Morning Splash: Blue Shield to Set 2% Profit Cap, Return Overage; Supes Approve Treas. Island Plan

A plan announced by Blue Shield of California on Tuesday to cap its profit at 2 percent and give back anything over that amount to its health care providers and policyholders was praised by some as the right step during a time of rising health care costs, but criticized by others for not going far enough.

Nearly two decades in the making, a massive plan to redevelop Treasure Island was unanimously approved Tuesday amid concerns over traffic impacts and the loss of hundreds of below-market rate units. With the vote by the Board of Supervisors on Tuesday, more than 8,000 residential units will be constructed on the man-made 550-acre island within 20 years, including a building as high as 450 feet. The project will also include 100,000 square feet of commercial space and 300 acres of park and open space.

After urging city workers to slash their pay and consider ways to shrink their pensions, the San Jose City Council voted Tuesday to swallow the same bitter pill. In an 8-3 vote, the council accepted the 10 percent pay cuts for the mayor and 10 council members recommended by the council's salary-setting commission. In addition to seeing their official pay rate cut from $90,000 to $81,000 a year, their monthly car allowances will drop from $600 to $350. The mayor's official pay rate will be cut from $127,000 to $114,000 a year.

Mayor Marie Gilmore called for an independent review Tuesday into the circumstances surrounding the death of Raymond Zack, who intentionally drowned himself on Memorial Day as police and firefighters watched from the shore. The call from Gilmore came after Acting City Manager Lisa Goldman said that 911 records and other documents detailing the emergency response would be posted on the city's website within the next several days.

Gov. Jerry Brown's administration had a clear message Tuesday for the three federal judges who have ordered California to rid its overcrowded prisons of tens of thousands of inmates -- trust us, we have a plan. In court papers filed on the governor's behalf, state officials assured a three-judge panel they have the right plan to comply with an order to shed more than 30,000 inmates from California's overcrowded prison system. But the eight-page outline remained unclear on how the state will pay for the dramatic shift and hinted prison officials may have trouble meeting court-ordered deadlines to clear prison space within two years.

Gov. Jerry Brown said Tuesday that budget negotiations are teetering on the edge of either disaster or breakthrough, depending in part on whether the handful of Republicans he's dealing with can withstand pressures from their conservative colleagues to oppose taxes. Brown told the Bay Area News Group that the main holdup in talks with a group of Republicans is their reluctance to go along with a so-called bridge tax...Brown is seeking a two-thirds vote for a temporary tax extension on sales, income and vehicle license fees, followed by a ratification vote of the people in the fall. He is trying to reel in four Republican votes -- two from both houses -- without losing any Democrats...

As more than 1,200 parents, children and residents packed an East San Jose church Tuesday night, school officials promised to welcome more charter schools. But they stopped short of pledging to close low-performing schools. School board members from four jurisdictions agreed with parents' demands to improve education for Latino children, but some hedged their answers. When asked if she would work to close five underperforming schools in the Alum Rock Union School District, trustee Darcie Green said she would, while opting to reopen half as charters and half as other models. But she added that closing schools is chaotic and scary, and asked for the audience's help. "It's not going to be easy," she said.

San Francisco will lose power in state government. A portion of The City could be unrepresented in the state Senate for two years. And a host of career politicians’ futures are flailing wildly in the winds of redistricting. Those are the wild possibilities confronting San Francisco’s political leadership this week, after the first peek at how the state’s independent Redistricting Commission — California’s first-ever attempt at politics-free district drawing — may reapportion the lines of power in California.

Three proposals were unveiled Tuesday for a monument at the San Francisco Civic Center honoring the men and women who served in the armed forces. Two of the three proposals are fairly conventional. One features a reflecting pool with a folded bronze flag, and another is an octagonal stone monument containing soil from battlefields where Americans lost their lives. A third is startlingly different. The centerpiece is a wreath made of material that resembles military dog tags, suspended above buried battlefield soil like a halo.

The Sacramento City Council voted Tuesday night to move forward with unprecedented cuts to the city's public safety agencies. Faced with an overflow crowd that spilled into the corridors outside their chambers, the council voted to lay off 80 police officers and place four Fire Department rigs on rotating closure. The city will immediately try to ease the police cuts. Of the 80 officers slated to lose their jobs, 35 are funded through a federal grant that the city will surrender by issuing police layoffs.

The stadium measure Santa Clara voters approved a year ago was supposed to seal the 49ers' move to the South Bay, but like the franchise's attempt to return to greatness on the field, the journey since then has included its share of fumbles. In the past week, the team revealed the stadium price tag has jumped $50 million, to nearly $1 billion, while city and 49ers leaders now say they don't know exactly how much the team will pay to fund the project. Even bigger issues have surfaced to threaten funding for the project -- chiefly the NFL lockout and the governor's plan to eliminate redevelopment agencies -- raising serious questions that weren't there a year ago.

Bay Area cities and counties whose jurisdictions contain the San Francisco and Oakland airports and the ports of Oakland and Redwood City would be required to prepare action plans to deal with rising sea levels under a trailblazing bill passed by the state Assembly last week.The bill would require roughly 75 cities, counties, harbor districts, ports and sanitary districts that administer state-granted coastal public lands to have a plan in place by 2013 to contend with storm surges and flooding expected to result from rising sea levels by the end of the century. Besides airports and ports, it would apply to commercial harbors, wastewater treatment plants and protected tideland areas.

Hercules voters recalled Mayor Joanne Ward and City Councilman Donald Kuehne in a special election Tuesday. Returns showed more than 80 percent of voters in the small East Bay town favored the recall effort. Write-in candidate Dan Romero, who won with 46 percent of the vote, said the recall was a response to perceived cronyism at City Hall and wasteful spending by previous administrations.

California's rebate program for people who buy electric cars has grown so popular that it's about to run out of cash. The state offers rebates of up to $5,000 to clean-car buyers, on a first-come, first-served basis. So many have applied during the current fiscal year, however, that the program's $5 million annual funding will probably be used up before the next fiscal year begins in July, state officials reported Tuesday.

While California experiences cooler-than-expected temperatures for early June, the rest of the country is reeling under a blazing heat wave. According to a team of Stanford University researchers, those furnace-hot temperatures soon may become the summer norm for North America. Nations in more tropical zones could experience “the permanent emergence of unprecedented summer heat.”