What’s going on with February rainfall for California? Forecasts using weather models predict some significant period for rain for Northern California starting around the 6th. But most of it stays above SF Bay and Tahoe.
Still it is an impressive rain total around Shasta, our largest reservoir , 5 to 7 inches between now and February 9th.Some parts get 20 inches ? Does not help the ski resorts.
Not Eggsactly
California complaint eggs are indeed costing you more but allowing the chickens to stretch their legs. The latest snapshot is that the cost of extra large eggs delivered to stores in California is 134% more than extra large 12 pack delivered to New York says USDA. Eggs delivered to NY cost an average of $1.40 a dozen compared to$3.28 here. Your price at the supermarket is over $5 for those dozen eye openers. Experts predict a moderation in price .
Who Is Selling All That Wine ? Costco!
Issaquah, Washington-based Costco sold $3.7 billion worth of alcoholic beverages in 2013 to its 75 million members. Costco has 11 alcohol buyers, each of whom buys beer, wine, and spirits for about 60 stores. The typical Costco store has 2,500 to 3,000 customers a day. Costco aims to sell about two-thirds US and a third imported wine, and marks wines up less than 15 percent. A third of the beer sold at Costco is craft beer. Kirkland Signature is a label developed in 1995, applied to wine in 2003, and now represents 20 percent of Costco wine sales.
from Rural Migration News
You got to love mortgage rates,down to a year-long low at 3.60% according to Mortgage News Daily (see chart). Should improve the pace of home sales.
Bloomberg reports that” the fewest Americans in almost 15 years filed applications for unemployment benefits during a holiday-shortened week that typically makes the data more volatile. Jobless claims plunged by 43,000 to 265,000 in the week ended Jan. 24, the lowest since April 2000, a Labor Department report showed Thursday in Washington. The median forecast of 51 economists surveyed by Bloomberg called for 300,000.”
Fresno Bee reports that Mexican owned Bimbo Bakery will be laying off 92 employees in Fresno after a similar layoff last summer as the company consolidates baking to Sacramento. The closure comes as Americans continue to eat less grain products grain products including white bread. In a survey last year 56% said they were cutting back on white bread and 28% said they were cutting back on all breads. But corn consumption is up.Tortillas now outsell many American staples, including spaghetti/macaroni/pasta, hamburgers and hot dog buns, all other fresh rolls,croissants and bagels.
US Approves An Increase In Take Levels For Smelt: Following a request submitted by the Bureau of Reclamation, the U.S. Fish and Wildlife Service (USFWS) approved an increase in the “take levels” for Delta smelt in the Sacramento–San Joaquin River Delta. The unexpected decision implements a modified, interim version of the Reasonable and Prudent Alternative of the 2008 USFWS Biological Opinion (BO) for operation of the Central Valley Project’s (CVP) pumps. The modified BO will increase the incidental Delta smelt take limit from 78 to 196. This decision, however, does not apply to biological opinions on salmon in the Delta.
Lower Fuel Prices – Good For Consumers But Bad For Cities’ Sales Tax Revenues
Other Big Sales Tax Trends Point To Possible Need For New Taxes
January 28,2015
Those lower gas and diesel prices are great for consumer pocketbooks including the good people of Tulare. But in a city where 22% of all sales tax revenues come from fuel sales, a 40 to 50 percent drop in in fuel prices is throwing a big monkey wrench in the City of Tulare’s budget.
Tulare finance chief Darlene Thompson reports the city sales tax increases this past year have been great – exceeding budget expectations by $500,000 as of June 30, 2014.
But in a budget message to be delivered to the Tulare City Council January 30, Thompson says a 40% drop in fuel prices means the “city sales tax budget could be some $650,000 lower” than estimated in the 2014-2015 city budget. That budget anticipated around $14.2 million in sales tax revenue.
Motor City
Tulare is ‘Motor City’ with a dependence on petroleum sales that is much bigger by percentage than many cities because it is a Hwy 99 town with several truck stops and scores of gasoline vendors. More than that, Tulare is also home base for seven trucking companies – some like Knight Transportation with big fleets. Add to that the fact Tulare is the milk production capital of the US with a gaggle of trucks filling up daily to both fetch and ship milk far and wide.
By contrast,right next door,the City of Visalia’s gasoline sales make up about 10% of their sales tax revenues says city Finance Director Eric Frost.
With $27 million in its sales tax fund, almost double what Tulare has to support city services, Visalia expects a $500,000 to $600,00 hit from lower fuel prices prices figuring it at a 50% decline in price says Frost. That’s a big number but smaller by percentage than Tulare.
Gasoline is selling for $2 a gallon today at one Tulare station compared to around $4 last spring.
Trend Is Not Your Friend
But beyond gas, there are plenty of other reasons to worry about future sales tax says Frost,pointing to trends all California cities might want to pay attention to.
This past week at the Visalia City Council retreat, Frost pointed out that the city enjoyed a “nice bump” in sales tax revenue after the recession – up around 8% annually. “But now that has slowed to a 2 to 3% growth” he says.
In Visalia sales sax represents 46% of the General Fund’s revenues.
Since the recession, sales tax revenue to the city has improved with 2007, before the recession, coming in $23.3 million. Since the rebound it has climbed to $26.8 million as of 2014. Visalia enjoys a regional effect and per capita, Visalia collects 67% more than its per capita share as shoppers come to town to trade for soft goods on Mooney and buy at the new car dealerships.
Still,significant trends are pointing downward besides those lower gasoline sales, a trend that after all – could reverse tomorrow!
They include increased per capita spending in California on items and services that are not taxable like healthcare and the Cloud. The Cloud is taking the place of computer-related hardware sales we use to buy at the local store,for example.
“The two big trends that cause us concern is that internet sales have grown from 2% to 12% of all sales with the trend likely accelerating” says Frost. “There continues to be an exemption for internet sales.”
“Secondly, expenditures on items and services that are taxable have gone from 50% to 30% of all spending.”
Frost’s presentation adds that “ millions of Americans are abandoning stores faster than retailers expected” – a trend that does not sound good for Mooney retail.(see retail chart)
On top of all this, some cities like Dinuba have forged sales tax agreements to capture, for example, all Best Buy Electronics internet sales at their distribution center location, something the League of Cities suggests the legislature might want to ban.
What is the bottom line?
Frost’s report says says reduced sales tax revenues will lead to policy choices as some communities decide they need new revenue options.
This may lead some cities to propose new taxes,likely a general tax that requires only a simple majority. These measures pass in California elections about two thirds of the time.
Tulare County’s December jobless rate fell to 12.7% from 13.6% a year ago. Total nonfarm jobs are up 1000 compared to year ago while farm jobs are flat.
December New Home Sales In Tulare County Zoom Higher
New home sales in Tulare County zoomed 57% higher year-over year in December with permits issued for 113 new homes compared t- 72 in December 2013. Helping to boost 2014 numbers was increased activity by locally-owned San Joaquin Valley Homes, the busiest.
Valley Solar Projects Soar
Central Valley’s residential solar projects soared in 2014 according to Construction Monitor. For all of 2013 there were 3952 home solar installations .For 2014 that number climbed to more than double – 8444 permits its issued.
Tulare County’s numbers were 1039 in 2013 and 1842 solar units in 2014.
Sequoia Visitation Up 14 Percent
NPS reports recreation visits to Sequoia National Park are up14% year to date as of December.
Overnight stays at Wuksachi Lodge have boomed – up 38% year to date through December to nearly 70,000 compared to 50,000 the year before.
Two gas stations in Lompoc are among a handful of locations statewide selling gas this weekend below $2.
Both stations are Circle K outlets with one station at $1.96 and the other at $1.99.
With oil prices continuing to decline – more downside is expected.
The average California price is now down to $2.46 says Gas Buddy.
Dinuba is losing food industry jobs in coming weeks as premium juice maker Odwalla shuts down their third shift,estimated at around 40 people and Amber Foods, who employs 50, relocates to Fresno.That company puts together fruit salads. Odwalla,owned by Coke, may be a victim of a larger Coke restructuring after the company posted a 14 percent drop in third quarter profits, and in October warned it would miss next year’s profits as well.Dinuba Chamber president Sandy Sills says employees told her of the third shift layoffs. The estimate comes from a company source speaking to this reporter.
It’s been a bone dry January but look for a wet spell on its way at the end of the month.
Forecast models suggest a period of unsettled weather and multiple storms coming in starting January 26. NWS Hanford says the Valley is likely to see a warm storm busting in on Monday night- a tropical front that unfortunately won’t help snowpack.
Northern California gets wet too in following days with colder storms through the 29th.Importantly estimates are that early February will be wet too.
Here is how the past 30 days have looked and a snapshot of expected rainfall on January 27.
From their website: In consideration of guest safety, resource protection, and guest experience, Badger Pass will temporarily close after business Monday, January 19, 2015. We plan on reopening as soon as we receive the appropriate amount of snow.
Kiss Gestation Pens Goodbye
industry in a tight spot
Looks like the hog industry has decided to stop fighting the inevitable.
On January 10th 2013 Smithfield’s Foods, the largest hog producer in the world with sales of $14 billion announced that their North Carolina subsidiary Murphy-Brown had converted over half of existing sow housing from gestation crates to group pens. On January 23rd 2013 Tyson followed with a similar announcement that they would require Contractors to transition from gestation crates over a seven year period with incentives for more rapid conversion. Concurrently a significant proportion of the membership of the National Restaurant Association, the National Chain Restaurant Association and the Food Marketing Institute announced that they would phase-out purchases of pork from producers using gestation crates. from EggCite.
Kern To Lose Tax Revenue
Kern County supervisors have been warned to expect a $61 million drop in tax revenues this year as a result of the oil-price bust, including a $17 million decrease in property taxes on oil fields.
Mojave Goes Parabolic
The Mojave Solar Project will become the second largest parabolic trough plant in the world, after Abengoa’s Solana Solar Plant in Arizona. Powering more than 90,000 homes, creating more than 2,200 construction and permanent jobs, and preventing more than 350,000 tons of CO2 emissions each year, the Mojave Solar Project has proven itself to be a boon both environmentally and economically.
The Granada Bistro and Hotel plans a 27 room expansion according to a plan submitted by the company to the city. The SLO Cultural Advisory Committee has received the proposal from Lunacy Club LLC to construct a 4-story hotel over the parking lot just to the rear of the Granada Hotel. Currently the upscale hotel has just 17 rooms and features a popular bistro.. The committee will hear the item January 26. The Granada, renovated by the current owner in the past few years was originally built in 1927.
Like the rest of California SLO has enjoyed an uptick in hotel occupancy up about 3.3% in the past year and even higher profitability with revenue measured by RevPAR higher by 10%.
January 15 Mark this day with two big headlines as WTI oil stabilized for the first time in months – up above $50 as we go to press.
10AM: OOPS! Oil went down after this. So much for my clairvoyance
But wait!!! As they say – there’s more.
Gas Buddy reports this morning that the lowest price for gasoline in California is now $1.98 at one northern state station and $1.99 at three others.
So why celebrate oil stabilizing? How about we don’t want to see further “destabilizing” in Russia, Nigeria or Venezuela?
They will be celebrating in Kern County as well where Midway Sunset oil is down to below $40 from $100 a year ago.
