Category: Central Valley

Sequoia Gateway may be affected

-June 28,2023-

San Joaquin Valley Homes wants to build a 303 parcel subdivision in Goshen west of Highway 99. It will likely get approval at the County Planning Commission this week.But the builder needs an OK from another key player- the City of Visalia- who supplies sewer capacity to Goshen from its wastewater treatment plant also west of 99.

But the Visalia City Council heard recently that the plant’s capacity has been affected by needed repairs and the city wants to reevaluate what needs to be done long term as well.

The City sent a letter to the Goshen CSD suggesting new development projects in Goshen be put on hold while the City works to repair and upgrade the plant.

”We were surprised by the letter“ says County Economic Development chief Mike Washam, who has now offered to meet with city officials to potentially “contribute to the solution.”

Visalia city council member Steve Nelsen says they too were “surprised” about the big proposed subdivision project adding that no notice was offered before they saw an agenda item.”Nobody let us know” that the project was on deck, says Nelsen.

“We used to think we had plenty of sewer capacity” but the city has grown and developed rapidly in recent years, he notes, including the industrial park. The big issue is the load of solids that needs to be processed from multiple sources including the big Cal Dairies milk plant.

Visalia first?

Defending the letter to the County,Nelsen argues “we need to make sure we have capacity for growth in Visalia first.”

In recent weeks staff has requested several emergency repairs funding to clean, inspect and repair each of the eight- 62 ft digesters at the plant after discovering a leak that made one of the digesters inoperable. The big issue is how to handle solids from upstream processes typically consisting of primary sludge, scum, fats, oils, and grease. A staff report says digester sludge has also seen a steady increase of disposable wipes and other non-disposable products. The wipes and plastic clump together with organic debris, forming large rag-balls within the digesters, clogging pumps, valves and pipes.
Inspections found the leak prompting staff to call for inspection of all the digesters but not until the first digester is repaired – what is a 6 month process, says a report in May.

It is not just new homes in Goshen of which there are now four subdivisions but the pending annexations in the wing around the outskirts of Visalia now the the City has approved an ag mitigation policy that will allow LAFCO to begin to approve annexations again.

“We need to hire a consultant to sort out all the issues at the WWT plant, ” says Nelsen. The last major upgrade at the plant was 2018.

Movie theater on 99?

Then there is the Sequoia Gateway drama also outside the city boundary but dependent on the city sewer nevertheless. Here too the County is running interference on this Caldwell/99 project.

The most recent news was the withdrawal of the huge resort- Great Wolf – a number months ago and since then – other retail uses at the site have stalled. However a new developer is in the wings who is going through their due diligence on whether to move forward or not confirms Washam.

But the City of Visalia has concerns about this commercial project depending on what and who a developer might want to attract. Washam says the City let them know they were concerned about some uses being considered.

Council member Nelsen says the County has asked if the City would approve a movie theater out there at Caldwell and 99. That has apparently stirred up opposition.

Nelsen says they told the County they would not welcome uses that could be accommodated on Mooney including a new movie theater.

Washam says city officials “got specific ” telling them that they wouldn’t approve some retailers including Dave & Busters, Crate and Barrel and Pottery Barn which like the movie theater could be easily accommodated on Mooney. All four uses are potential new developments that could be located at the Sequoia Mall that the city would love to see filled with new stores.

Developer Dave Paynter has been working hard to fill in the space at the mall after the Regal Cinema closed their doors and the company was allowed to exit their lease as of May 31 through the bankruptcy process. But Paynter may not be giving up on attracting a new theater.

The City was not opposed to the Sequoia Gateway project in general but now does not want a new retail complex on 99 to hurt Mooney – it is a lingering concern in Visalia that goes way back.

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A digester at the Visalia WWT plant
Great Wolf pulled out of Hwy 99 project

-June 28,2023-

People want their entertainment. But in recent years there has been a big shift in where they get their thrills.You don’t have to travel too far to witness a two-fold transformation.

Movie theaters are going dark while the lights and customers are ‘turning on’ at more Valley cannabis stores.

Curtain coming down

In Hanford there were three movie theaters a few years back showing regularly scheduled movies. Now the curtain has come down on two of them.This month the former theater on 11th street will get planning commission approval to convert the empty building to a First Pentecostal Church. The church already owns the property. The second former movie theater on 7th -Metro 4 Cinema has been for sale for years but the 15,000sf building has no offers.They closed in 2020 at the beginning of the pandemic that devastated all movie theatres across the country

In Visalia the former Main Street theater in Downtown will be converted to a simulated golf club according to plans filed with the city. Meanwhile, the Regal Cinema at the Sequoia Mall has closed their doors recently with the parent company in bankruptcy. Court records show that Regal will no longer lease the premises leaving the middle of the mall without a use. But what? The mall developer is working on plans but has yet to announce them.

The pandemic dried up ticket sales, shuttered theaters and ruined finances that pushed Regal’s parent company Cineworld into filing for Chapter 11 protection in September 2022 owing $8.8 billion. The chain, the number-two movie theater in the US, is now set to exit bankruptcy next month.

Cineworld, had 9,139 screens at 747 locations in 10 countries but in bankruptcy court has been paring down its portfolio of leased theaters. Now that includes the Sequoia Mall site as of May 31 according to the real estate firm CoStar.The second Regal Cinema property in Downtown Visalia is for sale.

The nation’s number one chain – AMC- isn’t doing much better with news this week that its stock has plunged to $4 a share compared to $36 this time in 2021. The chain has only one location in the Valley – in Bakersfield.

Even though the pandemic has calmed, customers are turning to at-home streaming for more of their movies, even blockbusters, putting the future of movie theaters very much in doubt.

If more people are staying home for their entertainment they are more likely to be puffing on a joint and popping their popcorn in their kitchen microwave.

Cannabis stores on the rise

Central Valley cities are permitting more cannabis stores in their jurisdictions as a way to increase their tax revenues. That includes Hanford where the city is permitting construction of a third cannabis dispensary- Embarc on 7th and Harris.The chain has a store in Fresno.

The City of Hanford estimates its cannabis tax take will grow from $879 thousand in 2022/23 to $1.3 million in the 23/24 year based on three dispensaries.

Likewise in Porterville where the city council approved adding a third dispensary and inTulare where the city will now allow three retail stores with hopes that tax revenues will top $1 million this fiscal year according assistant city manager Josh McDonnell.The city is budgeting less as a conservative measure.

Woodlake expects to take in over $1 million in the new fiscal year as they count on cannabis operations that grow and manufacture pot products for more of their revenue. Lemoore, too, has permitted cultivation and retail dispensaries to grow their revenue that may reach $3 million.

In Visalia the city council is expected to take a new look at allowing cannabis stores after a recently completed survey saw strong support among the younger population to allow dispensaries. A council vote could come later this year.

The City of Farmersville has seen their expected cannabis revenue decline slightly in the past year but still around $1.3 million.The City of Lindsay with one store in town is expected to approve a second.

The state reports that cannabis sales in 2022 in Tulare County were almost $15 million while in Kings County sales were just under $8 million.

Revenue declines 25%

Despite local growth, statewide pot revenues are declining amidst an apparent glut.

The California Department of Tax and Fee Administration (CDTFA) reported cannabis revenue for the fourth quarter of 2022. As of February 16, 2023, total cannabis tax revenue from fourth-quarter returns is $248,500 million. This includes California’s cannabis excise tax, which generated $128 million; and $120 million in sales tax revenue from cannabis businesses. The total reported cannabis tax revenues do not include outstanding returns. They also do not include locally imposed taxes collected by cities and counties.

For the same period a year earlier, the state reports cannabis tax revenue at $330,500 million – a drop of around 25%.

In November 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act. On January 1, 2018, two new cannabis taxes went into effect: a cultivation tax on all harvested cannabis that enters the commercial market and a 15 percent cannabis excise tax upon purchasers of cannabis and cannabis products. The cultivation tax no longer applies to cannabis or cannabis products starting July 1, 2022. Since January 1, 2023, distributors (including microbusinesses that distribute cannabis) are no longer responsible for collecting and paying the cannabis excise tax to CDTFA for cannabis or cannabis products sold or transferred to cannabis retailers. Cannabis retailers must register for a cannabis retailer excise tax permit and are now responsible for reporting and paying the cannabis excise tax to CDTFA for sales transactions of cannabis and cannabis products. Since the retailers’ responsibility to report and pay the cannabis excise tax to CDTFA started January 1, 2023, their first cannabis retailer excise tax return is due by May 1, 2023.

Pot price plunges

A Forbes article notes that California pot prices are down.“Most of us farmers have been trying to tell the state [regulators] that the marketplace is imploding,” says a grower “The drop in retail sales means the customer is tired of paying the exorbitant taxes and are now buying it from a friend of a friend or the guy on the corner.”

“The wholesale price in California is currently around $665 a pound, which is down 26% year over year, according to Cantor Fitzgerald. Since 2017, the year before legal recreational sales began in the state, and through last summer, the wholesale price of cannabis in California is down over 50%, according to New Leaf Data Services, an institutional-grade wholesale price tracker.”

“All of this means that California—which only has about 1,000 legal dispensaries for its 40 million residents—grows far more cannabis than can be legally consumed within its borders. The cannabis surplus has led to a price war in the legal industry and intense competition from the illicit market.”

A Santa Barbara County, a cannabis local news report says “ Amid a glut on cannabis in California, the prices for wholesale cannabis flower have plunged by half from their peak of $1,400 in 2020 to about $660 per pound now. The state is believed to be producing three times as much pot as residents can consume — much of it grown in Santa Barbara County — effectively fueling the black market where, by most estimates, two-thirds of the sales are taking place.
Statewide, county officials said, the number of active cannabis cultivation licenses has fallen by 20 percent since early 2022, as a host of provisional licenses expired and were not renewed.”

For local cities, the news could mean pot stores here too may also wane.
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Conversion of movie theaters to other uses like golf simulation happening nationwide and locally in Visalia

new Hanford cannabis operator

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-May 10,2023-

The Visalia City Council gave its blessing last week on moving forward with two-decade old plans to build a 3-story Mission Style civic center a few blocks east of Downtown. Most dramatically, they say they can pay for much of the 33-acre construction project with cash money.

The city’s war chest has built up this year to about $110 million according to city finance chief Renee Nagel, “Can we afford that? Yes we can – assuming no recession” projected through fiscal year 24/25.

The savings have been squirreled away in a civic center fund for the past 13 years as most recently- the city has increased general fund revenue even as staff costs were cut.
During the pandemic, as the city sales tax, industrial and retail development blossomed and increased the property tax – all surprised city staff to the upside. Sales tax revenue far exceeded budget estimates according to an April finance report to council. Estimates of sales tax revenue have been too low by 29% cumulatively over three years. Sales tax and property tax monies makes up over 79% of the city budget.One aspect of this is that the city receives sales tax money from recently arrived industrial shippers like Amazon in the past few years due to new state law.

Besides these sources the city has a variety of public safety funds that can be used to help pay for a new Public Safety building planned at the complex, the most expensive single building. Add to that the American Rescue (ARPA) funding that all local governments received from the federal government to help offset losses due the Covid 19 pandemic.

The city still has $13 million from ARPA it can use for this project by paying for salaries that will save the general fund. Add to that when the city moves here in 2025 – they will be able to sell a number of properties Downtown.

The current city hall was built in 1956 replacing a Spanish-style city hall also with towers – now the location of the Visalia Convention Center.

An immediate goal is to launch the construction bidding process to get a firm number for their budget. They also want to “buy” the land here that is still in the redevelopment agency’s hands.

Once hobo jungle

This land at Burke and School was formerly railroad-owned used by both ag uses, industries and car-related shops, next to Farm Bureau’s stockyard across Goshen Ave. The open land, dotted with iconic oak trees is cross-crossed by Mill Creek but its out of the way location made it popular as a former hobo jungle.It was a forgotten part of town.

The city began exploring development of the mostly empty acreage in 2002 and got an EPA Brownfield grant to remove contaminated soil, completing the job in 2010.The move to look east followed city purchase of other railroad land at Oak and Santa Fe where the city transit center is today. That move spurred private development in the blocks east of Visalia’s main Downtown blocks as well as the relocation of car dealers to Ben Maddox.

By 2011 the city began seeking funds to build a park along Mill Creek and has received funding but has not built the park that will be next to the Imagine Children’s Museum.

Now the plan is to start construction on this long held vision by 2025.

Council member Brett Taylor says former city councils saved up for years for this project and with cash in hand “it’s time for a new civic center complex” that can serve Visalia’s council and public safety services in one location The towered expansive complex will look out at parkland to the north toward Downtown.

The only building on the campus now is the VEC emergency call center. Now a new police and fire administration building and adjacent evidence budding will be joined to the west by an overhanging canopy, tower and plaza to the west – connected to the council chambers and eventually a city hall where the public can interface with city staff with a 125 car parking lot.

This last phase would increase the cost of the entire project by $56 million. Council is leaning toward not moving forward on this option for now even though they agree it will indeed cost more to wait and the city does have some of the funding. But for most of the money, finance says the council would have to issue some debt. They want to wait for the economy for now.

Adding it up

The Civic Center land consists of several parcels that are
designated: 15.7 acres Government Use, 17.4 acres Future Development and 33.1 acres altogether. The extra land could potentially draw other public uses including former council member Greg Collins’ plan to build a competition swimming pool on some of the land.Collins was an early proponent of the east Visalia civic center.

Here hare the estimated costs for the new civic center:
Council Chambers Building $ 6.8
Public Safety Administration Building $38.7
Evidence Building $12.2
Plaza/Canopy $ 9.0
Total $81.2M

Total Project Cost Estimate
Soft Costs $16.3M
+ Construction (Hard Costs) $81.2M
Subtotal $97.5M
plus Contingency (10%) = $107Million

Phase 2 Available Funding

Civic Impact Fee Fund $ 8.6 Projected thru FY 24/25 – Assumes no recession
Civic Center Reserve $ 73.1 Projected thru FY 24/25 – Assumes no recession
Police & Fire Impact fund $ 7.0 Would need a 7-9 yr GF advance
Measure T Police & Fire $ 8.0 Takes each Fund balance to $7 m at June 30, 2024
Funds Designated for Civic Center/PS Total $ 96.7
Additional Funding Options – Recommended
GF Building Maint Fund $ 0.8 Set-aside before Measure N passed
ARPA (PS Salary & Benefits Drawdown) $ 13.0

The City Hall phase -on hold now- could cost $51,189,000, Plus Cont. (10%) $ 5,200,000
Total $56,389,
SCHEDULE
• PS&E Spring 2024
• Bidding & Award Summer 2024
Construction Late 2025
Move-In Early 2026

Total cost around $165 million.

-April 29,2023-

NAVFAC Southwest Energy team confirms a solar energy project at NAS Lemoore navy base first announced in 2015 is still moving forward. The idea is to insure the base can operate even if faced with loss of power from the grid. Emergencies like wildfire in California have put portions of the state at risk of going dark with PG&E impacted.
The Navy is working with Arizona-based Bright Canyon Energy on an enhanced use lease agreement to develop an energy resilience project. To insulate the base from external loss of power, a key component of the project will be creation of a microgrid comprised of carbon-free electricity generated by solar photovoltaics and battery storage.The project will generate enough energy during grid contingencies to provide the Air Station with backup power supporting critical infrastructure.Once finalized, the project will enhance grid reliability, protect against base outages, and enhance power quality during normal operations say officials. Details of that size of the solar farm and battery output is not yet released.Nor is a firm timetable to construct the project with the Navy suggesting that development plans are ongoing.
In the past, plans called for the Navy and a private partner to enter into an agreement to allow the partner to use Navy land to construct, operate, and own the proposed solar PV system. The partner would sell the generated power to regional customers as they do with other Central Valley solar farms. The private partner would be responsible for maintenance, operation, and the eventual decommissioning of the solar system.

Tule River runoff 446% of average

Warm up will see 90 degrees on the Valley floor and 70s in the Sierra between now and early May. Concern over runoff is building in the lakebed with the Kaweah expected to be 300% of average, a record 446% of average on the Tule and 426% of average runoff coming down the Kern. Estimates are 50% exceedance as of April 18. Snowpack is largest ever. The LA Times may get some attention from Sacramento reporting “The only thing keeping the rising lake from inundating homes, businesses and the prison in Corcoran is the 14.5-mile-long dirt levee. Local officials want to see the levee reinforced and raised by 3.5 feet.” Locals hope the state will help.

DWR grants will help Coalinga, Huron, Avenal and Allensworth

With California adapting to intense shifts between extreme wet and dry weather, the Department of Water Resources (DWR) announced three projects that will receive support from DWR’s Water Desalination Grant Program, and an additional six projects that will receive funds through a partnership with the National Alliance for Water Innovation to advance desalination implementation and research.
The awarded projects directly support the State’s investment in desalination technology to help diversify local water supplies.
“California faces a range of water supply challenges, and climate change continues to intensify shifts between weather extremes as we’ve seen this season,” said DWR Director Karla Nemeth. “The State is exploring all opportunities to invest in innovative strategies like desalination to meet our growing water needs — including treating brackish water and ocean water where it’s environmentally appropriate on our 840 miles of coastline.”
Water Desalination Grant Program will award $5 million to three projects in Mendocino, Fresno and Los Angeles counties.The local project that will receive funding:

•Westlands Water District Design Pilot Project: In Fresno County, the project will desalinate brackish groundwater from the westside upper aquifer and use salt-tolerant plants to remove salts from the brine. The project will provide cost-effective, reliable and high-quality water to the district and the communities of Coalinga, Huron and Avenal.

In addition to providing support through the Water Desalination Grant program, DWR is collaborating with the U.S. Department of Energy’s National Alliance for Water Innovation (NAWI) to support six projects that will pilot breakthrough technologies to reduce energy demand and costs for desalination projects.One local project will remove arsenic.
•Piloting an Electrical, Modular, and Distributed ZLD Arsenic-Removal Technology
Arsenic is a pervasive, naturally occurring carcinogenic contaminant in groundwater. Thousands of wells in California and around the world have arsenic levels that exceed safe levels, forcing communities to install expensive and hard-to-operate treatment systems or shutter their local wells and travel miles to fill water jugs for home use. This project will demonstrate a new simple, reliable and highly automated electrochemical process that uses iron and electrical current to safely remove arsenic in well water. The team will partner with the community of Allensworth, California, a rural community whose residents must drive miles to pay for retail water from a kiosk.Partners: University of California, Berkeley and Allensworth Progressive Association.

 

Hearing on Foster Farms poultry ranch expansion

The Kings County Planning Commission will a hold public hearing on an application for a Conditional Use Permit No. 20-06 (Foster Farms – Kent Ave Ranch) – The applicant proposes to expand an existing poultry farm to grow turkeys and/or chickens and have the ability to adjust operations required to meet market demand located at 19744 Kent Ave, Lemoore. The proposed project would be implemented in two phases. As Phase 1 of the project, Foster Farms would place up to a maximum of 387,692 chickens or 112,00 turkeys on-site per flock for grow-out operations. For turkey brooding, Foster Farms has requested a maximum flock size of up to 280,000 poults at any given time. In Phase 2 of the project Foster Farms would expand the existing outdoor poultry pens from 75,600 square feet to a maximum of 189,000 square feet. In addition, Foster Farms would demolish and reconstruct all structures and utilities on the existing site, excluding the residential structure, which would be remodeled to current standards. The hearing will be held Monday, May 1, 2023, at 7:00 p.m. in the Board of Supervisors Chambers, in the Administrative Building No. 1, Kings County Government Center, 1400 W. Lacey Blvd., Hanfo

-April 28,2023-

NOAA weather models point to an uncharacteristic wet start to May .The first storm is expected next Tuesday/Wednesday with light rain in the Valley and coastal areas in Central California.Some 1.5 inches are expected in the Sierra between Tuesday and Friday adding to a record volume of precip and snow in the mountains. Some snow is expected.
Storms in the first half of May are pretty unusual says a forecaster at NWS Hanford  Hanford often gets no rain in May but averages 0.26 inches.

Hanford saw only a trace of rain in April after a almost 4 inches in March, receiving almost 15 inches since October 1 and nearly 11 inches since January.

 

 

 

LOS ANGELES, April 28, 2023–(BUSINESS WIRE)–Faraday Future Intelligent Electric Inc. (NASDAQ: FFIE) (“Faraday Future,” “FF,” or “Company”), a California-based global shared intelligent electric mobility ecosystem company, announced today that the Company has received the approval from the NASDAQ Stock Market LLC (“NASDAQ”) to list its common stock and warrants on the NASDAQ Capital Market starting from April 25, 2023. Based on guidance from NASDAQ, the Company expects to receive a second 180-day extension (or until October 28, 2023) to meet NASDAQ’s $1 minimum bid price requirement for ten consecutive trading days if it continues to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the NASDAQ Capital Market, with the exception of the minimum bid price requirement. Per NASDAQ’s standard procedures, the Company expects to receive official notification of such extension on May 2, 2023.

The NASDAQ Capital Market is one of the three listing tiers within the Nasdaq Composite Index. Currently over a third of NASDAQ listed companies are in NASDAQ Capital Market tier. For a company to become part of Nasdaq’s Capital Market, it will need to fulfill certain criteria and requirements, including financial and liquidity requirements and corporate governance requirements. As of today, there are many medium ($2Billion-$10Billion market cap) and large cap ($10Billion-$200Billion market cap) companies that trade on the NASDAQ Capital Market.
Furthermore, on April 19, 2023, the Company received a written notice from NASDAQ stating that the Company had regained compliance with Nasdaq Listing Rule 5620 which requires the Company to hold an annual meeting of stockholders.
FF started the production of its FF 91 Vehicle on March 30, 2023 at its FF ieFactory in Hanford, California and announced the first production vehicle coming off the line on April 14, 2023. The Company also recently announced its three-phase delivery plan for the FF 91 vehicle and continues to work diligently towards the start of delivery of its FF 91 vehicles.

Upside surprise
Conservative Visalia budget forecasters were too low by 29% but now fear future sales tax revenue will shrink

-April 16,2023-
A funny thing happened on the way to predicting tough economic times in Visalia.That did not happen, despite the worldwide pandemic and business shutdowns. City finance staff have been advising the city council on the need to be conservative on budget estimates year after year but the estimates of sales tax revenue have been too low by 29% cumulatively over three years, a city report said this week. Sales tax and property tax monies makes up over 79% of the city budget

The report detailing a look at the next two years says “the sales tax projection is conservative considering the previous three fiscal years (19/20 – 21/22) had a total increase of 29% which was a higher-than-normal growth.” The economy’s strong performance has surprised the forecasters.

This has been the trend as the city adopts a budget each fiscal year ending June 30 for the past five years. The upside strong numbers have included two other important tax revenue streams for the city – property tax and TOT bed tax monies- both higher.

Staff’s conservative approach goes back to 2018 when they projected sales tax to increase by only 1% in 2018/19 to $31.3 million, and 1% in FY 2019/20 to $31.6 million. They were a little light since the actual sales tax revenue came in at $32.4 million in 2018/19 and $34.2 million in fiscal 2019/20. The results were $2 million over what they had budgeted.

In the midst of the pandemic, city staff, understandably, advised continued caution with a forecast of only a 1% increase in FY 2020/21 and likewise in FY 2021/22. Using their growth assumptions, sales tax – they predicted- would be down to $30.0 million in FY 2020/21 and $30.3 million in FY 2021/22.

Here is where there was a big surprise to the upside.

Actual 2021/22 revenue from sales tax surged to $45.7 million as Visalians went on a shopping spree and revenue from big industrial park projects like Amazon also helped bolster our sales tax numbers.Visalia collects a portion when the Amazon fulfillment center here ships products. Federal help to business and to the city also helped. That year the city had budgeted only $31 million in revenue from sales- but was off by almost $15 million!

The next 2-year budget for 2022/23 for the fiscal year we are still in until June, calls for sales tax to increase 2% in 2022/23 to $43.6 million, and 2% in FY 2023/24 to $44.4 million. Staff reasoned that “This projection is conservative considering the previous and current fiscal years have experienced higher than normal growth”

Indeed budget analysts had figured the COVID 19 pandemic,travel and business shutdown would have put the kibosh on growth.

Visalians proved them wrong.

The April 2023 finance report notes that “Last fiscal year, sales tax grew by 12% and is projected to be the same this fiscal year.”

The 23/24 “adopted budget surplus for this fiscal year was $6.9 million and is now projected to be $15.5 million says the council report ,showing that clearly – sales are better than they thought a year ago- yet again.

But the staff argue that now is not the time to look for this upward growth pattern to continue with fears of recession, high inflation, job layoffs and a potential downturn in the economy makes it likely our sales tax will now shrink.

Particularly, since the tax base has grown so fast to a high-level they argue- we’re ripe for a fall.

“The sales tax projection is conservative considering the previous three fiscal years (19/20 – 21/22) had a total increase of 29% which was a higher-than-normal growth. This higher-than-normal growth has also inflated the sales tax base used to prepare projections for this fiscal year and next year(23/24).”

“In addition, sales tax revenue is the most volatile because it is based on consumer spending. This projection is also being conservative due to the continued rise in inflation. The continued splurge spending that is occurring has been good for the economy and is one of the biggest reasons that a recession has not begun. As mentioned earlier in the report, economists predict this extra spending will have to slow down as the cost of living continues to rise and disposable income becomes less.”

So the staff projecting 23/24 and 24/25 tax revenue will shrink by $2 million in the coming fiscal year (24/25) and decline again in 25/26 despite the 40-year trend of a 5% yearly increase and arguably staff missing the estimate mark over the past five years..

Despite the recession worries, staff says the projected surplus for FY 23/24 is $11 million . There is again a budget surplus for FY 23/24 they say – assuming zero vacancies for full time employees and hourlies. In the past the City has seen savings from vacancies and is safe to assume there will be a savings of $1.0 to $1.5 million. This savings has not been included in the projection, reads the report.

So this fiscal year ending in a few months will enjoy a $12 million surplus.

That’s good news. Most of that will be added to a fund earmarked for the new civic center that because of these years of surpluses since 2018 -now is over $60 milion.

You might wonder – isn’t it better that staff be conservative rather than overestimating income? Sure. But it also seems clear Visalia’s economy is stronger than you might think. Looking ahead there are criss-crossing trends with lower housing permits so far this year but expected increases in car sales and a continuing development pipeline in the Visalia Industrial Park. Mooney and Dinuba Ave are again filled with stores and Downtown has lots of activity.

Well respected MuniServices says Calif new vehicle registration that fell 10% in 2022 is projected to increase by 5.5%. Overall they predict state sales tax to avenge to increase in 2023 by 4.25%.

Not that good times last forever.During the Great Recession, sales tax decreased for three years (2008 – 2010) for a total reduction of 26%.

The Press Democrat
April 6,2023

Rural hospitals on edge

Hospital closures, cuts in services loom for some communities. How California may step in to help

Legislative proposals on the table include a bill that would offer emergency loans for hospitals facing closure or those trying to reopen. A second bill involves Medi-Cal, the health insurance program for low-income people. It proposes funneling more money to hospitals by boosting Medi-Cal payments to providers by reinstating a tax on health insurance plans.
In California, six rural hospitals are at heightened risk of closing, according to the Center for Healthcare Quality and Payment Reform. The center does not release the names of at-risk hospitals because a hospital’s situation can change quicker than data may reflect, said Harold Miller, the center’s president. The California Hospital Association said a few hospitals in metro areas are also struggling, but the organization has not publicly named every hospital it deems at risk, noting that when a hospital announces its perilous financial situation it can prematurely begin to lose workers and patients.
Among hospitals that have publicly talked about their troubles or attributed reductions in services and staff to their finances: Hazel Hawkins and Mad River Community Hospital in Arcata have both suspended their home health services programs; Kaweah Health Medical Center in Visalia has laid off at least 130 employees; El Centro Regional Medical Center in Imperial County cut its maternity ward, forcing local families to travel about 25 minutes to the only other hospital in the county.
Most recently, in mid-March, Beverly Hospital, a 202-bed hospital in Montebello, said that in June it will suspend its maternity, pediatric and outpatient radiology services. In a January letter to the state attorney general, the hospital noted its “dire financial circumstances” and said it would be canceling its plans to affiliate with the health care system Adventist Health because “Beverly Hospital does not have the resources to remain operational during the pendency of the attorney general review.” Under state law, the attorney general must approve the sale of nonprofit hospitals.
The California Hospital Association is asking for $1.5 billion from the state for struggling hospitals, and its request is being supported by a bipartisan group of lawmakers. But even supporters acknowledge this is a challenging request when the state is projecting a budget deficit.
“Does the government want to have a facility that could get them through this rough patch? What you don’t want is to hand out a billion and half dollars to hospitals that may not need it.”
glenn melnick, health economist at the university of southern california
Health economists interviewed by CalMatters said state help should be targeted so that any financial aid goes to hospitals in actual need.
“Most of the hospitals in California are in big systems and those systems have financial resources to get their members through. But there are a few that genuinely appear to be at risk if this cost surge continues,” said Glenn Melnick, a health economist at the University of Southern California. “The question is: Does the government want to have a facility that could get them (hospitals) through this rough patch? What you don’t want is to hand out a billion and half dollars to hospitals that may not need it.”
Providing aid to hospitals in trouble is warranted and different from helping other types of businesses because the goal is to protect patients, said Chris Whaley, a health economist with RAND Corp., a think tank.
“When businesses go out of business, even if it is no fault of their own, we accept that as part of capitalism, but in health care, if a hospital goes out of business that usually means a vulnerable patient population has lost access to care,” he said.

Plan would move some prisoners from Corcoran’s prisons

-April 12,2023-

Kings County Chairman of the Board of Supervisors Richard Valle says he expects flood damage could reach $2 billion in property and other economic consequences from foothill water that continues to flow into the Tulare Lakebed around Corcoran. Called “the big melt” the snowpack is starting to stream down from the foothills as the Valley gets its first 80 degree days.

Kings County Ag Commissioner has received estimates of approximately $800 million in Ag losses. And that is only so far,

The escalating estimates are up from a damage estimate of $1 billion printed in the Fresno Bee in the past week.

Valle, who uses social media to communicate with constituents and leaders in Sacramento, pleaded in a video on April 11 on Facebook that “we need funding now” to help raise the levee around Corcoran. He was standing next to the flood impacted levee. With the big state prison just one field over – there is “obviously a dangerous situation” if the levee would overtop.

In the past week a JG Boswell representative speaking at a BOS meeting said to expect 1 million acre-feet of water to swamp the lakebed.The representative responding to tension over where the flood water is going saying they “are trying to work with the County, but 1 million acre feet of water, can’t be mitigated.” He agreed with other local officials that the levees need to be elevated to “save the City of Corcoran and the State Prison facility.”

The worry is that this is just the beginning of trouble with Kings County Sheriff Dave Robinson saying he expects the potential for more flooding to continue until September.

A recent Sentinel report said the “horseshoe-shaped levee that stands between Corcoran and the 1 million acre-feet of snowmelt expected to fill the Tulare lakebed this spring will be raised by 3.5 feet starting immediately, the city and Cross Creek Flood Control District announced Friday.”

Valle told locals on his Facebook page that he is hopeful for state funding to raise the Corcoran levee- something already underway using some local reserve funds but not enough to raise the levee to an adequate height.

Top priority

Valle added he hopes funding for the levee will be announced with a visit by the Governor to the area. He said the state’s top emergency official did come to Kings County and told Valle the flood situation here “was her top priority.”

Valle says experts are estimating just how much snow melt could be heading for the lakebed – information needed to decide how much to raise the levee and what funding levels are needed to do it.

Looking to get the state’s attention, Valle posed for a photo with the two Corcoran state prisons in the background Tuesday noting the state needed to protect the investment in facilities and all the staff and prisoners. The two prisons have 8138 inmates and 9611 staff.The facilities were built just where Tulare Lake once was the largest body of water west of the Mississippi.

View of Corcoran prison shows the Corcoran levee in background

 

Valle has said the state is expected to move some prisoners from the two facilities including the most dangerous ones and a large contingent of medically infirmed prisoners who can’t simply hop on bus if need be. He say he supports the idea.”It’s just logistics.”

Valle adds he is concerned that whatever happens, the state should not close the Corcoran facilities with all the jobs and economic impact that the prisons have here.The state has said they planned to reduce the number of prisoners statewide and close 6 prisons this year. Not here though.”We can’t’ afford to lose the Kings County facilities ” he adds. Each prison has a budget of over $100 million.

Valle says that FEMA had already started distributing emergency supplies around the county placed on high ground.

Valle is the Board of Supervisors lone Democrat – perhaps with a better chance to reach out to Sacramento’s Democratic leaders. The County is expecting the state to add Kings County to President Biden’s emergency funding declaration.