Welcome to The Sun’s final edition of 2010. With this issue, we wrap up the year by taking a look back at the stories and events that have defined the past 364 days. A lot has changed in a year and we hope that, with each edition of The Sun, we have kept our readers abreast of the latest news.
I’m sure most of us will agree that one of the most notable changes in our Valley this year was the demise of our beloved Sonoma Valley Bank. When the doors closed on what we naively assumed was a venerable institution, many of us had our eyes opened to what had really been going on for months. Some folks lost their jobs, others lost money and all of us lost a piece of our Valley. The fight is on to save the Banco de Sonoma branch in the Springs. Watch The Sun for further coverage.
This year also saw the retirement of City Councilmember Aug Sebastiani whose vacated seat was filled by newcomer Tom Rouse during November elections. Incumbents Steve Barbose and Ken Brown were voted in for another round with newly appointed Mayor Laurie Gallian at the helm. Throughout the year, the council has heard – and will continue to hear – some contentious agenda items including the Tuesday night Farmer’s Market contract, the Watmaugh Bridge, the leaf blower ban and so forth.
Also during the election, the Sonoma Valley Unified School District’s Measure H won by what could be called a landslide. It was heartening to see voters step up and support this bond, which will save the district much needed money by way of increased energy efficiency in all the schools. The savings will be put directly back into the classrooms with the goal of making our schools world class, despite never ending budget cuts from Sacramento.
It seems hard to believe that Sonoma was named the nation’s first “slow city” over a year ago. But a first anniversary party for Cittaslow Sonoma Valley was held in September at the Sonoma Garden Park. The Sonoma Ecology Center shared in the festivities as they were celebrating their 20th anniversary. The Tuscan dinner prepared by John McReynolds was served al fresco in the candlelit garden, a true feast for the senses that defined what it means for our city to have the Cittaslow designation.
Probably the biggest news of the year for us was our purchase of the paper. Just under a year ago – last February to be exact – The Sun’s founder, Bill Hammett, offered us the opportunity to purchase the paper. We are: Barney Lahaye, Kelly Magner, Jody Purdom and Val Robichaud and we jumped at the chance to own our own business. We have been working diligently ever since to put out a quality paper each week as well as run the business end of things. In our time, we’ve instituted a fair amount of changes and introduced some fun new features and columns in addition to our coverage of the news and events of our town. Our most popular issue of the year, the April 1st edition, had Sonomans looking high and low for our new town mascot, the “Chickcow,” and eagerly awaiting the opening of the new pool, complete with volcano and water slide. No one can ever accuse us of not having a sense of humor.
As always, we are Sonoma’s community newspaper – free in print and online. We welcome your comments, your criticism, your ideas and often, your help with photos, news and the like. Together, let’s make 2011 a great year for Sonoma.
The failed Sonoma Valley Bank loan committee and the Board of Directors loaned approx $40 mill of our Valley’s money to two out of town strangers (Bijian Madjlessi-Santa Rosa, and Glenn Larsen-Marin) & bet the bank. These loans were centered in three projects (Sonoma Storage Emporium-Santa Rosa, Petaluma Greenbriar Apartments, and Courtside Village and related affiliates on Sebastopol Rd in Santa Rosa).
These principal borrowers and essentially all their affiliates are standing trial in Civil Court for foreclosure and fraud between January 7th and March 3rd in Sonoma County Superior Court and Washoe County (Reno) Superior Court.
The Board did not accurately disclose exposures in Concentrations of Credit and Lending Limit violations, nor disclose the accurate volume of out-of-area loans up on the 101 corridor in Annual Reports, SEC 10-K and 10-Q’s, Call Reports, Annual Shareholders Meetings, nor the Press. Further the Board and Executive Management published interviews, articles, and an Op-Ed piece as a “Letter from the Board” in the local papers (at least 4) blaming everything from the Government to the economy when in fact it was their failed policy.
In about 2004-2005 The Board approved a lucrative Excecutive Compensation program that was unsafe & unsound and incented only asset/loan growth with blatant disregard for quality, performance, risk grade, or any other risk or “disincentive.” This set up a recipe for disaster that led to introductions from the two principal partners running 5 projects and resulted in lending limit violations and concentrations of credit risk in Construction and Commercial Real Estate on the 101 corridor.
The Sonoma Valley Bank also participated some of these toxic loans with Napa’s Charter Bank that nearly failed that bank as well and the principal borrowers were also affiliated with IndyMac Bank the largest US Bank failure to date. Charter Oak found a merger partner unlike Sonoma Valley Bank however it may be rejected by regulators given the size of nonperforming (most of which are SVB toxic loans sold to them)
When will the Board (Nicholas, Switzer, Downing, Brangham, Page, Pistole, Sangiacomo, Hitchcock) and Executive Management (Cutting) own up and stand accountable for their failed actions? When will they own up to the truth? Thousands of Sonoma Valley residents are enquiring. The bank lost more than $39 million in book value equity, and cost the FDIC $10.1 million thusfar and the Treasury (TARP funds) more than $8.7 million.
Federal investigators are underway searching for fraud, negligence, and reasons for the failure. (FDIC, Treasury (TARP, IRS), DOJ (FBI) are all working to publish the Material Loss Report due out in February-March 2011.