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Top Stories: July 20, 2009Mass Transit Hammered; Feds Help VCs; School District Woesby Staff on Jul 20, 2009Public Transportation off Track? “It’s a punch in the gut.” That’s how Valley Transportation Authority General Manager Michael Burns describes the effects of the economy on the VTA. With the state’s $26 million deficit still unresolved, the VTA is being forced to take draconian measures, including layoffs and forced furloughs, fare increases, and the reduction or elimination of bus and light-rail service even during peak commuter hours. Though VTA buses reached peak ridership in May 2008, the system is now facing the worst cuts since the dot.com bubble burst in 2001. The two culprits are declines sales tax revenues that sharply exceeded expectations—in some instances as much as 200 percent—and the elimination of $306 million in state funding because of the budget crisis. What people fail to mention is that the Bay Area is targeted to receive as much as $1 billion in federal stimulus money for local transportation projects. But most of that money is going to roads and bridges, where it is expected to provide a one-year retrieve only. The irony is that public transportation serves three of the federal government’s major objectives: bringing the economy back from the brink, dealing with unemployment, and saving the environment. While new projects may create more road crews, that is hardly a consolation for the VTA’s eighty or so operators and mechanics, who stand to lose their jobs, and that number jumps up when considering the soon-to-be unemployed workers at AC Transit and BART as well. And theoretically at least, public transportation should be a top priority of the new “green” economy, especially in San Jose, where traffic is already the sixth-worst in the nation. Instead, tolls and bus fares are expected to go up, while service and employment are expected to go down. When it comes to public transportation, we may have missed the bus. Read More at The Mercury News and KCBS. New Bill Could Open VC-Backed Companies to Federal Funds A new bill, the Enhancing Small Business Research and Innovation Act of 2009, could make Silicon Valley biotech startups eligible to receive federal funding, even if they already have VC backing. According to the new bill, these companies will be eligible for up to $250,000 in phase one and $2 million in phase two. Responses to the proposed change are mixed. Companies with VC backing are largely for, citing the difficulties in accessing capital during the economic downturn as the impetus to the proposed change. Amy DuRoss, Vice President of policy and business affairs at Navigenics, Inc., adds that this is completely in line with the Obama administration’s focus on innovation. On the other hand, Melinda Richter, executive director of the San Jose BioCenter, has seen many companies opposed to the change in law, since they will now be forced to compete against VC-backed companies. One company that will be forced to compete is DNA2.0 Inc., which has received two patents for their work in gene expression with all of their funding from two SBIR grants, totaling just $600,000. Though their success stems from a tight business model, company president Jeremy Minshull welcomes the changes to the law as long as the science behind each application is solid. Read More at the Business Journal. Luther Burbank School District Takes another Hit After their beleaguered school district received a failing grade from a Civil Grand Jury, teachers at the Luther Burbank School didn’t think things could get much worse. They will, now that the school district missed its budget deadline for the fiscal year beginning July 1. With no approved budget, teachers cannot be paid. Board President Antonio Perez said he knew that the four-page budget he submitted in June was incomplete. Nor can the problem be attributed to a lack of funds. The district has been running a surplus in recent years, reaching $2 million—one-quarter of its budget—in the 2007-2008 fiscal year. Now, however, the Santa Clara County Office of Education will have to help the school district complete its budget, which will be voted on by the School Board on July 31. Since no checks can be issued until then, teachers and suppliers, who normally get paid on the 30th of the month, will have to wait to get paid. Read More at KLIV and the Mercury News. Audit Challenges East Side’s Union High School District The Luther Burbank school district isn’t the only school district in San Jose coming under scrutiny. An audit by the Santa Clara County Office of Education found a series of financial irregularities surrounding school superintendent Bob Nuñez and other district officials. Among the problems, over half of the credit card payments made over a 17-month lacked receipts or adequate explanations, including payments made for airfare and meals. Nuñez is also suspected of overcharging for the number of workdays, when he was not in the office—Nuñez’s representatives responded that just because he was not in the office doesn’t mean he wasn’t working—as well as repeat payments for contractors doing the same job. County auditors are also investigating whether he used his position to get a summer job for his son with one of the district’s major contractors. The school district, with 25,000 students, has been facing severe financial difficulties and was recently forced to lay off 200 workers. In December, Nuñez warned that the school would be forced to eliminate high school sports in order to balance its budget. The school board eventually voted to preserve the schools’ athletic programs, but only after parents conducted an extensive fundraising campaign on their behalf. The district also has a history of irregular spending, culminating in the cancelling of trustees’ credit cards in 2004. Read More at The Mercury News. Checkmate for Hacker A federal grand jury in San Jose indicted Gregory Alexander, 42, for hacking into a private email account belonging to Randall Hough. Hough serves on the Board of Directors of the non-profit United States Chess Federation. Alexander is webmaster of www.chessdiscussion.com, a website devoted to the game. Charged with computer fraud and aggravated identity theft, Alexander was released on $100,000 bail. He is scheduled to reappear in court on August 3. Read More at CBS5. There’s No Place Like Home Friends and relatives welcomed the Arnold family at the Brisbane Marina after the returned from a three-year jaunt around the world. The San Jose family left California in 2006, sailing down to Mexico and across the Pacific to the Galapagos and then on to the South Pacific islands, with stops in the Marquesas, Niue, Tahiti, and Tonga. From there they sailed to Indonesia and Thailand, then on to Africa, even sailing in a “caravan” with other vessels as they passed the pirate-infested waters off the Horn of Africa. They crossed the Mediterranean and sailed down the coast of West Africa, before heading to South America and then finally back home. The two Arnold girls, Alex, 16, and Claire, 14, will have plenty of adventures to share with their friends when they begin school this autumn. But for now, after three years of being “boat-schooled” on a 45-foot ketch while crossing the high seas, they are ready to settle back into life at home. And the next time they see a Komodo dragon, it will probably be behind glass at a zoo, rather than roaming freely on a beach. Read More in the Mercury News. by Staff on Jul 20, 2009 |
 VTA has been forced to slash service on it s bus routes and light rail lines. |
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