Orestimba Creek Feasibility Study - Stanislaus County

Economics Appendix – Draft Report - Orestimba Creek Feasibility Study, Stanislaus County, California – September 2012
federal government must repay its bond holders, is not considered as a direct regional
expenditure. Additionally, the transfer payment for land (the actual price the land) is not
considered as having any multiplier effect on the regional economy and therefore subtracted
from the total remaining costs of the project. Together these costs total $1,645,000. The annual
expenditures for the remaining on-the-ground project costs of $20,943,500 is assumed to be
spent over the construction period of 2 years (2015-2017). The average annual expenditure of
$20,943,500 is provided below to indicate the number of jobs, income, and output which can be
expected within the Modesto MSA, the State of California, and the Nation.
Direct expenditures expected for construction of earthen levees are spent primarily in two sectors
of the economy, construction labor, accounting for 54% of the project expenditures, equipment
which accounts for 35% of the project expenditures. Local capture rates are computed with
RECONS to show where the output from expenditures are realized. As shown in Table 2, over
89% of the output from construction labor and equipment are expected to be obtained from the
Modesto SMA. Virtually all labor and other materials will be obtained within the State of
California.
Table 2: Input Assumptions (Spending and LPCs)
Category
Spending
(%)
Spending
Amount
Local
LPC (%)
State
LPC (%)
Aggregate Materials 10% $2,052,463 38% 74% 98%
Other Materials 1% $251,322 76% 99% 100%
Equipment 35% $7,330,225 60% 96% 100%
Construction Labor 54% $11,309,490 76% 99% 100%
National
LPC (%)
Total 100% $20,943,500 - - -
The project is expected to annually expend $20,943,500 on the construction of the project. Of this
total project expenditure 76% of the labor expenditures will be captured within the regional
impact area. The rest will leak out to the state or the nation. The expenditures made by the
USACE for various services and products are expected to generate additional economic activity in
that can be measured in jobs, income, sales and gross regional product as summarized in the
following table and includes impacts to the region, the State impact area, and the Nation. Table 3
is the overall economic impacts for this analysis.
It should be noted that the number of jobs is significant to the Modesto SMA that is currently
faced with high unemployment. The number of jobs gained within the region (325) and within
the State of California (530) demonstrates the multiplier effect of this infusion of construction
funds for this project. Statewide, the gross regional product ($33,725,999) is 83 percent greater
than the gross regional product within the Modesto SMA.
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