The bank has since tightened lending procedures and the stock price has stabilized. The two rival banks were formed in 1989 after the only other locally owned bank, Bank of Loleta, was purchased by U.S. Bank. In a 6-1 ruling, the state Supreme Court Monday struck down Proposition 5, approved by 63 percent of the voters last November, which allowed expansion of legalized gambling on Indian reservations. Justice Kathryn Mickle Werdegar wrote in the majority opinion that the initiative violates the 1984 state constitutional amendment that established the state lottery. The amendment prohibited Nevada-style casinos in California.
Federal authorities have jurisdiction over Indian gambling casinos.
The ruling increased the possibility that voters will again face another ballot measure this time to transform Proposition 5 into a constitutional amendment on the March 2000 ballot. Despite talk of another costly initiative drive from some Southern California tribes, local tribes appeared unfazed by the court ruling. A field of five candidates seek to fill two seats left vacant on the McKinleyville Community Services District by long-time board members. The election is Nov. 2 and the following month the new board members minus Ben Shepherd and Joe Walund will begin service. Shepherd and Walund, who have served a combined 36 years on the board during a time of explosive growth, did not file for re-election by the Aug. 6 deadline.