Gov. Jerry Brown asks PUC to pass electric bill surcharge

 

Gov. Jerry Brown is asking his appointed members of the California Public Utilities Commission to come up with a way to continue tacking a surcharge on residential and commercial electric bills to pay for an energy efficiency program that did not get renewed by the Legislature last month.

The $400-million-a-year program is set to expire at the end of the year.

"We cannot afford to let any of these job-creating programs lapse," Brown said in a letter to PUC President Michael Peevey. The surcharges -- $1 to $2 a month on a typical residential bill -- pay for a 14-year-old levy called the Public Goods Charge. It pays for retrofitting structures to make them use less energy, for renewable energy subsidies and for research.

"I request that you take action under the commission's authority to ensure that programs like those supported by the Public Goods Charge are instituted -- and hopefully at their current levels," Brown wrote to Peevey.

The PUC will consider opening a legal and administrative proceeding on Brown's request at its Oct. 6 meeting in San Francisco, said spokeswoman Terrie D. Prosper.

"We're pursuing the fastest path to consider maintain funding levels for these programs and policies already underway," Prosper said.

Some environmentalists said they're supporting the governor's effort to revive the Public Goods Charge.

However, Sierra Club lobbyist Jim Metropulos lamented that Brown did not push earlier and more energetically to get enough bipartisan legislative support to pass the bill.

"We were disappointed that the governor put [his bill] out late, if it was one of his priorities," he said.

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Photo: A man looks at energy efficient washing machines at a mall in Baldwin Hills. Credit: Katie Falkenberg / For The Times

Governor signs bill raising doc fees on new and used cars

The documentation fees that auto dealers charge car buyers will go up at least $25 and consumers will get new regulatory protection under legislation signed by Gov. Jerry Brown.

AB 1215 by Assemblyman Bob Blumenfield (D-Woodland Hills) and signed by Brown on Monday allows auto retailers to raise the documentation fees charged for processing auto purchases and lease agreements to $80 from $55 for new- and used-car purchases and from $45 for car leases.

Dealers will now be required to run the vehicle identification number of any used auto for sale on their lots through the National Motor Vehicle Title Information System to check whether the auto has a so-called branded title. Any vehicles showing up as having been totaled or bought back through a lemon law or a victim of some other catastrophe would get a red window sticker warning potential buyers of the auto's history.

Both the new fees and vehicle history checks start July 1.

Insurance carriers, repair shops, towing companies and salvage yards must report totaled vehicles to the database, overseen by the U.S. Justice Department.

The legislation was supported by law enforcement agencies, consumer groups and the California New Car Dealers Assn.

“Buying a car comes second only to the commitment that comes with buying a home,” Blumenfield said.  “With working families striving to stretch their dollars in this tough economy, there couldn’t be a better time to help ensure that family cars are a good and safe investment.

Blumenfield said California is the nation’s largest car market.  Last year, more than 800,000 used cars were sold through dealerships.

Consumer advocates also liked the bill.

“For the first time, auto dealers will be required to provide vital information about a vehicle’s safety, reliability and worth before consumers even start negotiating. In California, millions of the most hazardous cars will be marked with a red sticker to warn consumers that they merit close scrutiny or should be avoided," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety.

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Photo: Assemblyman Bob Blumenfield (D-Woodland Hills), left, and state Sen. Mark Leno (D-San Francisco) at a state budget hearing at the Capitol on Feb. 23. Credit: Rich Pedroncelli / Associated Press

California seeks $17 million in back wages from ZipRealty

California's labor commissioner has filed a $17-million lawsuit for back wages against a San Francisco Bay Area real estate brokerage, ZipRealty Inc., that markets homes statewide and nationally using an Internet-based sales strategy.

The case is the largest minimum wage enforcement action in California history, according to the California Department of Industrial Relations.

The complaint filed in Alameda County Superior Court accuses ZipRealty of Emeryville of not paying minimum wage and overtime pay to hundreds of agents throughout California.

The lawsuit seeks about $7.5 million in unpaid minimum wages, $1.3 million in unpaid overtime and more than $9 million in damages and penalties.

"In times like these, enforcement of the minimum wage is critical to maintaining a floor that allows workers to survive," California Labor Commissioner Julie Su said. "This enforcement is important not just for employees but for hardworking employers who shouldn't have to compete against law breakers."

The suit is related to a September decision by a Kern County Superior Court judge that ruled that local ZipRealty agents frequently received no pay at all, even though as employees they were entitled to get at least minimum wage for all hours worked.

During the trial, ZipRealty argued that it did not need to pay minimum wage or overtime because the people involved were "outside sales persons." The court disagreed, noting that the agents should have been paid by law because they spent less than half their time working away from their offices.

ZipRealty lawyers did not respond to requests for comments on the lawsuit filing.

The ZipRealty case is a symptom of growing problems in the recession-wracked labor market, said Christine Baker, acting director of the Department of Industrial Relations.

"Violations of minimum labor standards are now occurring in a wide variety of occupations, even affecting employees outside traditional low-wage occupations," she said.

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His stock is cheap, so Warren Buffett will buy it

There are many differences between Warren Buffett’s company and most others -– starting, of course, with its outsized success.

But here’s another: Berkshire Hathaway Inc. announced Monday that it will buy back stock simply because Buffett thinks it’s cheap

Berkshire said it will acquire an undisclosed amount of stock, provided that the purchase price is within 10% of book value and that the company's cash holdings exceed $20 billion. The buyback will apply to Berkshire's A and B shares, and will “continue indefinitely,” the company said in a statement.

Berkshire currently has about $43 billion in cash. Its book value is now about $98,700 a share, according to Bloomberg.

Berkshire’s Class A shares surged $8,129, or 8.1%, to $108,449. The stock closed at a 52-week low of exactly $100,000 on Thursday. Class B shares rose $5.72, or 8.6%, to $72.09. Both share classes are down 10% for the year, compared with a 7.5% decline for the Standard & Poor’s 500 index.

Stock buybacks among big companies have increased the last two years, and topped $100 billion in the second quarter for the first time since early 2008, according to Standard & Poor's. The $109.2 billion total was up 22% from the first quarter and 41% from a year ago.

But those numbers are a tad misleading.

Rather than gobbling up shares because they have fallen to irresistable lows, many companies are doing so primarily to offset the effect of employee stock options, according to S&P.

When companies issue options, they need to buy back an equal number of shares to prevent their total number of shares from rising. An increase in total shares would dilute earnings per share, which no company wants to do.

But few company managements are buying shares because they think they’re a bargain.

“Few companies are venturing outside of the box to purchase additional shares, as was the common practice from late 2005 through mid-2007,” said Howard Silverblatt, senior index analyst at S&P.

There would be nothing better for investors than for Buffett to start a trend.

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Photo: Warren Buffett. Credit: Lucas Jackson/ Reuters

 

Treasury bond interest rates jump for second day

U.S. Treasury bond yields are rising for a second straight day as some investors and traders take profits after last week’s big bond rally.

A rebound in stocks also is pulling some money out of bonds and into equities.

The 10-year Treasury note yield, a benchmark for mortgage rates, was at 1.90% at about noon PDT Monday, up from 1.83% on Friday and up from a 60-year low of 1.72% on Thursday.

The 30-year T-bond (charted below) rose to 3.00% from 2.90% on Friday and 2.80% on Thursday.

Long-term Treasury yields plunged Wednesday and Thursday after the Federal Reserve said it would shift its massive bond holdings more toward longer-term securities, hoping to pull interest rates on those issues down further to help the economy.

The Fed also gave investors another reason to head for the relative safety of bonds: In their post-meeting statement Wednesday, policymakers warned of "significant downside risks to the economic outlook."

That triggered a blistering sell-off in stocks that drove the Dow Jones industrial average down a total of 5.9% over two days.

But stocks stabilized Friday, and they’re rallying Monday as investors once again get their hopes up that Europe will avoid a financial collapse. The Dow was up 200 points, or 1.9%, to 10,971 at about noon PDT.

Bill O’Donnell, government bond strategist at RBS Securities in Stamford, Conn., said there is “a lot of chatter” on Wall Street about big investors allocating some of their assets from bonds to stocks as the end of the quarter approaches Friday. The Dow is off nearly 12% for the quarter so far, while bonds have rocketed in value as market yields have tumbled.

But O’Donnell said Treasury bond yields are likely to head lower again unless the economy reaccelerates. He noted that the Fed’s planned long-term bond purchases haven’t even begun yet: That $400-billion program will probably begin next week and last through June.

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Queen Mary gets new management company

A Newport Beach hospitality company that manages hotels throughout the state has been hired to manage the iconic Queen Mary docked in Long Beach Harbor.

Evolution Hospitality, which manages a Courtyard by Marriott hotel in Anaheim and a Hard Rock Hotel in San Diego, among others, took over Monday managing the retired ocean liner, now a tourist attraction and hotel. The company is the third management firm to operate the ship since 2007.

The city of Long Beach bought the Queen Mary in 1967 from the Cunard Line shipping company. Since then, the city has brought in several firms -- including Walt Disney Co. -- to manage the ship and develop about 45 acres of adjacent oceanfront property. In addition to the hotel, the ship features three sit-down restaurants and several ornate ballrooms.

The current lease operators, New York-based Garrison Investment Group, hired Delaware North Cos., a New York hospitality and food service company, in 2009. But Delaware North announced in April that it was ending its relationship with the ship.

Delaware North said it had achieved "its goals of rebranding the attraction with targeted marketing, renovation of the ship’s staterooms, as well as some of the restaurants and meeting spaces. These have resulted in increased occupancy and higher revenue in lodging, food and beverage, retail and attractions."

Before Delaware North, Illinois-based Hostmark Hospitality Group operated the Queen Mary from 2007 to 2009.

A spokeswoman for Evolution said the company hopes to take advantage of its familiarity with the hotel market in Southern California to increase revenue at the Queen Mary.

-- Hugo Martin

Photo: The Queen Mary. Credit: Los Angeles Times

 

 

Fed official says central bank should keep trying to boost growth

Although the Federal Reserve's efforts to stimulate the economy and boost job creation haven't had great success so far, that shouldn't discourage the central bank from continuing its efforts, Fed Governor Sarah Bloom Raskin said Monday.

Her message was a version of the old adage, "If at first you don't succeed, try, try again."

In a speech at the University of Maryland, Raskin said that although the Fed's easy-money policies have succeeded in keeping interest rates down, their effect on growth and job creation have been "somewhat more muted than I might have expected."

The reasons for that could include the trouble banks and consumers have had accessing credit as well as the oversupply of housing caused by the crash of the real-estate market, she said.

But, Raskin said, the conclusion shouldn't be that more monetary easing wouldn't help.

"Indeed, the opposite conclusion might well be the case -- namely, that additional policy accommodation is warranted under present circumstances," she said.

Raskin, an Obama nominee who took office in October, has supported Fed Chairman Ben S. Bernanke's controversial efforts to try to stimulate economic and job growth.

The Fed's efforts have been sharply criticized as fueling inflation, and top congressional Republican leaders wrote to Bernanke last week urging him against "further extraordinary intervention" in the economy.

But Bernanke has been undeterred and has continued to pursue new strategies. They include a $400- billion initiative approved last week to sell some short-term Treasury bonds in its portfolio and buy longer-term bonds in hopes of reducing long-term interest rates.

Raskin was one of six members of the Fed's Open Market Committee that approved the plan, dubbed Operation Twist. Three members voted against it.

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Photo: Federal Reserve Gov. Sarah Bloom Raskin. Credit: Federal Reserve