South County Permit Center Opening. Another satellite County permit center, fashioned after the successful Felton Center, will be opening this spring sometime in the month of May. The new permit center for South County residents will be located at 8045 Soquel Drive in Aptos. A grant of approximately $30,000 from Monterey Bay Unified Air Pollution Control District will cover improvements, maintenance and rent through January 2002. Having neighborhood permit centers eliminates the multiple trips generated to the main County office on Ocean Street when processing permits.

Graham Hill Housing Project. For over ten years, 170 acres located on the old Graham Hill's showground property, between Santa Cruz and Scotts Valley has had approved plans to build 60 homes on half-acre lots by Los Gatos developer, Standard Pacific. However, fire and sewer service requirements have not been met. The Local Agency Formation Commission (LAFCO) meets on March 7 in the Board of Supervisors Chambers 8:30 am to consider a request to annex the showground to the Scotts Valley Fire District. At the meeting, LAFCO will also require approval for a special taxing district to pay for the sewer line into the Santa Cruz wastewater treatment plant. Henry Cowell Park and some homeowners along Graham Hill Road are affected by the proposal. With limited funds, the Scotts Valley Fire Department, County Fire Department and Department of Forestry officials will be reviewing response times and recommendations for the best safety scenario. Meanwhile, LAFCO expects to have annexation recommendations by the end of March, although it is still not decided whether some residents desiring hook-ups to the new sewer system on Graham Hill will be allowed. County Environmental Health is studying the issue. LAFCO meets on March 7. "WATCH"!

Approval Granted for Office Building, Retail/Restaurant Near Inn at Scotts Valley. Instead of the gas station that the developers proposed last year in the key Gateway South area on La Madrona Drive, a 6964 square foot retail commercial building and a 15,000 square foot office building was presented to the Council on February 21. The Planning Commission determined that the City Council should approve the project because the project provides landmark architecture which is required by the Gateway South Specific Plan. The buildings are designed to capture the same flavor as the Inn at Scotts Valley across the street. The 15,000 square foot building will include a two-story office building and will contain a tower feature with signs for the Inn at Scotts Valley. The 6964 square foot building will house retail service uses including restaurants and offices. Outdoor seating for the restaurant is shown on the site plan. "WATCH" as this project proceeds through the City's building approval process!

Harkins Slough Road Bridge Project and Millennium High School Memorandum of Understanding. The Santa Cruz County Public Works Department and the California Department of Transportation (CALTRANS) recently secured a Highway Bridge Replacement and Rehabilitation Program grant for $3.2 Million to replace an existing culvert crossing with a bridge structure on Harkins Slough Road. The proposed bridge project site is located directly south of the Highway 1 overpass on Harkins Slough Road at the Struve Slough crossing. The City of Watsonville has made a request to the County and CALTRANS to allow the City to assume lead agency responsibility for construction of the bridge project and administration of the grant. The City's interest in the bridge project is due primarily to their continuing support for the development of an appropriate pedestrian, bicycle and vehicular access to the New Millennium High School campus that is proposed to be located off of Harkins Slough Road south of the Highway 1. Currently, Harkins Slough Road is one of several potential access roads to the new high school that has been studied by the Pajaro Valley Unified School District. Their feasibility study also included a comprehensive review of four other alternative road connections, via a southwest extension of Airport Boulevard from Highway 1 to the proposed High school site. Regardless of the access route selected as the preferred access alternative to the new high school, the County will retain its authority to certify the environmental review and coastal permit for the bridge project since it is within the County's right-of-way. In addition, the City of Watsonville must also acquire an encroachment permit prior to constructing the project. It has been nearly twenty years since discussions for funding the Harkins Slough Bridge were discussed and for years, funding was the biggest stumbling block. "WATCH" as the long-awaited bridge will finally be built! Meanwhile, in a related matter, a public hearing before the Board of Supervisors is scheduled for March 13, 2001 to consider General Plan/Local Coastal Program Land Use Amendments related to the New Millennium High School and the Memorandum of Understanding. The Board of Supervisors entered into the MOU with the City of Watsonville and the California Coastal Commission as part of the agreement to allow the proposed New Millennium High School to be built in Watsonville's portion of the Coastal Zone, west of Highway 1. As part of the MOU, the County has agreed to implement provisions to prevent any further westward urban expansion by the City, including limitations (to be enforced by both the City and the County) on wastewater and potable water pipeline extensions from the City in areas west of Highway 1. The County General Plan/LCP land Use Plan and County Code/LCP implementation Plan amendments being proposed are intended to fulfill the County's responsibilities under the MOU. Public Hearing date is March 13. "WATCH"!

On March 2, an audience consisting of executives and business leaders listened as Assemblyman Fred Keeley; Senator Bruce McPherson; William Booth, an attorney for the California Large Energy Consumers Association; Tom Williams from Duke Energy, the owner/operator of the Moss Landing Power Plant; and Teresa Alvarado from PG&E outlined the energy crisis. William Booth provided a short history of the California energy situation. In 1996, when the State legislature deregulated the energy industry, and encouraged the utilities to sell off their fossil-fuel plants, they did not anticipate the tremendous demand on supply. The California Public Utilities Commission (PUC) created the market structure by mandating that PG&E and other big power utilities were not allowed to make long-term contracts. They were required to pay "spot prices," supposedly allowing more competition for the smaller utilities which were allowed by the PUC to make long-term contracts. But the smaller utilities could not match the demand even with their long-term contracts. Meanwhile, paying extraordinarily high "spot prices," the large utilities were fighting heavy deficits because they were not allowed to get long-term contracts. Thus, when the PUC attempted to level the playing field by deregulation, they instituted a "fatal flaw" by prohibiting an open market in long-term-contract-bidding for energy. Each of the speakers warned of the looming summer crisis and its impact on businesses. Whether this crisis will deter new business or damage existing businesses in California is unknown. California is still the sixth largest economy in the world, and it must be poised to engage in serious market reform said Keeley. He explained that Governor Davis put himself into a box, because the Governor wanted to solve the crisis without a rate increase, and immediate action to raise rates and activate market reform didn't happen quickly knowing that the PUC must raise the rates. Keeley believes it will take at least 18 months and maybe as long as three years to get the supply/demand problem in balance. McPherson disagrees with the proposal that Keeley discussed regarding a State purchase of PG&E transmission lines. In any case, this is a very complicated debt problem, which the State's energy experts must solve. Duke spokesman, Tom Williams said that he directs eleven states and various energy plants. Duke is based in North Carolina, and they are aggressively strategizing to build four new plants in California and one plant in Arizona is coming on-line, with a Washington State plant under construction. Duke has been invited to the Central Valley to build another plant. He suggests that the legislature work to expedite the EIR process. He also believes that "forward contracts" for new plants would be prudent because it would stabilize two volatile markets. He said that although this sounds aggressive, many of the existing plants are 30-40 years old and since they're running old equipment, they can break. "WATCH"!

On February 28, a meeting was held in Mountain View's City Hall Chambers, to discuss affordable housing and transportation issues. With the topic "Late for Dinner: Reducing Commutes and Promoting Housing," the speakers began to talk and provide suggestions to solve the current housing/transportation problem. Bud Mission, Chair of the Silicon Valley Manufacturers Group Land Use Committee, said that eight out of ten people cannot buy a median-priced home in Silicon Valley. Rents are up 50-60% in line with the sales prices. Lack of housing will erode our work force. Peak travel is now slower than anywhere in the state; an increasing number of commuters commute longer than two hours, and two thousand passengers ride the train and some stand the whole time for nearly an hour and a half. Businesses cannot staff key support people. Schools cannot find teachers because 50% leave the profession in less than three years. Proposals to build attractive communities near transit areas are needed. Santa Clara County has privately funded the Santa Clara County Housing Trust Fund to raise $20 Million in order to create a revolving loan fund for first time homebuyers, gap financing, affordable housing development, and grants to homeowners. Sixty per cent of the trust fund comes from the private sector. Some of the suggestions from the speakers included:

• Just "slightly" increasing density could help create housing and change the disincentives to affordable housing.
• Because of lawsuits, developers are not willing to build condos and town homes.
• Discouraging frivolous lawsuits and creating insurance programs for quality builders would help the new construction of condos and town homes.
• Build in urban areas near transportation centers.

Banks In Real Estate. C.A.R. President Gary Thomas, President-Elect Robert Bailey and Treasurer Toby Bradley will meet with U.S. Senators Dianne Feinstein and Barbara Boxer in March to discuss proposed regulations permitting banks to enter the real estate brokerage and property management business. The meetings with the two senators are part of C.A.R.'s leadership trip to Washington, D.C. March 5 to March 8. The regulatory change could take effect if the Federal Reserve Board of Governors decides real estate brokerage and property management are financial activities, or incidental to a financial activity. This has the potential to allow banks to cross-subsidize their real estate operations with profits from taxpayer-insured banking operations. REALTOR Rick Violett, C.A.R. Federal District Coordinator for Congressman Gary Miller, was in Washington, D.C. to meet with Miller to discuss the issue. REALTOR Nancy Arndorfer met with U.S. Representative Doug Ose in Sacramento. Both Miller and Ose are members of the House Financial Services Committee. Additional meetings with California REALTORS and other members of the House Financial Services Committee are being arranged for the President's Day recess the week of February 19, according to Marcia Salkin, C.A.R.'s Public Policy Director. For information: http://www.car.org/legislation/businessissues/banks.html