LINDA, Calif. — California taxpayers gave hundreds of thousands of dollars last month to Wayne Hall and his son, Dale, 19 years after a flood submerged their butcher shop in 6 feet of water. The settlement resolved a bitter legal battle so prolonged that nearly 500 victims of the disaster died waiting for similar payments.
The money -- "a nice check," said Wayne, though he won't disclose the figure -- settled the Halls' damage claims from a 1986 levee break that destroyed thousands of dollars worth of meat and all but the shell of their shop near Marysville, north of Sacramento.
In all, California taxpayers will pay $464 million to nearly 3,000 people and their heirs, as well as businesses and their insurers, affected by the collapse of a section of earthen mound along the Yuba River. The total is more than the annual budget of the state Department of Parks and Recreation, the state Department of Fish and Game or the state Energy Commission.
Officials fear the court ruling that spurred the settlement will lead to giant payouts of tax dollars to flood victims in the future. The June ruling found the state liable for damages from the collapse of the 101-year-old levee.
"I think it is going to have long-lasting and rather severe financial effects on the state of California," said Assemblyman Tom Harman (R-Huntington Beach).
Most of the settlement money is for interest accrued over nearly two decades while the state refused to settle. Shortly after the flood, overall damages in the relatively poor towns flooded were estimated at $100 million.
The state had a billion-dollar surplus at the time but argued in court that it was not liable for the damages. This year, the cash-strapped state borrowed most of the settlement money from Merrill Lynch & Co. The state has disbursed $36 million and is to pay back the rest with interest over the next decade.
Gov. Arnold Schwarzenegger's staff said he has asked for legislation to blunt such liability in the future, concerned that it could siphon money from schools, roads and other government services. A bill is in the works, but it has run into resistance from landowners, developers and local agencies that maintain levees, as well as most Republican lawmakers, who opposed the property fees the proposed legislation once contained for levee improvements.
Even with regular investment in levee repairs, experts say some flooding is inevitable along the earthen fortifications that hold back rivers as they flow from the Sierra into the Sacramento and San Joaquin valleys. Experts joke that there are two kinds of levees: those that have broken and those that will break.
At the same time, potential damages are soaring as thousands of homes are built on former peach orchards and tomato fields south of Yuba City and Marysville, within commuting distance of Sacramento. The same periodic floods that once simply washed silt onto fields would now destroy carpets, furniture and cars.
"There's development going on behind levees that we know are not good levees," said Jeffrey F. Mount, a UC Davis geology professor and member of the state Reclamation Board, which attempts to control development in flood plains. "If these levees break, and they will eventually fail, and these people are flooded, the first thing people are going to say is, 'You should have known.' "
A case in point is the 1986 damage claim, called Peter Paterno vs. State of California, which included two trials. In November 2003, an appellate court ruled that the flood victims suffered because of an unreasonable state plan.
The levee was scraped together by men and horses in 1904, improved by federal engineers in 1934 and incorporated into the state's Sacramento Valley flood control plan in 1953. After the state took responsibility, it never tested the heart of the levee to see how strong it was.
Even though the levee withstood floods in 1955 and 1964, its core was made mostly of gravel that was not compressed, and it was located in a place prone to seepage.
"When a public entity operates a flood control system built by someone else, it accepts liability as if it had planned and built the system itself," the appeals court justices wrote.
The state appealed that decision, but in the spring of 2004, the California Supreme Court declined to consider it. Settlement talks began in earnest for the first time, culminating in the recent agreement.
*
The sun was shining Feb. 20, 1986, after nine days of heavy rain, and the Yuba River was starting to recede when a 150-foot section of the levee gave way. Water inundated 10 square miles of land in the communities of Linda and Olivehurst, including the Peach Tree Mall a few blocks from the modest home of Mariel and Pete Paterno.
Scrimping to put two children through college, the Paternos had dropped their flood insurance four months earlier. The flood ruined Mariel Paterno's wedding gown, clippings from her children's first haircuts and French provincial-style furniture.
