Santa Cruz Sentinel from Santa Cruz, California • Page 1

SERVING' THE CO'UNTY SINCE 18 56 ii ilium a (0)15 50 CENTS Ar Tin-: Sma Cm CI.IKMKM 146m Ykar. Santa Cruz Skxtinki. Plui.ishkks Co. www.santacruzsentinel.com SC 1290466 092603 01 BMI IMAGING SYSTEMS 749 STADIUM LN SACRAMENTO, CA 95834 bDdqxqD hsm today Aptos High suit raises questions about finances, sexual conduct Hare and other administrators, claiming her charges were largely ignored, and that she was harassed for being a whistleblower. The settlement the details of which have yet to be released came just hours after a district official announced an investigation into some of Andrews' allegations, specifically that money was misspent.

Both the settlement and investigation follow a deposition Andrews gave in the case. It gives an unflattering glimpse of the school under Hare, with By DONNA JONES SliNTINEL STAFF WRITER WATSONVTLLE A former Aptos High School administrator has reached a tentative deal in a harassment lawsuit filed against the Pajaro Valley school district. Kelly Andrews, once an Aptos High assistant principal, first raised charges of sexual misconduct and misappropriation of funds by then-principal David Hare more than two years ago. She subsequently filed a lawsuit against the district, includes cash and an agreement to take care of any personnel records that might have damaged her client's reputation. She said no details would be released until the deal is final.

"It's a firm settlement, conditional to make sure we're satisfied with what they do with the paperwork," O'Connell said. Mark Cameron, the district's lawyer, confirmed the settlement, which needs approval by district trustees. Please see APTOS on BACK PAGE loose accounting and on-campus sexual relations between administrators. Hare, who was Aptos principal from 1995 to October 1999, left the district in July 2001 after his teaching credential was revoked in the wake of charges that he had sex with female students while teaching years earlier at a Nevada high school. Hare has since moved from the area, and could not be located to comment.

Andrews' lawyer, Mary-Margaret O'Connell, said the settlement reached Thursday afternoon Capitola recount begins HMOs get rich despite increase in medical costs 'Analyze' flat 'Analyze reuniting Billy Crystal and Robert De Niro, is a disappointing, going-through-the-motions comedy sequel. SANTA CRUZ STYLE, PAGE Bl Pioneering TV exec Roone Arledge dead The man responsible for creating 'ABC's Wide World of 'Monday Night Football' and 'Nightline' died Thursday at age 71. OBITUARIES, PAGE A12 Ft t5- IN DEPTH Church braces for wave of lawsuits State's bishops warn parishioners of threat to assets nW.iiii.il i By MICHAEL LIEDTKE THE ASSOCIATED PRESS SAN FRANCISCO California's biggest HMOs are getting richer even as rising medical costs strain the budgets of their customers, according to financial figures filed with state regulators. The state's five largest health maintenance organizations had stockpiled reserves totaling $3.15 billion as of Sept. 30.

That was $2.2 billion more than they needed to meet the minimum standards of financial health mandated by the California Department of Managed Health Care. The robust reserves, known as tangible net equity, underscore the financial strength of five HMOs that provide health insurance for nearly 18 million Californians. The five HMOs are: Kaiser Foundation, Blue Cross, Health Net, Blue Shield and PacificCare. These HMOs have two to four times more net equity than regulators figure they need under a complex formula 'It's One tyling based on their rev- to make sure enue and expenses. The excess reserves your Company IS increased during the S0Vent, but that summer at all five HMOs except Kaiser, doesn mean which ended Septem- you should be ber holding S616 mil- lion above the regula- allowed to get tory minimum, down fatter while hl yu're gOng HMO officials say their policyholders should draw comfort JAMI1- -OURT, from the hefty Foundation for reserves because they represent a sort of AXI'AYLR AND rainy day fund should Consumer Rights times get tough.

The fat cushions also should protect the HMOs from the financial trouble that bankrupted another health insurer, Lifeguard, earlier this year. "To say any plan has too much in reserve is absurd," said Walter Zclman, executive director for the California Association of Health Plans, a trade group. "Tilings can change very quickly, as we have all learned from looking at business and government in the last couple years. California had a big surplus just a couple years ago and now it has a record deficit." HMO critics, though, view the industry's large reserves as a sign of runaway greed. "It's one thing to make sure your company is solvent, but that doesn't mean you should be allowed to get fatter while you're gouging people," said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights, a watchdog group fighting for health insurance reforms.

Please see HMO on BACK PAGE Shmuel ThalerSentinel Recount observers Jane Armstrong and Vic Marani inspect a ballot as the Capitola City Council election recount gets under way Thursday at the county Elections Office. Workers hand-count ballots in one-vote council win By LAURIE GOODSTEIN THE NEW YORK TIMES LOS ANGELES This Sunday at Mass in California's 1,100 Roman Catholic Churches, priests will read an ominous letter from the state's bishops warning parishioners that their dioceses are about to be hit by an onslaught of sexual abuse lawsuits that could threaten the assets of church schools, parishes and charities. -The bishops' letter is the church's opening counterattack against a little-noticed law passed by the California Legislature that lifts the statute of limitations on sexual abuse lawsuits for one year, starting Jan. 1, 2003. The law allows plaintiffs to sue churches or other institutions, like hospitals or schools, that knowingly permitted molesters to have access to children or minors.

When the law passed the state Legislature unanimously last June, at the height of the outrage over the sexual abuse scandal, California's bishops Please see CHURCH on Page A5 Capitola City Council Stephanie Harlan and Bruce Arthur already have won seats on the Capitola City Council. The fight now Is for the third seat. Dennis R. Norton 1,807 Robert Begun 1,806 L- BEGUN KJ Evelyn Jones was one of the four women tallying the votes. She wore a crystal angel pin on the lapel of her red vest.

"She's watching over us," Jones said of the angel. Jones has been a part-time election worker since 1989 and said coffee helps prepare the mind for the task at hand. "It's not difficult to focus now," she said about two hours into the count Thursday. "But it gets harder to focus and not hear the background noise." The noise level in the office is kept to a minimum so they can concentrate, said Gail Pellerin, elections manager. And if the counters think they need a break, all they have to do is ask.

To help prevent the workers from seeing double when trying to read the ballots and cramped hands while taking the tallies, the foursome switch positions Please see RECOUNT on BACK PAGE By RAMONA TURNER SENTINEL STAFF WRITER CAPITOLA Election officials began recounting votes in the Nov. 5 City Council race Thursday. John Mancini, chairman of the local Reform Party, called for the recount, saying there seemed to have been some confusion to the final count that showed Dennis Norton holding on to his seat by one vote. The Elections Office reported last month that 1,807 voters chose Norton, while 1,806 cast votes for treasurer Robert Begun. So began the task of recounting more than 3,300 ballots cast more than a month ago.

Mancini, Begun and Norton were among the nine community members who watched the recount. Four Elections Office employees performed the recount. They sat around a conference-style table two on one side and two on the other. While one person read the name that had a pen mark next to it, the person next to them eyed the ballot and made sure the names read were correct. On the other side of the table, the two elections officials tallied the votes on paper.

The only other materials on the table were the ballots themselves, pencils, scratch paper and a calculator. WEATHER NORTON State could lose big if United Airlines falters some sun with a possibility of showers. High, 62; low, 45. BACK PAGE INDEX By JUSTIN PRITCHARD THE ASSOCIATED PRESS SAN FRANCISCO United Airlines may be based in Chicago, but more than a quarter of its 83,000 employees work in California, where the carrier provides essential service from small city airports to major hubs in San Francisco and Los Angeles. With the airline's bankruptcy all but confirmed, everyone from mechanics in San Francisco to airport managers in Eureka are wondering how United's troubles will ripple through the state.

The immediate answer Is that no one knows for sure, though the airline promises to keep flying all routes if it files for Chapter 11 The one sure thing Thursday at the airline's sprawling San Francisco International airport maintenance shop was the sense of gloom and a gallows sense of humor. It was a day after the federal government denied United's request for a $1.8 billion loan guarantee that could have helped stave off bankruptcy. "I was planning on working another three years," said Rich Keen, 57, a lead mechanic who has worked 33 years for the airline. "Now, how's Monday Sound?" His frustration was echoed by other rank-and-file United workers, who worried about the possibility of benefit cuts and now-worthless stock that they received In exchange for wage cuts and work rule changes. United accounts for half of passenger traffic United gropes for a strategyD6 at San Francisco, where the company employs 14,000 people.

Another 6,000 people work for the airline at Los Angeles International, where United is the largest passenger carrier and supplies 8 percent of the airport's annual revenue with $39 million in landing fees and rentals. Nearly 1,200 people work for United at Oakland's airport; the airline runs a quarter of the flights in and out of Sacramento. And then there are the smaller airports up and down the state while they don't have many United employees, the airline and its partners do connect places such as Palm Please see UNITED on Page A5 0bituariesA12 0plnionA13 SportsDl State newsA6 Stocks07 StyleBl TV listingsB6 WheelsCl. World newsAll AdvlceB6 Best BetsBl BuslnessD6 ClassifledC2 ComicsB7 CrbsswordB7 Local 'newsA2 1.otteryA12 National newsA7 The Associated Press Ticket agents and baggage handlers check in travelers at the United Airlines terminal at San Francisco International Airport on Thursday. III.