@jsreisman2066 I did some more research (this was bugging me...)
Rain skip only goes back one day so would not catch precipitation on the 2nd.
Climate skip does however go back to your last watering and should have caught this.
The station used was KAAO. According to the data from this station on July 2nd reported .82 inches of rain.
Look for '20160702' and then "totalIN": 0.82
On July 3rd '20160703' there was no temperature data for this station so the data is considered invalid.
At that point we invalidated the observation data since we use temperature data to calculate evapotranspiration.
Good news is if the station was reporting data correctly we would have skipped based on the close to 1 inches of rain received. Bad news I don't know if that station is too reliable for observation data.
I would either find a different station or next week I can followup with our weather provider. My guess is the station for whatever reason is lagging on data reporting, kind of like @plainsane alluded to earlier. I should have just listened to him.
Hope this helps.