Water situation called “dire” for coming months By Paul Brinkmann
As October passes, so do the chances of avoiding a crippling water shortage for another year in South Florida. The biggest water “holding tank,” Lake Okeechobee, is at historic low levels. And this year’s rainy season all but finished. Businesses ranging from golf courses to sugar cane growers are bracing for the worst over the coming drier months. Cane growers are already operating under an unprecedented 45 percent reductions in their water allowance.
“The current situation is very dire. It’s scary,” said Barbara Miedema, spokesman for the Sugar Cane Growers Cooperative of Florida. “We’re verging on uncharted territory. We’re hoping for rain north of the lake and on the lake. Unfortunately the recent rain has fallen near the coast and south of the lake. The state’s sugar industry says it has a $3.1 billion economic impact statewide and provides more than 25,000 direct jobs. The rich, mucky soil near Lake Okeechobee is used to grow vegetables, too, and Miedema said growers are delaying decisions to buy seed because they just aren’t sure if the water will be there. "This could have a big dent on consumer prices,” she said.
The South Florida Water Management District is planning a winter “Water Summit” similar to a summit in July where water restrictions were planned. Last summer the district took a wait and see attitude toward year-round water restrictions and additional year-round conservation measures. This time, it’s more certain that year-round water restrictions or water conservation rules will be mapped out, according to district officials. “Yes, the lake is lower than ever for this time of year,” said Bruce Adams, water conservation officer. “We’re probably going to stay in a water shortage until at least the end of next season, so we have time to do some comprehensive planning.”
Big banks issue warnings on mortgage problems By Jim Freer
Some prominent banks are preparing to release results showing the industry’s charge-offs and other mortgage problems may worsen for several quarters.
In early October, three banks with large South Florida operations raised that red flag by issuing preliminary guidance that earnings for this year’s third quarter will not be as strong as analysts expected. Coral Gables-based BankUnited Financial Corp. (Nasdaq: BKUNA), Seattle-based Washington Mutual (NYSE: WM) and New York-based Citigroup (NYSE: C), the parent of Citibank, cited projected increases in mortgage charge-offs.
Those warnings indicate “we are still early in the housing credit cycle,” said Albert Savastano, an analyst at Fox-Pitt Kelton in New York.
Savastano expects the banking industry’s “earnings will be under pressure for the near term. Some of their operations will have to send more time on the [loan] collection side rather than on the new business side.”
Research by First American LoanPerformance indicates why delinquencies and foreclosures could keep rising. The Santa Ana-Calif.-based company estimates a total of $1.1 trillion in U.S. adjustable rate mortgages are resetting for the first time this year or in 2008.
BankUnited, the largest bank based in Florida, said on Oct. 3 that its ratio of non-performing assets to total assets would be “approximately 1.40 percent” on Sept. 30. That ratio was 0.16 percent on Sept. 30, 2006 and 0.86 percent on June 30, 2007 when the national banking industry’s average was 0.61 percent. Non-performing assets are 90 days or more delinquent or are no longer accruing interest.
OAK SKY opens a Boca Raton office for North American expansionF BY ED DUGGAN
A private Danish technology company has chosen Boca Raton as a subsidiary headquarters to introduce its Spamfighter software to North America.
Worldwide, Spamfighter, has 3.9 million users, about 11 percent of them in the U.S. even without an office here, says Alix Aranza, the U.S. managing director for Oak Sky, the software company that developed Spamfighter.
With worries about some companies leaving South Florida, why move to Boca Raton? “Because I already live in the area,” Aranza quipped. Aranza also said the two-employee executive suite office in Mizner Park costs a third to a fourth of one in California or New York, two other tech hot spots. Best of all, she said she can find trained people with the marketing skills she needs to expand the business. In 2008 she expects to add three more employees.
Florida is doing better in technology than many might think. A report by the American Electronics Association (AEA) found Florida ranked fourth among states in tech employment behind California, Texas and New York.
South Florida is the state’s largest hub with a tech workforce of more than 75,000 – 38 out of every 1,000 private sector workers – and a tech payroll of $4.6 billion in 2005, the latest year for which data was available.
AEA president and CEO William T. Archey said that the state’s tech success is a well-kept secret “even within Florida.”
“They know all about high-tech Florida in Scandinavia,” Aranza said. “And the parent company frequently takes its employees on working vacation trips – so what better place to visit than sunny Florida.”