Winter economics for 2012
This unusual early winter, largely without snow and, at least until recently, with record breaking warm temperatures, is creating its own ripple effect.
A year ago, it was a different story.
The winter of 2011 brought plenty of snow and cold. A New Year’s Eve ice storm, followed by continuous cold, left area roads ice covered and treacherous. Battling that ice storm was an ongoing effort throughout the winter. Crow Wing County and area cities depleted stores and then wiped out reserves of salt and sand. The region was so hard hit, Baxter reported the city couldn’t even fill orders to replace its supply.
That isn’t the case for the winter of 2012.
“This is probably the most mild winter I have seen in 25 years,” said Jeff Hulsether, Brainerd city engineer. “I do not remember a year where we have not plowed at all this late in the season.”
What little snow has fallen hasn’t amounted to much. Brainerd, Baxter and Crow Wing County reported the slow start to this winter has allowed them to replenish sand/salt reserves. Brainerd spends $20,000 on salt and sand and is saving on purchases of cutting blades for the snowplows, which can cost $5,000 to $10,000 each year. And there is saving on city budgets in regard to overtime as crews work first to plow and then remove snow after a typical winter storm. For an 8-10 inch snowstorm, Hulsether said the city may burn 700-800 gallons of diesel fuel to plow and remove the snow. Heavier snow means using more fuel. At $4 a gallon that adds up to $3,000 cost for a single snow event.
Crow Wing County’s Highway Department uses a five-year average to determine snow and ice control operation expenses. Rob Hall, acting Crow Wing County engineer, reported the county uses that rolling average because of the great fluctuations from year to year in labor hours, fuel and mainly the salt/sand supply.
“For example, the winter of 2010/11 resulted in costs related to snow and ice control of $699,000,” Hall stated. “In comparison, the winter of 2009/10 resulted in costs of $264,000. The current five year average that we use is $485,000.
“In addition to the five-year average, we research and take into account economic trends such as whether diesel will be $3 per gallon or $5 per gallon, whether salt is likely to be $60 per ton or $90 per ton.”
Hall said in the past five years, the average amount spent on winter maintance — which typically goes from November to March — has been $324,000.
“As one would expect, the amount spent in November and December of 2011 is substantially less, at a total of $94,000,” Hall said. “This is an amount of $230,000 below the average. The majority of these savings will not be realized until the fall of 2012 when we purchase salt/sand materials for the winter of 2012/13.
“If the winter were to continue as it has, our salt/sand storage buildings will remain 50 percent to 75 percent full, but we will not hold our breaths on that until we see April roll around.
“Another item to take into consideration is that the county works on an annual budget from Jan. 1 to Dec. 31. The months of January through March of 2011 resulted in our department expending $133,000 more than our five year average for those months, meaning we basically started the 2011/12 winter in the negative. Between the $230,000 savings at the end of 2011, and the $133,000 amount over in the beginning, the net for 2011 was an amount $97,000 below what was anticipated.”
Money saved this year will be set aside to use next winter in case it pushes the average the other way. The county highway department also looked as ways to save and use earth excavated when a new cell was created at the landfill for an estimated saving of about $180,000 on sand costs during the next eight years.
In Baxter in 2011, the city budgeted $35,000 for contract plowing in its commercial areas. For the winter of 2011, the city expended $17,917 or 51 percent of the budget within the first four months of the year. Compare that to $12,061 spent during the entire 2010 calendar year. So far with this season’s mild winter, contract plowing in Baxter wasn’t necessary in November and December, saving the city about $17,000. Baxter has also saved in overtime pay. Last year, Baxter paid $3,365 in overtime pay, spending 62 percent of the street department’s annual overtime budget in just more than three months, the city reported.
“More importantly, the mild weather during the last few months has freed up the city’s maintenance staff to work on other outside maintenance projects, including water valve replacement inspections and chip trail maintenance,” reported Jeremy Vacinek, Baxter finance director.
But government officials aren’t counting their savings yet.
“Sometimes it catches up to us,” Hulsether said, noting snow could arrive yet in March or even April. But Hulsether said if current conditions keep up there will be a savings of salt/sand, meaning not as much will have to be purchased in 2013.
Hulsether said the lack of snow has a double edge. Others in the economy — hotels, restaurants, convenience stores among them — depend on snow and winter recreation.
“It hurts the entire local community,” Hulsether said of the lack of snow. “The money we save on snow removal doesn’t offset that.”
Economic ripple effect
The ripple effect, with bare pavement for much of the winter, hasn’t provided slippery surfaces for the typical winter crashes.
“Now with today’s recent cold snap, we see a lot of heater problems, a few fender benders, but really the big problems we’re seeing is that with the warmer weather we had, people had spring on their minds and fixing cars wasn’t a priority,” said Mike Forland, owner of Advanced Auto Repair, Brainerd. Forland said even with changing conditions they don’t really have a slow time. “So now they’ve got heaters that don’t work real good and cars that won’t start. Especially now with the cold today and the past few days, they’ve got huge sense of urgency to get this stuff done.
“But yeah, we’ve definitely seen an influx of things that break on cars related to the cold now. Cars not starting because it’s cold, tires with the colder air temperature decrease the tire pressure — which the overall moral there is to constantly check tire pressure.”
Vic Mars, owner of Vic’s Auto Repair, Brainerd, said: “The last five or so years have just been different, weather affecting or not. It used to be you could be busy up until Christmas time and then after Christmas things would slow down, but now it’s just kind of slow period. There’s no real gage anymore.”
“In relation to the weather this year, it seems like the warmer weather people kept putting things off until it was 20 below. Things like heaters, and tire rotations and brakes — no one had thought of until the cold weather actually hit.”
But does the warmer winter have an effect? Yes and no, Mars said.
“I would say that there are so many outside factors that go into why business is hurting and ultimately it’ll come back to the economy. The cold snap we’ve had now though shows how weather can affect your car and then, in turn, our business.”
Perhaps one of the most obvious businesses affected this winter comes with snow removal companies.
“It’s definitely impacted us a great deal,” said Mike Schwarze, owner of Mike’s Tree Co., Pillager. “In years’ past, we’ve always kept three or four individuals on year-round from our tree care staff to subsidize for snow removal, but this year we essentially laid everybody off due lack of snow. It’s definitely different this year and the lack of snow has hurt business for most part.”
Schwarze said they have been busy salting sidewalks and are still plowing for customers but this year, they essentially cut the staff in half. Compared to last year, Schwarze said business is down as much as 80 percent compared to last year. “Typically we’ve seen January always have very little snow but now (this year) we’re missing part of November and December, so that will hurt our bottom line as far as snow plow goes. We maintain probably more than 40 properties, commercial only with a few associations and a couple driveways but we haven’t done any of those. Out of almost 200 some driveways we haven’t plowed any of them once.”
Terry McQuoid, owner of McQuoid’s Inn, Mille Lacs/Isle, rents snowmobiles. The business, he said, has been nonexistent so far. “We haven’t sent a single one out.
“There is one time, back in the 2001 or 2002 winter when the weather was a lot like this and it put us in a bit of a slump, but it still almost seems like it’s worse now. In a normal (winter), we rent about 15 or so machines, with our biggest years up to 40 machines go out two or three days a week. But now we haven’t sent a single one out.
“There’s just a whisper of snow on the lake, and it doesn’t sounds like its going to be getting any better. We just need some snow. Most everything we do is either related to ice fishing stuff on the lake or snowmobiling. The ice fishing has finally gotten good on our end of the lake but the snowmobiling hasn’t been around.
“We get a lot of calls, people continually checking and following up on what it’s like up here and we’re still getting quite a few reservations ahead of schedule which is helping and paying the bills. But currently for both ice fishing and snowmobiling we’re still sitting behind.”
McQuoid said they are just waiting for one good snow. They are still planning to hold the Arctic Blast, children’s fund raising snowmobile ride, in February.
“Worse comes to worse, we’ll have to look in to running with the four-wheelers,” he said.
At Boats & Beyond Rentals in Nisswa, Jay Chaney said last year was one of the businesses best winters. This year has been the worst, by far, he said. “We’ve got 15 snowmobiles and not one has seen snow yet.”
“Right now we’re in our fifth year in business, third year with snowmobiles,” Chaney said. “We started with seven, the added some more last year with nine and this year we’re at 15 because we saw success in it. Every weekend we were booked solid with snowmobilers.”
Chaney said the past summer was the best one they had and if the winter had followed in 2011’s example, they would have had a great start for 2012. They’ve supplemented the winter business with fish house rentals, which Chaney said has helped. “It’s kind of funny, when people call from the (Twin) Cities, most people don’t monitor our weather and they just assume the Brainerd lakes area has a lot of snow on the ground, so the calls for rentals come in and we have to, unfortunately for everyone, tell them we don’t have any snow and can’t rent.”
With Super Bowl weekend and the Jaycee’s Ice Fishing Extravaganza coming up, Chaney said they can just hope for snow. But Dutch Cragun, owner of Cragun’s Resort, said he doesn’t hold out much hope for the rest of the year. “Right now, we’ve got 25 snowmobiles under wraps and have not gone even one mile this year. There hasn’t even been enough snow to break them in.
“By this time of the year they’re looking for lake related snow but in my mind we’ve lost the snowmobile business for the year already,” Cragun said. “I’ve never seen a winter like this since opening up year round more than 30 years ago. The reason we opened year round in the first place was to attempt to get snowmobilers in the area, we needed that business.
“We’ve definitely seen a drop in reservations, but like always, we have good years — like last year, and bad years. Without snowmobilers it hurts.
“The most important thing I think is that folks in the Brainerd lakes area now realize what we have here in the winters. It’s something that people will drive hundreds of miles to experience and it helps businesses all around the area.”
RENEE RICHARDSON may be reached at 855-5852 or email@example.com.
JESSI PIERCE may be reached at 855-5859.