Orestimba Creek Feasibility Study - Stanislaus County

Economics Appendix – Draft Report - Orestimba Creek Feasibility Study, Stanislaus County, California – September 2012
Table 7 is based on the average annual regional expenditures that are expected over the
construction period from FY 2015 through FY 2017 for the Locally Preferred Plan. Over these
two years a total of 51,939,000 is anticipated to be spent in the Modesto MSA region in order to
complete the construction effort and place the project beneficial status. The average construction
expenditure is $ 25,969,500 ($51,939,000/ 2 years). These costs do not reflect the IDC or
transfer payment for land but only those costs that are considered as construction on-the-ground
project costs.
The average annual expenditure of $25,969,500 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 for the locally preferred plan.
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 7, over
89% of the output from construction labor and equipment are expected to be obtained from the
Modesto SMA. Within the State of California virtually all labor and other materials will be
obtained.
Table 7: Input Assumptions (Spending and LPCs) - LPP
Category
Spending
(%)
Spending
Amount
Local
LPC (%)
State
LPC (%)
Aggregate Materials 10% $2,545,011 38% 74% 98%
Other Materials 1% $311,634 76% 99% 100%
Equipment 35% $9,089,325 60% 96% 100%
Construction Labor 54% $14,023,530 76% 99% 100%
Total 100% $25,969,500 - - -
National
LPC (%)
The annual expenditure of $25,696,500 is estimated on the construction of the locally preferred
project. Of this total project expenditure 76% of the labor expenditures will be captured within the
regional impact area. The rest will be leaked 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 8 is the overall economic impacts for this analysis.
It should be noted that the number of jobs is significant to the Modesto SMA which is currently
faced with high unemployment. The number of jobs gained within the region (382) and within
the State of California (584) demonstrates the multiplier effect of this infusion of construction
funds for this project. Statewide, the gross regional product ($34,360,560) is almost 65 percent
greater than the gross regional product within the Modesto SMA.
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