North Coast Journal - OCT. 5, 2000: IN THE NEWS

NEWSBRIEFS

October 5, 2000

UPDATE: Price princh at the gas pump
or spoiled-rotten Americans?

Price pinch at the gas pump or spoiled rotten Americans?

by GEORGE RINGWALD

THE BIGGEST REASON FOR THE HIGH price of gasoline is the market demand," asserts a car salesman with a major Humboldt County dealership.

Nothing brought that home to me more than a recent drive into San Francisco when I was tied up along with a couple hundred other drivers on the approach to the Golden Gate Bridge. And rush-hour traffic jams in Santa Rosa, the Bay Area, not to mention Los Angeles, are of course legendary. Even in Humboldt County we have our own version of rush-hour jams between Arcata and Eureka, ludicrous as that nomenclature may seem.

"We're spoiled absolutely rotten," says our car salesman, who understandably speaks on condition of anonymity. "I'm just back from Europe, where they're paying at least $4 a gallon. We have it wonderful here. All you have to do is go to Europe to see what it's like. They're cramped for space. You can see the smog hanging in the air, and the buildings are gray with soot from vehicle exhausts."

He could also have mentioned Japan, where gasoline has been $4 a gallon for decades. A recent visitor from Australia, where gas is also priced at more than $4 a gallon, said that Americans are "crazy" to be complaining about $2 a gallon gasoline -- especially when the vehicle of the day is the gas-guzzling sport utility vehicle (SUV). They don't even allow them in Australia. The tale is backed up by Dan Gates, sales manager at Eureka's McCrea Nissan, who remembers a customer who couldn't get his Pathfinder SUV into the down-under continent.

As Gates observes, filling up the tank of an SUV "tears the daylight out of a $50 bill." And pity the guys -- if you will -- who drive motorhomes into the gas station to fill 'er up. There goes a Ben Franklin greenback.

But then, as our unnamed car salesman says, "People who own SUVs can afford whatever they have to pay for gas." He borrows from the line of J.P. Morgan, or whoever that tycoon from yesteryear was who said: "If you have to worry about the price of a yacht, you can't afford it." Same with the SUV guys, the salesman says: "If you have to worry about the price of gas, you can't afford it."

When asked if the rising price of gasoline has hurt car sales, the salesman answers: "Our sales have increased over the past three months, not necessarily SUVs."

The same question is answered similarly by Pat J. Folkins, fleet manager of Northcoast Auto Inc. at the south end of Eureka: "We set a new sales record last month. What's that say?"

And Nissan's Dan Gates responds: "I haven't really seen it impacted a lot."

(You might reasonably expect to keel over if you ever heard a car salesman say, "Hey, the market's really gone to seed!")

But there is also near-unanimous agreement that customers are looking more carefully at the gas mileage they can expect from their new cars.

"I know customers are conscious of the gas price, and the miles per gallon," concedes Northcoast Auto's Folkins. "The gas issue is in front of us all the time."

At McCrea Nissan, Dan Gates tells me: "I have seen people trading in their bigger vehicles -- four-wheel drive trucks, for instance -- to get cars with better mileage. We see a lot of people trying to trade in their SUVs, but they don't have enough equity. They're tired of getting only 10-12 miles a gallon.

"Some people came in yesterday to trade in their Mercury," he noted, "getting 10 miles a gallon. They were looking for vehicles getting 40 miles a gallon."

"So many people are maxxed out," he added. "Between the price of gasoline, the insurance and the car payments, it's costing them $500 a month or more."

Gates said that he himself was brought up short recently when his wife asked: "Do you know we spent $349 on gas last month?"

Out in McKinleyville, used car dealer Opie Hendricks, a fixture in the town for 32 years ("and eight months," he adds), said he is getting "a lot" of people coming in with SUVs for trade-ins. "We got one in this morning," he said. "And I still buy 'em at auctions. Even with the high cost of fuel, sport utility vehicles will still be in demand. It's one of people's priorities. Families are making more money and they find the SUV handy for camping, sport outings, fishing and so on."

A genial, talkative man, Hendricks notes that his own fuel costs on the used car lot have gone from $3,000 a month to $4,000 in the past year. "We have to keep the cars fueled," he explains. "We keep 'em half full, but then you get the customer who says, `I'm not going to buy that car unless you fill 'er up.'"

And even though he's sold on the popularity of the SUV with families, he tells me later that the price of gasoline may well deter SUV sales. "I figure in the next six months I'll see a 20 percent decline in sales of SUVs."

The other day I stopped by the gas station where I regularly go to fill 'er up, and ask the manager if he's getting any complaints about the price of gasoline.

"A lot," he replies. "That's why I wear this sign." He's pointing to a small handwritten note on his shirt that says: "Gas prices are not my fault." He adds, "Nobody wants these prices -- Nobody!

"This area is just that way, and it's been that way for 30 years," he continues. "The bottom line is that it's competition (the lack of it -- that is, in the relatively remote North Coast), and there isn't anything we can do about it."

That explanation is frequently heard -- along with the more esoteric whine that it's some kind of nefarious conspiracy to rip off the consumer -- but it's quickly rejected by Jim Seiler, vice president of Humboldt Petroleum Inc., one of five or six gas and oil distributors in the county.

"That's not true," Seiler tells me. "There's plenty of competition. The problem in Humboldt County is that the major oil companies do not directly supply any of the gas stations, except for two 76 stations (one in Eureka, one in Arcata). All the others are supplied by jobbers, and this is a small isolated area."

Seiler goes on to say: "The problem we have up here, we're complaining about what we're used to in gas prices. In the last two-three years, the price has probably doubled."

Then he throws out a comment that could just possibly give the whiner pause.

"The price of gas, adjusted for inflation, is still not as high as it was 30 years ago. Think about the inflation we've seen in the past two-three decades.

"In 1968," he relates, "I paid $4,000 for a brand-new Pontiac."

Try finding a new car at that price today, he suggests. He figures the sales tax alone on a new car now would pay for a year's supply of gasoline.

In 1973, he reminds one, the oil embargo by OPEC (Organization of Petroleum Exporting Countries) resulting in block-long lines of cars at American service stations. "We recovered from that, and the world has benefited from low fuel prices for the last 18-19 years."

But OPEC, Seiler also notes, has "never been a very stable group," and right now he doesn't see any return to the lower prices of, say, a year ago, as long as OPEC holds the price of crude oil at $34-$35 a barrel.

In a scathing editorial earlier this month, the Santa Rosa Press Democrat chided Americans for their short memories, having forgotten those long waiting lines -- "because we were too busy indulging our appetites for energy . . . too busy buying SUVs, buying the latest appliance and building ever larger houses."

Something else we forgot is that in the wake of the '70s oil crunch, Americans suddenly turned to smaller cars that got more mileage for our gasoline bucks. Japan's Toyota and Nissan companies had the initial edge, and the American automakers tried to play catch-up. Small was beautiful, but then our penchant for bigness gradually returned, and now it's all big and bigger, and the oil crunch is on again. Among car dealers and gas company people the Journal interviewed, there is a consensus that higher gas prices are here to stay.

"It's never gonna be the same again," McCrea Nissan's Dan Gates predicts. We can forget about those halcyon days in the '70s and earlier when gasoline was 70 cents a gallon or as low as 28-40 cents.

Northcoast Auto's Pat Folkins concurs. "We don't expect it (the higher-priced gas) to die." And you can take it from him that gas station owners aren't getting rich.

"I certainly don't think there's some big conspiracy on the North Coast," he says. "For 10 years I sold gas at my grocery store and I didn't get rich in the gas business."

McKinleyville's Opie Hendricks is not surprised at today's higher cost of gasoline. "It's been coming a long time," he told the Journal. And he sees it staying around $2 a gallon for at least the next couple years -- "Businessmen see an opportunity and they take it," he says.

Humboldt Petroleum's Jim Seiler, pondering the question of the longevity of the higher-priced gasoline, starts out musingly, "How long it will be before it gets down to where the price is acceptable..."

Then, as if realizing the absurdity of that suggestion, he abruptly cuts himself off, and says, "Well, it will never get down to where it's `acceptable' -- Never!"

Accountability pays off

The California Department of Education Tuesday released the 2000 Academic Performance Index scores for California schools and most Humboldt County schools scored well.

The API, based on STAR test results, determine which schools achieved predetermined growth targets. Under the Public Schools Accountability Act, achieving targets translates into cash awards for schools.

School that met a 5 percent minimum annual API growth target are eligible for awards under the three programs -- the Schoolsite Employee Performance Bonus, the Governor's Performance Award Program and the Certificated Staff Performance Incentive Act.

The good news, according to Janet Frost of the Humboldt County Office of Education, is that 26 out of 40 eligible county schools met their targets.

The bad news?

"Only one of our high schools (South Fork) was able to meet its target," Frost said. "We believe this will be part of a statewide trend. Most high schools did not show improvement this year."

Schools with less than 100 students tested are ineligible for any of the grants and that leaves out a number of the county's 78 schools. The state is working on an alternative assessment system for next year.

And some of the schools who failed to meet their target can blame it on the fact that they already had relatively good scores. Jacoby Creek Elementary had the highest score in the county -- 856 out of 1000 possible -- and they were the highest in the county last year. But the school slipped by one point, making it ineligible for the grants.

How much money will the awards bring the schools? The final numbers are not in, but administrators are making educated guesses.

The Certificated Staff Performance Incentive Act excludes most area schools because school scores must have been in the bottom half of statewide ranking to begin with and then improved. Only three schools -- Lincoln, Jefferson and Toddy Thomas, all in Eureka -- are eligible for the funds. Teachers at those schools could get a bonus of anywhere from $5,000-$25,000 per certificated employee.

The Schoolsite Employee Performance Bonus is a one-time jackpot. Each employee will get a cash bonus. Full-time teachers and staff should receive around $800. Part-timers will get a percentage of that depending on how much they work. That includes janitors, office staff, lunchroom staff and teacher's aides. In addition, each school gets a bonus equal to the entire staff's bonus.

Morris School in McKinleyville, for instance, has the equivalent of 48 full-time and the school should receive $38,400 in additional funds.

The Governor's Performance Award Program set a maximum limit of $150 per student for the award. However, two-thirds of the schools in the state met their targets and are eligible. Since the fund has a cap -- $227 million -- the award amount would be approximately $75 per pupil.

For Morris School, with 442 students enrolled for the 1999/2000 school year, that's $33,150. If the governor increases the fund by $20 million to make good on his $150 promise, Morris will receive $66,300. Adding the Governor's Award and the Schoolsite bonus, Morris may receive more than $100,000.

Incidentally, Morris deserves the bonus. The school had the largest rise in scores in the county, a phenomenal 113 point jump.

-- story by Bob Doran

St. Joseph buys General

St. Joseph Health System, a non-profit health care provider which includes St. Joseph Hospital in Eureka and Redwood Memorial Hospital in Fortuna, announced Tuesday that it is buying its chief competitor, General Hospital.

The news took the the medical community by surprise, including administrators and the board of directors of General Hospital, owned by a publicly traded hospital system based in Nashville.

"We didn't even know negotiations were taking place," said one source who asked not to be identified.

St. Joseph Chief Executive Officer Mike Purvis said the purchase price is undisclosed while the sale is finalized.

General will be used to supplement patient care services while nearby St. Joseph undergoes major upgrades needed to comply with new seismic safety standards.

"The investment required to make both facilities (seismicly) compliant would be enormous. And trying to continue to provide patient care amid all the construction would be extremely difficult, if not impossible," Purvis said.

Later, the General Hospital facility, about a quarter of a mile from St. Joseph on Harrison Avenue, will be used for ambulatory patients and other services.

Reproductive health services -- such as vasectomies and tubal ligations -- will also be discontinued at General since St. Joseph is owned by the Catholic Sisters of St. Joseph of Orange in Orange County.

Purvis acknowledged there might be some job losses initially, primarily administrative and management.

"What I can say is that, over time, we anticipate additional growth and job opportunities as we expand."

RU-486 not yet available

RU-486, also known as "the abortion pill," is coming to the North Coast -- but not yet.

Mifepristone, a medical abortion technique that has been legal in Europe for more than a decade, was approved by the U.S. government last week. The drug is being considered for use by Six Rivers Planned Parenthood.

Tina Shelton, executive director of Six Rivers, said the Eureka clinic plans on waiting to see how larger Planned Parenthood branches fare with the new drug.

"It's considered a very safe and reliable method, but there's always something to be learned," she said.

The family planning clinic would need some new equipment, such as a sonogram, as well as a comprehensive counseling program.

Shelton said she wasn't aware of any local doctors who were making the drug available as yet, but she expected some to begin offering it soon.

Champagne for water

The U.S. State Department must have a warning flag on Fredy Champagne's passport. He only seems to travel to countries government officials recommend avoiding.

Champagne recently returned from a trip to Cuba with a Southern Humboldt youth baseball team ("Vamos a Cuba," June 8). Thursday he leaves on a trip to Iraq, a country not known for its stability or its friendliness to Americans.

"There'll be some danger, but I don't exactly fear for my life because I believe my good karma will protect me," he said.

Champagne is leading a expedition for the organization Veterans for Peace to repair a damaged water treatment facility near the city of Basrah. While restoring water to the surrounding communities is his immediate goal, Champagne said in an interview before he left that he was also trying to raise awareness of the effects of United Nations sanctions on the Iraqi people.

"We'll be helping to save 60,000 lives in Basrah, but there are 22 million people in Iraq. How do you save lives without dealing with the larger problem?"

County budget passes

The Humboldt County Board of Supervisors voted last week to pass the 2000-2001 budget, roughly $174 million worth of roads, sheriff deputies, social services and more. While concise information on which departments got how much is not yet available, there are several noteworthy features.

The county will be able to give the majority of its staff salary increases, which it had been unable to do for several years, and $200,000 will be set aside for the county's general reserve account to be used for contingencies. Another $200,000 will be used to start on the backlog of deferred building maintenance. A small dent will be put in the deficit in the county employee's medical plan, projected to be a negative $4 million at the end of the calendar year. The liability trust fund, used to pay for expensive litigation not handled by in-house attorneys, will receive a funding boost, and monies borrowed from the Headwaters fund will be repaid.

This progress came at a price. Some groups walked away from the budget process unsatisfied. Health advocates were upset that almost all of the $3 million in tobacco settlement funds was funneled into the general fund, rather than for anti-tobacco and public health programs.

Rio Dell water runs short

Over the weekend of Sept. 23, Rio Dell almost ran out of water.

"One of our tanks went dry and the other two went to extremely low levels," said Rio Dell City Manager Loretta Nicklaus.

That situation triggered a Stage 3 water emergency: No outdoor watering or washing. Water was shut off entirely Thursday night to repair leaks caused in water mains by earthquakes.

Those measures help, Nicklaus said, but do not solve Rio Dell's fundamental problem. The wells that serve the community are simply not producing enough water. The town is currently looking for new sources.

"By next spring the city council should be able to decide."

Pot ordinance passes muster

The effort to pass a medical marijuana ordinance at the county level took a step forward last week. On Sept. 26 County Counsel Tamara Falor presented the Humboldt County Board of Supervisors with a list of changes that would make a proposed draft ordinance legal.

The board had requested that Falor review the draft ordinance regulating the sale, production and use of medical marijuana. She was to evaluate the proposed ordinance's legality in light of state and federal laws prohibiting the use of marijuana.

In her memo to the board, Falor recommends two substantial changes. The board should remove the word "sell" from a passage describing how pot could be distributed from grower to patient, as the sale of marijuana is explicitly forbidden under California law. Falor also suggests it would be less problematic to have growers be "reimbursed" for the costs they incur while cultivating.

Falor also recommends in her memo that the ordinance refrain from specifying the precise amount of marijuana it is legal to grow or possess. Because patients' needs will differ. No one amount -- the committee had suggested two pounds -- would be correct for every patient.

Supervisor John Woolley, who was involved in the drafting of the ordinance, said that there is still resistance from law enforcement, "which has not been happy to see an ordinance."

Asked whether opposition could stop the passage of an ordinance, Woolley said that he hoped the sheriff and district attorney could still be convinced. He added that with the language changes Falor suggests, the board could legally pass the ordinance, "even over the objections of the sheriff."

KHSU to receive grant funding

KHSU, the public radio station affiliated with Humboldt State University, received a boost last week when Rep. Mike Thompson announced a $35,397 grant.

The money is to be used to replace outdated equipment like reel-to-reel tape recorders with modern digital devices. The grant will help complete the conversion of the entire station to a digital platform.

Thompson said in a statement that "upgrading the station from analog to digital, KHSU-FM will greatly improve its broadcasting infrastructure for the over 135,000 residents that rely on KHSU-FM's radio service."

KEET holds candidate forums

A series of forums for candidates running for local offices will be held on KEET-TV, the local public television station.

Oct. 5, candidates for the Arcata City Council are scheduled; Oct. 13, Crescent City; Oct. 19, Eureka City Council; and Oct. 26, candidates for the 1st U.S. Congressional District.

There had been a forum set for candidates for the state assembly, but incumbent Assemblywoman Virginia Strom-Martin's Republican opponent dropped out of the race.

Don't forget to register -- the deadline is Oct. 10.

All forums start at 7 p.m. Call 445-0813 for more information.

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