If San Benito County had a long developed coastline, it would not have its current economic problems. I believe I can now put an estimated number on that hypothetical. By analyzing the FY2011 spending of nine area cities, I have broadly estimated the economic value of the ocean. The nine cities were Gilroy, Hollister, Marina, Monterey, Morgan Hill, Salinas, Santa Cruz, Seaside and Watsonville.
This issue applies to proposals for regional planning. Hollister and San Benito Country is so unlike other regional cities and counties that the ‘one size fits all’ never seems to fit us well. It’s important to understand these potential pitfalls because certain constraints often have uneven impacts among cities and counties that are so different economically.
My overall analysis is based on two simple assumptions. The first is that cities spend almost all the General Fund (GF) monies they take in as revenue – especially in these tough times. The second is that they all spend approximately the same percentage of that revenue on full time employees. Therefore, a city’s spending on full time public employment per thousand residents relates directly to their economic condition.
The ocean is certainly not the only factor influencing economic vitality. There is population, per capita personal income – earnings and transfers – commuting patterns, sales taxes, property values, business taxes, fees, location of major educational institutions, etc.
Two cities, Monterey and Santa Cruz, are most directly involved in significant ocean and tourist related development and both have significant public institutions. Monterey – population 29,400 – is the epitome of the genre with great attractions such as the aquarium, recreation, extensive accommodations, the Presidio, Naval Postgraduate School, and CSU Monterey Bay is close by. Santa Cruz – population 60,800 – has both the developed beach and UC Santa Cruz, with more than 15,000 undergraduates.
Excluding Monterey and Santa Cruz, the other seven cities spent an average of $530,000 per 1,000 residents on wages and benefits for full time employees; these figures ranged from a high of $685,200 in Watsonville to a low of $407,400 in Hollister.
The two ocean cities are very different. Santa Cruz spent $1,187,000 and Monterey spent $1,785,000 per 1,000 residents on wages and benefits for full time employees, more than twice to more than three times the average expenditures of the other seven cities.
Ocean economic power is also reflected in the number of employees and higher management compensation, more so than it is in compensation for the rank and file. The seven other cities averaged 4.5 full-time employees per 1,000 residents while Santa Cruz had 12 and Monterey 16. Additionally, both Santa Cruz and Monterey had large numbers of part time, temporary, and casual employees.
The bigger departments and larger budgets justified higher compensation for the managers. The Monterey Police Department had 74 full-time employees managed by two chiefs and one assistant chief of police with a combined total compensation of $760,000.
Monterey and Santa Cruz are two exceptional examples of the value of an ocean-tourist-public institution economy. Monterey is perfectly tuned to this role; it would be unfair to use it as typical by itself, but with Santa Cruz, it’s reasonable to say that the ocean is worth at least $500,000 a year per 1,000 residents.
Hypothetically, that would add $17.5 million a year to Hollister’s General Fund, more than doubling it, but we don’t have the ocean or the money that comes with it. This built-in inequity must be considered in every aspect of planning – we have a lot of catching up to do.
Marty Richman writes a weekly column for the Free Lance.
