We have a few extra photos lying around from Saturday’s commencement ceremonies at Notre Dame de Namur University in Belmont. In the photo above, Yang Zhou holds her 1-year-old son Raymond.

Former teacher-astronaut Barbara Morgan, above, was the keynote speaker. Morgan, who got her teaching credential at Notre Dame de Namur in 1974, was a member of the space shuttle Endeavour crew that performed a two-week mission in 2007, making improvements to the International Space Station.

Derek Joseph DeGrenier, above, waved to friends during the commencement ceremonies.

Chairman Frank, (Rep.) Bachus, and colleagues –

I thank you for convening this hearing today to examine the devastating impact the failure of Lehman Brothers has had on state and local governments and other publicly funded entities. Although my district has been hit particularly hard, this truly is a national problem, as you will hear from the witnesses today from California, Colorado and Florida.

There are affected communities in at least 20 states, from Alaska to Washington to Massachusetts. Some of the losses are relatively small — only $18 in Tennessee as far as we can tell — but Minnesota lost more than $56 million, Missouri lost $50 million, Oregon lost $173 million, and Arizona lost $61 million. You will hear from one of today’s witnesses that Florida, already hurt hard by natural disasters and the recession, lost more than $465 million.

I would like to ask for unanimous consent to enter testimony from some other affected entities into the record.

As you know, Ms. Eshoo and I have introduced a bill, HR 467, that would require the Treasury Department to repurchase certain Lehman investments held by these government entities at full face value using TARP funds. The Treasury Department asserts it still has more than $135 billion left in its TARP arsenal. It has used hundreds of billions of those taxpayer funds to save Wall Street. We are asking that it use just $1.7 billion of those taxpayer provided funds to save Main Street.

Let’s be clear. Lehman is the only major investment bank the federal government did not prop up last September when Wall Street went into freefall, seemingly overnight. Bear Stearns, the first to be helped — and deemed “too big to fail” — was half the size of Lehman Brothers. Negotiations the weekend of September 13 between the Treasury, the Fed, Lehman Brothers and Merrill Lynch resulted in Merrill — with Treasury’s help — being acquired by Bank of America.

Goldman Sachs and Morgan Stanley were each allowed to become bank holding companies. Lehman then was allowed to go into bankruptcy — the largest in our history. In the words of Nobel Prize winner Paul Krugman, the decision to let Lehman fail was the event that “basically brought the entire world capital market down.”

The decision by the Treasury and Fed to allow Lehman to fail was arbitrary and caught many taxpayer-funded agencies unprepared. They had watched the takeover of Countrywide by Bank of America and the bailout and takeover of Bear Stearns by JP Morgan and concluded, like many others, that since in those cases noteholders had been made whole, Lehman was unlikely to declare bankruptcy.

But Secretary Paulson did not offer Lehman the same guarantees it had offered the others. And if these local governments had chosen to sell their Lehman investments prior to maturity, they would have suffered a definite and substantial loss, negatively affecting the whole investment pool.

It is not like these government bodies were using taxpayer funds to speculate in the market. The public agencies we are talking about invested in Lehman corporate bonds and notes as part of a strict, safe and conservative investment strategy. In fact, most of the debt instruments in question were highly rated right up until the moment of Lehman’s collapse.

San Mateo County’s pooled investments in Lehman were rated A-1 for its “floating rate” securities and A for its corporate bond. That investment pool is prohibited under state law from investing in equities, and is limited to conservative instruments such as U.S. Treasury obligations, highly rated commercial paper, certificates of deposit and the like. Preservation of principal is of primary importance — to minimize credit risk while recognizing and controlling market risk, matching maturities with capital expenditures and other planned outlays. Diversification plays a big role in that effort. San Mateo County only invested 5.9 percent of its pool in Lehman as part of its diversification strategy. It also holds similar investments with Morgan Stanley.

These local governments provide critical services and programs that every American family and business relies on to protect public safety, provide health care services, respond to emergencies and educate our children. Given our current economic situation, these services are more essential than ever, and the local governments providing them are already struggling with greater demand for services and declining tax revenues to fund them. These losses represent hundreds of jobs lost for construction, teachers, public safety, health care, and other services, and class rooms, fire stations, jails and other projects that will halt or never get started.

I believe the Treasury already has the power to do what we are asking. Section 103 of the Emergency Economic Stabilization Act, that we passed last fall, instructs the Treasury Secretary to take into consideration “the need to ensure stability for United States public instrumentalities, such as counties and cities that may have suffered significant increased costs or losses in the current market turmoil.”

We requested that Secretary Paulson take such action last fall, and we have made the same request of Secretary Geithner in February, but have gotten no response.

There seems to be no limit to the amount of assistance we are willing to provide to the likes of AIG, Citigroup, Bank of America, and Goldman Sachs, let alone the foreign interests whose speculative derivative deals have been fully paid through the taxpayer-funded bailout of AIG. Goldman not only has been the beneficiary of $10 billion of TARP money directly, but it has gotten another $13 billion through its credit default swaps with AIG. All while it reported a $1. 8 billion quarterly profit and is seeking to repay its $10 billion in TARP funds because it doesn’t like the compensation strings that come with it.

If AIG had been forced to declare bankruptcy, the financial institutions like Goldman doing business with it would have wound up in court, just like San Mateo County has had to do with Lehman, fighting to get pennies on the dollar for their claims. I say let Goldman repay its bailout and use that money where it is really needed — our local communities.

Restoring the value of these Lehman bonds is perhaps the fastest way to bring relief to communities across America, allowing them to pay their employees, maintain current levels of service and immediately put shovels in the ground on already approved projects.

Maybe in the grand scheme of things $1.7 billion is just not seen as a big enough problem. To the local governments, school districts, sanitation and water districts and the communities they serve, these losses are devastating. How ironic that they should be left wishing they had invested in credit default swaps with AIG — if they had we wouldn’t have to be here today.

Thirteen transportation projects will be reviewed, including projects in Brisbane, Burlingame, Millbrae, Pacifica and San Bruno.

Here are the projects, as listed in a press release from Speier’s office:

City of San Francisco — Ocean Avenue Streetscape project.

City of Burlingame — U.S. 101/Broadway Interchange Reconstruction Project.

SamTrans and CalTrain (2 projects) — Electric Multiple Units and Redi-Wheels Vehicle Expansion.

City of Pacifica — Manor Drive Overcrossing and Milagra On-Ramp.

San Mateo County City/County Association of Governments (3 projects) — San Mateo County Smart Corridors; U.S. 101 Auxiliary lanes from San Bruno to San Francisco County line; Alternative analysis (study) for operational improvement of the U.S. 101/SR92 interchange.

City of Millbrae — Millbrae Avenue Pedestrian Overcrossing Project.

City of Brisbane — Bayshore Boulevard Overlay Project.

City of San Bruno (3 projects) — Caltrain Grade Separation Project; Streetlight Rehabilitation and Energy Efficiency Upgrade; Sidewalk, Lighting, Accessibility and Landscape Improvement Project.

“AIG has shown, once again, that they are incapable of grasping the enormity of the financial mess which they helped create. Despite receiving more than $180 billion in taxpayer money, they are set to reward executives with $165 million in bonuses. Many of the executives are from the same ethically challenged Financial Products Division whose irresponsible practices drove the world economy off the cliff in the first place.

“I appreciate that President Obama has directed Treasury Secretary Geithner to use every legal means to stop the bonuses. If AIG insists that they are unable to change the existing contracts, perhaps it is time for us, as AIG’s largest shareholder, to break up AIG, sell off its profitable state-regulated insurance companies, fire the executives of the Financial Products Division, and put in place a leadership team that respects the American taxpayer.”

We’re a bit late on this, but here’s a clip of Rep. Jackie Speier (shown earlier this month during a tour of Greenbox Technology in San Bruno) on the Feb. 18 edition of “Larry King Live,” where she debated Ben Stein on the merits of President Obama’s plan to help American homeowners facing foreclosure.

Digression: King introduced Stein as a “noted economist,” among other things. But Stein is not an economist, let alone a noted one. He talks and writes about the economy, yes, so you could call him a noted “commentator,” but that’s about it.

In order to be an economist, you should probably have a postgraduate degree. Stein is certainly a very well-educated man, but majoring in economics in college does not make you an economist any more than majoring in philosophy makes you a philosopher.

Speier, who is mourning the recent death of her mother, Nancy, also made some news last week by opposing the omnibus spending bill on the basis of the earmarks it contained. She has also proposed an amendment to a housing bill that would make it easier for struggling homeowners to refinance their loans.

A couple comments from Anna Eshoo didn’t make it into the column. Responding to a question about the fact that President Obama’s efforts at bipartisanship have so far been a dismal failure*, Eshoo said she doesn’t think he’ll stop trying to reach across the aisle:

“The Barack Obama I know is very genuine about reaching out to everyone,” she said. “I think it’s in his DNA. But once having done that, and soliciting viewpoints, I believe he’s a man of action.”

On the subject of how Obama appeared to have let the debate on the stimulus get away from him in the weeks leading up to the vote, during which Republicans dominated the conversation on cable news programs, Eshoo said the Obama administration simply “had a bad week” and may have been thrown off its game a bit when Tom Daschle withdrew his nomination as health and human services secretary.

“It’s a brand-new White House,” she said, referring to the fact that Obama and his advisers are getting accustomed to their new positions. “They’re still putting it together.”

Mouse trap

Speier had an Op-Ed in the Feb. 14 edition of the San Francisco Chronicle on the subject of the salt marsh harvest mouse, which became the source of much confusion after a GOP staffer made a false claim to the effect that efforts to protect the mouse would get millions in stimulus money.

Check out Speier’s Web site for that and a lot more information on the stimulus.

*In two ways. First, the general perception in the media that Obama, despite his overtures to the GOP, has somehow not been bipartisan enough. Second, the fact that Republicans have greeted Obama’s advances with hostility.

Parents braved the weather Friday morning to line up for the opportunity to register their kids for the Merry Moppet Preschool in Belmont. They’d have to stay there until Saturday morning for a chance to register their kids in the private preschool, which is affiliated with the K-5 Belmont Oaks Academy.

This photo was sent to us by Judy Block, of Palo Alto, who spent some time in line on behalf of a grandchild.

But that seems unlikely, especially now that Foster City parents are clamoring for the construction of a fourth elementary school on city land. Some of these parents are well aware that four acres of the 15-acre Mirabella site remain available, since plans for a public charter high school there fell through last summer.

The Foster City Council was never particularly fond of the charter school idea and its backer, the Foster City High School Foundation, so it’ll be interesting to see how it reacts if and when parents of children in the San Mateo-Foster City School District suggest the eastern corner of the Mirabella property as a possible school site.

Regardless, the small but committed group of residents who oppose Mirabella is not going anywhere. In fact, they may be about to amplify their message.

Let’s put aside the questions of the moment — those pertaining to traffic and construction noise and other issues covered by an environmental impact report that the city is currently reviewing — and step back for a look at the bigger picture.

The City Council pitched Mirabella in 2007 as a chance to create a community gathering place, a “village square” flanked by a continuing-care retirement community for seniors and bolstered by a retail complex. Besides creating a home for aging residents, Mirabella would give Foster City something it lacks, city officials said: a true downtown.

But the plan has changed since then, slowly but significantly. The proposed high school is gone. The retirement community has grown in size. And most of the retail space within the complex, according to the current incarnation of the plan, which remains fluid, is located on one side of the public plaza.

The City Council voted 3-1 last July to approve increasing the number of independent residential units in the continuing-care facility from 251 to 350. City officials also allowed the developer to increase its maximum building height from 10 to 15 stories. The development now will be able to hold a total of 490 people, including the residents of 70 affordable housing apartments for seniors.

From the start, the council took a cautious approach to the amount of retail space in the project, not wanting to risk creating a ghost town. One of three finalists to win the bid for the development proposed including a movie theater on the site, but the council turned it down.

In its current form, the project calls for 31,300 square feet of retail space, which will likely be filled with one or more restaurants, a café or two, and shops. There’s room to increase that square footage to 50,000 in a second phase of development.

(As a point of reference, Talbot’s Toyland, the big toy store on B Street in downtown San Mateo, is about 25,000 square feet in size.)

Resident Linda Haskin, of Foster City Friends, who’s emerged as the most vocal critic of Mirabella, worries that the retail will be overshadowed, literally and figuratively, by the retirement community, which will occupy several buildings.

But here’s the question we’re interested in, one that city officials never seem to have discussed. And before we raise it, let’s acknowledge that seniors are indispensable members of any community and that creating a home for seniors in Foster City is in itself a laudable goal.

But here, again, is the question we’re entertaining: If you’re trying to create a bustling city center, do you really want the dominant feature of the area to be a retirement community?

When Mirabella was first conceived, it seemed incongruous that seniors and high school students would be its primary inhabitants. It was hard to reconcile the mental image of seniors quietly taking a stroll or reading the paper with a vision of teenagers slouching on benches, smoking cigarettes and yelling at each other across the plaza.

But at least there would have been a mix of generations. Now Mirabella seems homogeneous. A gigantic retirement community surrounded by a Jamba Juice, a Starbucks, a restaurant and a few stores. That’s your dynamic downtown?

Maybe the residents of Mirabella and visitors to the Peninsula Jewish Community Center will be able to provide enough demand on their own to keep the retail area humming. Perhaps city employees and others will flock to the area for lunch, and special events and concerts will pack the plaza at night. Maybe Gary Danko will open a restaurant and put Foster City on the culinary map.

Or maybe the new heart of the city will wind up being little more than a nice place for Mirabella residents to stretch their legs.

None of this will matter, however, if Mirabella’s developers can’t find the money to build it. Since they asked for a delay in their schedule in December, citing a lack of funding, the economy has gotten worse, not better. We’ll find out soon enough whether all these questions are moot.

The congresswoman was seated up on the rostrum, right along the aisle by the door from which Obama and everyone else emerged from the Capitol. We asked her Friday for her impressions from that day.

“For me, I was overwhelmed by standing so close to history,” Eshoo said.

She said the “excitement was palpable,” whether you were up on rostrum, watching on television or standing among the millions of people gathered on the Mall. She was also struck by the absolute silence that seemed to prevail during Obama’s speech.

She said she was impressed by the speech itself, as was House Speaker Nancy Pelosi.

“I think it was a very important speech,” she said. “The Speaker told all of us the following day that everyone should have a copy of the speech and read it and reread it.”

On Thursday, Eshoo and her colleagues on the Energy and Commerce Committee spent more than 12 hours writing up its portion of the $825 billion stimulus package, writing out the language for provisions having to do with health care, energy and telecommunications.

She said she’s confident that, despite Republican opposition to the bill, there “will be bipartisan support for it when the vote is finally taken.” She said numerous Republican amendments were incorporated into the bill and pointed to the $275 million in tax cuts included in the package.

Speier will be holding walk-in office hours from 11 a.m. to 1 p.m. Unless there is a massive crowd, you should be able to get a few minutes to air your concerns or say hello. It’ll be first-come, first-served.

Speier’s office is located at 400 South El Camino Real, No. 410, in San Mateo. For more information, call the district office at (650) 342-0300.