4/16/25 Growing Pains: When to Expand Your Team + Breaking News with John Cox

The Moneywise Radio Show and Podcast Wednesday, April 16th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Guys" podcast call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Manageme instagram: MoneywiseWealthManagement Guest: John Cox, Business Editor for the Bakersfield Californian website: www. Bakersfield.com

• 0:00Speaker 00

  From the padded radio room off Stockdale Highway, here is Money Wise. Call or text in at 661-396-1000.

• 0:09Speaker 01

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• 0:30Speaker 02

  Securities offered through SCF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SCF Investment Advisors, Inc. SCF Securities, Inc. and Money Wise Wealth Management are independently owned and operated.

• 0:40Speaker 00

  Now, let's start the Money Wise Show.

• 0:43Speaker 03

  Welcome to the Money Wise Show. We are live from the Gero Ellis padded radio room off Stockdale Highway on ESPN Bakersfield, 1230 a.m., 101.1 FM, and always streaming at MoneyWiseGuys.com. You can text into the show 24 hours a day at 661-396-1000. Today, we're your hosts, I'm Sherid Wait and?

• 1:02Speaker 02

  Emily Wait.

• 1:03Speaker 03

  Hey, Em.

• 1:03Speaker 02

  Hey.

• 1:04Speaker 03

  Great having you here.

• 1:05Speaker 02

  Thank you.

• 1:06Speaker 03

  We've had great listener interactions. We've got a few comments and questions to go over when we get started.

• 1:13Speaker 02

  Let's do it. We had a question come in here from Izzy with Izzy's Pest Control. What are your strategies when it comes to hiring? How do you know you're hiring the right person? I'm entering the stage of my small business where I see myself hiring this year. Thanks, love the show.

• 1:29Speaker 03

  All right, so this is a really great question.

• 1:31Speaker 02

  Great question.

• 1:32Speaker 03

  And I think that it's one of the biggest challenges for a small business owner is when to hire and who to hire because generally speaking, labor costs, depending on your industry, is between 30 to 40% of your overall cost. Generally, it's your labor. And so if you're at a business where you're starting out where maybe it's just you or you and a partner, that's actually how we started Money Wise.

• 2:02Speaker 02

  Sure.

• 2:02Speaker 03

  It was just me and my partner. And we were very slow to hire because we knew that if we didn't have the money, it was just on us. We didn't rely on, you know, somebody else wasn't relying on. Us, you know, to, to make sure that they were getting paid. We just had to make sure we didn't even have to worry about us getting paid and we didn't get paid for a little bit.

• 2:27Speaker 02

  Well, you worried about it, but you knew it was part of the growth part.

• 2:31Speaker 03

  Yeah, obviously, we were, you know, we were, we were, we were stressed and worried about, you know, being able to make it, but it was, it was only going to land on us if we didn't. And we could go a little ways without paying ourselves and many business owners, that's how they start out. You know, it's like, I'd love to be on the payroll and I'd love to have it, but when it's, you know, when you're starting out, it's just yourself. It's, it's, it's difficult and you, you wanna, you wanna make sure that you, you keep your labor costs down. You know, some, some problems that a lot of business owners run into, at least when they're starting up, is that they don't ever pay themselves.

• 3:09Speaker 02

  Yes, very common.

• 3:11Speaker 03

  And if they included paying themselves, then you would see that ratio, that labor, you know, that limit of 40% of the cost going towards labor go way higher, which then devalues their business. Cause if they were to sell it, for example, now they have to, whoever's gonna buy is gonna have to, either they're gonna pay themselves or they're gonna pay a manager to run it.

• 3:32Speaker 02

  This is something that a lot of people don't think about.

• 3:34Speaker 03

  Right. Especially, it happens a lot in the restaurant industry. So you've got somebody who's running, you know, a restaurant and, you know, they're, they may or may not be paying themselves enough. And then when they go to sell it, or if they, you know, goes to the market, the, you know, any buyer's gonna be like, well, now I've gotta, you know, hire somebody to run it, cause you're not gonna be here. And that, you know, devalues the company. So it's definitely something you wanna, you wanna be aware of. So it sounds like Izzy's definitely thinking about this. I think there's some good rules of thumb that I wanna give in terms of signs that you know that it's time to hire.

• 4:07Speaker 02

  Oh, good, yeah.

• 4:08Speaker 03

  And so if, if you are turning down business, so for example, you can't take on any more clients, or you're missing opportunities that, where you could get more clients due to, due to some constraints, it may be time to hire. Perhaps your customer service is slipping and that could be a sign that you're over. Or extended, maybe you're working long hours, too many hours, 60 to eight hours a week. That's not sustainable, right? So you can only do that for so long. And you might be doing some tasks that outside sources could take care of. So if you're spending time on administration or marketing, bookkeeping,

• 4:49Speaker 03

  instead of work that is more revenue driven, that's another sign. And you want to look for something, work that is consistent and repeatable. Because that's something that is easier to hire. So certain tasks are predictable, certain tasks are recurring, and those can likely be handed off. So maybe you're doing those as the owner operator. That may be another sign. So, you know, it can be nerve wracking in terms of financially, whether you can afford it or not. You definitely want to have some cash available to be able to, you know, make it. Because now you're going to be paying, you know, payroll taxes, potentially benefits, and the extra wages.

• 5:34Speaker 02

  Because what if somebody is doing, I don't know, say, two of, out of those five things? Like, they're working 60 hours a week. It's too much, right?

• 5:43Speaker 03

  Yeah.

• 5:43Speaker 02

  But they're doing that to just keep afloat. They're not ready to hire somebody.

• 5:50Speaker 03

  Well, you want to get ready, you know? You want to get ready to do it. And so some of those, you know, you need to determine, first of all, you're going to hire, if it's a good hire, it should be increasing revenue or reducing your operational costs over time. You don't just hire just because. You hire because it's going to bring in revenues, or it's going to perhaps help in some of the operations, maybe some of the operations that the owner's currently doing. But now it can allow them to go do other things that are more revenue generating, rather than, you know, like bookkeeping is a classic example. So, you know, before hiring you, make sure you have your standard operating procedures so that the new hire can be productive.

• 6:33Speaker 03

  That's one of the things that, you know, you want to be prepared for. Have a clearly defined role. And you know, you can evaluate outsourcing first so that you know, sometimes a freelancer or a contractor, like a temp using a temp agency or an outside contractor can be

• 6:50Speaker 02

  Like a trial run, basically, like, see how it goes.

• 6:54Speaker 03

  Exactly. You know, work out some of your SOPs and so on.

• 6:59Speaker 02

  Which for the normal listener would mean what?

• 7:01Speaker 03

  Standard operating procedure.

• 7:02Speaker 02

  Okay.

• 7:03Speaker 03

  Yeah, so there you go. Great question, Izzy. Appreciate the comments and questions. We've got another comment there. Did you?

• 7:09Speaker 02

  Yeah, yeah. Thank you for talking the local cost rise. And I understand how you broke it down, but it's just funny. They sit on it and raise costs when most people are hurting financially. Let's just throw some salt on the wound. Love the show.

• 7:25Speaker 03

  Yeah, so yesterday, Emily, we talked about the increase in the sewage sewage and water fees for the city of Bakersfield. It's only been increased twice in the last, I think, 19 years.

• 7:40Speaker 02

  Yeah.

• 7:40Speaker 03

  And it was really, I think, what appears to be the punting of previous city council members not willing to necessarily...

• 7:50Speaker 02

  Kicking it down the road?

• 7:50Speaker 03

  Yeah, kicking, kicking the can down the...

• 7:52Speaker 02

  Not wanting to be the ones who pulled the trigger on that?

• 7:54Speaker 03

  Right, because there were just so minimal, the increases that there were. And so now it's, you know, we're coming up against where we have to upgrade or improve. There's only three sewage or water treatment plants in town, and one of them is, needs to be, I guess, completely redone. It's like hundreds of millions of dollars. And so now we're seeing these sewage fees that people are going to get hit on their tax, property tax bill.

• 8:25Speaker 02

  And you guys talked about this yesterday?

• 8:26Speaker 03

  Yeah, we talked about it yesterday.

• 8:27Speaker 02

  Okay, so you talked about what the current rate is and the proposed rate and all that stuff. Okay.

• 8:30Speaker 03

  Why, did you have it there?

• 8:31Speaker 02

  Uh huh, yeah. Actually, the Bakersfield City did a, did a social media post on this just with, this morning.

• 8:39Speaker 03

  Uh huh.

• 8:39Speaker 02

  And talked about this. The current rate's $2.39 a year, which is about 20 bucks a month. The proposed rate, $9.50 a year, which is almost $80 a month. The, what's driving the increase is wastewater systems aging. I'm sure our guest coming in has a lot of info on this too, but wastewater treatment plant, nearly 70 years old, needs improvements. Delaying these will only increase, increase emergency costs and the risk of system failure.

• 9:05Speaker 03

  Right.

• 9:06Speaker 02

  And some more stuff, but.

• 9:07Speaker 03

  So this is what happens and we, and this has happened to us with our home several times where you get, you get this nice letter from your mortgage company.

• 9:16Speaker 02

  Nice letter.

• 9:17Speaker 03

  It says, oh, by the way, your payment's going up.

• 9:21Speaker 02

  Yeah, sure.

• 9:21Speaker 03

  Because a lot of people, most people pay their property tax through their mortgage payment, through the escrow and their mortgage. And so they're all of a sudden, you either need to start paying more each month, or you gotta, you know, pay, pay up.

• 9:34Speaker 02

  One big chunk.

• 9:35Speaker 03

  Yeah, one big chunk. So that's going to start happening with people. And so those who haven't been paying attention to the news will be like, wait, what? You know, my, my payment's going up. As you said, it went from $20 a month to $80 a month. So about $60 a month.

• 9:49Speaker 02

  So that. This is inevitable, right?

• 9:51Speaker 03

  It's inevitable.

• 9:52Speaker 02

  I mean, yeah, because, because they, they said you, you can offer write-in protests and there's a public hearing, which they have to do, obviously. But my guess is this is moving forward no matter what.

• 10:02Speaker 03

  It's gonna have to.

• 10:03Speaker 02

  Yeah.

• 10:04Speaker 03

  It has to, I mean, like, like they just said, if they don't, then it fails and now you got like a section of the city that can't flush their toilet.

• 10:12Speaker 02

  Yeah.

• 10:14Speaker 03

  I was with, I was on the show with Frank yesterday and Frank was like, looks like I need to invest in a porta potty. This is crazy, you know, but that, I mean, an extra 60 bucks a month.

• 10:23Speaker 02

  No, it's significant.

• 10:24Speaker 03

  It's significant, definitely for families. It's, it's gonna hit them hard. And, um, you know, it's, it's unfortunate that the current city council is the one's gonna have to deal with a PR mess.

• 10:34Speaker 02

  Oh, yeah, I'm sure.

• 10:35Speaker 03

  But that's what happens when you, when you delay.

• 10:37Speaker 02

  The last time was 2016, I think, is what, what, what are the last?

• 10:40Speaker 03

  I believe so. And then before that, and it was real minimal.

• 10:44Speaker 02

  Oh, six was before that.

• 10:45Speaker 03

  Yeah, both of those were like very small increases, you know, over the year. It was, you know, so people wouldn't have noticed it as much. But yeah, you don't stop kicking, stop kicking the can down the road.

• 10:57Speaker 02

  Yeah.

• 10:58Speaker 03

  Why don't we take our first break of the day? When we come back, we're gonna be joined by John Cox. He's the editor, business editor for the Bakersfield, California. We've got a bunch of great stories to talk to John about. We're Money Wise. We'll be right back.

• 11:08Speaker 00

  Are you an employee with a company-sponsored retirement plan? Do you fully understand how you're invested and whether or not you are maximizing your retirement plan's options? For more information on a free assessment, contact Money Wise's 401K specialist, Justin Leland, at 661-847-1000. That's 661-847-1000.

• 11:31Speaker 04

  John Cox. He's a man of a million words. John Cox. He's the king of the business nerds. Looks like Jimmy Elson from Superman, but a little bit taller and a bit of a tan. John Cox. He's from Bakersfield Californian. John Cox. Makes stories on credit unions. It's a good thing that he's only on the radio air. Or else you'd be distracted by his dark flowing hair. John Cox.

• 12:00Speaker 03

  That's right. We're joined today by John Cox, the business editor for the Bakersfield Californian. Actually writes so much more than just business, but we love having John on. Longtime guest of the show. Welcome back. Hey, John.

• 12:14Speaker 05

  Hi there. Thanks for having me.

• 12:16Speaker 03

  Great having you.

• 12:17Speaker 02

  Yes, love having you.

• 12:18Speaker 03

  Can we start with the breaking stuff?

• 12:19Speaker 05

  Sure.

• 12:20Speaker 03

  We've got some kind of breaking news. And this is great because I was going to ask you, well, we can first talk about the Rosedale Refinery because you wrote in the paper, the Bakersfield Californian, about, I think just last week or the week before, that the refinery had acquired a $10 million line of credit.

• 12:38Speaker 05

  Or increased its line of credit.

• 12:39Speaker 03

  Increased its line of credit by $10 million.

• 12:41Speaker 05

  Right. Which, you know, was great because they had, the company had just warned there's concern about whether we're going to be able to continue as a growing concern, a going concern, excuse me.

• 12:54Speaker 02

  Sure.

• 12:54Speaker 05

  And for that reason said, well, we really can't file our annual report, which could have meant a number of things. But they say, you know, we're just too focused on talking with lenders and we're very worried here. And so now we find out.

• 13:07Speaker 02

  What's the news?

• 13:07Speaker 05

  What the news is that the company, Global Clean Energy Holdings Incorporated, now located, headquartered in Bakersfield, filed for Chapter 11 bankruptcy reorganization today. Reportedly $2 billion in debt and that owner, the control of the company will go to its lenders and the company, the US subsidiary of the Taiwanese-based company that did a lot of the engineering and construction of the conversion from oil and gas refining to renewable diesel and other renewable fuels.

• 13:46Speaker 03

  Yeah. So $2 billion. You've been following this refinery, John, for

• 13:51Speaker 02

  How many years now?

• 13:52Speaker 03

  Over a decade.

• 13:53Speaker 05

  Well, it's, well, certainly, yes.

• 13:55Speaker 03

  Back when it was, I mean, before it was even that, it was part of that, a lawn and...

• 14:00Speaker 05

  Right. 2008 was when the big news came down. Well, actually, it was before that. Shell wanted to close it down. Barbara Boxer, you know, put it, put pressure on them. They eventually sold it. Flying J took it over. Flying J couldn't make it work. They sold it to this other company, which had some interesting, strange sort of deal where they're taking byproducts from LA County by truck to, to Bakersfield to create this other fuel. And then that didn't work. And so they sold it to this new company. It was going to convert just the southern portion of the property to create renewable fuels,

• 14:40Speaker 05

  including renewable diesel, which is, at the time, was huge, huge demand. And there's still good demand, but now there's a lot more supply. And so now, you know, not, not a big surprise, this filing today. I mean, they've been having a really hard time. The, the project, the conversion project was much more expensive, much more complicated and difficult than they expected. And so now, if you look at their stock price, GCEH, I mean, it was like 250 and it had a high of 250. It traded that. I don't know that it closed that high, but I believe at one point it was $2.50

• 15:20Speaker 05

  in, in December. Now it is, I believe, less than 12 cents.

• 15:26Speaker 03

  Wow.

• 15:27Speaker 05

  Today. It dropped from like 48 cents yesterday to like, I believe it's, it's something, I think it was below 12 cents right now.

• 15:35Speaker 03

  So it, it looks like they were producing, according to your article, they were producing about 6,000 barrels a day of renewable diesel. It was well below, below its design capacity.

• 15:47Speaker 05

  You know, so they were, they were, the, the design capacity was going to be 15,000 barrels. But really that facility, I mean, if you look at the whole thing, they were hoping to go higher than that. In fact, it used to, it used to refine 60... 67,000 barrels a day of a regular.

• 16:05Speaker 02

  In it a day.

• 16:07Speaker 05

  Right, or at least that was actually 2008.

• 16:10Speaker 02

  Okay.

• 16:10Speaker 05

  So that was, I mean, this is an old refinery. It's actually a combination of three different refineries and one big property.

• 16:16Speaker 02

  Yeah.

• 16:16Speaker 05

  The majority of the site is not being used for refining. It is said to have great value, although, you know, I keep hearing that and, you know, I think it sold in 2020 for $40 million, which is what the previous owners bought it for. They keep on saying, or folks say, well, there's a lot of assets there. You could sell off certain things and yet I don't see that happening.

• 16:41Speaker 03

  Well, so they, so they bought for $40 billion, but apparently put about $2 billion into it? Or they just have $2 billion in debt?

• 16:48Speaker 05

  Right, so bought it for $40 million, put $2 billion. It's just, just things not going well.

• 16:54Speaker 02

  Not going great.

• 16:56Speaker 05

  Yeah, and, and then just, you know, falling out with the different companies, the engineering companies that were going to work on this. And they, you know, at the end of the day, you know, where's our, where's our money? Well, we'll get back to you, you know? And it ends up with lawyers and then ExxonMobil was going to get in there and, and they backed out of it. And you sort of wonder, I, I haven't, I don't have a firm grasp of all the different deals with these lenders, exactly who's going to get what. But, you know, there's been some speculation for a while that this is going to end up with the different companies that it's been working with. They're owed money and they're essentially was like, well, it's yours now.

• 17:35Speaker 03

  Well, yeah, and yeah, because Chapter 11 bankruptcy, that's it, you know, they're, they're, they're going to have to reorganize. And do you see this? What's your feeling about, about it sustain, like staying open? Do you think that it's, it's now maybe sustainable? They could get rid of the debt and?

• 17:52Speaker 05

  The speculation has been that really it needs to change hands, that, that after all of this and all the debt and the financial problems, now you've got something that works. I mean, last we heard, there's been no operational update since December and the 6,000 barrels. I mean, maybe it's up to 15,000. We haven't seen the report. But now that it's working, you would think that if you get on firm financial footing, you could make this thing work. And really, if you look at the headline on the company's news release today announcing the bankruptcy filing, it's very happy. Hey, we're now doing great.

• 18:25Speaker 02

  Good news, guys.

• 18:27Speaker 05

  Bye bye dad.

• 18:29Speaker 03

  Yeah, well, it's called a candlestick burn, right? Where the fire that's

• 18:33Speaker 05

  I think that's what they call it and flare, you know, when you see it burning.

• 18:36Speaker 03

  Yeah, it's it seems it's constant.

• 18:40Speaker 02

  Seems to be always

• 18:41Speaker 03

  Always going. I can see it for my usually on my drive.

• 18:45Speaker 05

  So it's probably working. It's probably producing. You know, just because they haven't announced it doesn't mean it's not actually operational and selling product. They've got a, I believe, a Swiss-based company, I think, that is doing the marketing and the fuel. So they're, you know, ostensibly they're producing goods that are that are going into transportation fuel and fuel in California.

• 19:05Speaker 03

  Yeah, very cool. You got another story.

• 19:07Speaker 02

  Yeah, what else have you got to top news?

• 19:08Speaker 03

  Sort of breaking as well.

• 19:10Speaker 05

  So, yes, and this is a big deal for Kern County's signature. I call it now the signature industry of Kern County, oil and gas production. A very big deal several years ago was the state's passage and the governor's signature of Senate Bill 1137, which created what's called a setback law. And what that did is create a buffer zone, one kilometer, 3,200 feet from a sensitive site such as schools and and and homes.

• 19:40Speaker 02

  Residents, yeah.

• 19:41Speaker 05

  And residents, I believe churches too. And you cannot, in that buffer zone, drill new wells. You can't maintain your existing wells. And what that did is it, you know, limited a lot of ability to do your work on those. Well, today, as expected, I would add, a lawsuit was filed challenging enforcement of that law. And so it was filed in LA County by the two plaintiffs, royalty owners in Long Beach. And they say that, as has been the industry's position for quite some time, that the bill takes away there is an illegal taking of government of private property and their income.

• 20:26Speaker 05

  And that it is, let me see, there was another, oh, it denies them due process.

• 20:32Speaker 03

  Yeah.

• 20:32Speaker 05

  And so there's an interesting background. Originally, they were challenging, the industry was going to challenge this. By voter referendum and things were really going their way. I mean, the opinion polls were very much, you know, it's California. They were going very much, you know, no, this is oil and gas, bad oil and gas, you know. But the industry put a bunch of money and time and getting this on the ballot. And then at the end, and what I understand was a deal that was made, they agreed to drop that. But they told us, the newspaper, they were going to challenge this thing in court. And so, I mean, it was many months ago. And so, that just dropped today. So, yeah, busy day. And it's been a busy couple of weeks, actually. If

• 21:16Speaker 05

  you look in the paper, I've been, you know,

• 21:18Speaker 02

  We noticed, yeah.

• 21:20Speaker 00

  What's new? I mean, you're always busy and you're always writing 50 stories.

• 21:25Speaker 05

  Oh, I need, you know, what I need is not less work. I need more hours in my day. We need 40 hour days.

• 21:32Speaker 02

  Oh, yeah.

• 21:33Speaker 05

  And six day weekends, by the way.

• 21:37Speaker 03

  Yeah, that would be nice. But you do kind of get a weekend now that the Californian has changed its schedule a little bit.

• 21:45Speaker 05

  Although, this weekend, my boss is going to be gone. So I'm going to be editing Tehachapi News on Saturdays and Sundays and Mondays and Tuesdays.

• 21:52Speaker 03

  Oh, gosh.

• 21:53Speaker 05

  But she'll be, she'll be back and things will be back to normal.

• 21:57Speaker 03

  Yeah, yeah. Well, good.

• 21:59Speaker 02

  Sure, whatever that means.

• 22:00Speaker 05

  Whatever that means, right? Writing three stars a day.

• 22:02Speaker 03

  So you also wrote about the partnership between Bakersfield College and Amazon and Wonderful. It's a new industrial workforce training. I think this is really, should be a real positive. I don't know if anybody would be against something like this because essentially, it's a great answer to how do we staff all of these major warehouses and distribution centers that are coming into our county. Some of these are pretty technical jobs.

• 22:30Speaker 05

  True. And part of it isn't so much, how do we staff them? It is how do we fix the robots that are staffing them?

• 22:36Speaker 03

  Yeah, that's right.

• 22:37Speaker 05

  Honestly, that's a lot of this. Is that, you know, if you've been inside or have read our story about how the Amazon place works and in the Walmart, I think it's on the Walmart Distribution Center in Chafter, it's robots that work in there. But somebody's, you know, some of the better jobs, if you're going to work in that, if it's not management or HR, IT, whatever, it's in fixing the robots.

• 23:03Speaker 03

  Yeah.

• 23:04Speaker 05

  You know, so you've, what you want to do is have Good work ethic employees who good with their hands, but you know, you need to train them and that's what this is about. It's maintenance and it's not just the robots, but there's a lot of equipment goes in these things. But if you look at some of the more advanced distribution centers in Kern County, robots are doing a lot of the work.

• 23:27Speaker 02

  Interesting.

• 23:27Speaker 03

  It's a program that lasts about 12 weeks. It looks like the apprenticeship aspect comprises 2,000 work hours. And then at the end, you get a certificate from the US Department of Labor recognizing you as an electromechanical technician.

• 23:42Speaker 05

  Yeah.

• 23:42Speaker 03

  Did you get, I didn't read anything where it said what they're, what they're paid.

• 23:46Speaker 05

  No, that, that was not disclosed. I, I believe it's pretty good though. You know, when you've got that sort of level of certification, that's not someone coming off the street. You know, one of the criticisms or really truths that's out there about our local distribution center is it's, you know, it's not particularly high paying. The idea is that a lot of the workers are folks who used to be work at agriculture. And this is a big step up. It pays better. It is less dangerous. You're working inside.

• 24:17Speaker 03

  Yeah.

• 24:17Speaker 05

  But we have that sort of workforce, people who are good. Maybe they didn't go to college and they're looking for this. So this is, you know, it looks like it's a good opportunity. No, they didn't, they didn't state what the, what it pays. I'm sure that, you know, you can, once you get into it, it should be the first thing you ask, maybe.

• 24:35Speaker 03

  Yeah.

• 24:36Speaker 05

  What do I sign and what's my?

• 24:39Speaker 03

  How much?

• 24:39Speaker 05

  How am I gonna get?

• 24:40Speaker 03

  What are the benefits?

• 24:41Speaker 05

  And then it's, you know, apprenticeship. So how many, what was it like a thousand hours before you get?

• 24:46Speaker 03

  Yeah.

• 24:47Speaker 05

  Before you actually get hired or something?

• 24:49Speaker 03

  Yeah, 2,000 hours, work hours.

• 24:52Speaker 05

  How many hours is that?

• 24:54Speaker 03

  Yeah. How many, is that a year?

• 24:55Speaker 02

  How many like?

• 24:56Speaker 03

  I guess it depends on how many.

• 24:57Speaker 02

  If you're working 40 hours a week, what's the math?

• 24:59Speaker 03

  Yeah.

• 24:59Speaker 02

  Do some fast math, Stephen.

• 25:01Speaker 03

  Somebody needs a calculator.

• 25:02Speaker 00

  Now, what if you're working 40 hours a day?

• 25:04Speaker 02

  Right. Oh, see?

• 25:05Speaker 00

  Ah!

• 25:05Speaker 02

  John wants, nice.

• 25:06Speaker 03

  Well, we got a listener message asking about the Bernie Sanders being in town and that you reported on this.

• 25:12Speaker 05

  I did. I was there. We had one reporter inside.

• 25:14Speaker 03

  Let's take a break first.

• 25:15Speaker 05

  Okay.

• 25:16Speaker 03

  And then when we come back, I'd like to hear.

• 25:17Speaker 02

  Yeah.

• 25:18Speaker 03

  Your insights. I read the, I read the article that you wrote, but we'll answer our listener question about Bernie Sanders being here yesterday. We're Money Wise. Stick around. Don't go anywhere.

• 25:25Speaker 00

  Are you nearing retirement and currently working with a financial advisor? Are you not sure if you're invested appropriately? Call our offices at 661-847-1000 to sit down with a Money Wise financial advisor for a no obligation assessment of your investment.

• 25:50Speaker 03

  That's Mimsy. Welcome back. We're Money Wise.

• 25:54Speaker 02

  Welcome back.

• 25:54Speaker 03

  I'm here with Emily. I'm Sherrod. We're joined by our guest, regular guest, John Cox from the Bakersfield Californian. John, we got a listener message here. It says, I know Bernie Sanders was in town earlier this week, and I was just wondering if these types of big events benefit local businesses. Looks like there were a ton of visitors here the last few days. So.

• 26:14Speaker 02

  I noticed that as well, especially downtown.

• 26:16Speaker 03

  Yeah. And I noticed in your article that you must have been, today's paper came out, right? Because they were just here yesterday.

• 26:23Speaker 05

  Right.

• 26:23Speaker 03

  That you interviewed a lot of people and it seemed like almost all of them were from out of town. The ones that at least you talked to.

• 26:29Speaker 05

  A bunch of them. I mean, I also spoke to a bunch of people who were in town and, and nobody was like wearing shirts and said, hi, I'm from, you know, but I spoke to people in Tehachapi, people from Inyo Kern, you know, one guy from Inyo Kern, I think a couple from Tehachapi.

• 26:44Speaker 03

  From Fresno.

• 26:46Speaker 05

  Fresno, LA.

• 26:47Speaker 03

  Yeah.

• 26:47Speaker 05

  And at least a couple from Bakersfield.

• 26:50Speaker 03

  Yeah.

• 26:50Speaker 05

  So, you know, the suspicion is, hey, they're busing these people from out of town. I don't know. Maybe they are, but certainly there's local people here. And what I, one sentiment I heard, and I talked to a bunch of people, was that, you know, we just feel like we're surrounded here and it's so nice to feel like community.

• 27:06Speaker 03

  Yeah.

• 27:06Speaker 05

  So I can see where they come from.

• 27:08Speaker 03

  Yeah. So, and you know, just our.

• 27:12Speaker 03

  Evidence in terms of business activity, the Woolworths building got tagged with a political sign.

• 27:19Speaker 02

  Well, well tagged is, I guess, yeah. But a big vinyl sign on our, on our fence.

• 27:25Speaker 03

  On our Woolworths fence, but it's like massive, massive sign. And I don't know if it, it probably had to do with, it coincided, it was yesterday.

• 27:35Speaker 02

  It was the same day.

• 27:36Speaker 03

  Yeah, so there, there must have been some people out.

• 27:38Speaker 02

  There were some other spots downtown that got the same sign put up.

• 27:40Speaker 05

  Wow. Yeah, that, that sort of goes against your cause. Whatever you're trying to say, you just undercut it a little bit.

• 27:47Speaker 03

  Yeah, I guess so. I guess so. I mean, some of those people had to eat somewhere, though. Like, I'm guessing that that, it was, there was some business given.

• 27:55Speaker 05

  You know, I've written, the, the story that usually falls to the business reporter in the newspaper is, what's the economic impact of this event? And what it comes down to is like, three main things. You've got hotel stays, so maybe the people spend a night or two, maybe. I don't know. Another one is, well, food, you know, they go eat lunch or whatever downtown area, which probably they did, there didn't seem to be, and I didn't go inside the building, I covered the outside. And, and, you know, Bernie and AOC were out there.

• 28:25Speaker 03

  Did you, were you there when they came out?

• 28:26Speaker 05

  Yes, I was. I couldn't see them. Oh, I could only see them with the, there was such a crowd around them, people holding their cell phones up and videotaping it, so I was able to see their cell phones and see what they looked like in the cell phones. Because you couldn't see them, because there was such a crowd.

• 28:42Speaker 03

  Right, right.

• 28:44Speaker 05

  So that's another impact. You've got the, the, the restaurants or bars, you know, whatever, and the hotels, and the other one is buying gas, basically, in convenience stores. But that's it. It's not like, you know, when you go visit another place, what do you do? What do you spend money on? Well, those things.

• 29:00Speaker 02

  Yes, it's true.

• 29:01Speaker 05

  You don't just say, well, you know, here's a little tip for Kern County.

• 29:03Speaker 03

  Right. Put this in the treasury.

• 29:05Speaker 02

  Donation. Tip jar.

• 29:08Speaker 03

  Any observations, you know, or anything interesting that you saw there?

• 29:11Speaker 05

  Well, it was interesting. Yes, so.

• 29:16Speaker 05

  My assignment, as it were, and I sort of created it for myself, was to get reactions, reacts, as we call it, R E A X in the newspaper business. Every story, big story has a reacts. And so I did, I talked with a bunch of people. One of the things I decided first, the first people I came up to walking to the site from the I Street parking garage was, you know, people holding, you know, Trump signs and, you know, demonstrating, the counter demonstrators, which I thought were going to be the only ones, I was wrong. But they were there and I saw, I was at Trucks in an O. And as I was there, this lady drives by in her car with birds flying and, yeah.

• 29:58Speaker 05

  And supposedly she had a kid in her back and just cussing out this lady who was like holding a pink Women for Trump flag. And they were just both going at it right there. I mean, shouting, and the lady on the sidewalk had a, had a bullhorn just shouting into there. You need Jesus, Karen. It was ugly. And apparently this had been happening over and over, the same woman just going around the block.

• 30:24Speaker 02

  Wow, she's really setting the scene.

• 30:26Speaker 05

  Yeah. And so, you know, that's the, but you know, that was kind of it.

• 30:30Speaker 02

  Okay.

• 30:31Speaker 05

  There wasn't any, it didn't get ugly. So you had, certainly you had socialists who like socialism is the future. So you had the sort of farther left. And one of the, the perception that I got was Bernie and AOC, who on the national scene looked like, you know, the extremists, they look very mainstream at this thing. Cause you had people to the right, you know, demonstrating outside. And then you had, you know, the socialists, which may or may not be, you know, perfectly aligned with AOC and Bernie. And then, then across the street, like halfway into this event, out come the pro Palestinian protesters, the other counter protesters.

• 31:05Speaker 02

  Yes. I saw them walking to the event.

• 31:08Speaker 05

  Right.

• 31:09Speaker 02

  Yes. And I was like, what's going on? Oh, it all checked, checked out for me.

• 31:12Speaker 05

  Right. And so they were upset with Bernie for not acknowledging the Palestinians, whereas apparently AOC has.

• 31:20Speaker 02

  Yeah.

• 31:21Speaker 05

  And so, you know, so you've got AOC and Bernie Sanders looking very mainstream. Because you had the the the counter demonstrators on the right and counter demonstrators on the left.

• 31:29Speaker 03

  Far right, far left.

• 31:30Speaker 05

  Yeah, it's like, oh, well, they're very mainstream. And I talked to this woman from Fresno who's a physician. She said, you know, she's never voted for, uh, in recent years for, you know, Bernie. She said that she voted for the mainstream Democratic nominee, which was Hillary, which was Kamala Harris, Biden. But she never voted. But then she said, you know what? He just made a lot of sense. I agreed with everything he said. And so, you know, I wonder, I mean, is that because we're in red territory where any blue message, you know, if you're, if you're not down with the red, any blue message looks very reasonable? I don't know, you know, but it became, it kind of put things into perspective.

• 32:15Speaker 03

  So you also mentioned this kind of kind of segue into another, another couple of articles that you've written because I think you interviewed somebody who's, who's said, who was a little lukewarm on Trump's policy with tariffs and some of the, maybe some of the pullbacks that are fund, a pullback of funding of certain projects. And we've got several projects going on in Kern County that are hundreds of millions of dollars that were already, have already been approved and, and, and grants have been approved, but now there's some pullback.

• 32:46Speaker 05

  There's some real questions about whether those are going to be denied, yeah, clawed back, I think they're calling it. And I saw a letter today that we'll be reporting on later. But before I, before I talk about that, we took a look at some database entries that said a half billion dollar subsidy proposed for the cement plant near Gorman that has been recommended for termination by the US Department of Energy. Now, that's a big project.

• 33:17Speaker 03

  Yeah, $500 million project. It's a, it's a carbon neutral cement plant.

• 33:23Speaker 05

  Right. Yeah. And a lot of different things, very advanced thinking in California, you know, you're not going to be able to have these plants unless they are carbon neutral. And this, you know, project would get that plant there, but it has been. And proposed, and there's no final decision. I was very pleased to hear back from the DOE. Apparently, other media, national media have written about this project. The DOE never got back to them. Well, they returned my call.

• 33:47Speaker 02

  That's because you are John Cox.

• 33:49Speaker 03

  Be John Cox.

• 33:50Speaker 05

  Well, I think that probably they took so much heat last week for not responding. They decided to start responding.

• 33:56Speaker 03

  Yeah.

• 33:57Speaker 05

  Or week before last. Anyway, so this letter I saw today was addressed to Vince Fong, and it consisted of comments from, or it was one letter, but the signatories were Kern, EDC, and BizFed, and individual companies. And they said, besides that cement plant, you've got carbon tar vault by CRC, you know, the carbon capture.

• 34:27Speaker 03

  Hydrostore?

• 34:28Speaker 05

  I'm not sure if it was Hydrostore. I think it is Hydrostore. But a total of four projects totaling, you know, $5 billion. And it, and it, it wasn't just Vince Fong who received the letter. It was also David Valdejo. And they're saying, we need you to step up. We need you to advocate on our behalf. And so, you know, Valdejo has worked with other congressmen to send letters to Mike Johnson, saying, you know, the House Speaker, saying, you know, these are important projects. Many of them are in Republican districts, as ours is. You need to go to bat for us. You need to not, you know, roll back these subsidies given out under the Biden administration.

• 35:13Speaker 05

  And so, this one looks to do the same. And it really sort of delineates how much is at stake. Big projects here.

• 35:22Speaker 03

  Yeah.

• 35:22Speaker 05

  So Vince Fong has not publicly said much about this. I did ask him, sort of coincidentally, about a month ago through his spokeswoman, you know, what are, what's your feeling on these projects? There's a real lot of uncertainty when Trump came over and said, you know, the Chinese hoax with the climate change, and we're going drill, baby, drill. Support for, you know, coal. And he got back and said, I support, you know, clean energy. I said, whoa, whoa, whoa, I'm talking about carbon capture here. And so, they, he sort of added that statement there. But now, they're looking for more than a statement. You know, because... Mr. Fong has largely agreed with a lot of things that Trump is doing.

• 36:04Speaker 05

  But he has not, well, I don't know what, I don't know to what degree he has actually spoken up and said, we need these projects. By the way, you guys aware of the refinery thing today?

• 36:13Speaker 03

  Yeah.

• 36:14Speaker 05

  Yeah, the Benicia refinery.

• 36:16Speaker 03

  No, what? I haven't heard this.

• 36:18Speaker 05

  Well, they told the state, they're pulling, they're closing the thing.

• 36:21Speaker 03

  Oh, boy.

• 36:22Speaker 05

  And it's like 20% of California's gasoline supply. They're pulling out. And Fong put out a statement like, this is what we could have expected. And frankly, he's got a point.

• 36:31Speaker 03

  Yes.

• 36:31Speaker 05

  California has been so anti-refining.

• 36:34Speaker 03

  Refinery, yeah. It's terrible because that's really, now we're, you know, losing this. We've had Chad Hathaway on the show regularly talking about this problem in California and the issues that are around refinering, refining in California that now you have one that catches on fire and, you know, where you think gas prices are expensive now, they're not going to get any better. It's so much of the cost of gas isn't the crude oil, it's the cost of refining in California.

• 37:03Speaker 05

  Supply and demand too.

• 37:04Speaker 03

  Yeah.

• 37:05Speaker 05

  You know?

• 37:05Speaker 03

  Yeah, right.

• 37:06Speaker 05

  There's only so much supply and demand remains the same.

• 37:09Speaker 03

  And the demand keeps going up. Exactly. And a lot of these regulations aren't addressing the demand side. It's all just the supply side. And eventually that can catch up to us, you know, these lawsuits that we were just talking about, the lawsuit to ban the maintenance of oil wells near properties and, you know, all these things, it's a mess. So, did you, you haven't heard, but you've reached out to Valadeo and Fong?

• 37:38Speaker 05

  You know, so I decided I'm going to do that tomorrow. So, I have in the past.

• 37:43Speaker 03

  Yeah.

• 37:43Speaker 05

  And Valadeo, he has been, you know, part of these groups of Republicans sending letters, I believe he's signed at least two of them, calling on Mike Johnson to not pass any bills. But, you know, how much is legislature involved in these things? It's the executive branch that seems to be pulling the strings right now in Washington.

• 38:03Speaker 03

  Right.

• 38:03Speaker 05

  So, is he sending it to the right people, person? And- So I mean, we'll see what happens. Vince Fong, I just don't know how much the legislative branch can do on these things.

• 38:17Speaker 03

  It would take a lot of them, is my guess. And it would, I don't know. Yeah, this is a big deal. It's a $5 billion for Kern County is close to about 10% of our GDP. You can imagine the United States, you know, is the world leader. California is the, you know, fifth largest economy and Kern's up there. It's not the, it's not the most wealthy county, but you know, we're 60, 70 billion total.

• 38:48Speaker 05

  And in energy, we punch way above our weight.

• 38:50Speaker 03

  Way above. And so you have a blow like this could be substantial. And so, you know, we haven't heard from, so the DOE, Department of Energy is saying this, but they, I guess they're, they would be the ones that would be getting the orders from the White House to do this?

• 39:06Speaker 05

  You know, I believe so. There's like an office within the DOE that had been awarding these, these grants that are now in jeopardy or appear to be in jeopardy. You know, a lot of this came from the Inflation Reduction Act, I think 2021, signed by former President Biden. I think that Trump would like nothing more than to just, you know, scratch all those out. You know, you're reducing taxpayer burden, you're drilling baby drill, even though prices are down. But, you know, to what degree are you, are you hurting your own districts? I think that's what it's kind of come down to. But I don't know that that's going to necessarily stop him.

• 39:47Speaker 03

  Yeah, yeah, we don't know.

• 39:48Speaker 05

  If he does these.

• 39:48Speaker 03

  Well, we'll stop it. A message here kind of refers a little bit to what we're talking about. It says, "Does the cost of water increase in Bakersfield hurt local farmers? They continue to get hit and thought we could figure out something to help out our farmers. Feels like it's not that important to the decision makers anymore. John is such a great writer and we are lucky to still have him. P.S. I saw that crazy lady and felt so bad for the kids in her car. There was actually two kids in the backseat."

• 40:17Speaker 05

  They learned a lot about obscenities yesterday.

• 40:20Speaker 03

  Oh, my gosh, yeah.

• 40:21Speaker 05

  Well, thanks. That is an awfully nice message.

• 40:24Speaker 03

  Very nice, very nice comment. You know, the water issue, I don't know about the water increasing. I don't know how this would impact farmers because I don't think there's a lot of farming going on in city limits, you know, within the city, but I don't know, maybe it could affect them.

• 40:39Speaker 05

  But, yes, the price of water has gone up and it has become more precious. You know, we've been very fortunate to have some good water years and that allows the, you know, the state and federal water projects to send more water down that ends up in Kern County, which is great. It is said that the Trump administration's promised to address, you know, the water situation in California, such as, you know, the questions when he was in town last time, when he came to Bakersfield, or Oildale, I should say. He pledged to, you know, make some regulatory changes that would send more water to the Central Valley farmers and less, you know, out through the Sacramento, San Joaquin Delta, I think it's called.

• 41:25Speaker 05

  So apparently, his doing that has sort of blunted some of the criticism that he would otherwise have received from the farmers who are just planning to be pummeled by these tariffs.

• 41:38Speaker 03

  Yeah.

• 41:38Speaker 05

  These tariffs are going to be very difficult for almond growers, for pistachio growers, wine grape growers, not as much, I think we do some wine grapes here. Table groves, citrus, dairies, all of them are in line just to be slammed if these tariffs go through. And so, you know, the analysis that I have read, analyses, more the ones, say they're willing to be quiet reportedly on these tariffs as long as they get the water that has been promised to them.

• 42:14Speaker 02

  Okay.

• 42:15Speaker 03

  Yeah, you know, I have very limited insight into how farmers are feeling about the tariffs other than we have, we've had Steve Murray on the show from Murray Family Farms, and I know he's involved in the ag community. And last time we had him on, I asked him about the tariffs and he was, he, he, I'm summarizing what he said, but he, he wasn't too concerned about it because he was remembering what happened in the first term, which was, these were like very temporary and actually there was some silver linings involved depending on what you were growing. And I can't remember what crops there were, but there were certain crops where you're like, oh, this is actually good for us.

• 42:50Speaker 05

  I don't think that he grows nuts, though.

• 42:53Speaker 03

  Right, right.

• 42:54Speaker 05

  The almond guys are supposedly going to be hit the hardest, like three quarters of the, of the nuts grown, of the almonds grown here go overseas, expected to be hit by that. China never did lower its tariffs, India did. And one thing to keep in mind about that is, the Trump administration did, you know, sort of compensate farmers for this, but not California farmers so much.

• 43:20Speaker 03

  Right.

• 43:21Speaker 05

  You know, specialty crops like, for the most part, did not get compensated for the damage they suffered. And not only is it the direct damage, one of the bigger problems here is your trade relationships.

• 43:32Speaker 03

  Yeah.

• 43:33Speaker 05

  You know, Australia loves this situation because they go in, they start making deals with the Chinese, for example, and now, let's say all this is resolved, we've got to deal with the Chinese. Well, the Australians already got these trade relationships.

• 43:46Speaker 03

  Now we lose market share.

• 43:47Speaker 05

  Right.

• 43:47Speaker 03

  Yeah, it's, it's, it's ugly and it could get, it could get worse before it gets better, unfortunately. And almond growers can't afford to lose much these days. I don't know, they're not, they're not hardly, I don't know if any of them are making any money right now.

• 44:01Speaker 05

  Right. No, the, the prices were just coming up and that's partly the reason they went down, or apparently a very big part of the reason they're not $4.50 a pound anymore is the tariffs.

• 44:09Speaker 03

  Oh, boy. Um, shifting gears a little bit, you've written and you've followed up on the Tone Ranch developments. There's so much that seems to go on there that continues to develop, but this is a very kind of interesting drama. It's essentially, it's a, it's a, a bored, a bored political move.

• 44:31Speaker 05

  My gosh.

• 44:32Speaker 03

  Shareholder, shareholder board manipulation. Can you talk about it?

• 44:36Speaker 05

  Yes. You know, I had heard rumblings years ago that shareholders were tired of the lethargic performance of the Tohono Ranch stock price, which is where it was today, roughly where it was 40 years ago. So if you look at, you know, stock, is this a good investment is what they're asking themselves. And so it was last year that this group came in and said, you know, don't vote for their executive compensation plan. Do not support the directors that the company floated. Well, they got by. None of that passed, but it sort of shook the company. And the company did go ahead and change its CEO and president, the same

• 45:18Speaker 05

  dude. And then they also brought in, I believe it was four new directors to the board of directors, you know. So there was, there was an acknowledgement, hey, you know, we're keeping up with the times.

• 45:28Speaker 03

  Yeah.

• 45:29Speaker 05

  And yet this, this other, this group from New Jersey kind of buys a few shares, not a few, but you know, nothing huge. And then they come to visit. These are, this are activist kind of shareholders.

• 45:42Speaker 03

  Yeah, yeah.

• 45:42Speaker 05

  And they come and visit and they, you know what, we, we think you should stop doing these developments, these master plan communities, and instead focus on the Commerce Center. And the company's, well, it was nice to see you. Come visit us sometime. No. And then they buy up a bunch more shares, this New Jersey company.

• 46:00Speaker 03

  Yeah.

• 46:00Speaker 05

  And they start filing with the SEC, speaking directly to the shareholders, who's with us now? We're going to shake this thing up. We're going to put in three new directors. Everybody vote for our directors and vote down theirs because we're going to, we're going to change the direction of this ship.

• 46:15Speaker 03

  Yeah.

• 46:16Speaker 05

  And so now. Spicy. And yeah. And then the company goes, puts out a big news release about this and defending itself. I mean, they, they kind of did to, when I, when a story that I wrote about this, but then they put out a news release afterwards, say, you know, these guys don't know what they're doing. They don't have experience in this. They're, they're really, it's the wrong agenda. And then the other company files back. With the SEC again, saying, no, no, you know, they're, they're just, there's insiders, they're making all the money with the stock grants and the executive bonuses. No, you know, so it's coming up like next month.

• 46:49Speaker 03

  Yeah.

• 46:49Speaker 05

  There's gonna be the big vote and we will see what happens.

• 46:52Speaker 03

  It's the New Jersey hedge fund is Bulldog Investors that's kind of doing this. It's, it's interesting. I know just, again, just my little knowledge of Tohone Ranch. I love, you know, like the ranch, the, the nature and all of that, but all the development stuff, it's always been like, we've got the, we got the outlets, but what about the other things? You know, what about the big community, the big?

• 47:14Speaker 05

  Tohone Mountain Village.

• 47:15Speaker 03

  Yeah, Tohone Mountain Village.

• 47:16Speaker 05

  Centennial and Grapevine.

• 47:18Speaker 03

  Yeah, where are they?

• 47:19Speaker 05

  So the company's perspective on this is that they have been vigorously defending against attacks from, you know.

• 47:28Speaker 03

  Environmentalists?

• 47:29Speaker 05

  Yeah, the Center for Biology of Diversity and the usual folks who are saying, you know, you didn't comply with CEQA, the California Environmental Quality Act. And so the company has spent something like 300, I think it was 300 million dollars in, in entitlements and just one step forward, two steps back, this sort of thing. Or I think I got that backwards. Cause you know, they, they, they believe that they have it, but you know, these investors saying, when are you going to unlock this value? And that's what Bulldog says, that we need to come in, do things differently. And then it's all the, suddenly the price, stock price is going to rise, everyone gets rich, you know. So we'll see what happens. It could very well come down to this vote.

• 48:07Speaker 03

  It's a fascinating story because Tohone Ranch is the largest private continuous landowner in the state and they had, they struck this deal years ago with Schwarzenegger, right? Where they were able to, we're going to preserve 90% of it or 95% of it. And then we just have this little section over here that we want to develop. And then they go to start developing it and they just continued to tax.

• 48:28Speaker 05

  Clobbered.

• 48:29Speaker 03

  You know, clobbered. It's like, oh, man, it's can't, you can't win. Can't win. But at least we got the outlets. I've only been to once or twice. It's cool. Outlets are, are fine. Well, John Cox, thank you so much. Thanks for taking the time.

• 48:43Speaker 02

  So great to have you, John.

• 48:44Speaker 03

  Yeah, I really appreciate it. Go subscribe to the Bakersfield Californian. Now it comes in the mail. You don't have to get out. It'll be right in your mailbox even. Remember these three things. Be smart, be safe, and always be money wise.

• 48:57Speaker 02

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