Economic Impact Analysis: 1st Progress Report, January
Evaluation of the potential economic benefits, costs and impacts of enhanced aquifer protection in the LPRV requires:
An understanding of current economic and demographic conditions and trends in the study area;
A projection of future economic and demographic conditions in the absence of enhanced protection measures termed the "baseline" scenario; and
A comparative projection of future economic and demographic conditions in the study area with enhanced protection measures.
This section is the foundation for the baseline scenario. We define the study area, describe key economic components of the area and provide an overview of economic and demographic conditions and recent trends. Subsequent work during the next few months will further define the baseline and develop the comparative scenario with enhanced protection measures. Both the examination of recent economic and demographic trends and the baseline scenario closely integrate with the working assumptions, projections and data assembled for the Our Valley, Our Vision study.
STUDY AREA DEFINITION
From an economic and demographic standpoint, the study area is defined as the region that relies directly or indirectly upon the LPRV aquifer for its water supply. Certain areas not directly overlying the aquifer, such as portions of the cities of Pocatello and Chubbuck, are included in the study area because of their jurisdictional relationship to areas that do lie directly above the aquifer. The study area and its vicinity are mapped on Exhibit II-1.
The cities of Pocatello and Chubbuck currently pump all their municipal water from the LPRV aquifer. Other withdrawals from the aquifer consist of private and other wells for domestic, industrial and agricultural self-supply. Non-municipal withdrawals in the study area are mostly within Bannock County.
The LPRV aquifer system itself is composed of two main parts:
The southern aquifer system flows northward as a very narrow, strip aquifer from Portneuf Gap to Red Hill. In this area, the aquifer roughly parallels Interstate 15 (I-15) and the lower Portneuf River.
The northern aquifer system begins at Red Hill and flows northward to a point where the aquifer widens and merges with the Snake River Plain aquifer and Fort Hall groundwater.
Six portions of surface water basins overlap the aquifers surface, which covers an area of about 26 square miles.
STUDY AREA HISTORY
Long a transportation corridor first traveled by Native Americans, then by trappers, westward migrants, and fortune seekers in the gold fields the Portneuf Valley entered a new age with the coming of the railroad in 1876. At Pocatello Junction, Union Pacific created the largest rail center west of the Mississippi. Pocatello incorporated in 1882 and, reflecting its strategic location in southeast Idaho, took the nickname "The Gate City."
During World War II, the United States Naval Ordnance Plant was sited in Pocatello to reline naval guns from warships. The refurbished weapons were shipped to a range at what is now the Idaho National Environmental and Engineering Laboratory for test firing of shells over distances of up to 35 miles.
Today the study area is a community of diverse occupations. The railroad remains a major employer. In Pocatello, Idaho State University increasingly shapes the economy and lifestyle. Diverse industries use the regions natural and human resources: mineral processing, food products, high tech manufacturing, industrial fabrication, telecommunications services, and government research and development. Still a crossroads, Portneuf Valley businesses continue to supply goods and services to travelers who now follow the nations interstate highways instead of the Oregon Trail.
MAJOR EMPLOYERS & THE ECONOMIC BASE
Chief sources of income in the study area are higher education, manufacturing, transportation, business services, agriculture, high-tech and nuclear research, recreation, and tourism. The study area has an unusually diversified economic base.
The Union Pacific Railroad has a major freight classification yard in Pocatello, plus maintenance and repair facilities for locomotives, cars, and track maintenance equipment. The broad manufacturing base includes integrated circuits, processed foods, and medical products. There is a growing "call center" segment of the business services industry. Agriculture, including farming and potato processing, remains a small but significant export industry. Public employers in the economic base include Idaho State University and the FBI Western Data Center. Other major public sector employers are School District 25, the City of Pocatello and Bannock County.
The study area is a retail hub for southeast Idaho and, because of its location on major transportation routes, it supplies goods and services to tourists, business travelers and visitors to the regions recreation areas. However, studies have shown there is considerable retail "leakage," and many local residents apparently travel to Idaho Falls or to the Salt Lake City, Utah area, to make certain purchases. Located 60 miles northwest of Pocatello, the Idaho National Environmental and Engineering Laboratory (INEEL) employs about 7,900 people, a number of who live within the study area. Pocatello houses INEEL suppliers, as well. Examples include the labs cleanup contractor and a specialty steel fabricator.
Since 1990, employment growth in the study area has rebounded, although total Bannock County job growth is still below the statewide average.
From 1980 to 1990, Bannock County achieved no net job growth, largely because of the shutdown and loss of 3,000 jobs at dragline manufacturer, Bucyrus-Erie. However, from 1990 to 1998 (the most recent data available) total job growth for Bannock County was 3.3 percent per year, just 0.4 percentage points off the statewide pace of 3.7 percent.
Since 1990 four sectors manufacturing, construction, agricultural services, and government have grown faster than the state average. Only the transportation and utilities sector has declined (by 1.1 percent per year) reflecting, in part, significant layoffs by the Union Pacific Railroad. Among the largest sectors, retail trade and services have both grown rapidly, similar to Idaho as a whole.
Recent employment growth within the study area has substantially reduced the unemployment rate in Bannock County. The County exceeded the state average in the early 1990s, but currently mirrors Idaho.
Since 1996, unemployment rates for both Bannock County and the state have ranged between 4.8 percent and 5.4 percent.
The present tight labor market has been felt locally. Hiring entry-level employees has been more difficult for retailers, service establishments, fast food restaurants, nursing homes and contractors.
PER CAPITA PERSONAL INCOME
At parity or nearly so with Idaho through 1985, Bannock County per capita personal income went flat during the last half of the 1980s while statewide personal income growth accelerated. By the mid 1990s, Bannock County per capita personal income resumed a healthy growth rate.
Average study area personal income has remained stable at about 90 percent of the state average over the past decade.
COUNTY & STATE POPULATION
From 1980 to 1999, the U.S. Census Bureau estimated that Bannock County grew by 14.1 percent compared to 32 percent for the state of Idaho as a whole. This equates to an average annual rate of 0.7 percent for Bannock County versus 1.4 percent per year on average statewide.
Net natural change (births minus deaths) accounted for all of Bannock Countys growth in the 1980s (net natural change was 9,151, offsetting net out-migration of 8,546) and for 81 percent of growth in the 1990s (natural change was 7,203 and net in-migration was 1,652). Annual estimates were not available specifically for the study area, given its irregular geography.
POPULATION RELYING ON THE LPRV AQUIFER
An estimated 68,300 persons in the cities of Pocatello, Chubbuck, and the surrounding unincorporated area rely on the LPRV aquifer as a water supply.
Within this area, a population of about 7,200 persons in an estimated 2,200 households have their own groundwater supply.
Growth has varied within the study area. While the City of Chubbuck grew 31 percent, the City of Pocatello grew 11 percent from 1980 to 2000. The self-supplied area grew about 19 percent, or 1.8 percent per year.
Sewered housing units predominate within the study area, but households on septic appear to be increasing more rapidly.
The 1990 Census found approximately 1,400 housing units on septic in the City of Pocatello, 35 in Chubbuck, and about 700 septic tanks in the unincorporated area served by the aquifer.
Local sources estimate that approximately 50 to 75 new homes on septic have been added to the study area each year since 1996.
WATER USE & THE ECONOMIC BASE
Based on national averages, key industries within the study areas economic base are moderate to high in water use intensity. Values for the following sectors are expressed in gallons per employee per day: food processing, 469; chemicals processing, 267; hotels and other lodging places, 230; educational services, 117; electronics manufacturing, 95 gallons; business services, 73; railroad transportation, 68 (Table 23.10, Average Rates of Nonresidential Water Use from Establishment Level Data, McGraw-Hill Water Resources Handbook).
The top ten water consumers served by the City of Pocatello Water Utility include several of the study areas base industries: American Microsystems, Inc., Heinz Weight Watchers Foods and the Union Pacific Railroad. Other top consumers are government entities: School District 25 and Idaho State University. The FBI Western Data Center is also a large water customer of the City of Pocatello Utility. Highland Golf Course, leased to an operating company, ranks high in water consumption, too, despite irrigating only five months a year.
Relatively attractive water and wastewater costs play a role in the study areas economic development strategy. In 1998, the City of Pocatello charged $0.85 per thousand gallons for industrial/commercial water, $0.98 per thousand gallons of wastewater for establishments inside the City, $1.29 per thousand gallons of wastewater outside the City, and additional charges of $1.18 and $1.07 per pound per year for suspended solids and BOD respectively for amounts greater than 200 PPM. Wastewater service rates and connection fees are ranked relatively low among comparable site location markets in a six-state, intermountain region, according to Bannock Development Corp.
ECONOMIC DEVELOPMENT STRENGTHS & WEAKNESSES
The study area combines a positive attitude toward growth with numerous economic development strengths among them relatively low wages, energy costs and cost of living, a skilled industrial work force, and the presence of a technology-oriented university. ISU increasingly is a seedbed for economic development, business incubation and technical training of the work force.
Although the preponderance of total jobs has shifted to retail and services and away from transportation, the traditional leading sector, the study area remains focused on industrial activity as a primary source of higher-wage economic development. Gateway West Industrial Center, the former World War II Naval Ordnance Plant in Pocatello, is a 200-acre complex currently home to more than 20 businesses and about 500 jobs, many in heavy industry. The industrial infrastructure that exists at the facility is unique in the state.
The study areas location within an important transportation corridor is a plus. However, a key economic development issue in the attraction of industrial growth in the future is limited air transportation and high truck freight costs. In addition, the telecommunications infrastructure, though advanced, lacks fiber optic capacity. As a trade center, the study area faces two strong competitors: Idaho Falls and the Salt Lake City, Utah area. In addition, the local economy remains sensitive to the fortunes of the key employers (Union Pacific, Simplot, FMC INEEL, and others). This leads to some volatility in economic performance and the potential for severe economic shocks.