TODAY

– July 22, 2014

Bell back on financial feet after near-bankruptcy

(AP) — A Los Angeles suburb facing potential bankruptcy following a corruption scandal is back on its financial feet.

The state controller had warned that the city of Bell could end the year with a million-dollar shortfall. But City Manager Doug Willmore tells the Los Angeles Times (http://lat.ms/1gSnOAj) that Bell now has two years of reserves in the bank.

The city raised $15.5 million by selling property and got $5.5 million from firms it blamed for failing to prevent officials from giving themselves exorbitant raises.

Five former City Council members and assistant city manager were convicted of crimes.

Former city manager Robert Rizzo has pleaded no contest to 69 criminal counts. He's also agreed to plead guilty to filing a false income tax return.

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Latest Local News

Written on 07/22/2014, 10:48 am by LINDA DEUTSCH, TAMI ABDOLLAH, AP Special Correspondent
(AP) — A person close to the case says Steve Ballmer has met with Donald Sterling, who is resisting selling the Los Angeles Clippers to the former...
Written on 07/22/2014, 10:46 am by The Associated Press
(AP) — As the U.S. economy adds new jobs, Americans must have the skills to fill those jobs, President Barack Obama said Tuesday. Obama spoke at a signing ceremony for bipartisan job-training legislation aimed at improving business engagement and accountability in federally funded programs. Obama said it will give states and cities more flexibility in managing their job-training programs. The White House used the occasion to release a six-month review of federal job-training programs. The review concludes that the government needs to better engage U.S. employers, improve the use of data, and boost apprenticeship programs so workers can earn while they train. The report also said the government is working to tailor training and grants to better match jobs that are in demand. And it stressed the need for regional partnerships and for programs that provide stepping stones for a seamless transition from one level of education to the next. The report was overseen by Vice President Joe Biden.
Written on 07/22/2014, 10:44 am by Associated Press
(AP) — Bay Area Rapid Transit police have started enforcing a ban on sleeping, lying or sitting with legs stretched out at a busy downtown San Francisco station. Agency officials tell the San Francisco Chronicle (http://bit.ly/1losCep ) the campaign at the Powell Street station is intended to ensure that stations can be quickly evacuated in an emergency, and insist they're not targeting the homeless. BART's deputy police chief, Jeffry Jennings, says state law requires BART to be able to evacuate stations promptly. He said a growing number of people are sleeping, lying down or sitting with their legs extended in downtown stations with long corridors. Officers plan to enforce the ordinance at all BART stations.
Written on 07/22/2014, 10:43 am by 
BERNARD CONDON, AP Business Writer
(AP) — Just as the U.S. economy is strengthening, other countries are threatening to drag it down. Employers in the U.S. are creating jobs at the fastest pace since the late 1990s and the economy finally looks ready to expand at a healthy rate. But sluggish growth in France, Italy, Russia, Brazil and China suggests that the old truism, "When the U.S. sneezes, the rest of the world catches a cold," may need to be flipped. Maybe the rest of the world will sneeze this time, and the U.S. will get sick. That's the view of David Levy, who oversees the Levy Forecast, a newsletter analyzing the economy that his family started in 1949 and one with an enviable record. Nearly a decade ago, the now 59-year-old economist warned that U.S. housing was a bubble set to burst, and that the damage would push the country into a recession so severe the Federal Reserve would have no choice but to slash short-term borrowing rates to their lowest levels ever to stimulate the economy. That's exactly what happened. Now, Levy says the United States is likely to fall into a recession next year triggered by downturns in other countries, the first time in modern history. "The recession for the rest of the world ... will be worse than the last one," says Levy, whose grandfather called the 1929 stock crash and whose father won praise over decades for anticipating turns in the business cycle, often against conventional wisdom. Levy's forecast for a global recession is an extreme one, but worth considering given so much is riding on the dominant view that economies are healing. Investors have pushed U.S. stocks to record highs, and Fed estimates have the U.S. growing at an annual pace of at least 3 percent for the rest of the year and all of 2015. Investors have also poured hundreds of millions of dollars into emerging market stock funds recently on hopes economic growth in those countries will pick up, not stall. Worrisome signs are already out there. Unlike their U.S. counterparts, European banks are still stuck with too many bad loans from the financial crisis. Household and business debt there is too high. And confidence is fleeting, as investors saw earlier this month when stocks sold off on worries over the stability of Portugal's largest bank. In China and other emerging markets, the old problem of relying on indebted Americans to buy more of their goods each year and not selling enough to their own people means a glut of underused factories. "The world hopes to ride on the coattails of the U.S. consumer," says Eswar Prasad, an economist at Cornell University, "but the U.S. consumer isn't in a position to take on the burden."
Written on 07/22/2014, 10:41 am by The Associated Press
(AP) — McDonald's Corp. said its profit slipped in the second quarter as sales in the U.S. continued to flag. The world's biggest hamburger chain has been struggling to boost sales in its flagship market amid intensifying competition, changing eating habits and the persistent financial struggles of its lower-income customers. In the U.S., sales at established locations fell 1.5 percent for the period fewer customers came into its restaurants. The company, based in Oak Brook, Illinois, hasn't managed to raise the figure since October. Executives say they're working to improve basics such as operational speed and service, but that they don't expect performance to change significantly in the near term. CEO Don Thompson said the company was moving with a sense of urgency to improve its performance but acknowledged the concerns expressed by analysts about the pace of change during a conference call. "This is not the kind of thing that I would say I sleep well at night," Thompson said.Globally, McDonald's said comparable sales were "relatively flat" for the period. A stronger performance in the unit encompassing Asia, the Middle East and Africa helped offset a decline in Europe. For July, however, McDonald's said it expects the figure to be negative. For the quarter ended June 30, McDonald's earned $1.39 billion, or $1.40 per share. That was short of the $1.43 per share expected by analysts surveyed by Zacks Investment Research. A year ago, the company earned $1.4 billion, or $1.38 per share. Total revenue rose 1.4 percent to $7.18 billion. That missed Wall Street forecasts for $7.29 billion. Shares of McDonald's, which is based in Oak Brook, Illinois, were down 2 percent at $95.19 in premarket trading. Shares have increased 52 cents, or 0.5 percent, to $97.55 since the beginning of the year, while the Standard & Poor's 500 index has climbed 6.8 percent.
Written on 07/22/2014, 10:41 am by Associated Press
(AP) — A San Francisco Bay Area water district is set to vote on the hiring of "water cops" to issue fines to people caught wasting water. The Santa Clara Valley Water District board must decide Tuesday whether to spend $500,000 to hire up to 10 temporary workers to help enforce new state rules on water conservation. The San Jose Mercury News reports (http://bit.ly/1wTs8lS ) that if approved, the workers would respond in person to complaints about wasteful outdoor watering. Last week California water regulators approved fines of up to $500 a day for water wasters after a survey showed that a statewide call to cut water use by 20 percent failed. The three-year drought is the worst in California since the mid-1970s.
Written on 07/22/2014, 10:39 am by Associated Press
(AP) — Richard Parsons, the interim CEO of the Los Angeles Clippers, is due to step into the battle of billionaires going on in probate court over the proposed sale of the Los Angeles Clippers. Parsons, once known as the "Mr. Fixit" of the business world during his tenure as CEO of Time Warner and Citigroup, will be called as a witness Tuesday to support Shelly Sterling's bid to sell the team for $2 billion to former Microsoft CEO Steve Ballmer. Donald Sterling, who owns the team along with estranged wife Shelly, is resisting the sale. Parsons took over leadership of the Clippers in May during the media blitz surrounding the banishment of Sterling from the NBA for making racist comments. Sterling was ordered to sell his team, a plan he seemed to accept until he rescinded his agreement for his wife to sell the team. By then, she had a $2 billion offer from Ballmer. Shelly Sterling also is on the witness list Tuesday along with Dean Bonham, an expert on sponsorship and marketing issues who is also the president of an NBA franchise. He is a leading negotiator of business and sports sponsorship contracts. The high-stakes financial fight centers on whether Shelly Sterling was authorized to make a deal with Ballmer for the team's ownership on behalf of the Sterling Family Trust. While she was negotiating, Donald Sterling revoked the trust, a move designed to rescind his signed agreement for the sale of the Clippers, a team he bought for $12 million. He announced from the witness stand earlier in the trial that he would never sell the team and would be suing the NBA for the rest of his life. Shelley Sterling says her estranged husband has the onset of Alzheimer's disease and is not competent to handle his own business affairs. But that issue is not being litigated. On Monday, the chief financial officer of Sterling's properties said that if the sale does not go through the billionaire may be forced to sell a large portion of his real estate empire to cover $500 million in real estate loans. Darren Schield, who oversees the finances of the Sterling Family Trust, testified that three banks are ready to recall their loans to Sterling because of his decision to dissolve the trust. Schield said if Sterling has to dump $500 million worth of apartment buildings he could destabilize the Los Angeles real estate market. Sterling attorney Maxwell Blecher suggested that Sterling could take the company public in order to raise funds. But Shelly Sterling's lawyer, Pierce O'Donnell, suggested it would be a tough sell "with Donald Sterling's reputation." Schield responded: "There's huge reputation issues. I don't know if anyone would want to go into partnership with him." The NBA banned Donald Sterling for life for making racist statements after the release of recorded conversations. Sterling has denied he is a racist from the witness stand. Schield testified in the probate trial that if Sterling's loans go into default and he needs to refinance, banks would be reluctant to give him that much money at the low rate he has now. If the sale doesn't go through by Sept. 15, the NBA can seize the team and sell it at auction. Donald Sterling has vowed he'll never sell the team, claiming he is the victim of illegally recorded conversations that invaded his privacy.
Written on 07/22/2014, 10:36 am by Associated Press
(AP) — San Francisco lawmakers will decide whether a two-cent-per-ounce soda tax will appear on ballots this fall. The Board of Supervisors is scheduled to decide Tuesday whether to put the tax before voters in November. Eight of the city's 11 supervisors have indicated they will support it. A committee voted to endorse the proposed measure last week. The tax on sugary drinks, including sports drinks and concentrated juice drinks, would have to be approved by two-thirds of the city's voters to take effect. The proceeds would go toward nutrition, health, disease prevention and recreation programs. City officials have estimated that the tax would raise somewhere between $31 million to $52 million a year. Lawmakers in Berkeley voted earlier this month to put a measure on the local ballot that would impose a penny-per-ounce tax on beverages sweetened with sugar.
Written on 07/22/2014, 10:33 am by Associated Press
(AP) — Medical marijuana advocates in San Jose have failed in its petition drive to let voters decide whether to overturn the city's tough restrictions on pot clubs. The City Clerk's office on Monday says supporters came up more than 10,000 signatures short of the 33,262 registered voters needed to put their measure seeking more loose regulations on the ballot in November, according to the San Jose Mercury News (http://bit.ly/1ka6Mk9 ). Last month, San Jose's City Council approved new rules that limit pot clubs to less than one percent of the city's parcels. Those new rules may likely force a majority of the 80 dispensaries in the city to shutter by July 2015 even though those businesses have a year to find a new location. Many dispensaries near homes have already shut down.
Written on 07/22/2014, 10:26 am by Business Journal staff
Valley lodges fared a little better in June in what looks to be an early start to the busy summer season. According to a monthly lodging report by STR, the average occupancy rate in the Fresno area stood at 61.6 percent in June. That's up from 60.1 percent in May and slightly above 61.3 percent in June 2013. The average daily rate for a room in the area increased from $82.46 in May and $81.31 a year ago to $86.06 in the latest month. While the supply of rooms fell from 317,440 to 307,200 in the month, Fresno area lodges reported increased revenues of $16.29 million in June compared to $15.74 million the prior month and $15.38 million last year. Tulare/Visalia area lodges saw the average occupancy rate rise to 76.2 percent in June compared to 67.7 percent in May and 73.7 percent last year. The area's average daily rate picked up to $91.07 compared to $87.24 the prior month and $88.28 a year ago. There were 162,150 rooms available in the Tulare/Visalia area in June, down from 166,904 in May. Revenues increased, however, going from $9.86 million in May and $10.55 million a year ago to $11.26 million in June. Statewide, the average occupancy rate stood at 78.1 percent in June, up from 73.8 percent in May and 77.4 percent a year ago. The average daily rate for a room in California increased to $142.82 percent in the month compared to $137.08 in May and $132.90 in June 2013. With a combined supply of just more than 15.11 million rooms in the month, lodges in the state reported revenues of around $1.69 billion in June, up from $1.58 billion the month before and $1.54 billion the year before.

Latest State News

Written on 07/22/2014, 10:48 am by LINDA DEUTSCH, TAMI ABDOLLAH, AP Special Correspondent
(AP) — A person close to the case says...
Written on 07/22/2014, 10:44 am by Associated Press
(AP) — Bay Area Rapid Transit police...
Written on 07/22/2014, 10:41 am by Associated Press
(AP) — A San Francisco Bay Area water...
Written on 07/22/2014, 10:39 am by Associated Press
(AP) — Richard Parsons, the interim CEO...

Latest National News

Written on 07/22/2014, 10:46 am by The Associated Press
(AP) — As the U.S. economy adds new...
Written on 07/22/2014, 10:43 am by 
BERNARD CONDON, AP Business Writer
(AP) — Just as the U.S. economy is...
Written on 07/22/2014, 10:41 am by The Associated Press
(AP) — McDonald's Corp. said its profit...
Written on 07/22/2014, 9:03 am by The Associated Press
(AP) — A federal appeals court...