on all student fees recommended for
his approval. The per-semester fee will go into effect this fall
as part of mandatory enrollment and registration fees. Richmond
said without the increased fee, students would have suffered
a double setback, losing thrifty, timely and necessary medical
services on campus, while becoming more dependent on high-cost
urgent care and hospital services off-campus.
FATALITY IN HYDESVILLE: A Fortuna High School junior died after being
ejected from her car May 12 on State Route 36, the California
Highway Patrol and county Coroner's Office reported. Nicole Chyanne
Arney, 17, of Carlotta was driving westbound shortly before 8
a.m. on SR 36, west of A Street in Hydesville, when for unknown
reasons she failed to negotiate a sharp right curve, crossing
the eastbound lane and driving off the road, the CHP said. Her
1988 Ford Aerostar struck the guardrail on the other shoulder
and continued to travel over the rail and down a steep hillside.
The car landed on its roof about 300 feet south of SR 36. Arney
was not wearing a seatbelt.
BIG PRIZE FOR AUTHOR: McKinleyville author Barbara Kerley received a
prestigious Commonwealth Club of California Book Award for her
2004 Walt Whitman: Words for America earlier this month.
The book won the silver medal in the juvenile literature category,
for children ages 11-16. Kerley, 44, was chosen from hundreds
of California authors for the award, which included a $300 cash
prize. "It brings [Whitman] to life the way a typical book
about his life would not," Kerley said. Other winners of
the 74th annual California Book Awards included feminist poet
Adrienne Rich and novelist Andrew Sean Greer. The awards honor
the exceptional literary merit of California writers and publishers.
An awards ceremony will be held in San Francisco June 14, hosted
by Chronicle book critic David Kipen and former L.A. Times
Book Review Editor Steve Wasserman.
DISASTER RELIEF ASKED: Rep. Mike Thompson (D-St. Helena) called last
week for disaster relief for West Coast commercial salmon fishermen,
who are economically distressed by low salmon returns and a limited
fishing season. In a letter, Thompson said that the estimated
loss to the West Coast commercial fishing fleet could be tens
of millions of dollars. NOAA is investigating whether fishermen
can receive long-term, low-interest loans through the Magnuson-Stevens
Act. The commercial fishing season will be open May 21-July 22.
Meanwhile, tribes of the Klamath River area are preparing for
a summer trip to Scotland to attend the annual meeting of ScottishPower,
the owner of hydro-electric dams that block water flows on the
Klamath, which has been plagued with massive fish kills due to
low flows in recent years. Last year the tribes sued the power
company for $1 billion. In April, a Scottish magistrate recommended
the suit be dismissed.
PREZ OF THE YEAR: The California
State Student Association named HSU President Rollin Richmond
"President of the Year" last week, honoring his accessibility
to students and commitment to the "RenewCSU" goals
for system-wide building practices. The association also noted
Richmond's support of the Associated Students voter registration
drive. The award, given on behalf of the 23 campuses and more
than 400,000 students in the California State University system,
recognizes a CSU President who goes above and beyond normal duties
and encourages the airing of student views.
CALLING ALL GRAND JURORS: The Humboldt
County Superior Court is accepting applications to serve on the
Humboldt County Civil Grand Jury for the fiscal year of 2005-06.
The volunteer grand jury investigates citizen complaints as well
as county and city government, elected officials, special districts,
jails, service districts and nonprofit agencies that receive
public money. At the end of the fiscal year, the jury submits
a final report of completed investigations to the Superior Court
and the county Board of Supervisors. The jury will be comprised
of 19 members, including four or five of this year's members.
To receive an application, contact the Jury Commissioner's Office
with your name and address at 269-1270 by 5 p.m. Wednesday, June
WATERMARK SELLS DIVISION: WaterMark, corporate owner of the sports rack
manufacturer Yakima, officially sold its water sport division
to Trinity, N.C.-based competitor Confluence Holdings Corp. Monday,
WaterMark officials said. Confluence will keep the division under
the WaterMark name, and the rest of WaterMark -- including Rhode
Gear and Yakima -- has been renamed Yakima Products. Nearly all
of the 200 employees of the sold division will be retained by
Yakima Products or offered positions at Confluence, said Jim
Clark, CEO of Yakima Products. WaterMark, founded in 1998 with
the merger of kayak brands Daggar and Perception, acquired a
handful of other outdoor and paddle sport companies, including
Yakima in 2001. The company moved its headquarters to Arcata
the same year, only to announce this December that it would move
most operations to Beaverton, Ore., a suburb of Portland, leaving
jobs behind for 70 or so Arcata employees. But in January Watermark
announced that the remainder of its operations would move to
Beaverton by the end of this year. Around 50 employees are still
employed in Arcata, but the facility is scheduled to close by
the end of September.
BANK STOCK SOARS: Redwood Capital
Bank received the "Market Cap of the Year" award last
month for achieving the highest stock appreciation of any bank
in California last year for the asset class below $50 million.
The California Bankers Association and Carpenter & Company
presented the award, which recognized that the bank achieved
an 80 percent stock increase since its opening last year.
To trial or not?
by HANK SIMS
The long-delayed trial of Fortuna
City Councilmember Debi August is scheduled to begin this Monday
-- unless it is dismissed by a Humboldt County Superior Court
judge sometime this week.
Late last month, after receiving
a trove of newly released documents from the Humboldt County
Grand Jury, August's attorneys filed a motion with the court
asking that the charges against her -- which include conflict
of interest, non-disclosure of income and revealing evidence
from the Grand Jury investigation of her -- be dismissed.
Judge John Feeney had not ruled
on the objection by the time the Journal went to press.
In the motion, August attorney
Greg Rael argues that August's actions in representing a Fortuna
developer do not meet several legal standards that would justify
the action being brought against her, which seeks to remove her
"[The] facts underlying
each of the four counts contained in the First Amended Accusation
reveal that Councilwoman August has violated no law justifying
her removal from office," Rael writes.
In his legal analysis of the
August case, Rael relies heavily on a 1996 state appellate court
case that addressed the circumstances under which a grand jury
could seek to remove an elected official from office. The case,
Steiner v. Superior Court, arose when the Orange County
Grand Jury sought to remove members of the Board of Supervisors
following that county's bankruptcy.
In that case, according to Rael,
the appellate court held that such actions by grand juries are
permissible only in cases of criminal conduct or "purposeful
failure to carry out mandatory duties of office." August's
actions, he argues, never rose to that level, partly because
Fortuna's code of conduct for elected officials did not specify
mandatory removal from office as a potential punishment.
Deputy District Attorney Tim
Stoen, who is representing the grand jury in the proceedings,
replied in an argument filed with the court on May 4. He argues
that Fortuna did not have to spell out the potential penalties
for officials that violate its code of conduct in order for the
grand jury to act.
"Neither Steiner v.
Superior Court nor any other authority supports the preposterous
notion that the `sanction of removal' must be enacted in a statement
of duties before a public official may be removed for a violation,"
In a follow-up argument submitted
to the court on May 9, Rael further hints that evidence recently
released from the grand jury's deliberations shows that several
of its members were biased against August from the early days
of its investigation.
"The Grand Jury's e-mail
correspondence reveals a body which relished its role, targeting
the City of Fortuna in general and Councilwoman August in particular
from early in its term," Rael writes.
As evidence, Rael quotes several
e-mails sent between individual members of the grand jury. "[Maybe]
the good ol' boys are running scared," Rael quotes from
one such e-mail. "What is certain is that we are on to something
that may clean up the act in Fortuna."
Rael writes that such prosecutorial
zeal should have been tempered by Stoen, the grand jury's legal
advisor. Instead, he argues, Stoen's actual advice amounted to
"misconduct," in that his instructions to the grand
jury showed a "grossly erroneous" understanding of
The accusation against August,
which was filed on May 4, 2004, stems from the grand jury's investigation
of her involvement in a real estate subdivision proposal making
its way through the city's regulatory process. On Sept. 30, 2003,
August -- who is a real estate broker and was listed in the subdivision
application as the project's agent -- argued vigorously for its
approval before the Fortuna Planning Commission.
For more background on the case,
see Journal cover story "The Debi August File,"
Sept. 9, 2004.
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