Week in Review

funds from investment pool

The Housing Endowment and Regional trust is yanking $1.4 million from the county investment pool after losing $150,000 in the Lehman Brother’s bankruptcy — approximately the same amount of money the joint powers authority earned in the pool since its inception.

The HEART Board of Directors voted 10-2 in favor of removing all money from the investment pool and researching safer options, said Executive Director Chris Mohr.

"There was a concern for the security of the funds,” he said.

HEART also has money in financial institutions that won’t be moved. Dissenting boardmembers thought more research should be done before removing the money but were overridden by a majority who believe safety is the bigger issue, Mohr said.

The Sept. 15 Lehman collapse rippled through the economy, particularly 19 California counties with investments in it. San Mateo County lost more than $150 million from its investment pool which includes school districts, cities and special agencies such as HEART.

Unlike school districts, HEART is not legally required to keep any funds in the pool. The money was placed there because the county gave the JPA seed money in 2002.

Toll lane idea starts up

Legislation allowing solo drivers to pay up to 50 cents a mile to bypass traffic with approximately 800 miles of Bay Area commuter lanes is expected to speed through the state Capitol after its introduction this week.

State Assembly Majority Leader Alberto Torrico, D-Fremont, introduced Assembly Bill 744, which would authorize development of a comprehensive network of high-occupancy toll — or HOT — lanes on Bay Area freeways, allowing solo drivers the option to bypass congestion by paying a toll to use lanes in which carpools and buses currently travel free of charge.

The legislation would create an 800-mile Regional HOT Network that would include conversion of 500 miles of existing carpool lanes to HOT lanes plus construction of 300 miles of new HOT lanes. The plan would cost $3.6 billion to implement but produce an estimated $6 billion in revenue that would likely be used to make transit improvements around the Bay Area, said Metropolitan Transportation Commission spokesman John Goodwin.

In San Mateo County, the existing carpool lane on Highway 101 beginning in Redwood City will be converted to a HOT lane. Further in the future, Highway 101 will be expanded between Redwood City and Millbrae to allow for new HOT lanes, Goodwin said.

Partners in the Regional HOT Network initiative will include Caltrans, the California Highway Patrol and the Bay Area’s county congestion management agencies.

San Mateo ‘tightens belt’

There will be 23 fewer jobs in the city of San Mateo and residents will be asked to approve two new taxes after the City Council approved this week a two-phased approach to solving the worsening budget crisis.

The San Mateo City Council met in a special meeting Tuesday to discuss the budget reduction process. The city will immediately cut $4 million in jobs and services and begin the process of placing two ballot measures — to increase sales and hotel taxes — on the November ballot to raise another $4 million. It will also ask employees to consider furloughs to help bridge the budget between now and when new taxes are delivered to the city next year.

The cuts come as an ongoing structural deficit balloons from an anticipated $4 million to $8 million amid a weak economy.

The city initially projected a $3 million to $4 million structural budget gap between ongoing revenue and expenses. The recent economic turmoil is affecting nearly all the city’s revenue sources.

The most significant decline is in property transfer tax — a percentage of a property sale collected by the county and delivered to the city in which the property resides. Fewer homes are selling and for less money.

The city estimates it will collect approximately $4 million in property transfer tax in fiscal year 2008-09. It collected $10.5 million in property transfer taxes a year earlier. On average, the city collects $6 million to $7 million annually in property transfer taxes, City Manager Susan Loftus said.

Doctor takes plea deal for illegal prescription

The former Colorado doctor who illegally prescribed generic Prozac online to a Stanford University student who subsequently killed himself pleaded no contest Tuesday to felony practicing medicine in California without a license.

The deal settles Christian Hageseth’s case — a complicated one that stretched over three years, including seven motions to dismiss, an appellate court ruling on jurisdiction and a consistent stance by the defense that county prosecutors could not try him for practicing in the state because he never stepped foot in California.

Although the decision does not bring back John McKay, the university freshman who obtained the drugs from an online pharmacy, prosecutor Jenny Ow said his family is happy with the resolution.

The felony conviction also puts doctors on notice of consequence for their actions via the Internet, Ow said.

"It lets doctors know that if you’re going to prescribe online you better have a California license,” Ow said. "You’re telling people online you are qualified to do what you’re doing and people rely on you.”

In return for his plea, Hageseth was promised no state prison and up to one year in jail. He will be sentenced April 17.