The High Desert Report » July 2013

Monthly Archives: July 2013

General

Publisher’s Message-Spring 2013

Published by:

By Joseph W. Brady, CCIM, SIOR
President
The Bradco Companies/TCN Worldwide

I wish to welcome our current, future and long standing subscribers and spon­sors to the 52nd edition of the Bradco High Desert Report, the first and only economic overview of the High Desert region, covering the northern portion of San Bernardino County and the Inland Empire.

Great information in this edition in­cludes a building permit overview by Dr. Alfred Gobar, Chairman Emeritus of Alfred Gobar Associates (Anaheim) and editor of the Bradco High Desert Re­port as it relates to residential permits, nonresidential permits and its cycle that their firm has monitored over the last (10) ten years.

I personally want to thank Mr. Carlos Rodriguez, Chief Executive Officer of the Building Industry Association (BIA/Baldy View Chapter), Mr. Den­nis Draeger, Assessor-Recorder-County Clerk for San Bernardino County, and our longstanding sponsor Ms. Violette Roberts of Mojave Desert Air Quality Management District for their articles. We wish to welcome back 33rd District Assemblyman Tim Donnelly; the Coun­ty of San Bernardino Workforce Invest­ment Board, and congratulate Ms. Kelly Reenders on her position as Director of San Bernardino County Economic De­velopment Department.

The leadership in the First District of San Bernardino County is led by Mr. Robert A. Lovingood, our newly elected Supervisor. Robert and his staff are do­ing a tremendous job at the grassroots level to bring transparency and results to the First District Region.

We appreciate the articles from Ms. Vici Nagel of Academy for Grassroots Orga­nizations, Ms. Yvonne Hester of Mojave Water Agency, and Ms. Jane Dreher with San Bernardino Associated Gov­ernments (SANBAG) and her update on the exciting road projects that the High Desert is experiencing.

As a Trustee at Victor Valley Commu­nity College District, I would also like to thank Mr. Bill Gruelich our Public In­formation Officer for his update on the great things occurring at Victor Valley Community College.

Nearly (2) two months ago I had a brief conversation with Mr. Robert A. Mar­tinez, AIA a well-known and respected architect within the region about new laws affecting Americans with Disabil­ity Act (ADA), and we have asked him to write a rather complete but concise article about new laws etc. Robert is an expert in the field and we strongly en­courage people to call him if they are in need of an ADA inspection assessment etc.

We always appreciate hearing from our friend Ms. Terri Kasinga of Caltrans, who always keeps the Inland Empire apprised of the many projects that Cal­trans is continually working through. I recently drove to San Diego, I com­mented to my wife Deborah on how many hundreds of millions of dollars is being spent within the Inland Empire and more specifically within our county on road improvement, new interchang­es, new overpasses, and new off ramps etc.

We wish to welcome the articles and input from Senator Jean Fuller and our friends at the Southern California As­sociation of Governments (SCAG) un­der the great leadership of Mr. Hasan Ikhrata.

Lastly, we could not complete our en­deavors to properly portray the High Desert economy without the help of our friend Mr. Mike Borja, Sr. City of Adelanto, Mr. Orlando Acevedo Town of Apple Valley, Mr. Oliver Chi City of Barstow, Ms. Lisa K. LaMere City of Hesperia, and Mr. Doug Robertson who stepped up on very quick notice to assist us with this endeavor representing the City of Victorville.

The economy is improving, although slowly and we are all feeling that the “bottom” of the market is hopefully be­hind us. The next (6) six months I be­lieve is critical to determine where we really are in this economic revival. It is my hope, as it is our staffs, including our associates at Barstow Real Estate Group and Alliance Management Group, that those reading this have an enjoyable summer and fall as we prepare for the 53rd edition of the Bradco High Desert Report. We hope to have the 53rd edi­tion completed by October/November of this year.

Lastly, and most importantly, if you wish to continue to receive a copy of the Bradco High Desert Report, any statisti­cal reports, op-ed articles that we post to our website for free, please register at our website at www.TheBradcoCompa­nies.com/register. Thank you.

Economy General

Economic Recovery Continues-Slowly

Published by:

By Dr. Alfred J. Gobar
Chairman
Alfred Gobar Associates

Historically, there has been a close correlation between reported nonagricultural wage and salary employment and number of occupied dwelling units. This relationship has been tested for the United States as a whole, showing a long-term (50 years) correlation coefficient (R2) of about 0.985. Individual analyses of housing markets in 140 U.S. Metropolitan Areas confirm this correlation.

Currently, the Federal Reserve Board seems to believe that a strong housing market will cause growth in employment, whereas most of the research Alfred Gobar Associates has done over the past decades suggests employment is the independent variable, and housing absorption is a dependent variable.

In any case, as shown in Exhibit A, nonagricultural wage and salary employment in Southern California as a whole has been increasing over the past twelve months. This measure of economic growth for the Southern California economy as a whole (Ventura, Los Angeles, San Bernardino, Riverside, Orange, and San Diego Counties) is illustrated on a county-by-county basis in graphic form in Exhibit A. In percentage terms, employment growth in the Inland Empire has been substantially stronger than in other parts of Southern California, suggesting that the local employment base accounts for an increasing share of the total housing market in the Inland Empire, which for several decades prior to 1990 was dependent on commuters to jobs in Orange, San Diego, and Los Angeles Counties.

Growth in nonagricultural wage and salary employment in the Southern California area between 2012 and 2013 amounted to approximately 150,000 jobs. This is fairly typical of “normal” economic times in the Southern California region and suggests increase in housing demand at a rate of about 120,000 units a year, allowing for second homes, some increase in vacant units, etc.

Strong employment growth is evident for professional and administrative jobs, in the education and health fields, and in leisure and hospitality. State and local employment actually decreased over the most recent twelve months.

The pattern of change in nonagricultural wage and salary employment in Southern California, in the current recession as, compared with similar trends for the recession that began in June of 1990is illustrated graphically in Exhibit B. Extrapolation of these trends suggest that employment levels in Southern California will be back to the pre-recession level (of 2007) in late 2016 or early 2017; i.e., we still have a little ways to go to get back to where we started. Meanwhile, we are building a few new units.

Anecdotal information in the media suggest an exploding housing market. To some degree, this is an illusion. The large proportion of cash buyers implies that professional investors account for a large share of the market. In essence, when a speculator buys a foreclosed home for cash, rehabilitates it, and then sells it to a user, the entire transaction is equivalent to only one net sale of a housing unit to an ultimate user; i.e., the formation of a new household to buy or rent the incremental dwelling unit generates two sales—one to the speculator and the final sale to the user. In most normal circumstances, the formation of a new housing consumer generates one sale. The current market also is, in part, an illusion fueled by incredibly low mortgage interest rates.

Building permit activity in the High Desert is illustrated in Exhibit C. During the first three months of 2013, a total of 81 new units were authorized by permit, all of which were single-family homes. The largest number of new units authorized was in Victorville, followed by Apple Valley and the unincorporated area.

A linear extrapolation of 81 units per quarter suggests an annual rate of new development of 324 units a year, or 4.0 percent of the level of building permit activity that was achieved in 2005 (8,295new units were authorized by permit in the High Desert in 2005). The current level of development represents about 8.0 percent of annual average building permit activity in this area from 2000 to 2010.

The supply-side of the demand and supply equation is not accelerating at a rate likely to result in shock in the near term.

Permit valuation data for 2012 and 2013 are not available. Information for 2011, however, shows a high average permit value per unit for new single-family units, suggesting that the limited amount of new housing being developed in the High Desert includes a larger-than-average proportion of custom homes, which would typically carry a higher permit value per unit.

Exhibit D summarizes nonresidential building permit activity on the HighDesert. There is little recent activity except for some new retail construction in Barstow and industrial development in the unincorporated High Desert. The total for the first quarter of 2013 is at an annualized rate of about $100 million worth of permit activity, which is less than the aggregate for 2012 or any other prior year shown in Exhibit D.

Exhibit E expresses this information as a percent of San Bernardino County totals. The High Desert is not constituting a large proportion of the county’s industrial and retail development. This is to be expected since these uses tend to be driven by either an urban environment or an increase in the consumer population.

Another interesting manifestation of the recession is that the composition of employment in Southern California is changing. Historically, nonagricultural wage and salary employment data are collected on the basis of a survey of employers. This data do not provide a basis for estimating unemployment. Another measure of total employment as well as of unemployment levels is based on a household survey in which respondents report the number of people in the household who are employed and also the number of people in the household who would like to be employed, but who are not (unemployed) and further information regarding part-time work, type of employment versus the employed person’s training and education, etc. Historically, the level of employmentthat could be deduced from the Household Survey has exceeded the employment level estimated on the basis of the Employer Surveys, with the nonagricultural wage and salary employment estimate being about 85.0 to 87.0 percent of the estimate derived from the Household Surveys. This suggests that 13.0 to 15.0 percent of employed people worked in jobs as independent contractors, self-employed entrepreneurs, etc. The most recent data for 2013 indicate that the nonagricultural wage and salary employment sector as reported by employers is a smaller percentage of total employment than typical and that, therefore, independent contractors, self-employed people, etc., are an above-average proportion of the total; i.e., a larger-than-usual “informal” job base.

This ambiguous employment is likely to represent an increasing share of total employment as Obamacare goes into full force with restrictions on employers in terms of providing medical insurance relative to full-time versus part-time total employment level, etc.

In the next few years we are likely to see a larger proportion of total employment who will be people whose employment is not reported on the basis of the Establishment Survey and, therefore, the relationship between change in nonagricultural wage and salary employment and number of occupied units will imply that it takes fewer jobs to support the absorption of a new dwelling unit. That phenomenon may already be appearing to some degreebecause of the trend lines illustrated in Exhibit F.

The data discussed above implies that full economic recovery is likely to be two to three years in the future. A larger proportion of the housing market in the Inland Empire will be supported by locally-employed people than has been true in the past. Land absorption (the economic variable of interest to many of the readers of this newsletter) at a rate of 120 acres per 1,000 new residents of the Inland Empire is likely to be fairly modest for the next two to three years. Sometime during the reasonably near future, real inflating-adjusted interest will have to come above zero percent on an after-tax basis, which raises the potential for a cosmic economic problem at the national and international level of how we cope with the huge amount of debt and high interest rates in an environment where we need economic growth. The economist whose ideas account for a lot of our current problems (John Maynard Keynes) may have had this situation in mind when he responded to questions about the long-term risks of his policy implications that, “…in the long run, we will all be dead.” Could it be that the long run is finally catching up with us? At the age of 81, my odds of avoiding the long run are a lot better than those of the typical reader.

Economy General Property

Homeownership Policy Priorities-A Federal Perspective

Published by:

By Carlos Rodriguez
Chief Executive Officer
Building Industry Association (BIA) Baldy View Chapter

Every new home built creates three jobs, as well as expands and increases the tax base that supports schools and our community.

Our homes are the foundation of strong communities, and it is imperative that we pay attention to the debate about housing policy occurring at the national level.

Thanks to national policy that has acknowledged the importance of the home in American family life for almost a century, generations of Americans have counted on their homes for their children’s education, their own retirement and a personal sense of accomplishment.

Despite the fact that most Americans want change that will mend the housing market, create jobs, and boost the overall economy, policymakers are proposing radical changes that threaten the dream of homeownership for millions of current and future Americans.

The policies that are being considered could negatively impact Americans’ ability to buy a first home, keep their current home, or enter into the move-up market.

Mortgage interest deduction

Eliminating or limiting the mortgage interest deduction would impose a huge tax increase on millions of middle-class homeowners and discourage prospective buyers.

Changing the deduction would cause after-tax housing costs to increase and housing demand to decrease.

Reduced demand would depress home prices – produce a sizable loss for existing homeowners – leave more homeowners underwater, and fuel even more foreclosures.

Such a change in home values could weaken the economic recovery and perhaps drive the nation’s economy back into recession.

Mandating 20 percent down payments

The national Qualified Residential Mortgage standard that is being proposed by federal agencies would require a minimum 20 percent down payment and other stricter qualifications, which would keep homeownership out of reach for most first-time home buyers and middle class households.

It would take 12 years for the typical family to save enough money for a 20 percent down payment on a median-priced single-family home, according to National Association of Home Builders estimates.

Other research has found it would take even longer.

Creditworthy borrowers denied homeownership opportunities

Even though there is pent up demand for homes in many parts of the country – the construction or sale of which would create jobs and support local economies – lenders are not making loans to qualified home buyers.

Overly restrictive lending standards prevent creditworthy borrowers from buying homes, which slows the housing recovery and hurts the economic recovery.

Restoring the flow of credit to qualified homebuyers will boost the housing market, help put America back to work and strengthen the economic health of communities across the country by providing tax revenues that local governments need to fund schools, police and firefighters.

Just as each home is important to the family that owns it, housing is vitally important to local, state, and national economies.

It is critical that homeownership remains attainable and that access to safe, decent and affordable housing remains a national priority.

General Politics Property

Assessed Values on the Increase

Published by:

By Dennis Draeger
Assessor-Recorder-County Clerk
County of San Bernardino

Proposition 13, overwhelmingly approved by California voters in June 1978, is the basis for property tax assessment today in California and all of its 58 counties. Prior to the passage of Proposition 13, property taxes could increase dramatically from year to year based on the market value of the property. The tenets of Proposition 13 limits the tax rate to 1 percent plus additional rates necessary to fund local voter-approved bonded indebtedness. It limits the assessed value increases to a maximum of 2% per year on properties that did not undergo a change in ownership nor had completion of new construction. Proposition 13 placed explicit limitations on the power of government to impose additional property taxes and it requires real property to be assessed at its current market value upon a change in ownership and new construction is to be reappraised at its current market value as of its date of completion. Proposition 13 has been amended numerous times since 1978, resulting in several change in ownership and new construction exclusions from reassessment.

When Proposition 13 was originally enacted in 1978, it did not provide the assessor the legal authority to reduce assessments resulting from a decline in market value. California real estate was appreciating at record levels in the late 1970s so the drafters of Proposition 13 did not have the foresight or envision a need to allow assessors the ability to reduce assessments resulting from economic conditions, depreciation, damage, obsolescence, or other factors causing a decline in value. Proposition 8 was approved by the voters in November 1978 to remedy this oversight in Proposition 13. Proposition 8 allows the assessor to make temporary reductions to assessed values when property has been damaged or its value has been reduced by other factors suchas economic conditions. The assessor can recognize declines in value if the market value of the property on lien date (January 1st) falls below its Proposition 13 value, or stated otherwise, the value to be enrolled in any year is the lower of a property’s Proposition 13 value or its current market value.

During the mid-2000s, San Bernardino County experienced unprecedented appreciation in real estate prices in all areas of the county which resulted in double-digit increases to the assessment roll for years 2004 through 2007. The 5 High Desert cities and adjoining unincorporated areas showed a particularly robust increase in real estate prices with a corresponding increase in their assessed values for years 2004 through 2007, then stabilizing in 2008. The peak of the real estate market in San Bernardino County occurred in 2007, stabilized in 2008, and then began its steep decline. During the late 2000s, the 5 High Desert cities and adjoining unincorporated areas were especially hard hit with decline of real estate values and substantial decreases to the assessment roll. Beginning in 2008, the County Assessor’s Office began reviewing thousands of decline in market value requests and also proactively reviewed assessed values county-wide. Overall, more than 200,000 county-wide property values were temporarily reduced under the provisions of Proposition 8 and approximately $32 billion of assessed value was removed from the assessment roll for years 2008 through 2012.

The real estate market is now recovering in San Bernardino County, but some areas are recovering at a greater rate than others. This is particularly true in the High Desert area of San Bernardino County where some areas are recovering at a much greater rate than others as indicated by a comparison of median home prices between 2012 and 2013. Apple Valley, Hesperia, Victorville, Phelan, and Wrightwood (I disregard Yermo due to a small number of real estate sales) are showing strong signs of recovering. Adelanto, Barstow, and Pinon Hills median home prices are increasing but at a lesser rate than the other High Desert areas. Lucerne Valley’s median home price is flat and I do not place a great deal of weight on Newberry Spring’s 73% decrease due to limited number of real estate sales in that area.

For property owners, an increase in the market value of their real estate holdings is generally a good thing except when it comes to property taxes. Many property owners who had received Proposition 8 reductions since 2008 may see an increase in their 2013 assessed value, which will result in a slight increase in their 2013 property tax bill which they will receive next September. Proposition 8 reductions are temporary reductions that recognize the fact that the current market value as of a particular January 1st lien date has fallen below it Proposition 13 value. Once a Proposition 8 value has been enrolled, it is reviewed annually as of the January 1st lien date to determine if its market value is less than its Proposition 13 value. These Proposition 8 values can and do change from year-to-year as the market fluctuates and if an increase is warranted, the increase is not limited to 2%. which only applies if the property is assessed at its Proposition 13 value. Now with the real estate market in a recovery mode and the Assessor’s Office in the process of reviewing approximately 160,000 parcels that are under Proposition 8 status, we anticipate a significant number of parcels will see an increase in their assessed value. Let’s say for examplea single family parcel located in Apple Valley has a Proposition 13 value of $142,800 as of 1-1-2013. Last year for 2012 the property owner requested a Proposition 8 review and it was reduced to $106,000 as of 1-1-2012. It is now being reviewed for the 1-1-2013 lien date and market value is determined to be $125,750. This is an 18.6% increase from the previous year but it is allowable because properties under Proposition 8 provisions are not subject to the 2% annual increase limitations that apply to those enrolled under Proposition 13 provisions. Continuing on with this example, next year the assessor reviews the assessed value for the 1-1-2014 lien date and market value is determined to be $160,000. The assessor will reinstate the Proposition 13 value of $145,656 ($142,800 plus 2%) because in no case may a value higher than a property’s Proposition 13 value be enrolled. Once the parcel’s Prop 13 value is restored it will now be limited to the 2% increase, unless it changes ownership or experiences new construction.

Air Quality General

High Desert Air Quality Improves Significantly over Past 12 Years According to New Report

Published by:

By Violette Roberts
Community Relations & Education Manager
Mojave Desert Air Quality Management District

The California Air Pollution Control Officers Association has released its annual air quality report California’s Progress Toward Clean Air for all 35 local air districts in the state, docu­menting dramatic reductions in un­healthy levels of fine particulate pol­lution in every county reporting air quality data.

Fine particulate pollution – also known as PM2.5 – is associated with a wide range of health effects from increased hospitalizations to premature deaths. The report also shows a general trend of improving air quality for ground-level ozone – the primary component of smog – although some counties and their air district face unique challenges in reducing levels of that pollutant.

The report contains statistical infor­mation on ozone and PM2.5 air qual­ity for 2000 and 2012 for each coun­ty; statewide air quality trends and detailed descriptions of air pollution control programs at each air quality district.

The High Desert portion of San Bernar­dino County – which is under the regu­latory authority of the Mojave Desert Air Quality Management District – was one of only eleven county regions in the state where no exceedances of the federal 24-hour PM 2.5 standard (35 micrograms/cubic meter) occurred in either 2000 or 2012. PM2.5 is pri­marily formed in the atmosphere from gases, such as sulfur dioxides, nitro­gen oxides and volatile organic com­pounds, and is also directly emitted into the air from fuel combustion and as fugitive dust.

The report also highlights a 19% de­cline in exceedances of the federal 0.075 part per million ozone stan­dard which occurred throughout the MDAQMD’s 20,000 square mile ju­risdiction during the last twelve years. In 2000, 84 days were recorded dis­trict wide, while in 2012, only 68 days occurred. Meanwhile, “good” Air Quality Index days measured in the High Desert between 2000 and 2012 increased from 173 to 184, respective­ly. AQI levels are considered good when levels on the color-coded report­ing scale fall between 0 and 50, and air pollution poses little or no risk.

“Thanks to our collaborative partner­ships with the regulated community and local residents, High Desert air quality continues to improve and serve as a top reason for businesses to relo­cate to the region,” said Eldon Heaston, Executive Officer for the MDAQMD, adding that the MDAQMD’s business-friendly approach to regulation serves as another strong incentive for indus­tries to consider the High Desert.

California and its individual air dis­tricts have made remarkable progress in cleaning the air during the past three decades in spite of dramatic increases in population and driving. From 1980 to 2010, the state’s population in­creased by 65 percent and daily miles driven by all vehicles increased by 137 percent. But thanks to a compre­hensive air pollution control strategy, smog-forming pollutants were cut by 55 percent during the same period. California’s largest industrial plants also cut their greenhouse gas emis­sions by 17 percent between 2008 and 2011.

These improvements have occurred in spite of the fact that neither the state nor local air districts have the author­ity to regulate federally controlled sources of air pollution, including ships, locomotives, and aircraft.

For a copy of California’s Progress Toward Clean Air, or to learn more about the High Desert’s air quality, visit www.mdaqmd.ca.gov.

General Politics

Save our Courts-Revive our Economy

Published by:

By Assemblyman Tim Donnelly
State of California
33rd Assembly District

This year the state has the opportunity to correct a massive injustice that has been looming over our trial court system for years. The governor, however, did not include any new funding for our ailing courts in his latest budget. It is up to the legislature now and our response will have far reaching implications, not only for the judicial branch, but also for our economy.

The administration of justice is a core duty of government; it is also a necessary function within a free market system.

With California ranking among the five states with the highest unemployment rate and topping the charts for the worst states to do business in, we cannot afford to scare away any more businesses who rely on a properly funded court system to navigate lawsuits, enforce contracts, or settle disputes.

Over the last five years, California’s judiciary – the third constitutionally mandated branch of government – has been cut by over $1 billion. This has created a backlog of cases, caused court closures, and led to hundreds of staff layoffs. In San Bernardino alone, 8 of 13 courts have already shut their doors.

Access to an open court room is crucial to a thriving economy. According to a survey cited in USA Today, 71% of small-business owners said that they would delay hiring new employees while being sued. Further, many businesses caught up in litigation struggle to maintain customers and to get necessary loans. It is important that these businesses have access to a fair and speedy trial so they can continue contributing to our economy.

Despite the fact that our judiciary is a key indicator of our economic health, the California budget has historically underfunded certain regions of the State’s County Court system, including San Bernardino County. That is why I have introduced AB 1313, which will allocate up to 12 additional judicial positions each year to the counties with the greatest disparity between their current allocation and Judicial Council’s recommendation.

This is not an issue to play politics with. All of us rely on a high functioning court system and our very form of government depends on its existence.

If you are interested in supporting AB 1313, and other measures to improve court funding, please contact me at assmblymember.donnelly@assembly.ca.gov. Your voice is invaluable in this fight to reinvest in justice.

Economy General

County of San Bernardino Workforce Investment Board

Published by:

As the economy continues to show signs of recovery, County of San Bernardino businesses are pursuing new opportuni­ties for growth. The County is doing its part to support business growth through On-the-Job Training programs. Steeno Design Studios and Hi-Desert Medi­cal Center are examples of High Desert companies experiencing business im­provement. These companies are tak­ing advantage of Workforce Investment Board programs designed to offset the cost of hiring and training the new em­ployees needed for expansion.

Steeno Design Studios is a Hesperia-based architectural firm that provides land development, site and building de­sign, consulting, and general contract­ing services for a variety of industries, including residential, retail, office pro­fessional, and industrial projects. The company needed to add two drafters and an office assistant to keep up with in­creasing demand.

The technical nature of Steeno Design Studios’ work made it costly to train new employees. Fortunately, the Work­force Investment Board’s (WIB) On-The-Job Training program offered the perfect solution. The company received partial reimbursement for training costs through the On-The-Job Training pro­gram. This made it affordable to prop­erly prepare the three new employees in the diversified and highly technical du­ties of a busy architectural office.

Thomas Steeno, owner of Steeno De­sign Studios, said , “Working with the County of San Bernardino Workforce Investment Board’s Business Resource Team provides beneficial services that promote job creation in our local economy. It empowers our company to confidently hire from a pool of locally unemployed professionals. Each time we work with the Business Resource Team and the On-The-Job Training pro­gram, we know it means success for theemployee hired and for our company. We will continue to utilize the On-The-Job Training program and look forward to the future employees gained through these services.”

Hi-Desert Medical Center is also show­ing signs of growth. Once challenged by the economy, the Hi-Desert Medical Center recently added six full-time reg­istered nurses and saved $25,000 in hir­ing and training costs with the assistance of the On-the-Job Training program.

“When we learned about the On-the-Job Training program, it sounded too good to be true,” said Lionel Chadwick, Chief Executive Officer, Hi-Desert Medical Center. “The financial and professional support provided by the Workforce In­vestment Board’s program reduced our expense, limited our risk, and helped us recruit excellent employees at no cost to us. It was the answer to our growing pains.”

The On-the-Job Training program reim­bursed the Hi-Desert Medical Center for a portion of a new hire’s wages during the initial training period. All six em­ployees, now fully trained and having completed the probationary period, have been permanently hired on full-time at $28.04 per hour.

The County of San Bernardino Work­force Investment Board is dedicated to providing the services necessary to help employers continue to grow. Through careful analysis of the local economy, the Workforce Investment Board is helping to provide an educated work­force to expanding businesses.

Businesses interested in learning more about or enrolling in the no-cost servic­es provided by the County of San Ber­nardino Workforce Investment Board can visit www.csb-win.org or call (800) 451-JOBS.

General Transportation

High Desert Corridor-Spring 2013

Published by:

By Robert Lovingood
First District Supervisor
County of San Bernardino

Of the duties of the 1st District Supervisor in San Bernardino County, one of the most important responsibilities for the economic future of the High Desert is to co-lead the High Desert Corridor Joint Powers Authority (JPA) —a two county special authority (LA and San Bernardino) created in 2007 to jump start the planning and construction of the High Desert Corridor, by creating the state’s first Public Private Partnership (P3).

When the JPA began, environmental planning of a highway east of the US Hwy. 395 in Adelanto it was already underway, ending at SR 14 in the Lucerne Valley. A separate Caltrans highway widening project existed within Palmdale City Limits. Both were called the “High Desert Corridor Project.” There was no middle connector of the projects. Please see map below.

Without traditional gas tax funding available, the JPA jolted the project to life using an international financing model where private sector financing, backed by user fees, would be used as the primary source of construction, operation, and maintenance funding. In the USA, this model is known as a Public Private Partnership (P3).

To succeed as a P3, we need to plan and finance the middle connector betweenAdelanto and Palmdale, so that the P3 extends from the area surrounding a new highway interchange with the I-15 at Falschion Rd. Financing would also emanate from simultaneous construction of rail and green energy components—more info below.

This eastern terminus of the HDC P3 project is in very close proximity to the Southern California Logistics Airport (SCLA) and Apple Valley Industrial Park, both already operating with master planned logistics facilities. Logistics facility plans in Adelanto and Hesperia and even Barstow will benefit from the critical new access the HDC will bring. And importantly, post-construction, sustainable logistics and jobs will be stimulated, at the same time reducing the need for commuting down the hill.

Environmental Document Drafting Underway, Completion In December 2014

Voters in Los Angeles County passed a November 2009 ballot measure naming the High Desert Corridor environmental work among projects to receive funds. About the same time the two-county HDC JPA project was ranked near the top of potential P3 projects at the LA County Metropolitan Transportation Authority (Metro). Subsequently, in May 2010, with talented Metro executives willing to take on management, coordinate with SANBAG, and combine Metro’s P3 consultant’s analysis, the HDC JPA orchestrated regional consensus for Metro to lead the HDC project’s environmental work under CEQA and NEPA– to cojoin the existing environmental work underway in the Victor Valley, and the JPA’s P3 plans, with the Caltrans work underway in Palmdale. The Draft EIS/R is on schedule for release in the winter of 2014, the final document in December 2014.

Rail And Green Energy Corridor Added To HDC Project EIS/R

In 2009, the JPA had formed an alliance with XpressWest (XW) to collaborate our Draft Environmental Impact Statement/Report (DEIS/R) with an extension to XpressWest westward—so XpressWest could first build a segment from Vegas to Victorville, then turn westward to the Palmdale Transportation Center on tracks within the HDC.

Incorporation of a rail connection of the XW Station and the Palmdale Transportation Center Metrolink Station is now included in the Metro/ Caltrans EIS/R alternatives analysis, as part of the HDC DEIS/R.

That allows for a future connection between XW in Las Vegas and Los Angeles Union Station, and access to Metrolink for Victor Valley residents. Solar power generated in the right of way for electric powered rail was endorsed in concept, to make the rail and highway components energy independent and self-reliant.

The Two-County Environmental Document (DEIS/R) Managed By Metro

The HDC DEIS/R with rail connectivityto XpressWest and Metrolink, a Green Corridor and a Bikeway was officially dubbed a “Multipurpose Corridor.” This incorporated rail and right-of-way for green energy purposes into the EIS/R by Metro in March of 2012.

Strategic Multipurpose Corridor Components

  • Highway/Expressway (including tolling in the middle section between US 395 and 100th St. in Palmdale)
  • Green Energy (solar production and/ or transmission facility with connections for other renewable energy sources to be connected to the grid)
  • Feeder High Speed Rail (HSR) (connector service tracks from the private sector XW station in Victorville to the PalmdaleTransportation Center)
  • Bikeway ( Route has been included for further analysis)

The purpose of the EIS/R, started by Metro in September 2010, is to study alternatives that improve east-west capacity, safety, goods movement, connectivity to airports, and rail while also contributing to the state’s greenhouse gas reduction goals.

We are fortunate to have Metro and its dynamic staff and Caltrans District 7 taking the lead on this two county effort, and working with SANBAG, the JPA, and the cities along the way. The HDC EIS/R Project Team, led by Robert Machuca of Metro and Karl Price of Caltrans District 7, is currently conducting technical studies on highway and rail alternatives. A Draft EIS/R document is on schedule to be circulated in the spring of 2014, and a final document completed late in 2014.

*July Public Meetings*

Four public meetings are being scheduled for July for the HDC Multipurpose Corridor including two each in Los Angeles and San Bernardino counties. In addition, a live webcast will be provided at one of the meetings in each county.

Dates and places are in the box on page 12, notification of the meetings will be sent out closer to the meeting dates, but stakeholders are encouraged to visit the project website to obtain the latest project information and also to use the GeoSocial Interactive Map that has been created for this project.

This interactive map tool allows users to dynamically interface with project cities, alignments, and other features to get information and also geo-code comments on the map that can also be shared by social media.

*You can visit the project website at www.metro.net/hdc

I invite you to check it often.

General Nonprofits

Academy for Grassroots Organizations

Published by:

By Vici Nagel
President & CEO
Academy for Grassroots Organizations

The nonprofit sector plays an important role in San Bernardino County’s and the High Desert’s communities and economy. Not only do nonprofit organizations provide services that improve the well-being of local residents, they also support the local economy by offering job opportunities and purchasing goods and services from local businesses.

A new report from the San Bernardino County Capacity Building Consortium (Consortium), of which I am a member, outlines how nonprofits are a vital component of the local economy and represent a great deal of untapped potential. According to the Consortium’s study, in 2010 nonprofits secured $2.5 billion in out-of-county revenue … and spent it locally to create jobs and purchase goods and services. These dollars also supported infrastructure and services provided by local government through $219 million paid in state and local taxes.

Unlike other businesses which recirculate existing local dollars, the nonprofit sector is a magnet attracting new dollars into the local economy by securing foundation, state, and federal funding. And, most of those dollars stay in the local economy through the nonprofits’ purchasing of goods and services and their employees’ spending on housing, food, necessities, and entertainment.

Another important fact that the Consortium’s report identifies is that the nonprofit sector is a major generator of jobs in San Bernardino County. The employer of 6% of the county’s workforce, the nonprofit sector employed 48,792 people in 2010. The significance of this number is demonstrated in its comparison to the 47,200 people employed by the “Transportation, Warehousing, and Utilities” sector for the same period; a sector many understand to be important to our region’s economy. Add to those 48,792 direct jobs employed in the nonprofit sector, an additional 48,090 jobs that the sector indirectly supported through its and its employees’ spending, and you can see how vital nonprofits are to our county’s workforce and economy.

But the good news doesn’t stop there. While nonprofits generate economic impact, as do other local businesses, there is an important distinction: nonprofits provide a “triple benefit” by (1) bringing new dollars into the economy, (2) improving local residents’ quality of life through the direct services they provide in our communities – such as health services and recreational activities, and (3) they generate a cost saving to society – such as those that accrue when residents use community-based health care rather than expensive emergency rooms or when graduates of job training programs leave public assistance or find a better job.

Nonprofits also represent vast untapped potential for our economy! Many people have heard about the paltry $3 per capita San Bernardino County nonprofits receive from foundations as compared to a statewide average of $119. While this is indeed a problem, it is also a huge opportunity. Nonprofits receive income from a variety of sources in addition to foundation funding, much of which comes from outside the region. With greater investment in helping local nonprofits get stronger, the return on that investment could result in billions of additional dollars infused in to our struggling economy.

For example, in 2010 San Bernardino County received just $1,018 per capita in federal grants compared to a national average of $2,213. That is a $1,195 percapita disparity, or in other words, our county received approximately $2.4 billion less than the average allotment of federal grants … in just one year. What would you invest to bring an additional $2.4 billion to our county every year?

At Academy for Grassroots Organizations we believe that investing in our nonprofit sector is crucial to the region’s quality of life and each year we invest a great deal in the sector; supporting and strengthening it is our mission. By providing groups with meaningful opportunities to connect, exchange ideas and share resources; by advocating for and supporting their efforts; and by helping them learn how to professionalize management and fundraising, we endeavor to create a sector which contributes to a good way of life for local residents. Each year we work with hundreds of organizations, volunteers, and nonprofit professionals to ensure that local:

  • Families have the supportive services they need to be healthy, safe, and successful
  • Children are educated and nurtured
  • Resources, including government resources, are used efficiently and effectively where they are needed most
  • Businesses have a desirable, safe, healthy community in which to prosper

But we can’t do it alone! Collaboration is a core value of our organization and in this work we partner with: (1) the High Desert Community Foundation that provides a financial-oversight vehicle for local projects and start-up groups, (2) the Victor Valley Community Services Counsel that provides and supports services for seniors, (3) local cities and hospitals working together as Healthy High Desert to improve the built environment and poor healthoutcomes, (4) United Way, consultants, and other nonprofit capacity-building organizations through the Consortium, (5) our Board of Directors and Advisory Council of business and nonprofit professionals who oversee and evaluate our efforts, (6) The Community Foundation serving the Counties of Riverside and San Bernardino that provides funding to local organizations and donor development services, and (7) numerous businesses, foundations, and local governments that provide resources and expertise to accomplish our goals.

So my challenge to you, dear reader, is … join us also!

Get involved in a local nonprofit. Volunteer local. Give local. And help us not only improve our communities, but also improve the local economy at the same time.

If you would like to check us out at one of our High Desert Resource Network meetings, please come as my guest. For our schedule of meetings and trainings and to register please visit www.AcademyGO.com. If you would like a copy of the San Bernardino County Nonprofits Economic Impact Report you can send your request to me at Vici@ViciNagel.com.

I hope to see you soon!

General Water

High Desert Communities Focus on Water Projects and Program with an Eye to the Future

Published by:

By Yvonne Hester
Community Liaison Officer
Mojave Water Agency

A new spirit of cooperation among the High Desert communities, evidenced in recent joint marketing efforts, bodes well for planning water projects and programs for the Mojave Desert. An update of the 2004 Mojave Integrated Regional Water Management (MIR­WM) Plan is underway, and offers communities new opportunities to plan for water needs.

Leading this effort is the Regional Wa­ter Management Group comprised of the Mojave Water Agency (MWA), Victor Valley Wastewater Reclama­tion Authority, Mojave Desert Re­source Conservation District, Morongo Baseline Pipeline Commission, and the Technical Advisory Committee to MWA.

The planning process is a collaborative, stakeholder-driven effort to manage all aspects of water resources in the region and set a vision for the next 10-plus years of water management in the High Desert. During this process, partici­pants will discuss water supplies, wa­ter quality, flood management, water rights, water resources, and more.

As the agency charged with ensuring sustainable water supplies in the re­gion, Mojave Water Agency carries out the plans and programs recommended in the MIRWM Plan.The first integrat­ed plan yielded huge dividends for the High Desert region. Over the last 10 years $170 million in local, state, and federal dollars have been invested in lo­cal water infrastructure and water sup­plies. This included the construction of pipelines and groundwater recharge sites, investment in new water supplies, development of an aggressive water conservation program, and removal of invasive species in the Mojave River.

Among these projects is the recent completion of the Regional, Recharge and Recovery Project, called R3. This project delivers State Water Project water from the California Aqueduct in Hesperia to recharge sites along the Mojave River in Hesperia and south­ern Apple Valley. Production wells, owned by MWA, on either side of the Mojave River located immediately downstream of the recharge area will then recover and deliver the stored wa­ter through pipelines directly to retail water agencies. This $53 million proj­ect was constructed with more than $21 million in Proposition 50 IRWM funds. These funds, combined with federal grants and an MWA match, made the construction of this project possible.

The R3 Project is an excellent ex­ample of a conjunctive use–one that coordinates the use of surface water and groundwater supplies to maximize the yield of the overall water resource. Another key strategy used in the MWA water portfolio is conservation.

“Cash for Grass,” the Agency’s most successful water conservation pro­gram, also received $2 million in Prop­osition 84 funds as a result of the last integrated plan. The program offers customers a rebate of fifty cents per square foot for living and maintained turf that is removed and replaced with desert friendly landscaping. Residen­tial customers may receive a rebate up to $3,000 and commercial/industrial/institutional customers up to $10,000. To date, more than 3,200 projects have been completed with participants receiving some $2 million in direct rebates. In a service area of approxi­mately 450,000 residents, more than638 gallons per capita is being saved each year and this figure continues to grow.

Much progress has been made in the High Desert region, but statewide wa­ter issues affect availability. Success­ful integrated planning will yield new projects and programs for the region that will help MWA further reduce reli­ance on imported water from the Delta, and create a sustainable water supply.

While the Mojave Water Agency is responsible for managing the region’s water supply, successful plans reflect input from the entire region. During this planning process a number of op­portunities to participate are available. The next Technical Advisory Commit­tee meeting is June 6 at 9:30 a.m. at the Mojave Water Agency located at 13846 Conference Center Drive, Ap­ple Valley. Additionally, a number of public meetings are being held through the region. For more information on the plan or any of the public meetings, call 760.946.7000 or visit www.mywa­terplan.com

General Politics

Correctional Facilities: Friend or Foe?

Published by:

By Dr. James Hart
City Manager
City of Adelanto

Cities and Prisons, do they go togeth­er? Are prisons a magnet to draw fam­ily members of prisoners to the area? Often City of Adelanto representatives are asked these questions by people. Some people really want to know the answer and others have already made up their minds. Regardless of which side of the issue you are on, study af­ter study has indicated that prisons do not attract prisoners’ family members to the community in which they are lo­cated and in fact are economic benefits to the local area.

In 2010, the City of Adelanto entered into an Intergovernmental Service Agreement (IGSA) with the Depart­ment of Justice, Homeland Security to house approximately 1,300 inmates. While the city has experience operat­ing a correctional facility, the deci­sion was made to subcontract with The GEO Group as the operator. The GEO Group is one of the world’s largest pri­vate correctional facility operators and is well equipped to be the operator.

To house up to 1,300 inmates, a new facility had to be constructed and an old facility had to be rehabilitated. As part of the subcontract with The GEO Group, it took on the responsibility of purchasing and rehabilitating the city’s former correctional facility and build­ing a new facility. The purchase price for the city’s former facility was $28 Million and The GEO Group put an additional $20 Million into the reha­bilitation. To total cost for construc­tion of the new facility is not known by the author of this article, but both the rehabilitation of the city’s former cor­rectional facility and the new facility infused several millions of dollars into the local economy through the creation of construction jobs for approximately 18 months. Additionally, local vendors were used to purchase materials for the facilities. Overall, the project infused several millions of dollars into the lo­cal economy.

The GEO Group facilities were ful­ly operational in August/September 2011. There are currently 358 employ­ees working at The GEO Group facili­ties. With an average salary of $40,000 per year (an estimation not confirmed by The GEO Group), there is about $14 Million for expenditure in the lo­cal economy. As we all know, the mul­tiplier for this makes that $14 Million about $40 Million or more per year.

The economic benefit of a prison in the local area is significant and the fam­ily impacts are minimal to none. The GEO Group facility houses Immigra­tion Customs Enforcement individuals who are waiting to be deported. They are not criminals, just individuals who are in the United States illegally and are awaiting their hearing regarding deportation.

Adelanto has been known to support correctional facility development in appropriate zones. As one can see, the reason for this support is due to the economic benefit that is derived for the entire region.

General Transportation

SANBAG/High Desert Transportation Projects

Published by:

By Jane Dreher
Public Information Officer
San Bernardino Associated Governments

San Bernardino As­sociated Governments (SANBAG) is the council of governments and transporta­tion agency for San Bernardino Coun­ty. The SANBAG Mountain Desert Committee is composed of representa­tives from all mountain and desert cit­ies. They evaluate projects in the High Desert, mountains, Morongo Basin, and Colorado River regions. This edition of SANBAG’s update will focus on four of the many High Desert projects:

  • I-15/LaMesa-Nisqualli Road Inter­change Project, Victorville;
  • I-15/Ranchero Road Interchange Project, Hesperia;
  • I-15/I-215 Devore Junction Inter­change Project, Devore; and
  • Yucca Loma Bridge and Yucca Loma Corridor Project, Victorville.

I-15/La Mesa/Nisqualli Road Inter­change

The Interstate 15 La Mesa/Nisqualli Interchange Project, located in central Victorville between Bear Valley Road to the south and Palmdale Road to the north, is entering the final stages of con­struction and is scheduled for comple­tion in late Summer 2013.

In February, crews removed the final temporary bridge support system re­vealing the new La Mesa / Nisqualli Bridge over I-15, bringing it closer to a new east/west alternative for the resi­dents of the High Desert. Construction of the ramps, signals, and final freeway striping are all that remain on this major improvement to the regional and local transportation systems.

The project began on a warm January day in 2012 and was celebrated as a major achievement in project delivery. The teamwork between San Bernardino Associated Governments and the City of Victorville highlights the project’s theme of “Mission Possible.” When complete, the interchange will improve local circulation, enhance safety, relieve I-15 congestion, and improve the qual­ity of life for area residents.

I-15/Ranchero Road Interchange

Located in the city of Hesperia, the In­terstate 15 Ranchero Road Interchange officially broke ground in January 2013 and is well underway toward improving connectivity between many residents of eastern Hesperia and Interstate 15. This $59 million transportation improvement to the High Desert that will add a new bridge over I-15, provide congestion re­lief for I-15 and Main Street, improve drainage, and enhance safety is sched­uled for completion in early 2015.

Crews have already started clearing the way for work on the ramps, realigning frontage roads, and relocating utilities. Ramps will be constructed first and will serve as a temporary detour (when nec­essary) for bridge work over the main­line of the freeway.

The new interchange is part of a series of projects for the Hesperia area. The Ranchero Road Underpass (grade sepa­ration) to the east combined with future improvements to Ranchero Road and this new interchange will offer a much-needed alternative for area residents, saving commuters time and money from their daily travels.

I-15/I-215 Devore Interchange Project to Start Construction in June

This long-awaited regional interchange project will officially begin construction with a groundbreaking ceremony on June 28, 2013. The Devore Interchange Project, where the I-15 and I-215 free­ways meet, is a $324 million project that is being funded with a combination of federal, state, and local Measure I funds.

The purpose of the Devore Interchange Project is to reduce congestion, acci­dents, and improve freeway operations through the Devore Interchange at the southern base of the Cajon Pass. This is considered one of the worst grade-related bottlenecks in the United States. This junction experiences severe delays, especially during peak afternoon traffic, holidays, and weekend hours, when traf­fic backs up for five miles. The project limits on I-15 are from 2.3 miles south to 2.0 miles north of the I-15/I-215 in­terchange and on the I-215 from 1.0 mile south to the interchange.

The Devore Interchange Project is the first design-build highway project for Caltrans in the Inland Empire. This means the contractor is responsible for the design and build of the project. The design-build approach has been suc­cessful nationwide and offers these ad­vantages: faster construction comple­tion; cost savings; better quality; single designer/contractor responsibility; de­creased administration burden; and re­duced risk.

The four primary features include:

  • Addition of truck by-pass lanes
  • Addition of general purpose lanes
  • Brings the interchange up to operational standards
  • Reconnects the old Route 66

The Devore Interchange Project is a partnership between Caltrans and San Bernardino Associated Governments (SANBAG). Construction begins in summer 2013 and completion is antici­pated in 2016.

Yucca Loma Bridge and the Yucca Loma Corridor

The Yucca Loma Bridge, Yates Road, and Green Tree Boulevard projects are three of the components of the Yucca Loma Corridor. These projects, along with the widening of Yucca Loma Road east of the Mojave River, are of regional importance to the High Desert as they will become a new east-west connector across the Victor Valley. The project is midway between two existing Mojave River crossings at Highway 18 and Bear Valley Road and is the first new river crossing to be built in 40 years.

SANBAG has secured funding for the Yucca Loma Bridge and Yates Road construction, which is set to begin in Fall 2013. Funding sources include the Measure I Major Local Highway Pro­gram, State Local Partnership Program, and city funds.

The Green Tree Boulevard portion of the project, which includes a bridge over the BNSF railroad, recently entered the final design phase. Construction is scheduled for 2017 if funding is secured for that phase of the project.

Education General

Victor Valley Community College

Published by:

By Bill Gruelich
Public Information Officer
Victor Valley Community College, President’s Office

Victor Valley College is in its 52nd year of service to the students of the High Desert. Currently, the college is serving approximately 13,500 students. For apportionment purposes, these numbers equal about 8,895 full-time equivalent students. Each full-time equivalent student (FTES) represents one student taking 15 credit hours per semester or five students each taking a course that equals 3 credit hours per semester. The college is funded on these FTES at about $4,564. The total budget for the college is approximately $50 million. Currently, the college employs about 800 people. Due to the economy, the college stepped up and enrolled more students than it is being compensated for. The High Desert needs to increase the overall number of residents who have a college degree to raise the economic level of the area. This is a profound goal for the college. This pronouncement is based on data that was presented by an area economist during several economic summits hosted by the college.

The college is currently in the process of re-inventing itself to meet the standards for accreditation established by the Accrediting Commission for Community and Junior Colleges (ACCJC). It has been a challenge to change the entire culture of the college. It is much like a group of overweight people trying to lose pounds. They know they love to eat, but are unwilling to change their lifestyle to accomplish the goal. At VVC, everyone is on a diet and is making lifestyle changes that will make it a continuous quality improvement institution. The college has made great strides as has been noted in an article recently appearing in an area newspaper.

“While we believe we were further along than the ACCJC was able to verify during their visit in October 2012, we recognize that more work in all three of these areas is needed and we have continued to focus on getting them done.

These three areas relate to assessments of student learning outcomes, program review, and elimination of a structural deficit.

Today we can report 100% of all Student Learning Outcomes have been identified and all 100% of active course outcomes will have been assessed by October 15, 2013. As not every class is offered each semester, some of what is required to assess Student Learning Outcomes in all courses is simply the passing of time, such that a course can be completed on its planned schedule. We also implemented a comprehensive tracking system, known as TracDat, for compiling this assessment data and are confident that the ACCJC will acknowledge our full compliance with this standard when they next visit.

The second reason for being retained on probation was that the ACCJC visiting team did not believe that the college had identified and reviewed all of its current programs, both instructional and non-instructional. Program review had been an on-going activity at the college for many years; however, the ACCJC review gave the college an opportunity to establish teams for both parts of program review, instructional and non-instructional. These teams have reviewed every program review report completed by all areas of the college. The ACCJC requires that there is “robust dialog” in the program review process which will move the college forward in closing the loop between planning, implementing, and correcting. The establishment of interdisciplinary program review teams has enabled that dialogue and we are confident that the ACCJC will acknowledge our full compliance with this standard.

The third issue that remains to be resolved is the assertion that Victor Valley College faces a “structural deficit.” The college has reduced spending sufficiently, and implemented cost saving measures, and accessed reserves to balance its budget. This cannot continue indefinitely and the college is examining options for restoring a structural balance to its budget. Some relief will come in the form of additional revenues from the State as our economy improves, but the college is taking other proactive steps to evaluate programs and expenditures.

There has been a significant culture change within the ranks at VVC and the college faculty and staff has embraced the benefits of proper planning and proper assessment. Future students of the high desert will be ultimate beneficiaries of this culture change.”

Construction

The next major project on the drawing boards for Victor Valley College is the construction of a new Science and Health Building. The 25,000 square foot building will feature several new labs and faculty areas dedicated to the study of Science and Health. The plan features highly specialized training labs for the Nursing program that include a simulation lab and fundamentals lab, a chemistry lab, additional Life and Physical Science lab (digital), an anatomy lab, a faculty suite, and dean’s office. The plan for this free standing building also includes an outdoor covered courtyard area for student and faculty interaction to promote a collaborative and technology driven learning environment. The college has selected Balfour Beatty Construction and NTD Architecture to construct this project. It will be a one-story structure located adjacent to and on the west side of the existing Science Building 31. Together Balfour Beatty and NTD have completed over 30 educational projects totaling over $600 million throughout Southern California. The team will contract with local consulting firms and contractors to provide training and jobs for the local community.