Of Water, State Budgets, and “Entertainment” Golf

Wednesday, January 24, 2024

Article provided by Craig Kessler

It’s that time of year when we start to pay close heed to the status of the Sierra snowpack upon which so much of Southern California’s water needs continue to depend – a dependence that the region is busy working to reduce in favor of local supplies – e.g., storm water capture, aquifer replenishment, traditional recycling (non-potable), potable reuse, and desalination.

At the close of 2023 (December 31) things weren’t looking so good. But veterans of this exercise know that it is not where things stand in November/December but where they stand during the three winter months leading up to the all-important April 1 reading that really matters. December 31 – just 26% of the average for that date.

As of Monday (1/22) California was still below overall average; however, enough snow dropped on the Sierras in the three weeks between the New Year and January 22 that the California Department of Water Resources (DWR) reported the snowpack at 55% of the average for that date. That would be 30% of the overall April 1 average if no more snow were to fall between now and then. Of course, more snow has fallen in the days since Monday and more snow is sure to fall, even if the amounts are disappointing.

To put these numbers in context, at this time last year the Sierra snowpack sat at 240% of historical average. That is why despite this year’s somewhat sluggish start, the state’s reservoirs remain well above historical averages. Shasta is currently at 115% of the average and 73% of total capacity. Oroville levels are 128% of the average and 72% of total capacity. Don Pedro reports 114% of average and 80% of total capacity. New Melones is 145% of the average at 83% of total capacity. That is pretty much the pattern across the state, although there are a few reservoirs still below historical averages.

Predicting Mother Nature is a fool’s errand, but it would appear that we are at least not going to suffer a drought year after last year’s incredible bounty. Whether winter 2024 will be average, above average, or below average remains to be seen. Whether ever increasing warming and drying conditions will yield another 3-year run like we suffered 2020-2022 also remains to be seen. But given what we have come to learn about the last quarter century, erring on the side of caution would seem to be in order. The Sierra Snowpack driven State Water Project is but half of Southern California’s import formula. The other half – the Colorado Basin – did not enjoy the same “bounty” as the Sierra Snowpack did last year and is not enjoying much of a resurgence this year either. As Sammy Roth reported this week in the highly informative “Boiling Point” newsletter that he produces on a weekly basis for the Los Angeles Times, “Federal scientists are projecting that Lake Mead — created by Hoover Dam, which interrupts the Colorado River not far from Las Vegas — will fall close to its lowest level ever by the end of 2025.”

Reprieve – relief; use whatever term suits your fancy. Just make sure that you don’t fall into the trap of describing current hydrological conditions as something akin to surcease.

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In our last “Update” (1/8) we took a deep dive into the Legislative Analyst Office’s (LAO) scathing criticism of the State Water Resources Control Board’s (SWRCB) proposed rule to effectuate the Governor’s “Making Conservation a California Way of Life” mandate. Technically, the rule is a regulatory framework to establish individualized efficiency goals for each Urban Retail Water Supplier in the state based upon the unique characteristics of the supplier’s service area along with the flexibility to implement locally appropriate solutions. More thematically, the rule represents a reprise of the successful 20% by 2020 campaign that had been launched in the 1st decade of the 21st Century through the same 3-pronged process of Gubernatorial Order followed in turn by legislation directing SWRCB and DWR (Department of Water Resources) to adopt regulations to enable it.

If you missed it or want to take another deep dive into its particulars, click here. Today we just want to highlight something of significance we failed to highlight two weeks ago.

Agriculture’s use of water has long been the 3rd rail of California water politics. Despite using the lion’s share of the state’s water and often using that share to grow highly water consumptive crops, it’s the state’s urban dwellers and their uses that have been the targets of conservation initiatives – first indoor uses and more recently outdoor uses. This LAO report takes dead aim at agricultural by suggesting that the savings to be achieved by ever more stringent urban conservation are not sufficient to merit continued ignorance of those agricultural practices that favor highly profitable water consumptive crops. This is a shift that bears watching for what it may portend in terms of easing some of the pressure on outdoor irrigation.

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No January “Update” would be complete without some mention of that first step in the state’s budget process known as the Governor’s initial budget submittal. Between now and when the budget is supposed to be finalized (June 15), there will be much dickering between the executive and legislative branches of government – dickering influenced by a lot of outside lobbying – but it is the Governor’s initial salvo that frames the process in terms of both realities and priorities.

As for the “realities,” by now everyone knows that last year’s near $100 billion surplus has evaporated into what the state’s nonpartisan budget analysts are calling a $68 billion deficit and Governor Newsom is pegging as a $38 billion deficit. Arguably, the only California “whiplash” greater than the one created by a warming/drying climate is the one caused by tax structure disproportionately dependent upon progressive levies upon income and capital gains. But that’s a subject for another day – one that it increasingly appears won’t come in California until it absolutely has to. Tax reform is another of those proverbial “3rd rails” of California politics.

As for “priorities,” we note that the Governor has proposed $3 billion in cuts to “climate change” programs and delays in anticipated expenditures for the University of California and California State University System, certain social welfare programs, and housing programs, including those targeted for college students and 1st time buyers. The Governor has also proposed to draw $13.1 billion from the $38 billion in the state’s “rainy day fund” in part to maintain commitments made the last two years to programs to reduce homelessness and extend Medi-Cal to all immigrants. As for raising taxes, the Governor has indicated fierce opposition, including opposition to Assembly Member Alex Lee’s (D-San Jose) proposed 1.5% “wealth tax” on amounts of “net worth” exceeding $50 million.

What might all this mean for California golf? The “realities” make it unlikely that we will see the kind of free money that AB 1910 offered cities/developers to develop municipal golf courses into housing complexes. But they also make it unlikely that we will see some of the generous conservation rebate and incentive programs we have enjoyed in recent years – at the state level, that is. Federal and ratepayer generated rebates/incentives should not be affected.

As for the “priorities,” your guess is as good as ours, although we do take note of the Governor’s willingness to incur the wrath of the myriad environmental organizations that have already begun to complain loudly about those $3 billion in proposed cuts to “climate change” initiatives.

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Much is being made this week at the NGCOA Business Conference and PGA Show in Orlando about just how well golf continues to perform post COVID. Most in golf expected a correction – not a return to pre-COVID numbers, but certainly a dip from the heights golf achieved when it was practically the only game in town in many places for a year or more.

But it now appears that 2023 was even better than 2022. We don’t track state numbers, let alone national numbers. But we do monitor the numbers published by municipalities. And despite a critical shortage that has led to the near impossibility in many places to secure a tee time any time of day, those numbers continue to go up. Of course, given the reality that it is all but impossible to construct a new public golf course anywhere in Southern California’s urban core, those numbers cannot go up unabated. Of course, the prices can. And if you are an owner/operator or someone who labors in the industry or someone in possession of a membership in an equity club, that is good news. If you are a daily fee player, not so much.

But that too is a subject for another day. Today’s subject is the increasingly discernible divergence between traditional golf’s continued growth and “entertainment” golf’s recent dip – a divergence that the Wall Street Journal highlighted last week as part of a much larger story about declines in multiple forms of those tech/electronic substitutes mimicking traditional games/sports that were supposed to overtake their original versions as modern tastes moved to all things electronic, fast, and short.

With the caveat that a discernible dip does not a trend make, what to make of this? But first another caveat. What follows is opinion, commentary if you will – informed opinion we hope, but opinion, nonetheless.

Perhaps the more grounded who have long cautioned about investing in things unproven at the expense of those things that have endured 500 + years were on to something. Perhaps the golf community might be wise to figure out what about 4 hours in nature with good friends far away from the hustle and bustle of the world and emails/virtual meetings playing a game that changes each day with the rhythms of nature offers something that few things in modern American life offer. And we might add, offer it at a price point much less expensive than many of the high tech/electronic substitutes that mimic traditional games/sports. And then maybe consider the lesson we all learned in economics 101 – that it is the unique niche that distinguishes one activity from another in a world filled with an almost unlimited supply of them. Sell what you are, not what you’re not. Promote what you uniquely offer, not what duplicates the offerings of others.

Golf resides in the domain of the long-distance run – staid, steady, and dependable. Perhaps a little more focus on strengths that have proven reliable for 500 + years and a little less obsession with newfangled gadgets is in order.

Or not. Everyone is entitled to an opinion.